Loan Agreement Between CHINDEX CHINA HEALTHCARE FINANCE, LLC And DEG – DEUTSCHE INVESTITIONS – UND ENTWICKLUNGSGESELLSCHAFT mbH Dated January 8, 2008
Between
CHINDEX
CHINA HEALTHCARE FINANCE, LLC
And
DEG
– DEUTSCHE INVESTITIONS – UND ENTWICKLUNGSGESELLSCHAFT mbH
Dated
January 8, 2008
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Section
7.05 Enforcement
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38
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Section
7.06 Disclosure
of Information
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40
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Section
7.07 Successors
and Assignees
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41
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Section
7.08 Amendments,
Waivers and
Consents
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41
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Section
7.09 Counterparts
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41
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Section
7.10 Local
Loan Agreement; Separate
Transactions
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41
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ANNEX
A
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PROJECT
COST AND FINANCIAL PLAN
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ANNEX
B
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ONSHORE
BORROWER/PROJECT AUTHORIZATIONS
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ANNEX
C
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INSURANCE
REQUIREMENTS
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ANNEX
D
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ANTI-CORRUPTION
GUIDELINES FOR IFC TRANSACTIONS
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SCHEDULE
1
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FORM
OF CERTIFICATE OF INCUMBENCY AND AUTHORITY
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SCHEDULE
2
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FORM
OF REQUEST FOR DISBURSEMENT
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SCHEDULE
3
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FORM
OF DISBURSEMENT RECEIPT
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SCHEDULE
4
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FORM
OF SERVICE OF PROCESS LETTER
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SCHEDULE
5 (A)
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MATTERS
TO BE COVERED IN LOCAL COUNSEL’S LEGAL OPINION
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SCHEDULE
6
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FORM
OF LETTER TO ONSHORE BORROWER’S AUDITORS
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SCHEDULE
7
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FORM
OF ONSHORE BORROWER’S CERTIFICATION ON DISTRIBUTION OF
DIVIDENDS
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SCHEDULE
8
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INFORMATION
TO BE INCLUDED IN ANNUAL AND QUARTERLY REVIEW OF
OPERATIONS
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SCHEDULE
9
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SPECIAL
REPRESENTATIONS AND WARRANTIES
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SCHEDULE
10
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SPECIAL
COVENANTS
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SCHEDULE
11
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SPECIAL
CONDITIONS OF DISBURSEMENT
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SCHEDULE
12
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ANNUAL
MONITORING REPORT (AMR)
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FORM
OF SPV GUARANTEE AGREEMENT
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FORM
OF ONSHORE BORROWER GUARANTEE AGREEMENT
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FORM
OF MORTGAGE AGREEMENT
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FORM
OF SHARE PLEDGE AGREEMENT
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ANNEX
AA
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METHODOLOGY
FOR DETERMINATION OF THE BASE FIXED RATE FOR EACH LOAN
DISBURSEMENT
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ANNEX
BB
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METHODOLOGY
FOR CALCULATION OF REDEPLOYMENT COSTS
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LOAN
AGREEMENT (the “Agreement”) dated January 8,
2007, between CHINDEX CHINA HEALTHCARE FINANCE, LLC., a limited liability
company organized and existing under the laws of the State of Delaware of the
United States of America (“SPV”); and DEG –Deutsche
Investitions – und Entwicklungsgesellschaft mbH, (Registration No. HRB1005) a
limited liability company organized and existing under the laws of the Federal
Republic of Germany (“DEG”).
RECITALS
Chindex
International Inc. (“Chindex”) is the owner of
100%
of the membership interest in SPV;
Chindex
will form a subsidiary, Beijing UFH (as defined below), to undertake the Beijing
Project (as defined below) and will form a subsidiary, Guangzhou UFH (as defined
below), to undertake the Guangzhou Project (as defined below);
Chindex
has entered into a separate Loan Agreement with International Finance
Corporation (“IFC”)
under which IFC has agreed to loan (“the “IFC
Loan”) Twenty-Five Million
Dollars ($25,000,000) to finance the Projects;
Chindex
has requested DEG to provide the loan described in this Agreement as additional
financing for the construction, equipping and placing into operation by each
Onshore Borrower (as defined below) of its Project and certain other costs
and
expenditures associated with the development by each Onshore Borrower of its
Project;
Simultaneous
with the execution of this Agreement Chindex is executing a Guarantee Agreement
in the form of Exhibit 1A annexed hereto pursuant to which Chindex is
guaranteeing the obligations of SPV and the Onshore Borrowers to DEG hereunder;
and
DEG
is
willing to provide the loan to each Onshore Borrower upon the terms and
conditions set forth in this Agreement.
Definitions
and Interpretation
Section
1.01 Definitions. Wherever
used in this Agreement,
the following terms have the meanings opposite them:
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“Accounting
Standards”
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United
States Generally Accepted Accounting Practices (“US
GAAP”);
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“Affiliate”
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any
Person directly or indirectly controlling, controlled by or under
common
control with, an Onshore Borrower (for purposes of this definition,
“control” means the power to direct the management or policies of a
Person, directly or
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indirectly,
whether through the ownership of shares or other securities, by
contract
or otherwise, provided that the direct or indirect ownership of
fifty per cent (50%) or more of the voting share capital of a
Person is deemed to constitute control of that Person, and “controlling”
and “controlled” have corresponding meanings);
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“Annual
Monitoring Report”
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the
current annual monitoring report substantially in the form of Schedule
12
hereto setting out the specific social, environmental and developmental
impact information to be provided by each Onshore Borrower in respect
of
its Project, as such form of Annual Monitoring Report may be amended
or
supplemented from time to time with IFC’s consent;
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“Applicable
S&E Law”
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all
applicable statutes, laws, ordinances, rules and regulations of
the
Country, including without limitation, licenses, permits or other
governmental Authorizations setting standards concerning environmental,
social, labor, health and safety or security risks of the type
contemplated by the Performance Standards or imposing liability
for the
breach thereof;
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“Auditors”
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BDO
▇▇▇▇▇▇▇ (“BDO”),
or its affiliates, or, in the case of the Onshore Borrowers, Shanghai
JaHwa Certified Public Accountants Co, Ltd, or its affiliates,
or such
other firm of recognized independent public accountants acceptable
to DEG,
that Chindex or the relevant Onshore Borrower, as applicable, appoints
from time to time, subject to, in the case of the Onshore Borrowers,
Section 5.01 (e) (Affirmative Covenants) of Schedule 10
hereto;
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“Authority”
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any
national, regional or local government or governmental, administrative,
fiscal, judicial, or government-owned body, department, commission,
authority, tribunal, agency or entity, or central bank (or any
Person,
whether or not government owned and howsoever constituted or called,
that
exercises the functions of a central bank);
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“Authorization”
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any
consent, registration, filing, agreement, notarization, certificate,
license, approval, permit, authority or exemption from, by or with
any
Authority, whether given by express action or deemed given by failure
to
act within any specified time period;
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“Authorized
Representative”
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any
natural person who is duly authorized by the Onshore Borrower to
act on
its behalf for the purposes specified in, and whose name and a
specimen of
whose signature appear on, the Certificate of Incumbency and Authority
most recently delivered by the Onshore Borrower to DEG;
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“Base
Fixed Rate”
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for
each Disbursement of each relevant Loan, the rate determined in
accordance
with Article II hereof, and with the methodology set out in Annex
AA
hereto;
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“Beijing
Hospital”
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the
hospital and health care facility to be located in Beijing, as
further
described in a report dated October 2006, and revised from time
to time by
Chindex, provided to DEG;
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“Beijing
Project”
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the
construction, equipping and placing into operation of a hospital
and
health care facility to be located in Beijing, as further described
in a
report dated October 2006, and revised from time to time by Chindex,
provided to DEG;
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“Beijing UFH”
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the
entity to be established in Beijing, PRC to undertake the construction,
equipping and operation of the Beijing Hospital;
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“Business
Day”
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“CAO”
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Compliance
Advisor Ombudsman, the independent accountability mechanism for
IFC that
impartially responds to environmental and social concerns of affected
communities and aims to enhance outcomes;
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“CAO’s
Role”
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(i)
to respond to complaints by persons who have been or are likely
to be
directly affected by the social or environmental impacts of IFC
projects;
and
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(ii) to
oversee
audits of IFC’s social and environmental performance, particularly in
relation to sensitive projects, and to ensure compliance with IFC’s social
and environmental policies, guidelines, procedures and
systems;
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“Certificate
of Incumbency and Authority”
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a
certificate provided to DEG by the relevant Onshore Borrower in
the form
of Schedule 1 hereto;
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“Charters”
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with
respect to SPV, its certificate of formation, with respect to Chindex,
its
certificate of incorporation, and with respect to each of the Onshore
Borrowers, its articles of association;
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“Chindex”
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a
corporation organized and existing under the laws of the State
of Delaware
of the United States of America;
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“Clinics”
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means
the following:
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(i)
the “Shunyi Clinic” located at ▇▇. ▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇;
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(ii) the
“Jianguomen Clinic” located at ▇▇▇-▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Beijing
International Hotel Club, ▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇;
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(iii) the
“SRC Minhang Clinic” located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇; and
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(iv) any
other medical clinic established or to be established by any of
entities
within the Group;
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“Coercive
Practice”
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the
impairing or harming, or threatening to impair or harm, directly
or
indirectly, any party or the property of the
party
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to
influence improperly the actions of a party;
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“Collusive
Practice”
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an
arrangement between two or more parties designed to achieve an
improper
purpose, including to influence improperly the actions of another
party;
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“Consolidated”
or “Consolidated
Basis”
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has
the meaning provided in Section 1.02 (c) (Financial Calculations)
hereof;
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“Corrupt
Practice”
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the
offering, giving, receiving or soliciting, directly or indirectly,
of
anything of value to influence improperly the actions of another
party;
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“Country”
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the
People’s Republic of China;
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“Current
Assets”
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the
aggregate of the Chindex’s or the relevant Onshore Borrower’s, as
applicable, cash, investments classified as “held for trading”,
investments classified as “available for sale”, trade and other
receivables realizable within one year, inventories and prepaid
expenses
which are to be charged to income within one year;
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“Current
Liabilities”
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the
aggregate of all Liabilities of Chindex or the relevant Onshore
Borrower,
as applicable, falling due on demand or within one year (including
the
portion of Long term Debt falling due within one year);
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“Current
Ratio”
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the
result obtained by dividing Current Assets of such Person (less
prepaid
expenses) by Current Liabilities of such Person. For the purposes
of
calculating this ratio for Chindex, the balance in the Sinking
Fund
Account (as defined in the IFC RMB Loan Agreement dated October
10, 2005)
shall be deducted from Current Assets and any payment due on the
Sinking
Fund Account within one year shall be added to Current
Liabilities;
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“DEG
Security”
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the
security created by or pursuant to the Security Documents to secure
all
amounts owing by the relevant Onshore Borrower to DEG under the
Local Loan
Agreements;
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“Derivative
Transaction”
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any
swap agreement, cap agreement, collar agreement, futures contract,
forward
contract or similar arrangement with respect to interest rates,
currencies
or commodity prices;
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“Disbursement”
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any
disbursement of the Loan;
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“Disbursement
Interest Rate”
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for
each Disbursement, a rate of interest equal to the sum
of:
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(i)
the Spread; and
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(ii) the
Base Fixed Rate;
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“Dollars”
and “$”
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the
lawful currency of the United States of America;
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“EBITDA”
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for
the year most recently ended for which Annual Reviewed Combined
Financial
Statements of such Person are available, Net Income plus the sum
of
interest expense, income taxes, extraordinary items, depreciation,
amortization and any other non-cash expenses (to the extent each
was
deducted in the
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calculation
of Net Income);
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“ESRS”
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the Environmental
and Social Review Summary dated July 18, 2007, which sets out specific
social and environmental measures as actions to be undertaken by
the
relevant Onshore Borrower to enable the Project to comply with
the
Performance Standards, as such may be amended or supplemented from
time to
time with IFC’s consent;
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“Event
of Default”
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any
one of the events specified in Section 6.02 (Events of Default)
hereto;
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“Financing
Documents”
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collectively:
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(i) this
Agreement (or the Local Loan Agreements, as
applicable);
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(ii) the
Share Retention Agreement; and
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(iii) the
Security Documents;
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“Financial
Debt”
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any
indebtedness of Chindex or the relevant Onshore Borrower, as applicable,
for or in respect of:
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(i) borrowed
money;
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(ii) the
outstanding principal amount of any bonds, debentures, notes, loan
stock,
commercial paper, acceptance credits, bills or promissory notes
drawn,
accepted, endorsed or issued by Chindex or such Onshore Borrower,
as
applicable;
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(iii) the
deferred purchase price of assets or services (except trade accounts
incurred and payable in the ordinary course of business to trade
creditors
within ninety (90) days of the date they are incurred and which
are not
overdue);
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(iv) non-contingent
obligations of Chindex or the relevant Onshore Borrower, as applicable,
to
reimburse any other person for amounts paid by that person under
a letter
of credit or similar instrument (excluding any letter of credit
or similar
instrument issued for the benefit of Chindex or the relevant Onshore
Borrower, as applicable, with respect to trade accounts that are
payable
in the ordinary course of business within ninety (90) days of the
date of
determination and which are not overdue);
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(v) the
amount of any Liability in respect of any Financial
Lease;
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(vi) amounts
raised under any other transaction having the financial effect
of a
borrowing and which would be classified as a borrowing (and not
as an
off-balance sheet financing) under the Accounting
Standards;
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(vii) the
amount of Chindex’s or the relevant Onshore Borrower’s, as applicable,
obligations under derivative transactions entered into in
connection
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with
the protection against or benefit from fluctuation in any rate
or price
(but only the net amount owing by Chindex or such Onshore Borrower,
as
applicable, after marking the relevant derivative transactions
to
market);
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(viii) any
premium payable on a redemption or replacement of any of the foregoing
items; and
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(ix) the
amount of
any liability in respect of any guarantee or indemnity for any
of the
foregoing items incurred by any other person;
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“Financial
Lease”
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any
lease or hire purchase contract which would, under the Accounting
Standards, be treated as a finance or capital lease;
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“Financial
Plan”
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the
proposed sources of financing for the Project as set out in Annex
A (Project Cost
and Financial
Plan);
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“Financial
Year”
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the
accounting year of Chindex, or the relevant Onshore Borrower commencing
each year on April 1 and ending on the following March 31, or such
other
period as Chindex or such Onshore Borrower, with DEG’s consent, from time
to time designates as its accounting year;
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“Fraudulent
Practice”
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any
action or omission, including misrepresentation, that knowingly
or
recklessly misleads, or attempts to mislead, a party to obtain
a financial
benefit or to avoid an obligation;
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“Grace
Period”
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in
respect of each Loan, the period commencing on the date of first
Disbursement of that Loan and ending on the date which is three
years and
three calendar months following the date of such first
Disbursement;
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“Group”
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collectively,
Chindex, SPV the Onshore Borrowers, Beijing United Family Health
Center,
Shanghai United Family Hospital, and any of their present or future
Subsidiaries or Affiliates;
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“Guangzhou
Hospital”
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the
hospital and health care facility to be located in Guangzhou, as
further
described in a report dated October 2006, and revised from time
to time by
Chindex, provided to DEG;
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“Guangzhou
Project”
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the
construction, equipping and placing into operation of a hospital
and
health care facility to be located in Guangzhou, as further described
in a
report dated October 2006, and revised from time to time by Chindex,
provided to DEG;
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“Guangzhou
UFH”
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the
entity to be established in Guangzhou, PRC to undertake the construction,
equipping and operation of the Guangzhou Hospital;
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“Guarantee
Agreement”
|
means
each of the Guarantee Agreements entitled “Guarantee Agreement” between
Chindex and DEG pursuant to which Chindex will guaranty the obligations
to
DEG of (i) SPV under this Agreement, which
Guarantee
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Agreement
shall be substantially in the form of Exhibit 1A hereto, or (2)
the
respective Onshore Borrower under the Local Loan Agreement between
DEG and
such Onshore Borrower, which Guarantee Agreement shall be in the
Loan of
Exhibit 1B hereto.
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“Hospitals”
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the
Beijing Hospital and the Guangzhou Hospital;
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“IFC”
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International
Finance Corporation an international organization established by
Articles
of Agreement among its members countries including the
country;
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“IFC
Loan”
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the
loan to be granted by IFC to Chindex and the Onshore Borrowers
for the
primary purpose of financing the Projects;
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“IFC
Loan Agreement”
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the
Loan Agreement dated as of December 10, 2007 between Chindex International
Inc. and IFC
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“IFC
RMB Loan”
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the
loan granted by IFC pursuant to the RMB Loan Agreement;
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“IFC
RMB Loan Agreement”
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the
“RMB Loan Agreement” signed among IFC on the one hand, and Beijing United
Family Health Center and Shanghai United Family Hospital, Inc.
(as
co-Onshore Borrowers) on the other hand, dated October 10,
2005;
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“Increased
Costs”
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the
amount certified in an Increased Costs Certificate to be the net
incremental costs of, or reduction in return to, DEG in the Loan
to any
Onshore Borrower in connection with the making or maintaining of
such Loan
that result from:
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(i) any
change in any applicable law or regulation or directive (whether
or not
having the force of law) or in its interpretation or application
by any
Authority charged with its administration; or
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(ii) compliance
with any request from, or requirement of, any central bank or other
monetary or other Authority;
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which,
in either case, after the date of this Agreement:
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(A) imposes,
modifies or makes applicable any reserve, special deposit or similar
requirements against assets held by, or deposits with or for the
account
of, or loans made by, DEG;
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(B)
imposes a cost on DEG as a result of DEG having made such Loan
or reduces
the rate of return on the overall capital of DEG that it would
have
achieved, had DEG not made such Loan;
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(C)
changes the basis of taxation on payments received by DEG in respect
of
such Loan (otherwise than by a change in taxation of the overall
net
income of DEG, if any); or
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(D)
imposes on DEG any other condition regarding the making or maintaining
of
such Loan;
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“Increased
Costs Certificate”
|
a
certificate provided from time to time by DEG to the applicable
Onshore
Borrower, certifying:
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(i) the
circumstances giving rise to the Increased Costs;
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(ii) that
the costs of DEG have increased or the rate of return has been
reduced;
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(iii) that,
DEG, in DEG’s reasonable opinion, exercised reasonable efforts to minimize
or eliminate the relevant increase or reduction, as the case may
be;
and
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(iv) the
amount of Increased Costs;
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“Interest
Payment Date”
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in
respect of each respective Loan, and in respect of each year, the
following dates:
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(i)
the first Interest Payment Date shall be the 15th day of the month
occurring on or after the date of completion of the Grace Period;
and
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(ii) each
Interest Payment Date thereafter shall be the numerically corresponding
date falling six calendar months after the immediately preceding
Interest
Payment Date;
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“Interest
Rate”
|
for
any particular Onshore Borrower, beginning on the Loan Consolidation
Date,
the rate at which interest is payable on the Loan, as determined
in
accordance with Article II;
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Interest
Rate Setting Date”
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for
each Disbursement, the date on which the Base Fixed Rate is set
pursuant
to Section 2.03 (d)
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“Joint
Venture Agreements”
|
the
proposed joint venture agreements to be entered
into between Chindex for the
incorporation of the Beijing UFH and Guangzhou UFH,
respectively;
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“Liabilities”
|
the
aggregate of all obligations (actual or contingent) of Chindex
or the
relevant Onshore Borrower, as applicable, to pay or repay money,
including, without limitation:
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(i) Financial
Debt;
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(ii)
the amount of all liabilities of Chindex or such Onshore Borrower,
as the
case may be, (actual or contingent) under any conditional sale
or a
transfer with recourse or obligation to repurchase, including,
without
limitation, by way of discount or factoring of book debts or
receivables;
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(iii) taxes
(including deferred taxes);
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(iv) trade
accounts that are payable in the ordinary course of business within
ninety
(90) days of the date they are incurred and which are not overdue
(including letters of credit or similar instruments issued for
the benefit
of Chindex or such Onshore Borrower, as the case may be, with respect
to
such trade accounts);
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(v) accrued
expenses, including wages and other amounts due to employees and
other
services providers;
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(vi) the
amount of all liabilities of Chindex or
such
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Onshore
Borrower, as the case may be, howsoever arising to redeem any of
its
shares; and
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(vii) to
the extent not included in the definition of Financial Debt, the
amount of
all liabilities of any person to the extent Chindex or such Onshore
Borrower, as the case may be, guarantees them or otherwise obligates
itself to pay them;
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“Liabilities
to Tangible Net
Worth
Ratio”
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the
result obtained by dividing Liabilities of such Person by Tangible
Net
Worth of such Person. For the purpose of calculating this ratio
based on
the Consolidated Financial Statements of Chindex, (i) the balance
of the
Sinking Fund Account will be deducted from the DEG Loan amount
outstanding
for the purposes of the Liabilities calculation and the balance
in the
Sinking Fund Account will be deducted from Tangible Net Worth in
the
Tangible Net Worth calculation; (ii) prior to Maturity, the
Tranche B Notes and Tranche C notes as defined in the Securities
Purchase
Agreement by and among Chindex and Magenta Magic Limited dated
November 7,
2007 shall be deducted from the Liabilities and added to Tangible
Net
Worth; and (iii) the letters of credit for the medical product
division of
Chindex up to five million US dollars shall be excluded from the
Liabilities.
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“Lien”
|
any
mortgage, pledge, charge, assignment, hypothecation, security interest,
title retention, preferential right, trust arrangement, right of
set-off,
counterclaim or banker’s lien, privilege or priority of any kind having
the effect of security, any designation of loss payees or beneficiaries
or
any similar arrangement under or with respect to any insurance
policy or
any preference of one creditor over another arising by operation
of
law;
|
|
“Loan”
|
for
each Onshore Borrower, the loan specified in Section 2.01(a) (The Loan) or,
as the
context requires, its principal amount from time to time
outstanding;
|
|
“Loan
Consolidation Date”
|
for
any particular Onshore Borrower, the first Interest Payment Date
after the
Loan for that Onshore Borrower has been fully disbursed (or the
undisbursed balance of the relevant Loan has been
canceled);
|
|
“Loan
Currency”
|
Dollars
or $;
|
|
“Local
Loan Agreement”
|
has
the meaning ascribed to that term in Section 4.02(b) (Loan Agreements
with Onshore
Borrowers).
|
|
“Long-term
Debt”
|
that
part of Financial Debt whose final maturity, by its terms or terms
of any
agreement relating to it, falls due more than one year after the
date it
is incurred;
|
|
“Management
Contract”
|
the
management agreements to be entered into between Chindex and each
of the
respective Onshore Borrowers;
|
|
“Material
Adverse Effect”
|
a
material adverse effect on:
|
|
(i)
the Onshore Borrower, its assets or properties;
|
|
|
(ii) the
Onshore Borrower’s business prospects or financial
condition;
|
|
|
(iii) with
respect to each Onshore Borrower, the implementation of the Project
of
such Onshore Borrower, the Financial Plan of such Onshore Borrower
or the
carrying on of such Onshore Borrower’s business or operations;
or
|
|
|
(iv) the
ability of the Onshore Borrower to comply with its obligations
under this
Agreement, or under any other Transaction Document or Project Document
to
which it is a party;
|
|
|
“Mortgage
Agreements”
|
the
agreements entitled “Mortgage Agreement” to be entered into between DEG
and each of the Onshore Borrowers, pursuant to which, to the extent
permitted by applicable law and reasonably customary for such document
in
the Country, and, subject to Section 4.01(k) hereof, such Onshore
Borrower
shall create a first ranking mortgage over all present and
future (i) immovable assets of such Onshore Borrower, including
all granted land use rights of such Onshore Borrower, buildings
and other
rights of such Onshore Borrower associated with these assets; and
(ii)
machinery and equipment of such Onshore Borrower, and, in each
case, in
substantially the form of Exhibit 2 attached
hereto;
|
|
“Net
Income”
|
for
any Financial Year, the excess (if any) of gross income over total
expenses (provided that income taxes shall be treated as part of
total
expenses) appearing in the audited financial statements for such
Financial
Year;
|
|
“Non-Cash
Items”
|
for
any Financial Year, the net aggregate amount (which may be a positive
or
negative number) of all non-cash expenses and non-cash credits
which have
been subtracted or, as the case may be, added in calculating Net
Income
during that Financial Year, including, without limitation, depreciation,
amortization, deferred taxes, provisions for severance pay of staff
and
workers, provision for bad debt, bad debt write off and credits
resulting
from revaluation of the assets’ book value;
|
|
“Obstructive
Practice”
|
(i)
deliberately destroying, falsifying, altering or concealing of
evidence
material to the investigation or making of false statements to
investigators, in order to materially impede a World Bank Group
investigation into allegations of a Corrupt Practice, Fraudulent
Practice,
Coercive Practice or Collusive Practice, and/or threatening, harassing
or
intimidating any party to prevent it from disclosing
its
|
|
knowledge
of matters relevant to the investigation or from pursuing the
investigation, or (ii) acts intended to materially impede the exercise
of
IFC’s access to contractually required information in connection with
a
World Bank Group investigation into allegations of a Corrupt Practice,
Fraudulent Practice, Coercive Practice or Collusive
Practice;
|
|
|
“Onshore
Borrower Guarantee Agreement”
|
means
each agreement entitled “Guarantee Agreement” between Chindex and DEG
pursuant to which Chindex shall guarantee the payment obligations
of each
Onshore Borrower under its respective Local Loan Agreement, such
Guarantee
Agreement in each case to be substantially in the form of Exhibit
1B
hereto;
|
|
“Onshore
Borrowers”
|
Beijing
UFH and Guangzhou UFH or either of them as the context may
require;
|
|
“PRC”
|
The
People’s Republic of China
|
|
“Peak
Debt Service Coverage
Ratio”
|
the
ratio obtained by dividing:
|
|
(i)
the aggregate, for the Financial Year most recently ended prior
to the
relevant date of calculation for which audited financial statements
are
available, of Chindex’s or the relevant Onshore Borrower’s, as applicable,
(A) Net Income, (B) Non-Cash Items and (C) the amount of all payments
that
were due during that Financial Year on account of interest and
other
charges on Financial Debt (to the extent deducted from Net
Income);
|
|
|
by
|
|
|
(ii) the
aggregate of (A) the highest aggregate amount, in any financial
year after
the financial year described in clause (i) above until the final
scheduled
maturity of the DEG Loan, of all scheduled payments (including
payments to
be made to the Sinking Fund Account pursuant to Section 6.01(d)
of the IFC
RMB Loan Agreement and the difference between the final balloon
payment
the scheduled balance in the Sinking Fund Account) falling due
on account
of principal of Long-term Debt and interest and other charges on
all
Financial Debt and (B) without double counting any payment already
counted
in the preceding sub-clause (A), any payment required to be made
to any
debt service account in such financial year under the terms of
any
agreement providing for Financial Debt;
|
|
|
where,
for the purposes of clause (ii) above:
|
|
|
(x)
subject to sub-clause (y), for the computation of interest payable
during
any period for which the applicable rate is not yet determined,
that
|
|
interest
shall be computed at the rate in effect at the time of the relevant
date
of calculation;
|
|
|
(y) interest
on Short-term Debt in such Financial Year shall be computed by
reference
to the aggregate amount of interest thereon paid during the Financial
Year
in which the relevant date of calculation falls up to the end of
the
period covered by the latest quarterly financial statements prepared
by
Chindex or the relevant Onshore Borrower, as applicable, multiplied
by a
factor of 4, 2 or 4/3 depending on whether the computation is made
by
reference to the financial statements for the first quarter, the
first two
quarters or the first three quarters, respectively; and
|
|
|
“Performance
Standards”
|
IFC’s
Performance Standards on Social & Environmental Sustainability, dated
April 30, 2006, copies of which have been delivered to and receipt
of
which has been acknowledged by Chindex in a letter dated July 18,
2007;
|
|
“Person”
|
any
natural person, corporation, company, partnership, firm, voluntary
association, joint venture, trust, unincorporated organization,
Authority
or any other entity whether acting in an individual, fiduciary
or other
capacity;
|
|
“Potential
Event of Default”
|
any
event or circumstance which would, with notice, lapse of time,
the making
of a determination or any combination thereof, become an Event
of
Default;
|
|
“Project”
|
the
Beijing Project and the Guangzhou Project, or either one of them
as the
context may require;
|
|
“Project
Physical Completion Date”
|
in
respect of each of the Projects, the date in which the following
requirements have been fully satisfied:
|
|
(i) no
Event of Default or Potential Event of Default with respect to
the
applicable Onshore Borrower has occurred and is
continuing;
|
|
|
(ii) the
facilities included in the applicable Project have been completed
and
available for use by the applicable Onshore Borrower;
|
|
|
(iii) the
Hospital included in the applicable Project has been operational
and
generating revenues for three (3) consecutive months;
|
|
|
(iv) there
are no material outstanding claims by contractors or supplier in
respect
of the construction of the applicable Project (other than claims
being
contested in good faith and with respect to which the applicable
Onshore
Borrower has made adequate reserves, such reserves to be reasonably
determined by such Onshore Borrower in accordance
with
|
|
applicable
accounting practices) that has or could be reasonably expected
to have a
Material Adverse Effect and for which provisions have not been
made;
|
|
|
(v) the
business license and the medical facility practicing permit required
for
the operation of such Project has been obtained;
|
|
|
(vi) the
sites, equipment and facilities comprising such Project have been
acquired, developed, constructed and are operational in a manner
consistent with the applicable requirements of the Performance
Standards;
|
|
|
(vii) the
applicable Onshore Borrower’s working capital is not less than the working
capital set forth in Annex A (Project Cost
and Financial
Plan);
|
|
|
(viii) the
applicable Onshore Borrower has delivered to DEG a notice, signed
by an
Authorized Representative, certifying that the requirements set
out in
paragraphs (i) through (vii) above are fulfilled and DEG has not
notified
the Onshore Borrower that it disputes the certifications made
therein;
|
|
|
“Project
Cost”
|
the
total estimated cost of the Project, as set forth in Annex A (Project Cost
and Financial
Plan);
|
|
“Project
Documents”
|
collectively:
|
|
(a)
the Management Contracts;
(b)
the Joint Venture Agreements;
(c)
the Charters;
|
|
|
“Prospective
Debt Service Coverage Ratio”
|
the
ratio obtained by dividing:
|
|
(i)
the aggregate, for the Financial Year most
recently ended prior to the relevant date of calculation for which
audited
financial statements are available, of the Onshore Borrower’s (A) Net
Income, (B) Non-Cash Items and (C) the amount of all payments that
were
due during that Financial Year on account of interest and other
charges on
Financial Debt (to the extent deducted from Net
Income);
|
|
|
by
|
|
|
(ii) the
aggregate of (A) all scheduled payments (including, in the case
of the
loan made under the IFC RMB Loan Agreement, payments to be made
to the
Sinking Fund Account pursuant to Section 6.01(d) of the IFC RMB
Loan
Agreement and the difference between the final balloon payment
of such
loan and the scheduled balance in the Sinking Fund Account) that
fall due
during the financial year in which the relevant date of calculation
falls
on account of
|
|
principal
of Long-term Debt and interest and other charges on all Financial
Debt and
(B) without double counting any payment already counted in the
preceding
sub-clause (A), any payment made or required to be made to any
debt
service account under the terms of any agreement providing for
Financial
Debt;
|
|
|
where,
for the purposes of clause (ii) above:
|
|
|
(x) subject
to sub-clause (y) below, for the computation of interest payable
during
any period for which the applicable rate is not yet determined,
that
interest shall be computed at the rate in effect at the time of
the
relevant date of calculation; and
|
|
|
(y) interest
on Short-term Debt payable in the Financial Year in which the relevant
date of calculation falls shall be computed by reference to the
aggregate
amount of interest thereon paid during that Financial Year up to
the end
of the period covered by the latest quarterly financial statements
prepared by the Onshore Borrower multiplied by a factor of 4, 2
or 4/3
depending on whether the computation is made by reference to the
financial
statements for the first quarter, the first two quarters or the
first
three quarters, respectively;
|
|
|
“Prospective
Debt Service and Capital Expenditure Coverage Ratio”
|
the
ratio obtained by dividing:
|
|
(i) the
aggregate, for the Financial Year most recently ended prior to
the
relevant date of calculation for which audited financial statements
are
available, of (A) Net Income for that Financial Year, (B) Non-Cash
Items
and (C) the amount of all payments that were due during that Financial
Year on account of interest and other charges on Financial Debt
(to the
extent deducted from Net Income);
|
|
|
after
deducting from
that aggregate the amount of capital expenditure actually expended
to that
date or as projected for the entire Financial Year for the Financial
Year
in which the relevant date of calculation falls;
|
|
|
by
|
|
|
(ii) the
aggregate of (A) all scheduled payments (including, in the case
of the IFC
RMB Loan, payments to be made to the Sinking Fund
Account
|
|
pursuant
to Section 6.01 (d) of the RMB Loan Agreement and the
difference between the final balloon payment the scheduled balance
in the
Sinking Fund Account) that fall due during the Financial Year
in which the relevant date of calculation falls on account of principal
of
Long-term Debt and interest and other charges on all Financial
Debt and
(B) without double counting any payment already counted in the
preceding
sub-clause (A), any payment made or required to be made to any
debt
service account under the terms of any agreement providing for
Financial
Debt (excluding voluntary prepayments);
|
|
|
where,
for the purposes of clause
(ii) above:
|
|
|
(x) subject
to sub-clause (y) below, for the computation of interest payable
during
any period for which the applicable rate is not yet determined,
that
interest shall be computed at the rate in effect at the time of
the
relevant date of calculation; and
|
|
|
(y) interest
on Short-term Debt payable in the Financial Year in which the relevant
date of calculation falls shall be computed by reference to the
aggregate
amount of interest thereon paid during that Financial Year up to
the end
of the period covered by the latest quarterly financial statements
prepared by the Onshore Borrower multiplied by a factor of 4, 2
or 4/3
depending on whether the computation is made by reference to the
financial
statements for the first quarter, the first two quarters or the
first
three quarters, respectively;
|
|
|
“Relevant
Spread”
|
2.75%
per annum provided that the Relevant Spread shall be reduced
to:
|
|
(i)
2.50% from and as of the date on which the Project Physical Completion
Dates in respect of both Projects have been attained;
and
|
|
|
(ii) provided
that the Project Physical Completion Dates of both Projects have
been
attained, 2.00% from and as of the date on which BDO has issued
written
confirmation (the “Confirmation”) to DEG
that all of the following ratios have been satisfied based on the
most
recent financial statements of Chindex (calculated on a Consolidated
Basis) (the “Confirmation
Date”):
|
|
|
(a) the
Current Ratio is at least 1.5;
|
|
|
(b) the
Peak Debt Service Coverage Ratio is
not
|
|
less
than 1.2; and
|
|
|
(c) the
Prospective Debt Service Coverage Ratio will be greater than
1.7.
|
|
|
Such
reduction in the Relevant Spread shall be effective on the date
immediately succeeding the Confirmation Date, provided that there
has been
no manifest error in the Confirmation. For each such reduction
in the
Relevant Spread, DEG shall issue written notice to the Onshore
Borrower of
the reduction, along with confirmation of the date on which such
reduction
shall apply;
|
|
|
“RMB”
|
the
lawful currency of the Country;
|
|
“Sanctionable
Practice”
|
any
Corrupt Practice, Fraudulent Practice, Coercive Practice, Collusive
Practice, or Obstructive Practice, as those terms are defined herein
and
interpreted in accordance with the Anti-Corruption Guidelines attached
to
this Agreement as Annex D;
|
|
“S&EA”
|
the
social and environmental assessments prepared by the Onshore Borrower
in
accordance with the Performance Standards;
|
|
“S&E
Management System”
|
the
Onshore Borrower’s social and environmental management system enabling it
to identify, assess and manage Project risks on an ongoing
basis;
|
|
“Security
Documents”
|
the
documents providing for the DEG Security consisting of:
|
|
(i) the
Mortgage Agreement;
|
|
|
(ii) the
Share Pledge Agreement; and
|
|
|
(iii) the
Guarantee Agreement;
|
|
|
“Security
Sharing Agreement”
|
the
agreement entitled “Security Sharing Agreement” to be entered into between
DEG and IFC, (the other senior secured creditor providing the loan
financing included in the Financial Plan);
|
|
“Share
Pledge Agreement”
|
the
agreements entitled “Share Pledge Agreement” to be entered into between
Chindex and DEG, (a) pursuant to which, to the extent permitted
by
applicable law and reasonably customary for such document in the
Country,
and, subject to Section 4.01(k) hereof, Chindex shall create a
first
ranking pledge over all of its equity interest in each of the Onshore
Borrowers in favor of DEG to secure such Onshore Borrower’s payment
obligations to DEG, (b) providing for its termination in the event
that
(i) such Onshore Borrower’s Project Physical Completion Date has been
achieved, (ii) the aggregate cash generation from such Onshore
Borrower
for the preceding four quarters was at least $2,5000,000, and (iii)
the
Peak Debt Service Ratio based on the most recent Chindex Consolidated
Financial Statements is not less than 1.2, and, (c) in substantially
the
form of Exh-ibit 3attached
hereto;
|
|
“Share
Retention Agreement”
|
the
agreement entitled “Share Retention Agreement” to be entered in to between
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the “Major Shareholder”) and
DEG, pursuant to which during the Restricted Period, the Major
Shareholder
shall not, directly or indirectly, sell, transfer, assign, or otherwise
dispose of (“Transfer”) any
shares of
Class B Common Stock owned by her in Chindex or any right, title
or
interest therein or thereto to any third party, except that the
Major
Shareholder shall have the right to Transfer no more than 20,000
shares of
Class B Common Stock owned by her in Chindex as of date hereof
to a
trust or trusts to be created for the benefit of any child, or
children, of the Major Shareholder, provided, that the voting power
of the
above-mentioned trust(s) shall be retained by the Major Shareholder
and
such trust(s) shall be subject to the same restrictions as the
Major
Shareholder under this Agreement.
|
|
For
the purposes of the foregoing, the term “Restricted Period”
means
the period commencing from the date of this Agreement until the
earlier
of:
|
|
|
(i)
in the event that both Hospitals are to be constructed and opened
for
operation, then the earlier of:
|
|
|
(x) two
years have elapsed since the official commencement of operation
by both of
the Hospitals; or
|
|
|
(y) one
year has elapsed since both Hospitals have respectively achieved
a
break-even EBITDA for any 12-month period ending on a date that
is the
last day of a fiscal quarter as evidenced by audited Financial
Statements
for such period; or
|
|
|
(z) the
fifth anniversary of the date of this Agreement;
|
|
|
OR
|
|
|
(ii) in
the event that only one Hospital is to be constructed and opened
for
operation, then the earlier of:
|
|
|
(x) two
years have elapsed since the official commencement of operation
by such
Hospital, or
|
|
|
(y) one
year has elapsed since such Hospital has achieved a break-even
EBITDA for
any 12-month period ending on a date that is the last day of a
fiscal
quarter as evidenced by audited Financial Statements for such period,
or
|
|
|
(z) the
fifth anniversary of the date of
this
|
|
Agreement;
|
|
|
“Short
term Debt”
|
all
Financial Debt other than Long term Debt;
|
|
“Sinking
Fund Account”
|
the
bank account opened and maintained by each of Beijing United Family
Health
Center and Shanghai United Family Hospital Inc. pursuant to the
terms and
conditions of the IFC RMB Loan Agreement;
|
|
“Subsidiary”
|
with
respect to a Person, an Affiliate over 50% of whose capital is
owned,
directly or indirectly, by such Person;
|
|
“Tangible
Net Worth”
|
the
aggregate of:
|
|
(i)
(A) the amount paid up or credited as paid up on
the share capital of Chindex or the relevant Onshore Borrower,
as the case
may be; and
|
|
|
(B)
the amount standing to the credit of the reserves of Chindex or
the
relevant Onshore Borrower, as the case may be (including, without
limitation, any share premium account, capital redemption reserve
funds
and any credit balance on the accumulated profit and loss
account);
|
|
|
after
deducting from the amounts in (A) and (B):
|
|
|
(x) any
debit balance on the profit and loss account or impairment of the
issued
share capital of Chindex or the relevant Onshore Borrower, as the
case may
be (except to the extent that deduction with respect to that debit
balance
or impairment has already been made);
|
|
|
(y)
amounts set aside for dividends or taxation (including deferred
taxation);
and
|
|
|
(z)
amounts attributable to capitalized items such as goodwill, trademarks,
deferred charges, licenses, patents and other intangible assets;
and
|
|
|
(ii) if
applicable, that part of the net results of operations and the
net assets
of any Subsidiary of Chindex or the relevant Onshore Borrower,
as the case
may be, attributable to interests that are not owned, directly
or
indirectly, by Chindex or the relevant Onshore Borrower, as the
case may
be;
|
|
|
“Taxes”
|
any
present or future taxes, withholding obligations, duties and other
charges
of whatever nature levied by any Authority;
|
|
“Transaction
Documents”
|
together,
the Financing Documents, the Security Documents, the Security
Sharing Agreement and the Share Retention Agreement;
|
|
“World
Bank”
|
the
International Bank for Reconstruction and Development, an international
organization established by Articles of Agreement among its member
countries.
|
Section
1.02 Financial
Calculations. (a) All
financial calculations to be made under, or for the purposes of, this Agreement
shall be made in accordance with the Accounting Standards and, except as
otherwise required by a provision of this Agreement, shall be calculated from
the then most recent consolidated quarterly financial statements delivered
to
DEG or, where those statements are with respect to the last quarter of a of
a
Financial Year then, at DEG’s option, from the consolidated audited financial
statements for the relevant Financial Year. Any Material Adverse Effect that
occurs after the end of the period covered by the financial statements used
to
make the relevant financial calculations shall also be taken into account in
calculating the relevant figures.
(b) Where
quarterly financial statements from the last quarter of a Financial Year are
used for the purpose of making certain financial calculations then, at DEG’s
option, those calculations may instead be made from the audited financial
statements for such Financial Year.
(c) If
a
financial calculation is to be made under or for the purposes of this Agreement
or any other Transaction Document on a Consolidated Basis, that calculation
shall be made by reference to the sum of all amounts of similar nature reported
in the relevant financial statements of each of the entities whose accounts
are
to be consolidated with the accounts of Chindex or the applicable Onshore
Borrower, as the case may be, plus or minus the consolidation adjustments
customarily applied to avoid double counting of transactions among any of those
entities, including Chindex or the applicable Onshore Borrower, as the case
may
be.
Section
1.03 Interpretation. In
this Agreement, unless the
context otherwise requires:
(a) headings
are for convenience only and do not affect the interpretation of this
Agreement;
(b) words
importing the singular include the plural and vice versa;
(c) a
reference to an Annex, Article, party, Schedule or Section is a reference to
that Article or Section of, or that Annex, party or Schedule to, this
Agreement;
(d) a
reference to a document includes an amendment or supplement to, or replacement
or novation of, that document but disregarding any amendment, supplement,
replacement or novation made in breach of this Agreement; and
(e) a
reference to a party to any document includes that party’s successors and
permitted assigns.
Section
1.04 Business
Day Adjustment. (a) When an Interest
Payment Date is not a Business Day, then the interest payable or such Interest
Payment Date shall be payable on the next Business Day in that calendar month
(if there is one) or the preceding Business Day (if there is not).
(b) When
the
day on or by which a payment is due to be made is not a Business Day, that
payment shall be made on or by the next Business Day in that calendar month
(if
there is one) or the preceding Business Day (if there is not).
The
Loan
Section
2.01 The
Loan. (a) Subject to the provisions of
this Agreement, DEG agrees to lend to each Onshore Borrower according to its
respective Onshore Allocation, an aggregate amount of Twenty Million Dollars
($20,000,000) (the “Total Loan
Amount”) which shall be guaranteed by Chindex pursuant to the Onshore
Borrower Guarantee Agreement. The rights and obligations of Chindex and each
of
the Onshore Borrowers shall be several, not joint.
(b) The
Total
Loan Amount shall be allocated between the Onshore Borrowers in accordance
with
a notice delivered by Chindex prior to the execution of the Local Loan
Agreements (each, an “Onshore
Allocation” or the “Loans”). Unless
with the express written consent of DEG, a single Onshore Allocation for an
Onshore Borrower shall not exceed sixty percent (60%) of the Total Loan
Amount.
(c) Each
such
Onshore Allocation shall be disbursed directly to the to applicable Onshore
Borrower. In no event shall the sum of the two Onshore Allocations
exceed the Total Loan Amount.
Section
2.02 Disbursement
Procedure. (a) Each
Onshore Borrower may request Disbursements of its Loan by delivering to DEG,
at
least ten (10) Business Days prior to the proposed date of disbursement, a
Disbursement request substantially in the form of Schedule 2.
(b) All
Disbursements of the Loan for a particular Onshore Borrower shall be made
directly to the applicable Onshore Borrower. The maximum aggregate amount of
Disbursements to a single Onshore Borrowers shall not exceed such Onshore
Borrower’s Onshore Allocation. Each Disbursement shall be made by DEG at a bank
in New York, New York for further credit to the relevant Onshore Borrower’s
account at a bank in the Country, or any other place acceptable to DEG, all
as
specified by Chindex or such Onshore Borrower in the relevant Disbursement
request.
(c) Each
Disbursement (other than the last one) in respect of an Onshore Allocation
shall
be made in an amount of not less than $4,000,000. No more than two (2) Disbursements may
be
requested in respect of each Onshore Allocation.
(d) The
relevant Onshore Borrower shall deliver to DEG a receipt, substantially in
the
form of Schedule 3, within five (5) Business Days following each Disbursement
to
such Onshore Borrower.
Section
2.03 Interest. Subject
to the provisions of
Section 2.04 (Default Rate
Interest), the each Onshore Borrower shall pay interest on its Loan in
accordance with this Section 2.03:
(a) Interest
on the Loan for a relevant Onshore Borrower shall accrue from day to day, be
prorated on the basis of a 360 day year for the actual number of days in the
relevant period and be payable, subject to Section 1.04 (Business Day Adjustment), in
arrears on each Interest Payment Date; provided that with respect to any
Disbursement made less than fifteen (15) days before an Interest Payment Date,
interest on that Disbursement shall be payable commencing on the second Interest
Payment Date following the date of that Disbursement.
(b) Up
to the
Loan Consolidation Date, an Onshore Borrower shall pay interest on the amount
of
each Disbursement outstanding from time to time at the Disbursement Interest
Rate applicable to that Disbursement.
(c) For
the
purpose of determining the Disbursement Interest Rate applicable to each
Disbursement, DEG shall, on the relevant Interest Rate Setting Date, determine
the Base Fixed Rate for that Disbursement using the methodology set out in
Annex
AA, add the Relevant Spread and promptly notify the Onshore Borrower of the
Disbursement Interest Rate applicable to that Disbursement.
(d) For
each
Disbursement, the Onshore Borrower shall specify the date on which to determine
the applicable Base Fixed Rate, which date shall be two (2) Business Days before
the proposed date of such Disbursement. In the event the conditions of
disbursement relevant to that Disbursement have not been fulfilled to DEG’s
satisfaction or waived by DEG by the rate-setting date specified in the relevant
request for Disbursement, then, after the relevant conditions of disbursement
have been fulfilled to DEG’s satisfaction or waived by DEG, the Onshore Borrower
shall specify a new date on which to determine the Base Fixed Rate, which shall
be two (2) Business Days before the new proposed date of the requested
Disbursement unless otherwise specified by DEG.
(e) The
relevant Onshore Borrower may from time to time at any time in connection with
any proposed Disbursement request from DEG an indication of what the
Disbursement Interest Rate would be for such a Disbursement as of the date
of
that request. As promptly as practicable after that request, DEG
shall advise the Onshore Borrower of the indicative Disbursement Interest
Rate.
(f) Beginning
on and including the applicable Loan Consolidation Date for a particular Onshore
Borrower, the Onshore Borrower shall pay interest at the applicable Interest
Rate on the full amount of the Loan outstanding for that Onshore Borrower from
time to time. The “Interest Rate” for a particular Onshore Borrower
shall be the rate calculated by DEG equal to the weighted average of the Loan
Disbursement Interest Rates for the relevant Onshore Borrower, the weighting
being based on the principal amount of each Disbursement to that Onshore
Borrower in relation to the entire principal amount of the Loan for that Onshore
Borrower and the average being rounded up to the nearest two decimal
places. DEG shall determine the Interest Rate for each Onshore
Borrower not less than two (2) Business Days before the relevant Loan
Consolidation Date and promptly notify the relevant Onshore Borrower of that
rate.
(g) The
determination by DEG of each Disbursement Interest Rate or the Interest Rate,
as
the case may be, shall be final and conclusive and bind the Borrower (unless
the
Borrower
shows to DEG’s reasonable satisfaction that the determination involves manifest
error).
Section
2.04 Default
Rate Interest. (a) Without limiting
the remedies available to DEG under this Agreement or otherwise (and to the
maximum extent permitted by applicable law), if any Onshore Borrower fails
to
make any payment of principal or interest (including interest payable pursuant
to this Section) or any other payment provided for in Section 2.07 (Fees) when
due as specified in this Agreement (whether at stated maturity or upon
acceleration), such Onshore Borrower shall pay interest on the amount of that
payment due and unpaid by such Onshore Borrower at the rate which shall be
the
sum of two per cent (2%) per annum and the Interest Rate in effect from time
to
time.
(b) Interest
at the rate referred to in Section 2.04 (a) shall accrue from the date on which
payment of the relevant overdue amount became due until the date of actual
payment of that amount (as well after as before judgment), and shall be payable
by such Onshore Borrower on demand or, if not demanded, on each Interest Payment
Date falling after any such overdue amount became due.
Section
2.05 Repayment. (a)
Subject to Section 1.04 (Business Day Adjustment), in
respect of each Loan made to an Onshore Borrower, such Onshore Borrower shall
commence repayment of the principal of such Loan on the Interest Payment Date
occurring on the 15th day of the month occurring on or after the date of
completion of the Grace Period.
(b) Subject
to Section 1.04 (Business Day
Adjustment), commencing on the 15th day of the month occurring on or
after the date of completion of the Grace Period, in respect of each separate
Onshore Allocation, the relevant Onshore Borrower shall repay the principal
amount of the Loan made to it in accordance with the following
schedule:
|
12
Month
Periods
Commencing
on the
15th
Day
of the month
occurring
on
or after the Date
of
Completion
of the Grace Period
|
First
or Second
Interest
Payment
Date in
Relevant 12
Month
Period
|
Principal
Amount
Due
|
|
Year
1
|
First
|
$769,230.76
|
|
Second
|
$769,230.76
|
|
|
Year
2
|
First
|
$769,230.76
|
|
Second
|
$769,230.76
|
|
|
Year
3
|
First
|
$769,230.76
|
|
Second
|
$769,230.76
|
|
|
Year
4
|
First
|
$769,230.76
|
|
Second
|
$769,230.76
|
|
|
Year
5
|
First
|
$769,230.76
|
|
Second
|
$769,230.76
|
|
|
Year
6
|
First
|
$769,230.76
|
|
Second
|
$769,230.76
|
|
|
Year
7
|
First
|
$769,230.88
|
(c) If
the
outstanding balance of the Loan in respect of any particular Onshore Allocation
at the date of completion of the Grace Period is more or less than $10,000,000,
then the amounts in the column entitled “Principal Amount Due” in Section 2.05
(b) above, shall be adjusted on a pro-rata basis.
(d) Any
principal amount of the Loan repaid under this Agreement may not be
re-borrowed.
Section
2.06 Prepayment. Without
prejudice to Section 2.10 (b) (Increased Costs) and Section
2.14 (Taxes), and
Section 5.04 (c) (Insurance)of Schedule
10.:
(a) each
Onshore Borrower may prepay on all or any part of the Loan made to it, on not
less than fifteen (15) days’ prior notice to DEG, but only if:
|
(i)
|
such
Onshore Borrower simultaneously pays all accrued interest and Increased
Costs (if any) on the amount of such Loan to be prepaid, together
with and
all other amounts then due and payable by it under this
Agreement;
|
|
(ii)
|
for
a partial prepayment, that prepayment is an amount not less than
one
million Dollars ($1,000,000);
|
|
(iii)
|
if
requested by DEG, the Onshore Borrower delivers to DEG, prior to
the date
of prepayment, evidence reasonably satisfactory to DEG that all
necessary
Authorizations for prepayment have been obtained;
and
|
|
(iv)
|
the
redeployment cost with respect to the amount of the Loan to be
prepaid as
determined by DEG in accordance with the methodology set out
in Annex BB.
|
(b) Amounts
of principal prepaid under this Section shall be applied by DEG on a pro-rata
basis to the remaining repayment installments of the Loan made to such Onshore
Borrower.
(c) Upon
delivery of a notice in accordance with Section 2.06 (a), the relevant Onshore
Borrower shall make the prepayment in accordance with the terms of that
notice.
(d) Any
principal amount of the Loan prepaid under this Agreement may not be
re-borrowed.
(e) If
any
Onshore Borrower prepays any other long-term loans (other than in connection
with a refinancing, replacement or restructuring with similar or better terms)
made to it, DEG will have the right to require prepayment of the Loan made
to
such Onshore Borrower on a pro-rata basis.
Section
2.07 Fees. (a)
SPV or the relevant Onshore
Borrower shall pay to DEG a commitment fee:
|
(i)
|
at
the rate of one-half of one per cent (½ %) per annum on that part of such
Onshore Borrower’s Onshore Allocation that from time to time has not been
disbursed or canceled, beginning to accrue on the date of this
Agreement;
|
|
(ii)
|
pro
rated on the basis of a 360-day year for the actual number of days
elapsed; and
|
|
(iii)
|
payable
annually, in arrears, payable:
|
|
a.
|
until
the first Interest Payment Date, in arrears on September 15th of
each year
(the first such payment to be due on September 15, 2008);
and
|
|
b.
|
on
and after the first Interest Payment Date, in arrears (A) on such
first
Interest Payment Date, and (B) annually thereafter on an Interest
Payment
Date.
|
(b) Chindex
or the relevant Onshore Borrower shall pay to DEG:
|
(i)
|
a
front-end fee (“Front-end Fee”) on each Onshore Allocation of seven
hundred and seventy-five thousands of one percent (0.775%) of the
amount
of the Loan to be made to such Onshore Borrower, to be
paid:
|
|
a.
|
40%
on the date which is thirty (30) days after the date of this Agreement;
and
|
|
b.
|
60%
on September 15, 2008;
|
|
(ii)
|
a
portfolio supervision fee in the aggregate amount of $10,000 per
annum,
payable annually in advance, starting from the date of first Disbursement
of the Loan, provided, however, that after the date that the Local
Loan
Agreements become effective this portfolio fee shall be paid solely
by the
Onshore Borrowers in an amount of $5,000 each;
and
|
|
(iii)
|
if
such Onshore Borrower and DEG agree to restructure all or part of
the Loan
made to such Onshore Borrower, such Onshore Borrower and DEG shall
negotiate in good faith an
appropriate
|
|
|
amount
to compensate DEG for the additional work of DEG staff required in
connection with such restructuring.
|
Section
2.08 Currency
and Place of
Payments. (a) Each Onshore Borrower shall make
all payments of principal, interest, fees, and any other amount due to DEG
and
payable by such Onshore Borrower under its Local Loan Agreement in the Loan
Currency, in same day funds, to the account of DEG at Citibank New York,
3849-2573, Swiftcode: CITIUS 33/ABA# 0210000 89 [Chips 0008], or at
such other bank or account in New York City as DEG from time to time
designates. Payments must be received in DEG’s designated account no
later than 1:00 p.m. New York time.
(b) The
tender or payment of any amount payable under this Agreement (whether or not
by
recovery under a judgment) in any currency other than the Loan Currency shall
not novate, discharge or satisfy the obligation of the applicable Onshore
Borrower to pay in the Loan Currency all amounts payable by it under this
Agreement except to the extent that (and as of the date when) DEG actually
receives funds in the Loan Currency;
(c) Each
Onshore Borrower shall indemnify DEG against any losses resulting from a payment
being received or an order or judgment being given under this Agreement in
any
currency other than the Loan Currency or any place other than the account
specified in, or pursuant to, Section 2.08 (a). Each Onshore Borrower shall,
as
a separate obligation, pay such additional amount as is necessary to enable
DEG
to receive, after conversion to the Loan Currency at a market rate and transfer
to that account, the full amount due to DEG under this Agreement in the Loan
Currency and in the account specified in, or pursuant to, Section 2.08
(a).
(d) Notwithstanding
the provisions of Section 2.08 (a) and Section 2.08 (b), DEG may require the
applicable Onshore Borrower to pay (or reimburse DEG) for any Taxes, fees,
costs, expenses and other amounts payable by such Onshore Borrower under Section
2.14 (a) (Taxes) and Section 2.15 (Expenses) in the currency
in
which they are payable, if other than the Loan Currency.
Section
2.09 Allocation
of Partial Payments. If at any
time DEG receives less than the full amount then due and payable to it by an
Onshore Borrower under this Agreement, DEG may allocate and apply the amount
received to satisfy the payment obligations of such Onshore Borrower under
this
Agreement in any way or manner and for such purpose or purposes under this
Agreement as DEG in its sole discretion determines, notwithstanding any
instruction that such Onshore Borrower may give to the contrary.
Section
2.10 Increased
Costs. On each Interest Payment
Date, each Onshore Borrower shall pay, in addition to interest payable by it,
the amount which DEG from time to time notifies to such Onshore Borrower in
an
Increased Costs Certificate as being the aggregate Increased Costs of DEG in
connection with the Loan made to such Onshore Borrower which is accrued and
unpaid prior to that Interest Payment Date.
Section
2.11 Unwinding
Costs. (a) If DEG incurs
any cost, expense or loss as a result of any Onshore Borrower:
|
(i)
|
failing
to borrow in accordance with a request for Disbursement made by such
Onshore Borrower pursuant to Section 2.02 (Disbursement
Procedure); or
|
|
(ii)
|
failing
to prepay in accordance with a notice of prepayment delivered by
such
Onshore Borrower;
|
then
such
Onshore Borrower shall immediately pay to DEG the amount that DEG from time
to
time notifies to such Onshore Borrower as being the amount of those costs,
expenses and losses incurred.
(b) For
the
purposes of this Section, “costs, expenses or losses” include any premium,
penalty or expense incurred to liquidate or obtain third party deposits,
borrowings, ▇▇▇▇▇▇ or swaps in order to make, maintain, fund or hedge all or
any
part of any Disbursement or prepayment of the applicable Loan, or any payment
of
all or part of the applicable Loan upon acceleration.
Section
2.12 Suspension
or Cancellation by
DEG. (a) DEG may, by notice to the applicable
Onshore Borrower, suspend the right of such Onshore Borrower to Disbursements
or
cancel the undisbursed portion of the Loan to such Onshore Borrower in whole
or
in part:
|
(i)
|
if
the first Disbursement to such Onshore Borrower has not been made
by July
1, 2009, or such other later date as DEG and Chindex
agree;
|
|
(ii)
|
if
any Event of Default has occurred and is continuing;
or
|
|
(iii)
|
after
January 1, 2011.
|
(b) Upon
the
giving of any such notice, the right of the relevant Onshore Borrower to any
further Disbursement, and its obligation to make any payments of the commitment
fee set out in Section 2.07(a), shall be suspended or canceled, as the case
may
be. The exercise by DEG of its right of suspension shall not preclude DEG from
exercising its right of cancellation, either for the same or any other reason
specified in Section 2.12 (a) and shall not limit any other provision of this
Agreement. Upon any cancellation the Onshore Borrower shall, subject to
paragraph (c) of this Section 2.13, pay to DEG all fees and other amounts
accrued (whether or not then due and payable) under this Agreement up to the
date of that cancellation.
(c) In
the
case of partial cancellation of the Loan pursuant to paragraph (a) of this
Section 2.12, or Section 2.13 (a), interest on the amount then outstanding
of
the Loan remains payable as provided in Section 2.03 (Interest).
Section
2.13 Cancellation
by the Onshore Borrower. (a)
Each Onshore Borrower or Chindex may, by notice to DEG, irrevocably request
DEG
to cancel the undisbursed portion of the Loan to be made to it on the date
specified in that notice (which shall be a date not earlier than thirty (30)
days after the date of that notice).
(b) DEG
shall, by notice to the applicable Onshore Borrower or Chindex, as the case
may
be, cancel the undisbursed portion of the Loan to be made to it effective as
of
that specified date if:
|
(i)
|
subject
to Section 2.12(c), DEG has received all fees and other amounts accrued
(whether or not then due and payable) to such Onshore Borrower or
Chindex,
as the case may be, under this Agreement up to such specified date;
and
|
|
(ii)
|
if
any amount of the Loan to such Onshore Borrower is then outstanding,
DEG
is reasonably satisfied that such Onshore Borrower has sufficient
long-term funding available, on terms satisfactory to DEG, to cause
the
Project Physical Completion Date for the Project of such Onshore
Borrower
to occur as scheduled.
|
(c) Any
portion of the Loan that is cancelled under this Section 2.13 may not be
reinstated or disbursed.
Section
2.14 Taxes. (a) Each
Onshore Borrower
shall pay or cause to be paid all Taxes (other than taxes, if any, payable
on
the overall income of DEG) on or in connection with the payment of any and
all
amounts due by it under this Agreement that are now or in the future levied
or
imposed by any Authority of the Country or by any organization of which the
Country is a member or any jurisdiction through or out of which a payment by
such Onshore Borrower is made.
(b) All
payments of principal, interest, fees and other amounts due under this Agreement
shall be made without deduction for or on account of any Taxes.
(c) If
any
Onshore Borrower is prevented by operation of law or otherwise from making
or
causing to be made those payments without deduction, the principal or (as the
case may be) interest, fees or other amounts payable by it and due under this
Agreement shall be increased to such amount as may be necessary so that DEG
receives the full amount it would have received (taking into account any Taxes
payable on amounts payable by the Onshore Borrower under this subsection) had
those payments been made without that deduction.
(d) If
Section 2.13(c) applies and DEG so requests, the applicable Onshore Borrower
shall deliver to DEG official tax receipts evidencing payment (or certified
copies of them) within thirty (30) days of the date of that
request.
Section
2.15 Expenses. (a) Each
Onshore
Borrower shall pay or, as the case may be, reimburse to DEG any amount paid
by
DEG on account of, all taxes (including stamp taxes), duties, fees or other
charges payable on or in connection with the execution, issue, delivery,
registration or notarization of the Transaction Documents to which such Onshore
Borrower is a party and any other documents related to this Agreement or any
other Transaction Document to which such Onshore Borrower is a
party.
(b) Each
Onshore Borrower shall pay to DEG or as DEG may direct:
|
(i)
|
the
fees and expenses of DEG’s legal counsel in the Country incurred in
connection with:
|
|
(A)
|
the
preparation of the investment by DEG provided for under this Agreement
and
any other Transaction Document to which such Onshore Borrower is
a
party;
|
|
(B)
|
the
preparation and/or review, execution and, where appropriate, translation
and registration of the Transaction Documents to which such Onshore
Borrower is a party and any other documents related to
them;
|
|
(C)
|
the
giving of any legal opinions required by DEG under this Agreement
and any
other Transaction Document to which such Onshore Borrower is a
party;
|
|
(D)
|
the
administration by DEG of the investment provided for in this Agreement
or
otherwise in connection with any amendment, supplement or modification
to,
or waiver under, any of the Transaction Documents to which such Onshore
Borrower is a party;
|
|
(E)
|
the
registration (where appropriate) and the delivery of the evidences
of
indebtedness relating to the Loan to such Onshore Borrower and its
disbursement;
|
|
(F)
|
the
occurrence of any Event of Default or Potential Event of Default
with
respect to such Onshore Borrower;
and
|
|
(G)
|
the
release of the DEG Security following repayment in full of the Loan
by
such Onshore Borrower; and
|
|
(ii)
|
the
costs and expenses incurred by DEG in relation to efforts to enforce
or
protect its rights under any Transaction Document to which such Onshore
Borrower is a party, or the exercise of its rights or powers consequent
upon or arising out of the occurrence of any Event of Default or
Potential
Event of Default relating to such Onshore Borrower, including legal
and
other professional consultants’ fees on a full indemnity
basis.
|
Representations
and Warranties
Section
3.01 Representations
and Warranties. SPV
represents and warrants that:
(a) Organization
and
Authority. SPV is a limited liability company duly formed and
validly existing under the laws of Delaware, United States of America and has
the limited liability company power and has obtained all required Authorizations
to enter into, to deliver and to perform its obligations under, this
Agreement.
(b) the
execution and delivery by it of this Agreement and the performance by it of
its
obligations hereunder have been duly authorized;
(c) this
Agreement has been duly executed by it and constitutes its valid and legally
binding obligations enforceable in accordance with its terms and would be so
treated in the courts of its place of formation and in the courts of the State
of New York;
(d) neither
the execution and delivery by it of this Agreement nor the performance by it
of
its obligations under this Agreement conflicts or will conflict with or result
in any breach of any of the terms, conditions or provisions of, or violate
or
constitute a default or require any consent under:
|
(i)
|
any
indenture, mortgage, contract, agreement or other instrument or
arrangement to which it is a party or which is binding upon it or
any of
its property or assets, and will not result in the imposition or
creation
of any material lien, charge, or encumbrance on, or security interest
in,
any part of its property or assets pursuant to the provisions of
any such
agreement, instrument or arrangement;
or
|
|
(ii)
|
any
of the terms or provisions of its operating agreement;
or
|
|
(iii)
|
any
statute, rule or regulation or any judgment, decree or order of any
court,
governmental authority, bureau or agency known to SPV and binding
on or
applicable to it; and
|
Section
3.02 DEG
Reliance.
(a) SPV
acknowledges that it makes the representations and warranties in Section 3.01
with the intention of inducing DEG to enter into this Agreement and that SPV
enters into this Agreement on the basis of, and in full reliance on, each of
such representations and warranties.
(b) SPV
warrants to DEG that each of such representations is true and correct in all
material respects as of the date of this Agreement and that none of them omits
any matter the omission of which makes any of such representations
misleading.
Section
3.03 Rights
and Remedies not Limited. DEG’s rights
and remedies in relation to any misrepresentation or breach of warranty on
the
part of SPV are not prejudiced:
(a) by
any
investigation by or on behalf of DEG into the affairs of SPV;
(b) by
the
execution or the performance of this Agreement; or
(c) by
any
other act or thing which may be done by or on behalf of DEG in connection with
this Agreement and which might, apart from this Section, prejudice such rights
or remedies.
Conditions
of Disbursement
Section
4.01 General
Conditions of Initial
Disbursement. The obligation of DEG to make the initial
Disbursement to any Onshore Borrower is subject to the fulfillment prior to
or
concurrently with the making of that first Disbursement to such Onshore Borrower
of the following conditions:
(a) Charter
Amendments. No amendment has been made to such Onshore
Borrower’s Charter since it was delivered to DEG, or if any such amendment was
made, DEG has received a copy of such amended Charter and determined, in its
reasonable judgment, that it is not inconsistent with the provisions of the
Transaction Documents and does not have or could not reasonably be expected
to
have Material Adverse Effect;
(b) Authorizations. Such
Onshore Borrower has obtained all Authorizations that may become necessary
for:
|
(i)
|
the
Loans;
|
|
(ii)
|
the
due execution, delivery, validity and enforceability of, and performance
by such Onshore Borrower of its obligations under its Local Loan
Agreement;
|
and
all
those Authorizations are in full force and effect;
(c) Fees. DEG
has received the fees which Section 2.07 (Fees) requires to be paid before
the
date of the first Disbursement;
(d) Legal
Fees and
Expenses. DEG has received the reimbursement of all invoiced
fees and expenses of DEG’s counsel as provided in Section 2.15 (b) (i) or
confirmation that those fees and expenses have been paid directly to that
counsel, in each case, to the extent an invoice approved by the DEG has been
submitted to the Onshore Borrowers at least five (5) day prior to the
Disbursement;
(e) Incumbency. DEG
has received a Certificate of Incumbency and Authority; and
(f) Appointment
of
Agent. Such Onshore Borrower has delivered to the DEG
evidence, substantially in the form of Schedule 4 hereto, of appointment of
an
agent for service of process pursuant to the Local Loan Agreement.
(g) Special
Conditions of Disbursement. The obligation of DEG to make any
Disbursement to any Onshore
Borrower,
including the initial Disbursement to such Onshore Borrower, is subject to
the
fulfillment prior to or concurrently with the making of such Disbursement of
the
following conditions related specifically the Onshore Borrowers, its Hospital
and its Project:
|
(i)
|
Such
Onshore Borrower has been established as a Sino-foreign joint venture
enterprises under the laws of the People’s Republic of China, and has been
approved to construct, equip and operate its
Hospital;
|
|
(ii)
|
Chindex
owns no less than a 60% of the equity interest in the total registered
capital of such Onshore Borrower;
|
|
(iii)
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Chindex
exercises effective management and operational control of such Onshore
Borrower in a manner consistent with and no less favorable than,
the
management and operational control currently exercised by Chindex
over the
business and operations of Beijing United Family Health Center and
Shanghai United Family Hospital;
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(iv)
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Chindex
has made available to DEG the following information regarding such
Onshore
Borrower prior to finalization of requisite joint venture agreements
for
the establishment of the Onshore Borrowers: (A) the proposed capital
budget, including proposed working capital and contingency amounts,
the
proposed plan for the construction, commencement of operations, staffing,
training and marketing, (B) a proposed general time schedule for
the
material expenditures contemplated in such budget and (C) any other
information that DEG may have reasonably requested regarding such
Onshore
Borrower;
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(v)
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The
joint venture agreements and/or other constituent documents of such
Onshore Borrower shall provide that the joint venture parties will
receive
dividend distributions pro rata with their actual ownership interest
in
the registered capital of each of such Onshore Borrower, and no
agreement or arrangement has been entered into between the Chindex
and the
minority shareholders of such Onshore Borrower to the contrary;
and
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(vi)
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The
“Guangzhou Clinic” described and included in the Project Cost table in
Annex A shall have been opened and
operational.
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(h) Loan
Agreements with Onshore
Borrowers. The applicable Onshore Borrowers have entered into
legally binding and enforceable loan agreements with DEG on terms and conditions
substantially similar to those set forth in this Agreement (“Local Loan Agreements”), save
that:
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(i)
|
the
principal amount of the Loan stipulated under a Local Loan Agreement
shall
be the relevant Onshore Allocation for that particular Onshore
Borrower;
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(ii)
|
each
of the Local Loan Agreements shall have incorporated the special
representations as set forth in Schedule
9
hereto instead of the representations in Article III (Representations
and
Warranties) hereof;
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(iii)
|
each
of the Local Loan Agreements shall have incorporated the special
covenants
as set forth in Schedule
10
hereto instead of the covenants in Article V (Particular Covenants)
hereof; and
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(iv)
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each
of the Local Loan Agreements shall have incorporated the special
Conditions of Disbursement as set forth in Schedule
11
hereto instead of the conditions in Article IV (Conditions of
Disbursement) hereof.
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(i) Loan
and Security
Arrangements. DEG recognizes that the IFC Loan Agreement
provides that as security for the IFC Loan, IFC shall be granted a first
priority mortgage on the Projects and a first ranking pledge of the equity
interests of Chindex in the Onshore Borrowers. DEG and IFC intend to
enter into an intercreditor agreement (the “Security Sharing Agreement”) to the
effect, that irrespective of the Loan Agreement and Security Documents, as
between DEG and IFC, the security interests to be granted to DEG as security
for
the Loan as provided in this Agreement shall rank pari passu
in seniority with the security interests to be granted to IFC under the IFC
Loan
Agreement and DEG and IFC will share the proceeds of enforcement of such
security interest pro rata (based on the outstanding loan
amounts). Accordingly, if necessary to accomplish the foregoing in
view of Chinese law and procedures, subject to the Security Sharing Agreement
being entered into between DEG and IFC in form and on terms satisfactory to
DEG,
DEG will accept alternative Loan and Security Document and arrangements to
the
same effect, including, but not limited to, a mortgage which is second in
priority to IFC’s mortgage position and a pledge of the equity interests which
is subject to the prior pledge to IFC.
(j) Local
Loan Conditions
Satisfied. In respect of any Disbursement to a particular
Onshore Borrower, all of the conditions of disbursement described in the
relevant Local Loan Agreement for that Onshore Borrower shall have been
satisfied.
(k) Guarantee
Agreement by
Chindex. Chindex shall have executed and delivered to DEG the
Guarantee Agreement by Chindex of the obligations of such Onshore Borrower
under
its Local Loan Agreement. Such Guarantee shall be substantially in
the form of Exhibit 1B attached to this Agreement and shall be in full force
and
effect.
Section
4.02 Onshore
Borrower’s Certification. The
applicable Onshore Borrower shall deliver to DEG with respect to each request
for Disbursement by such Onshore Borrower:
(a) certifications,
in the form included in Schedule 2, relating to the conditions specified in
Section 4.02 (Conditions of All Disbursements) set out in Schedule 11 (other
than the condition in Section 4.02 (f) of Schedule 11) expressed to be effective
as of the date of that Disbursement; and
(b) such
evidence as DEG may reasonably request of the proposed utilization of the
proceeds of that Disbursement or the utilization of the proceeds of any prior
Disbursement.
Section
4.03 Conditions
for DEG Benefit. The conditions in
Section 4.01 through Section 4.03 are for the benefit of DEG and may be waived
only by DEG in its sole discretion.
[INTENTIONALLY
OMITTED]
Event
of Default
Section
6.01 Acceleration
after Default. If any Event of
Default occurs and is continuing (whether it is voluntary or involuntary, or
results from operation of law or otherwise), DEG may, by notice to the
applicable Onshore Borrower, require such Onshore Borrower to repay the Loan
made to it or such part of the Loan made to it as is specified in that
notice. On receipt of any such notice, the applicable Onshore
Borrower shall immediately repay the Loan (or that part of the Loan specified
in
that notice) made to it and pay all interest accrued on it, redeployment cost
and any other amounts then payable by such Onshore Borrower under this
Agreement. Each Onshore Borrower waives any right it might have to further
notice, presentment, demand or protest with respect to that demand for immediate
payment.
Section
6.02 Events
of Default. It shall be an Event of Default with respect
to each Onshore Borrower, if:
(a) Failure
to Pay Principal or Interest. Such Onshore Borrower fails to pay when
due any part of the principal of, or interest on, the Loan made to it and such
failure continues for a period of five (5) days;
(b) Failure
to Pay any Other DEG Loans. Such Onshore Borrower fails to pay when
due any part of the principal of, or interest on, any loan from DEG to such
Onshore Borrower other than the Loan and any such failure continues for the
relevant grace period allowed for in the agreement providing for that
loan;
(c) Failure
to Comply with Obligations. Such Onshore Borrower fails to comply
with any of its obligations under this Agreement or any other Transaction
Document (other than for the payment of the principal of, or interest on, the
Loan or any other loan from
DEG
to
the Onshore Borrower), and any such failure continues for a period of thirty
(30) days after the date on which DEG notifies such Onshore Borrower of that
failure;
(d) Failure
by Other Parties to Comply with Obligations. The Guarantor or Major
Shareholder fails to observe or perform any of its material obligations under
a
Transaction Document to which such a Person is a party, and any such failure
continues for a period of thirty (30) days after the date on which DEG notifies
such Onshore Borrower of that failure;
(e) Misrepresentation. Any
representation or warranty made in Article III or in connection with the
execution of, or any request (including a request for Disbursement) under,
this
Agreement or any other Transaction Document is found to be incorrect in any
material respect;
(f) Expropriation,
Nationalization, Etc. Any Authority condemns, nationalizes, seizes,
or otherwise expropriates all or any substantial part of the property or other
assets of such Onshore Borrower or of its share capital or assumes custody
or
control of that property or other assets or of the business or operations of
such Onshore Borrower or of its share capital, or takes any action for the
dissolution or disestablishment of such Onshore Borrower or any action that
would prevent such Onshore Borrower or its officers from carrying on all or
a
substantial part of its business or operations;
(g) Involuntary
Proceedings. A decree or order by a court is entered against such
Onshore Borrower:
(i) adjudging
such Onshore Borrower bankrupt or insolvent;
(ii) approving
as properly filed a petition seeking reorganization, arrangement, adjustment
or
composition of, or with respect to, the Onshore Borrower under any applicable
law;
(iii) appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Onshore Borrower or of any substantial part of its property
or
other assets; or
(iv) ordering
the winding up or liquidation of its affairs;
or
any
petition is filed seeking any of the above and is not dismissed within thirty
(30) days;
(h) Voluntary
Proceedings. Such Onshore Borrower:
(i) requests
a moratorium or suspension of payment of Liabilities from any
court;
(ii) institutes
proceedings or takes any form of corporate action to be liquidated, adjudicated
bankrupt or insolvent;
(iii) consents
to the institution of bankruptcy or insolvency proceedings against
it;
(iv) files
a
petition or answer or consent seeking reorganization or relief under any
applicable law, or consents to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other
similar official) of the Onshore Borrower or of any substantial part of its
property;
(v) makes
a
general assignment for the benefit of creditors; or
(vi) admits
in
writing its inability to pay its Liabilities generally as they become due or
otherwise becomes insolvent;
(i) Attachment. An
attachment or analogous process is levied or enforced upon or issued against
any
of the assets of such Onshore Borrower for an amount in excess of the equivalent
of Five Million Dollars ($5,000,000) and is not discharged within forty five
(45) days;
(j) Analogous
Events to
Bankruptcy. Any other event with respect to such Onshore
Borrower occurs which under any applicable law would have an effect analogous
to
any of those events listed in Section 6.02 (g), Section 6.02(h) and Section
6.02
(i);
(k) Cross-Default. Such
Onshore Borrower fails to make any payment in respect of any of its Liabilities
(other than the Loan) with an amount exceeding One Million Dollars ($1,000,000)
or to perform any of its obligations under any agreement pursuant to which
there
is outstanding any Liability with an amount exceeding One Million Dollars
($1,000,000), and any such failure continues for more than any applicable period
of grace or any such Liability becomes prematurely due and payable or is placed
on demand;
(l) Failure
to Maintain
Authorizations. Any Authorization necessary for the Chindex or
such Onshore Borrower to perform and observe its obligations under any
Transaction Document, or to carry out the Project, is not obtained when required
or is rescinded, terminated, lapses or otherwise ceases to be in full force
and
effect, including with respect to the remittance to DEG or its assignees, in
the
Loan Currency, of any amounts payable under any Transaction Document, and is
not
restored or reinstated within thirty (30) days of notice by DEG to such Onshore
Borrower requiring that restoration or reinstatement;
(m) Revocation,
Etc., of
Security Documents. Any Security Document or any of its
material provisions:
(i) is
revoked, terminated or ceases to be in full force and effect or ceases to
provide the security intended, without, in each case, the prior consent of
DEG;
(ii) becomes
unlawful or is declared void; or
(iii) is
repudiated or and any such repudiation continues for a period of thirty (30)
days during which period such repudiation has no effect;
(n) Revocation
of Transaction
Documents. Any Transaction Document (other than a Security
Document) or any of its material provisions:
(i) is
revoked, terminated or ceases to be in full force and effect without, in each
case, the prior consent of DEG, and that event, if capable of being remedied,
is
not remedied to the satisfaction of DEG within thirty (30) days of DEG’s notice
to the Onshore Borrower; or
(ii) becomes
unlawful or is declared void; or
(iii) is
repudiated and such repudiation is not withdrawn within thirty (30) days of
DEG’s notice to the Onshore Borrower requiring that withdrawal; provided that no
such notice shall be required or, as the case may be, the notice period shall
terminate if and when such repudiation becomes effective;
(o) Non-Performance
of Project
Documents. Any of the Project Documents:
(i) is
breached by any party to it and such breach has or could reasonably be expected
to have a Material Adverse Effect; or
(ii) is
revoked, terminated or ceases to be in full force and effect without the prior
consent of DEG, or performance of any of the material obligations under any
such
agreement becomes unlawful or any such agreement is declared to be void or
is
repudiated by any party to it; and
(p) Bankruptcy
of
Chindex. Any of the events specified in Sections 6.02 (f)
through 6.02 (i) occurs to Chindex.
Section
6.03 Bankruptcy. If
any Onshore Borrower is
liquidated or declared bankrupt, the Loan to such Onshore Borrower, all interest
accrued on it and any other amounts payable under this Agreement by such Onshore
Borrower will become immediately due and payable without any presentment,
demand, protest or notice of any kind, all of which such Onshore Borrower
waives.
Miscellaneous
Section
7.01 Saving
of Rights. (a) The rights
and remedies of DEG in relation to any misrepresentation or breach of warranty
on the part of Chindex or any Onshore Borrower shall not be prejudiced by any
investigation by or on behalf of DEG into the affairs of Chindex or such Onshore
Borrower, by the execution or the performance of this Agreement or by any other
act or thing which may be done by or on behalf of DEG in connection with this
Agreement and which might, apart from this Section, prejudice such rights or
remedies.
(b) No
course
of dealing or waiver by DEG in connection with any condition of Disbursement
of
the Loan under any Local Loan Agreements shall impair any right, power or remedy
of DEG with respect to any other condition of Disbursement under such Local
Loan
Agreements, or be construed to be a waiver thereof; nor shall the action of
DEG
with respect to
any
Disbursement affect or impair any right, power or remedy of DEG with respect
to
any other Disbursement.
(c) Unless
otherwise notified to Chindex by DEG and without prejudice to the generality
of
Section 7.01 (b), the right of DEG to require compliance with any condition
under any Local Loan Agreement that may be waived by DEG with respect to any
Disbursement under such Local Loan Agreement is expressly preserved for the
purposes of any subsequent Disbursement under such Local Loan
Agreement.
(d) No
course
of dealing and no failure or delay by DEG in exercising, in whole or in part,
any power, remedy, discretion, authority or other right under this Agreement
or
any other agreement shall waive or impair, or be construed to be a waiver of,
such or any other power, remedy, discretion, authority or right under this
Agreement, or in any manner preclude its additional or future exercise; nor
shall the action of DEG with respect to any default, or any acquiescence by
it
therein, affect or impair any right, power or remedy of DEG with respect to
any
other default.
Section
7.02 Notices. Any
notice, request or other
communication to be given or made under this Agreement shall be in
writing. Subject to Section 5.01 (Covenants) and Section 7.05
(Enforcement), any such communication may be delivered by hand, airmail,
facsimile or established courier service to the party’s address specified below
or at such other address as such party notifies to the other party from time
to
time, and will be effective upon receipt.
|
For
SPV:
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Chindex
China Healthcare Finance, LLC
c/o
Chindex International, Inc.
|
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▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
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▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attn:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, CEO of Chindex
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, CFO of
Chindex
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Facsimile:
301 215-7719
502
427 0409
|
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With
a copy sent by e-mail to the attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
CEO,
and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, CFO, at:
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|
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E-mail
addresses: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ and
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
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For
DEG:
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DEG
– Deutsche Investitions – und Entwicklungsgesellschaft
mbH
|
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▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇
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▇▇▇▇▇
▇▇▇▇
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Federal
Republic of Germany
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Attn:
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Facsimile: +
▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
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Section
7.03 English
Language. (a) All
documents to be provided or communications to be given or made under this
Agreement shall be in the English language.
(b) To
the
extent that the original version of any document to be provided, or
communication to be given or made, to DEG under this Agreement or any other
Transaction Document is in a language other than English, that document or
communication shall be accompanied by an English translation certified by an
Authorized Representative to be a true and correct translation of the
original. DEG may, if it so requires, obtain an English translation
of any document or communication received in a language other than English
at
the cost and expense of applicable Onshore Borrower. DEG may deem any
such English translation to be the governing version between the Onshore
Borrower and DEG.
Section
7.04 Term
of Agreement. Each Local Loan Agreement
shall continue in force until all monies payable under it have been fully paid
in accordance with its provisions. This Loan Agreement shall
automatically terminate upon the execution and delivery of both Local Loan
Agreements by DEG and by the Onshore Borrowers.
Section
7.05 Enforcement. (a) This
Agreement
shall be governed by and construed in accordance with the laws of the State
of
New York, United States of America.
(b) For
the
exclusive benefit of DEG, SPV irrevocably agrees that any legal action, suit
or
proceeding arising out of or relating to this Agreement may be brought in the
courts of the United States of America located in the Southern District of
New
York or in the courts of the State of New York located in the Borough of
Manhattan. By the execution of this Agreement, SPV irrevocably submits to the
jurisdiction of any such court in any such action, suit or proceeding. Final
judgment against SPV in any such action, suit or proceeding shall be conclusive
and may be enforced in any other jurisdiction, including the Country, by suit
on
the judgment, a certified or exemplified copy of which shall be conclusive
evidence of the judgment, or in any other manner provided by law.
(c) Nothing
in this Agreement shall affect the right of SPV to commence legal proceedings
or
otherwise ▇▇▇ SPV or any Onshore Borrower in the Country or any other
appropriate jurisdiction, or concurrently in more than one jurisdiction, or
to
serve process, pleadings and other legal papers upon SPV or any Onshore Borrower
in any manner authorized by the laws of any such jurisdiction.
(d) SPV
hereby irrevocably designates, appoints and empowers CT Corporation System,
with
offices currently located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, as its authorized agent solely to receive for and on its behalf service
of any summons, complaint or other legal process in any action, suit or
proceeding DEG may bring in the State of New York in respect of this
Agreement.
(e) As
long
as this Agreement remains in force, SPV shall maintain a duly appointed and
authorized agent to receive for and on its behalf service of any summons,
complaint or other legal process in any action, suit or proceeding DEG may
bring
in New York, New York, United States of America, with respect to this
Agreement. SPV shall keep DEG advised of the identity and location of
such agent.
(f) SPV
also
irrevocably consents, if for any reason its authorized agent for service of
process of summons, complaint and other legal process in any action, suit or
proceeding is not present in New York, New York, to the service of such papers
being made out of the courts of the United States of America located in the
Southern District of New York and the courts of the State of New York located
in
the Borough of Manhattan by mailing copies of the papers by registered United
States air mail, postage prepaid, to SPV, at its address specified pursuant
to
Section 7.02 (Notices). In such a case, DEG shall also send by facsimile, or
have sent by facsimile, a copy of the papers to SPV.
(g) Service
in the manner provided in Sections 7.05 (d), (e) and (f) in any action, suit
or
proceeding will be deemed personal service, will be accepted by SPV as such
and
will be valid and binding upon the Onshore Borrower for all purposes of any
such
action, suit or proceeding.
(h) SPV
irrevocably waives to the fullest extent permitted by applicable
law:
|
(i)
|
any
objection which it may have now or in the future to the laying of
the
venue of any action, suit or proceeding in any court referred to
in this
Section;
|
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(ii)
|
any
claim that any such action, suit or proceeding has been brought in
an
inconvenient forum;
|
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(iii)
|
its
right of removal of any matter commenced by DEG in the courts of
the State
of New York to any court of the United States of America;
and
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(iv)
|
any
and all rights to demand a trial by jury in any such action, suit
or
proceeding brought against such party by
DEG.
|
(i) To
the
extent that DEG may be entitled in any jurisdiction to claim for itself or
its
assets immunity in respect of its obligations under this Agreement or any other
Transaction Document to which it is a party, from any suit, execution,
attachment (whether provisional or final, in aid of execution, before judgment
or otherwise) or other legal process or to the extent that in any jurisdiction
that immunity (whether or not claimed) may be attributed to it or its assets,
SPV irrevocably agrees not to claim and irrevocably waives such immunity to
the
fullest extent permitted now or in the future by the laws of such
jurisdiction.
(j) SPV
hereby waives any and all rights to demand a trial by jury in any action, suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated by this Agreement, brought against DEG in any forum in which DEG
is
not entitled to immunity from a trial by jury.
(k) To
the
extent that SPV may, in any action, suit or proceeding brought in any of the
courts referred to in Section 7.05 (b) or a court of the Country or elsewhere
arising out of or in connection with this Agreement or any other Transaction
Document to which SPV is a party, be entitled to the benefit of any provision
of
law requiring DEG in such action, suit or proceeding to post security for the
costs of SPV, or to post a bond or to take similar action, SPV hereby
irrevocably waives such benefit, in each case to the fullest extent now or
in
the future permitted under the laws of the Country or, as the case may be,
the
jurisdiction in which such court is located.
Section
7.06 Disclosure
of Information. (a) DEG
may disclose any documents or records of, or information about, this Agreement
or any other Transaction Document, or the assets, business or affairs of SPV
to:
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(i)
|
its
outside counsel, auditors and rating
agencies,
|
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(ii)
|
any
Person who intends to purchase a participation in a portion of the
Loan or
any Participant, and
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(iii)
|
any
other Person as DEG may deem appropriate in connection with any proposed
sale, transfer, assignment or other disposition of DEG’s rights under this
Agreement or any Transaction Document or otherwise for the purpose
of
exercising any power, remedy, right, authority, or discretion relevant
to
this Agreement or any other Transaction
Document.
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(iv)
|
SPV
acknowledges and agrees that, notwithstanding the terms of any other
agreement between SPV and DEG, a disclosure of information by DEG
in the
circumstances contemplated by Section 7.06 (a) does not violate any
duty
owed to SPV under this Agreement or under any such other
agreement.
|
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a.
|
SPV
is aware that DEG is a wholly-owned subsidiary of Kreditanstalt für
Wiederaufbau (“KfW”) and a
member of
the KfW Bankengruppe. The members of the KfW Bankengruppe are
KfW, DEG, FuB – Finanzierungs- und Beratungsgesellschaft mbH, Berlin and
such further entities as listed on the website of the KfW Bankengruppe
(▇▇▇.▇▇▇.▇▇).
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b.
|
DEG
shall be entitled to disclose confidential information (e.g., any
data as
to legal status, business and financial condition, privacy data,
etc.) it
receives in connection with this financing to any member of the KfW
Bankengruppe at any given date. Since within the KfW
Bankengruppe a central corporate risk management and a standardised
controlling will be performed, it may be necessary to forward special
client data and/or documents within KfW Bankengruppe. This
client data and/or documents
include:
|
|
|
forward
special client data and/or documents within KfW
Bankengruppe. This client data and/or documents
include:
|
· data
provided by the client;
· documents
and data developed by DEG relating to the client.
The
client data and/or documents will be forwarded exclusively to members of the
KfW
Bankengruppe and will not be made available to any person outside the KfW
Bankengruppe. All members of the KfW Bankengruppe will treat any
client data forwarded to them in compliance with the legal provisions as
prescribed by the Federal Data Protection Law (“Bundesdatenschutzgesetz”) and
the rules on banking secrecy.
|
c.
|
With
reference to the above information under a) and b) the SPVhereby
agrees to
the transfer of client data within the KfW Bankengruppe for the purposes
of central corporate risk management and standardised controlling
and, to
such extent, expressly release DEG from banking secrecy rules, the
provisions of the Federal Data Protection Law (“Bundesdatensschutzgesetz”)
and any separately concluded confidentiality
agreement.
|
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d.
|
If
an entity ceases to be a member of the KfW Bankengruppe, DEG shall
no
longer be entitled to disclose information to the relative
entity. The relative entity shall destroy or return the
information disclosed to it.
|
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(v)
|
The
disclosure by DEG may also be required or requested in order to fulfil
legal, judicial or regulatory requirements. SPV consents to any
such disclosure.
|
Section
7.07 Successors
and Assignees. This Agreement
binds and benefits the respective successors and assignees of the parties.
However, SPV may not assign or delegate any of its rights or obligations under
this Agreement without the prior consent of DEG.
Section
7.08 Amendments,
Waivers and Consents. Any
amendment or waiver of, or any consent given under, any provision of this
Agreement shall be in writing and, in the case of an amendment, signed by the
parties.
Section
7.09 Counterparts. This
Agreement may be executed
in several counterparts, each of which is an original, but all of which together
constitute one and the same agreement.
Section
7.10 Local
Loan Agreement; Separate
Transactions. It is the intention of the parties that the
transactions contemplated hereby be documented under separate Local
Loan
Agreements,
and related Transaction Documents, for each Onshore Borrower as soon as such
Onshore Borrower is formed and validly existing. Accordingly, upon
execution of a Local Loan Agreement by an Onshore Borrower, SPV’s obligations
hereunder with respect to such Onshore Borrower shall immediately
terminate.
[Signature
pages to follow]
IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed in their
respective names as of the date first above written.
|
CHINDEX
HEALTHCARE FINANCE, LLC
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||
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By:
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CHINDEX INTERNATIONAL, INC., as member | |
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By:
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/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
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Name:
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
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Title:
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Chief Financial Officer | |
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DEG
– DEUTSCHE INVESTITIONS – UND
ENTWICKLUNGSGESELLSCHAFT
mbH
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||
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By:
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/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ von Plettenberg | |
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Name:
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▇▇▇▇▇▇▇▇ ▇▇▇▇ von Plettenberg | |
|
Title:
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First
Vice President
Manufacturing
Industry/Services
|
|
|
|
|
|
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ |
| ▇▇▇▇▇▇ ▇▇▇▇▇ | |
| Senior Investment Manager |
43
SPV
GUARANTEE AGREEMENT
This
AGREEMENT (the “Agreement”)
is made
on January 8, 2007,
Between
|
(1)
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CHINDEX
INTERNATIONAL, INC. (the “Guarantor”),
a
NASDAQ listed company incorporated in the State of Delaware in
the United
States with an office address at Chindex International, Inc., ▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
and
|
|
(2)
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DEG
– Deutsche Investitions-und Entwicklungsgesellschaft mbH (“DEG”),
a
limited liability company organized in the Federal Republic of
Germany
with its legal office at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇ , ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of Germany.
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Whereas:
(A) By
a loan
agreement (the “DEG
Loan Agreement”) dated January 8, 2007 between Chindex, China Healthcare
Finance, LLC (“SPV”) and DEG, DEG has agreed to extend to the Onshore Borrowers
(as defined therein) (each a “Borrower”
and
collectively, the “Borrowers”) a loan
in
the total amount of Twenty Million Dollars ($20,000,000) (the “DEG Loan”), such
total loan amount to be allocated between the Borrowers on the terms and
subject
to the conditions set forth in the DEG Local Loan Agreements.
(B) The
Guarantor has been provided with, and hereby acknowledges receipt of, a copy
of
the DEG Loan Agreement.
(C) As
an
inducement to DEG to enter into the DEG Loan Agreement, the Guarantor has
agreed
to guaranty the obligations of SPV in respect of the DEG Loan
Agreement.
(D) SPV
is a
wholly-owned subsidiary of the Guarantor and the Borrowers will be subsidiaries
of the Guarantor. The Guarantor will obtain benefits as a result of
the DEG Loan made to the Borrowers and, accordingly, desires to execute and
deliver this Guarantee Agreement in order to provide the inducement as described
in the preceding paragraph.
NOW,
THEREFORE, the Guarantor
and DEG agree as follows:
ARTICLE
I
Definitions
and Interpretation
Section
1.1 Defined
Terms. Unless the context otherwise requires, terms defined in
the DEG Local Loan Agreements have the same meanings when used in this Agreement
and each of the following terms have the meaning opposite it:
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“Auditors”
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BDO ▇▇▇▇▇▇▇,
LLP or its
affiliates, or such other internationally
reputable
|
|
accounting
firm that the Guarantor appoints from time to time as its
auditors;
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|
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“Financial
Year”
|
the
accounting year of the Guarantor commencing each year on April
1 and
ending on the following March 31, or such other period as the
Guarantor,
with DEG’s consent, from time to time designates as its accounting
year.
|
Section
1.2 Guaranteed
Obligations. In this Agreement, the term “Guaranteed
Obligations” means all debts and monetary liabilities of SPV to DEG under or in
relation to the DEG Loan Agreement and in any capacity irrespective of whether
the debts or liabilities:
(a) are
present or future;
(b) are
actual or contingent;
(c) are
at
any time ascertained or unascertained;
(d) are
owed
or incurred by or on account of the SPV alone, or severally or jointly with
any
other Person;
(e) are
owed
or incurred to or for the account of DEG alone, or severally or jointly with
any
other Person;
(f) are
owed
or incurred as principal, interest, fees, charges, taxes, duties or other
imposts, damages (whether for breach of contract or tort or incurred on any
other ground), losses, costs or expenses, or on any other account;
or
(g) comprise
any combination of the above.
Section
1.3 Interpretation. In
this Agreement, unless the context otherwise requires:
(a) headings
are for convenience only and do not affect the interpretation of this
Agreement;
(b) words
importing the singular include the plural and vice versa;
(c) a
reference to a Section, Article, paragraph, party, Annex, Exhibit or Schedule
is
a reference to that Section, Article or paragraph of, or that party, Annex,
Exhibit or Schedule to, this Agreement;
(d) a
reference to a document includes an amendment or supplement to, or replacement
or novation of, that document but disregarding any amendment, supplement,
replacement or novation made in breach of this Agreement; and
(e) a
reference to a party to any document includes that party’s successors and
permitted assigns.
ARTICLE
II
Guarantee
Section
2.1 Guarantee. (a) The
Guarantor irrevocably, absolutely and unconditionally:
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(i)
|
as
principal obligor and not merely as surety, guarantees
to DEG the due and punctual payment of the Guaranteed Obligations;
and
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|
(ii)
|
undertakes
with DEG that whenever the SPV does not pay any amount of the Guaranteed
Obligations when due the Guarantor will, upon demand by DEG, pay
that
amount to DEG, in the currency prescribed in the DEG Loan Agreement,
and
otherwise in the same manner in all respects as the Guaranteed
Obligations
are required to be paid by the SPV.
|
(b) The
Guarantor waives notice of acceptance of this Agreement and notice of any
liability to which it may apply, and waives presentment, demand of payment,
protest, notice of dishonor or nonpayment of any such liability, suit or
taking
of other action by DEG against, and any other notice to, any party liable
thereon (including such Guarantor or any other guarantor).
Section
2.2 Continuing
Guarantee. (a) The guarantee contained in this
Agreement is a continuing obligation of the Guarantor (and all liabilities
to
which it applies or may apply under the terms of this Agreement shall be
conclusively presumed to have been created in reliance on this Agreement),
notwithstanding any settlement of account or the occurrence of any other
thing,
and shall remain in full force and effect until the Guaranteed Obligations
have
been fully paid strictly in accordance with the provisions of the DEG Loan
Agreement, regardless of any intermediate payment or discharge.
(b) The
guarantee contained in this Agreement shall be an additional, separate and
independent obligation of the Guarantor.
(c) The
Guarantor’s obligations under this Agreement can be discharged only by payment
and then only to the extent of such payment. These obligations are
not subject to any prior notice to, demand upon or action against the SPV
or to
any prior notice to the Guarantor with regard to any default by the
SPV.
Section
2.3 No
Set-off. All payments which the Guarantor is required to make
under this Agreement shall be without any set-off, counterclaim or
condition.
Section
2.4 Taxes. (a) The
Guarantor shall pay or cause to be paid all present and future taxes, duties,
fees and other charges of whatsoever nature, if any, now or in the future
levied
or imposed by the Government of the PRC or by any Authority or any jurisdiction
through or out of which a payment is made on or in connection with the payment
of any and all amounts due under this Agreement.
(b) All
payments due under this Agreement shall be made without deduction for or
on
account of any such taxes, duties, fees or other charges.
(c) If
the
Guarantor is prevented by operation of law or otherwise from making or causing
to be made such payments without deduction, the amounts due under this Agreement
shall be increased to such amount as may be necessary so that DEG receives
the
full amount it would have received (taking into account any such taxes, duties,
fees or other charges payable on amounts payable by the Guarantor under this
subsection) had such payments been made without such deduction.
(d) If
subsection (c) above applies and DEG so requires, the Guarantor shall deliver
to
DEG official tax receipts evidencing payment (or certified copies of them)
within thirty (30) days of the date of payment.
Section
2.5 Certificate
Conclusive. A certificate of DEG stating:
(a) the
amount of the Guaranteed Obligations due and payable; or
(b) any
amount due and payable by the Guarantor under this Agreement; or
(c) the
amount of the Guaranteed Obligations, whether currently due and payable or
not,
shall be conclusive in the absence of manifest error.
Section
2.6 Application
of Payments. DEG may apply any amounts received by it or
recovered under:
(a) any
Security; and
(b) any
other
document or agreement which is a security for any of the Guaranteed Obligations
and any other moneys, in such manner as it determines in its absolute
discretion.
Section
2.7 Allocation. If
the Guarantor at any time pays to DEG an amount less than the full amount
then
due and payable to DEG under this Agreement, DEG may allocate and apply such
payment to the Guaranteed Obligations in any way or manner and for such purpose
or purposes as DEG in its sole discretion determines, notwithstanding any
instruction that the Guarantor might give to the contrary.
ARTICLE
III
Saving
Provisions
Section
3.1 Waiver
of Defenses. The Guarantor’s obligations under this Guarantee
shall not be affected or impaired by any act, omission, circumstance (other
than
complete payment of the Guaranteed Obligations), matter or thing which, but
for
this provision, would reduce, release or prejudice any of its obligations
under
this Agreement or which might otherwise constitute a legal or equitable
discharge or defense of a surety or a guarantor, including (whether or not
known
to the Guarantor or to DEG):
(a) any
time,
waiver, composition, forbearance or concession given to the SPV or any other
person;
(b) any
assertion of, or failure to assert, or delay in asserting, any right, power
or
remedy against the SPV or any other person, or in respect of any security
for
the Loan;
(c) any
amplification, amendment (however fundamental), variation or replacement
of the
provisions of any Transaction Document or of any other agreement or security
between DEG and the SPV;
(d) any
failure of the SPV or the Guarantor to comply with any requirement of any
law,
regulation or order;
(e) the
dissolution, liquidation, reorganization or other alteration of the legal
status
or structure of the SPV or the Guarantor;
(f) any
purported or actual assignment of the Loan by DEG to any other party;
or
(g) the
DEG
Loan Agreement or any other Transaction Document being in whole or in part
illegal, void, voidable, avoided, invalid, unenforceable or otherwise of
limited
force and effect.
Section
3.2 Immediate
Recourse. The Guarantor waives any right it may have of first
requiring DEG (or any trustee, agent or other person acting on its behalf)
to
proceed against or enforce any other rights or security or claim payment
from
any person before claiming from the Guarantor under this Agreement.
Section
3.3 Non-Subrogation,
etc. (a) If
any amounts have become payable or have been paid by the Guarantor under
this
Agreement, the Guarantor shall not, in respect of such monies, seek to enforce
repayment, obtain the benefit of any security or exercise any other rights
or
legal remedies of any kind which may accrue to the Guarantor against the
SPV,
whether by way of subrogation, offset, counterclaim or otherwise, in respect
of
the amount so payable or so paid (or in respect of any other monies for the
time
being due to the Guarantor from the SPV) if and for so long as any Guaranteed
Obligations remain payable.
The
Guarantor shall hold in trust for, and forthwith pay or transfer to, DEG
any
payment or distribution or benefit of security received by it contrary to
this
Section 3.3.
(b) Upon
the
payment and satisfaction in full of all the Guaranteed Obligations and of
all
sums now or in future becoming due to DEG from the Guarantor pursuant to
this
Agreement, the Guarantor, if it has made a payment under this Agreement,
shall
be entitled to exercise its rights of subrogation to its proportion of all
relevant rights of DEG against the SPV pursuant to the DEG Loan
Agreement. DEG shall promptly execute, at the expense of the
Guarantor, an assignment and such other documents in such form as the Guarantor
may reasonably request to transfer such proportion of such rights of DEG
against
the SPV to the Guarantor as are required for the Guarantor to obtain the
full
benefit of such subrogation. The Guarantor shall enforce such rights
directly against the SPV in its own name and not in the name of
DEG.
Section
3.4 Bankruptcy
or Liquidation of the SPV. If the SPV is adjudged bankrupt or
insolvent, or a receiver, liquidator, assignee, trustee, sequestrator (or
other
similar official) of the SPV, or any substantial part of its property or
other
assets, is appointed, or the SPV makes any
arrangement
with its creditors, or is liquidated or wound up, the Guarantor shall not
claim,
rank, prove or vote as a creditor of the SPV or its estate in competition
with
DEG in respect of any amounts owing to the Guarantor by the SPV on any account
whatsoever, but instead shall give DEG the benefit of any such proof and
of all
amounts to be received in respect of that proof until all Guaranteed Obligations
have been fully paid.
Section
3.5 Appropriation
of Monies. Until all of the Guaranteed Obligations have been
irrevocably paid in full, DEG (or any trustee, agent or other person acting
on
its behalf) may:
(a) refrain
from applying or enforcing any other monies, security or rights held or received
by DEG (or such trustee, agent or other person) in respect of the Guaranteed
Obligations, or apply and enforce the same in such manner and order as it
sees
fit (whether against the Guaranteed Obligations or otherwise) and the Guarantor
shall not be entitled to the benefit of the same; and
(b) hold
and
keep for such time as it thinks prudent any monies received, recovered or
realized under this Agreement, to the credit either of the Guarantor or such
other person or persons as it thinks fit or in a suspense account.
Section
3.6 Reinstatement. (a) Where
any discharge (whether in respect of the obligations of the SPV, the Guarantor
or any security for those obligations or otherwise) is made in whole or in
part
or any arrangement is made on the faith of any payment, security or other
disposition which is avoided or must be restored on insolvency, liquidation
or
otherwise without limitation, the liability of the Guarantor under this
Agreement shall continue or shall be reinstated (as the case may be) as if
such
discharge or arrangement had not occurred.
(b) DEG
(or
any trustee, agent or other person acting on its behalf) may concede or
compromise any claim that any payment, security or other disposition is liable
to avoidance or restoration.
Section
3.7 Additional
Security. This Agreement is in addition to and is not in any
way prejudiced by any collateral or other security now or in future held
by DEG,
nor shall such collateral or other security held by DEG or the liability
of any
person for all or any part of the Guaranteed Obligations be in any manner
prejudiced or affected by this Agreement.
ARTICLE
IV
Representations
and Warranties
Section
4.1 Representations
and Warranties. The Guarantor represents and warrants that as
of the date of this Agreement:
(a) it
is a
company duly organized and validly existing under the laws of its place of
establishment, and has the corporate power to enter into and deliver and
to
perform its obligations under this Agreement;
(b) the
execution and delivery by it of this Agreement and the performance by it
of its
obligations hereunder have been duly authorized;
(c) this
Agreement has been duly executed by it and constitutes its valid and legally
binding obligations enforceable in accordance with its terms and would be
so
treated in the courts of its place of incorporation and any other jurisdiction
to which the Guarantor has agreed to submit in this Agreement;
(d) neither
the execution and delivery by it of this Agreement nor the performance by
it of
its obligations under this Agreement conflicts or will conflict with or result
in any breach of any of the terms, conditions or provisions of, or violate
or
constitute a default or require any consent under:
(i) any
indenture, mortgage, contract, agreement or other instrument or arrangement
to
which it is a party or which purports to be binding upon it or any of its
property or assets, and will not result in the imposition or creation of
any
material lien, charge, or encumbrance on, or security interest in, any part
thereof pursuant to the provisions of any such agreement, instrument or
arrangement; or
(ii) any
of
the terms or provisions of its memorandum or articles of association or by-laws;
or
(iii) any
statute, rule or regulation or any judgment, decree or order of any court,
governmental authority, bureau or agency known to the Guarantor and binding
on
or applicable to it; and
(e) all
Authorizations required for the execution and delivery of this Agreement
by it
and the performance by it of its obligations hereunder, have been duly obtained
or granted and are in full force and effect.
Section
4.2 DEG
Reliance. (a) The Guarantor acknowledges that it
makes the representations in Section 4.1 with the intention of inducing DEG
to
enter into this Agreement and the DEG Loan Agreement and that DEG enters
into
this Agreement and the DEG Loan Agreement on the basis of, and in full reliance
on, each of such representations.
(b) The
Guarantor warrants to DEG that each of such representations is true and correct
in all material respects as of the date of this Agreement and that none of
them
omits any matter the omission of which makes any of such representations
misleading.
Section
4.3 Rights
and Remedies not Limited. DEG’s rights and remedies in
relation to any misrepresentation or breach of warranty on the part of the
Guarantor are not prejudiced:
(a) by
any
investigation by or on behalf of DEG into the affairs of the
Guarantor;
(b) by
the
execution or the performance of this Agreement; or
(c) by
any
other act or thing which may be done by or on behalf of DEG in connection
with
this Agreement and which might, apart from this Section, prejudice such rights
or remedies.
ARTICLE
V
Covenants
Section
5.1 Guarantor’s
Affirmative Covenants. Unless DEG otherwise agrees in writing,
Guarantor shall:
(a) Clinic
Dividends. Ensure that: (i) all dividends and distributable
profits from the Clinics are, to the extent not payable to relevant domestic
joint venture partners or domestic co-investors, distributed directly or
indirectly through an Affiliate to the relevant Borrower or the Guarantor
and
not through any other Person; and (ii) all income from any management contracts
between any Clinic and the Guarantor or any other company affiliated with
the
Guarantor is paid directly or indirectly to the Guarantor or the relevant
Borrower;
(b) Quarterly
Reports. As soon as available or within sixty (60) days after
the end of each quarter of each Financial Year, whichever is later, furnish
to
DEG two (2) copies of its financial statements for such period prepared on
a
Consolidated Basis in accordance with the Accounting Principles, which
requirement is deemed satisfied if such filings have been made publicly
available and a notice has been sent to DEG regarding the availability of
those
filings;
(c) Annual
Reports. As soon as available or within one hundred and twenty
(120) days after the end of each Financial Year, whichever is later, furnish
to
DEG two (2) copies of its financial statements for such Financial Year (which
are in agreement with its books of account and prepared on a Consolidated
Basis
in accordance with the Accounting Principles), together with an audit report
on
them, all in form reasonably satisfactory to DEG, which requirement is deemed
satisfied if such filings have been made publicly available and a notice
has
been sent to DEG regarding the availability of those filings;
(d) Auditor
Certification. As soon as available or within one hundred and
twenty (120) days after the end of each Financial Year, whichever is later,
provide a report by the Auditor certifying that, on the basis of its financial
statements, Guarantor was in compliance with financial covenants under this
Agreement (including a clear methodology of the calculation of such covenants);
and
(e) Filings. Provide
DEG a copy of all filings that have been made by Guarantor with the Securities
and Exchange Commission of the United States and/or other Stock Exchange
on
which Guarantor stock is listed within five (5) Business Days after relevant
filling is made which requirement is deemed satisfied if such filings have
been
made available through ▇▇▇▇▇ and a notice has been sent to DEG regarding
the
availability of those filings in ▇▇▇▇▇.
Section
5.2 Guarantor’s
Negative Covenants. Unless
DEG otherwise
agrees, Guarantor shall not:
(a) Financial
Debt. Incur any additional Financial Debt, unless after giving
effect of such debt transaction:
|
(i)
|
the
Liabilities to Tangible Net Worth Ratio is not greater than 1.2;
and
|
|
(ii)
|
The
Peak Debt Service Coverage Ratio is not less than
1.2.
|
(b) Dividends. declare
or pay any cash dividend, make any other cash distribution on its equity,
or
make any payment under any shareholder loans unless:
|
(i)
|
the
Project Physical Completion Date of both Projects has
occurred;
|
|
(ii)
|
first
principal repayment of the Loan has been
made;
|
|
(iii)
|
in
the case of dividends, such payment would be made out of retained
earnings;
|
|
(iv)
|
the
Peak Debt Service Coverage Ratio is not less than 1.2
and
|
|
(v)
|
after
giving effect to such payment:
|
|
(A)
|
no
Event of Default or Potential Event of Default exists or is
continuing;
|
|
(B)
|
the
Current Ratio is not less than 1.5;
and
|
|
(C)
|
the
Liabilities to Tangible Net Worth Ratio is not greater than
1.0.
|
(c) Guarantees. Guarantee
or assume the Liabilities of others except for its Subsidiaries;
(d) Leases. Enter
into leases other than Financial Leases, if the aggregate payments are in
excess
of $2,000,000 in any financial year;
(e) Loans. Make
loans or advances to, deposits (except commercial bank deposits) with or
investments in other persons except for its subsidiaries other than short-term
investment grade marketable securities;
(f) Merger
of
Subsidiaries. Merge, consolidate, reorganize, or dispose of
any of the Borrowers or Beijing UFH or Beijing United Family Health Center
or
Shanghai United Family Hospital Inc., or merge, consolidate, reorganize,
or
dispose of any other Subsidiaries if such action has or could reasonably
be
expected to have a Material Adverse Effect;
(g) Practices. Engage
in any corrupt, fraudulent, coercive, collusive or obstructive practice related
to the Projects; and
(h) Make
any
principal payment of the Tranche B Note or Tranche C Note, each as defined
in
the Security Purchase Agreement by and between Chindex and Magenta Magic
Limited, dated November 7, 2007, in each case before the maturity of such
Tranche B Note and Tranche C Note, as the case may be.
(i) Liens
on Equity in the
Borrowers. Encumber, mortgage, pledge or otherwise secure any
interest in the registered capital of the Borrowers for the benefit of any
third
party, other than to IFC and DEG and in accordance
with
the Share Pledge Agreement.
ARTICLE
VI
Miscellaneous
Section
6.1 Notices. Any
notice, request or other communication to be given or made under this Agreement
to DEG or to the Guarantor shall be in writing and shall be deemed to have
been
duly given or made when it is delivered by hand, airmail, established courier
service or facsimile to the party to which it is required or permitted to
be
given or made at such party’s address specified below or at such other address
as such party has designated by notice to the other party hereto.
For
the
Guarantor:
Chindex
International, Inc.
▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇
▇▇▇▇▇▇, CEO
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, CFO
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
With
a
copy sent by e-mail to the attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, CEO, and
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, CFO, at:
E-mail
addresses: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
and
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
For
DEG:
DEG
–
Deutsche Investitions-und Entwicklungsgesellschaft mbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of Germany
Attn:
________________________
Facsimile:
+ 49-221- 4986-1290
Section
6.2 English
Language. All documents to be furnished or communications to
be given or made under this Agreement shall be in the English language or,
if in
another language, shall be accompanied by a translation into English
satisfactory to DEG certified by a representative of the Guarantor, which
translation shall be the governing version between the Guarantor and
DEG.
Section
6.3 Expenses. The
Guarantor shall pay to DEG or as DEG may direct:
(a) the
fees
and expenses of DEG’s counsel in the PRC, Delaware and New York incurred in
connection with:
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(i)
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the
preparation and/or review, execution and, where appropriate, stamping
or
registration of this Agreement;
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(ii)
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the
giving of any legal opinions required by DEG under this Agreement;
and
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(iii)
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any
amendment, supplement or modification to, or waiver under, this
Agreement;
and
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(b) the
costs
and expenses incurred by DEG in relation to the enforcement or protection
or
attempted enforcement or protection of its rights under this Agreement,
including legal and other professional consultants’ fees.
Section
6.4 Remedies
and Waivers. No failure or delay by DEG in exercising any
power, remedy, discretion, authority or other rights under this Agreement
shall
waive or impair that or any other right of DEG. No single or partial
exercise of such a right shall preclude its additional or future
exercise. No such waiver shall waive any other right under this
Agreement. All waivers or consents given under this Agreement shall
be in writing.
Section
6.5 Jurisdiction
and Enforcement. (a) This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, United States of America.
(b) For
the
exclusive benefit of DEG, the Guarantor irrevocably agrees that any legal
action, suit or proceeding arising out of or relating to this Agreement may
be
brought by DEG in the courts of the State of New York or of the United States
of
America located in the Southern District of New York. Final judgment
against the Guarantor in any such action, suit or proceeding shall be conclusive
and may be enforced in any other jurisdiction, including the PRC, by suit
on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the judgment, or in any other manner provided by law.
(c) By
the
execution of this Agreement, the Guarantor irrevocably submits to the
non-exclusive jurisdiction of such Court in any such action, suit or proceeding
and designates, appoints and empowers CT Corporation System, with
offices
currently located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
as its authorized agent to receive for and on its behalf service of
the
writ of summons or other legal process in any such action, suit or proceeding
in
the State of New York.
(d) Nothing
in this Agreement shall affect the right of DEG to commence legal proceedings
or
otherwise ▇▇▇ the Guarantor in the PRC or any other appropriate jurisdiction,
or
concurrently in more than one jurisdiction, or to serve process, pleadings
and
other papers upon the Guarantor in any manner authorized by the laws of any
such
jurisdiction.
(e) As
long
as this Agreement remains in force, the Guarantor shall maintain a duly
appointed agent for the service of summons, complaint and other legal process
in
New York, New York, United States of America, for purposes of any legal action,
suit or proceeding
brought
by DEG in respect of this Agreement. The Guarantor shall keep DEG
advised of the identity and location of such agent.
(f) The
Guarantor also irrevocably consents, if for any reason the Guarantor’s
authorized agent for service of process of summons, complaint and other legal
process in any such action, suit or proceeding is not present in New York,
New
York, to service of such papers being made out of those courts by mailing
copies
of the papers by registered United States air mail or by certified United
States
mail, Return Receipt Requested, postage prepaid, to the Guarantor at its
address
specified in Section 6.1. In such a case, DEG shall also send by
telex or facsimile, or have sent by telex or facsimile, a copy of the papers
to
SPV.
(g) Service
in the manner provided in subsection (f) above in any such action, suit or
proceeding will be deemed personal service, will be accepted by the Guarantor
as
such and will be valid and binding upon the Guarantor for all purposes of
any
such action, suit or proceeding.
(h) The
Guarantor irrevocably waives to the fullest extent permitted by applicable
law:
(i) any
objection which it may have now or in the future to the laying of the venue
of
any such action, suit or proceeding in any court referred to in this
Section;
(ii) any
claim
that any such action, suit or proceeding has been brought in an inconvenient
forum;
(iii) its
right
of removal of any matter commenced by DEG in the courts of the State of New
York
to any court of the United States of America; and
(iv) any
and
all rights to demand a trial by jury in any such action, suit or proceeding
brought against the Guarantor by DEG.
(i) To
the
extent that the Guarantor may be entitled in any jurisdiction to claim for
itself or its assets immunity in respect of its obligations under this Guarantee
from any suit, execution, attachment (whether provisional or final, in aid
of
execution, before judgment or otherwise) or other legal process or to the
extent
that in any jurisdiction such immunity (whether or not claimed), may be
attributed to it or its assets, the Guarantor irrevocably agrees not to claim
and irrevocably waives such immunity to the fullest extent permitted by the
laws
of such jurisdiction.
(j) The
Guarantor hereby waives any and all rights to demand a trial by jury in any
action, suit or proceeding arising out of or relating to this Agreement or
the
transactions contemplated by this Agreement brought against DEG in any forum
in
which DEG is not entitled to immunity from a trial by jury.
(k) To
the
extent that the Guarantor may, in any suit, action or proceeding brought
in any
of the courts referred to in paragraph (b) above or a court of the PRC or
elsewhere arising out of or in connection with this Agreement, be entitled
to
the benefit of any provision of law
requiring
DEG in such suit, action or proceeding to post security for the costs of
the
Guarantor (cautiojudicatumsolvi),
or to post a
bond or to take similar action, the Guarantor hereby irrevocably waives such
benefit, in each case to the fullest extent now or in the future permitted
under
the laws of the PRC or, as the case may be, the jurisdiction in which such
court
is located.
Section
6.6 Successors
and Assigns. This Agreement binds and inures to the benefit of
the respective successors and assigns of the parties, except that the Guarantor
may not assign or otherwise transfer all or any part of its rights or
obligations under this Agreement without the prior written consent of
DEG. The benefit of this Agreement may be freely and unconditionally
assigned, transferred or otherwise disposed of, in whole or in part, by DEG
to
any other person, corporate or otherwise.
Section
6.7 Amendment. Any
amendment of any provision of this Agreement shall be in writing and signed
by
the parties.
Section
6.8 Counterparts. This
Agreement may be executed in several counterparts, each of which is an original,
but all of which together constitute one and the same agreement.
Section
6.9 Termination. Upon
the execution of a Local Loan Agreement by a Borrower the Guarantor’s
obligations hereunder with respect to such Borrower shall immediately
terminate.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto, acting through their duly authorized
representatives, have caused this Agreement to be signed in their respective
names as of the date first above written.
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CHINDEX
INTERNATIONAL, INC.
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By:
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Authorized
Representative
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Name:
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(print)
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Title:
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DEG
- Deutsche Investitions-und
Entwicklungsgesellschaft
mbH
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By:
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Authorized
Representative
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Name:
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(print)
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Title:
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ONSHORE
BORROWER GUARANTEE AGREEMENT
This
AGREEMENT (the “Agreement”)
is made
on [_______________],
Between
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(1)
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CHINDEX
INTERNATIONAL, INC. (the “Guarantor”),
a
NASDAQ listed company incorporated in the State of Delaware in
the United
States with an office address at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and
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(2)
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DEG
– Deutsche Investitions-und Entwicklungsgesellschaft mbH (“DEG”),
a
limited liability company organized in the Federal Republic of
Germany
with its legal office at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇ , ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of Germany.
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Whereas:
(A) By
a loan
agreement (the “DEG
Loan Agreement”) dated [___________] between [the Onshore
Borrower] (“Borrower”)
and DEG,
DEG has agreed to extend to the Borrower a loan in the amount of _________
Million Dollars ($_________) (the “DEG Loan”), on
the
terms and subject to the conditions set forth in the DEG Loan
Agreements.
(B) The
Guarantor has been provided with, and hereby acknowledges receipt of, a
copy of
the Loan Agreement.
(C) It
is a
condition of the Disbursement under the DEG Loan Agreement that the Guarantor
has guaranteed the obligations of the Borrower in respect of the Loan on
terms
and conditions satisfactory to DEG.
(D) The
Borrower is a subsidiary of the Guarantor and the Guarantor will obtain
benefits
as a result of the DEG Loan made to the Borrower and, accordingly, desires
to
execute and deliver this Guarantee Agreement in order to satisfy the condition
described in the preceding paragraph.
(E) The
Guarantor, to induce DEG to make the DEG Loan and, in particular, the first
disbursement of the DEG Loan, has agreed to guarantee such obligations
of the
Borrower.
NOW,
THEREFORE, the Guarantor
and DEG agree as follows:
ARTICLE
I
Definitions
and Interpretation
Section
1.1 Defined
Terms. Unless the context otherwise requires, terms defined in
the Loan Agreement have the same meanings when used in this Agreement and
each
of the following terms have the meaning opposite it:
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“Auditors”
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BDO ▇▇▇▇▇▇▇,
LLP or its
affiliates, or such other internationally reputable accounting
firm that
the Guarantor appoints from time to time as its
auditors;
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“Financial
Year”
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the
accounting year of the Guarantor commencing each year on April
1 and
ending on the following March 31, or such other period as the
Guarantor,
with DEG’s consent, from time to time designates as its accounting
year.
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Section
1.2 Guaranteed
Obligations. In this Agreement, the term “Guaranteed
Obligations” means all debts and monetary liabilities of the Borrower to DEG
under or in relation to the Loan Agreement, in any capacity
irrespective of whether the debts or liabilities:
(a) are
present or future;
(b) are
actual or contingent;
(c) are
at
any time ascertained or unascertained;
(d) are
owed
or incurred by or on account of the Borrower alone, or severally or jointly
with
any other Person;
(e) are
owed
or incurred to or for the account of DEG alone, or severally or jointly
with any
other Person;
(f) are
owed
or incurred as principal, interest, fees, charges, taxes, duties or other
imposts, damages (whether for breach of contract or tort or incurred on
any
other ground), losses, costs or expenses, or on any other account;
or
(g) comprise
any combination of the above.
Section
1.3 Interpretation. In
this Agreement, unless the context otherwise requires:
(a) headings
are for convenience only and do not affect the interpretation of this
Agreement;
(b) words
importing the singular include the plural and vice versa;
(c) a
reference to a Section, Article, paragraph, party, Annex, Exhibit or Schedule
is
a reference to that Section, Article or paragraph of, or that party, Annex,
Exhibit or Schedule to this Agreement;
(d) a
reference to a document includes an amendment or supplement to, or replacement
or novation of, that document but disregarding any amendment, supplement,
replacement or novation made in breach of this Agreement; and
(e) a
reference to a party to any document includes that party’s successors and
permitted assigns.
ARTICLE
II
Guarantee
Section
2.1 Guarantee. (a) The
Guarantor irrevocably, absolutely and unconditionally:
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(i)
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as
principal obligor and not merely as surety, guarantees
to DEG the due and punctual payment of the Guaranteed Obligations;
and
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(ii)
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undertakes
with DEG that whenever the Borrower does not pay any amount of
the
Guaranteed Obligations when due the Guarantor will, upon demand
by DEG,
pay that amount to DEG, in the currency prescribed in the DEG
Local Loan
Agreements, and otherwise in the same manner in all respects
as the
Guaranteed Obligations are required to be paid by the
Borrower.
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(b) The
Guarantor waives notice of acceptance of this Agreement and notice of any
liability to which it may apply, and waives presentment, demand of payment,
protest, notice of dishonor or nonpayment of any such liability, suit or
taking
of other action by DEG against, and any other notice to, any party liable
thereon (including such Guarantor or any other guarantor).
Section
2.2 Continuing
Guarantee. (a) The guarantee contained in this
Agreement is a continuing obligation of the Guarantor (and all liabilities
to
which it applies or may apply under the terms of this Agreement shall be
conclusively presumed to have been created in reliance on this Agreement),
notwithstanding any settlement of account or the occurrence of any other
thing,
and shall remain in full force and effect until the Guaranteed Obligations
have
been fully paid strictly in accordance with the provisions of the DEG Local
Loan
Agreements, regardless of any intermediate payment or discharge.
(a) The
guarantee contained in this Agreement shall be an additional, separate
and
independent obligation of the Guarantor.
(b) The
Guarantor’s obligations under this Agreement can be discharged only by payment
and then only to the extent of such payment. These obligations are
not subject to any prior notice to, demand upon or action against the Borrower
or to any prior notice to the Guarantor with regard to any default by the
Borrower.
Section
2.3 No
Set-off. All payments which the Guarantor is required to make
under this Agreement shall be without any set-off, counterclaim or
condition.
Section
2.4 Taxes. (a) The
Guarantor shall pay or cause to be paid all present and future taxes, duties,
fees and other charges of whatsoever nature, if any, now or in the future
levied
or imposed by the Government of the PRC or by any Authority or any jurisdiction
through or out of which a payment is made on or in connection with the
payment
of any and all amounts due under this Agreement.
(b) All
payments due under this Agreement shall be made without deduction for or
on
account of any such taxes, duties, fees or other charges.
(c) If
the
Guarantor is prevented by operation of law or otherwise from making or
causing
to be made such payments without deduction, the amounts due under this
Agreement
shall be increased to such amount as may be necessary so that DEG receives
the
full amount it would have received (taking into account any such taxes,
duties,
fees or other charges payable on amounts payable by the Guarantor under
this
subsection) had such payments been made without such deduction.
(d) If
subsection (c) above applies and DEG so requires, the Guarantor shall deliver
to
DEG official tax receipts evidencing payment (or certified copies of them)
within thirty (30) days of the date of payment.
Section
2.5 Certificate
Conclusive. A certificate of DEG stating:
(a) the
amount of the Guaranteed Obligations due and payable; or
(b) any
amount due and payable by the Guarantor under this Agreement; or
(c) the
amount of the Guaranteed Obligations, whether currently due and payable
or not,
shall be conclusive in the absence of manifest error.
Section
2.6 Application
of Payments. DEG may apply any amounts received by it or
recovered under:
(a) any
Security; and
(b) any
other
document or agreement which is a security for any of the Guaranteed Obligations
and any other moneys, in such manner as it determines in its absolute
discretion.
Section
2.7 Allocation. If
the Guarantor at any time pays to DEG an amount less than the full amount
then
due and payable to DEG under this Agreement, DEG may allocate and apply
such
payment to the Guaranteed Obligations in any way or manner and for such
purpose
or purposes as DEG in its sole discretion determines, notwithstanding any
instruction that the Guarantor might give to the contrary.
ARTICLE
III
Saving
Provisions
Section
3.1 Waiver
of Defenses. The Guarantor’s obligations under this Guarantee
shall not be affected or impaired by any act, omission, circumstance (other
than
complete payment of the Guaranteed Obligations), matter or thing which,
but for
this provision, would reduce, release or prejudice any of its obligations
under
this Agreement or which might otherwise constitute a legal or equitable
discharge or defense of a surety or a guarantor, including (whether or
not known
to the Guarantor or to DEG):
(a) any
time,
waiver, composition, forbearance or concession given to the Borrower or
any
other person;
(b) any
assertion of, or failure to assert, or delay in asserting, any right, power
or
remedy against the Borrower or any other person, or in respect of any security
for the Loan;
(c) any
amplification, amendment (however fundamental), variation or replacement
of the
provisions of any Transaction Document or of any other agreement or security
between DEG and the Borrower;
(d) any
failure of the Borrower or the Guarantor to comply with any requirement
of any
law, regulation or order;
(e) the
dissolution, liquidation, reorganization or other alteration of the legal
status
or structure of the Borrower or the Guarantor;
(f) any
purported or actual assignment of the Loan by DEG to any other party;
or
(g) the
DEG
Local Loan Agreements or any other Transaction Document being in whole
or in
part illegal, void, voidable, avoided, invalid, unenforceable or otherwise
of
limited force and effect.
Section
3.2 Immediate
Recourse. The Guarantor waives any right it may have of first
requiring DEG (or any trustee, agent or other person acting on its behalf)
to
proceed against or enforce any other rights or security or claim payment
from
any person before claiming from the Guarantor under this Agreement.
Section
3.3 Non-Subrogation,
etc. (a) If any amounts have become payable or have
been paid by the Guarantor under this Agreement, the Guarantor shall not,
in
respect of such monies, seek to enforce repayment, obtain the benefit of
any
security or exercise any other rights or legal remedies of any kind which
may
accrue to the Guarantor against the Borrower, whether by way of subrogation,
offset, counterclaim or otherwise, in respect of the amount so payable
or so
paid (or in respect of any other monies for the time being due to the Guarantor
from the Borrower) if and for so long as any Guaranteed Obligations remain
payable.
The
Guarantor shall hold in trust for, and forthwith pay or transfer to, DEG
any
payment or distribution or benefit of security received by it contrary
to this
Section 3.3.
(b) Upon
the
payment and satisfaction in full of all the Guaranteed Obligations and
of all
sums now or in future becoming due to DEG from the Guarantor pursuant to
this
Agreement, and provided that DEG is not under any further obligation (actual
or
contingent) to advance monies to the Borrower under the DEG Local Loan
Agreement, the Guarantor, if it has made a payment under this Agreement,
shall
be entitled to exercise its rights of subrogation to its proportion of
all
relevant rights of DEG against the Borrower pursuant to the DEG Local Loan
Agreement. DEG shall promptly execute, at the expense of the Guarantor,
an
assignment and such other documents in such form as the Guarantor may reasonably
request to transfer such proportion of such rights of DEG against the Borrower
to the Guarantor as are required for the
Guarantor
to obtain the full benefit of such subrogation. The Guarantor shall
enforce such rights directly against the Borrower in its own name and not
in the
name of DEG.
Section
3.4 Bankruptcy
or Liquidation of Borrower. If the Borrower is adjudged
bankrupt or insolvent, or a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Borrower, or any substantial
part of its property or other assets, is appointed, or the Borrower makes
any
arrangement with its creditors, or is liquidated or wound up, the Guarantor
shall not claim, rank, prove or vote as a creditor of the Borrower or its
estate
in competition with DEG in respect of any amounts owing to the Guarantor
by the
Borrower on any account whatsoever, but instead shall give DEG the benefit
of
any such proof and of all amounts to be received in respect of that proof
until
all Guaranteed Obligations have been fully paid.
Section
3.5 Appropriation
of Monies. Until all of the Guaranteed Obligations have been
irrevocably paid in full, DEG (or any trustee, agent or other person acting
on
its behalf) may:
(a) refrain
from applying or enforcing any other monies, security or rights held or
received
by DEG (or such trustee, agent or other person) in respect of the Guaranteed
Obligations, or apply and enforce the same in such manner and order as
it sees
fit (whether against the Guaranteed Obligations or otherwise) and the Guarantor
shall not be entitled to the benefit of the same; and
(b) hold
and
keep for such time as it thinks prudent any monies received, recovered
or
realized under this Agreement, to the credit either of the Guarantor or
such
other person or persons as it thinks fit or in a suspense account.
Section
3.6 Reinstatement. (a) Where
any discharge (whether in respect of the obligations of the Borrower, the
Guarantor or any security for those obligations or otherwise) is made in
whole
or in part or any arrangement is made on the faith of any payment, security
or
other disposition which is avoided or must be restored on insolvency,
liquidation or otherwise without limitation, the liability of the Guarantor
under this Agreement shall continue or shall be reinstated (as the case
may be)
as if such discharge or arrangement had not occurred.
(b) DEG
(or
any trustee, agent or other person acting on its behalf) may concede or
compromise any claim that any payment, security or other disposition is
liable
to avoidance or restoration.
Section
3.7 Additional
Security. This Agreement is in addition to and is not in any
way prejudiced by any collateral or other security now or in future held
by DEG,
nor shall such collateral or other security held by DEG or the liability
of any
person for all or any part of the Guaranteed Obligations be in any manner
prejudiced or affected by this Agreement.
ARTICLE
IV
Representations
and Warranties
Section
4.1 Representations
and Warranties. The Guarantor represents and warrants that as
of the date of this Agreement:
(a) it
is a
company duly organized and validly existing under the laws of its place
of
establishment, and has the corporate power to enter into and deliver and
to
perform its obligations under this Agreement;
(b) the
execution and delivery by it of this Agreement and the performance by it
of its
obligations hereunder have been duly authorized;
(c) this
Agreement has been duly executed by it and constitutes its valid and legally
binding obligations enforceable in accordance with its terms and would
be so
treated in the courts of its place of incorporation and any other jurisdiction
to which the Guarantor has agreed to submit in this Agreement;
(d) neither
the execution and delivery by it of this Agreement nor the performance
by it of
its obligations under this Agreement conflicts or will conflict with or
result
in any breach of any of the terms, conditions or provisions of, or violate
or
constitute a default or require any consent under:
(i) any
indenture, mortgage, contract, agreement or other instrument or arrangement
to
which it is a party or which purports to be binding upon it or any of its
property or assets, and will not result in the imposition or creation of
any
material lien, charge, or encumbrance on, or security interest in, any
part
thereof pursuant to the provisions of any such agreement, instrument or
arrangement; or
(ii) any
of
the terms or provisions of its memorandum or articles of association or
by-laws;
or
(iii) any
statute, rule or regulation or any judgment, decree or order of any court,
governmental authority, bureau or agency known to the Guarantor and binding
on
or applicable to it; and
(e) all
Authorizations required for the execution and delivery of this Agreement
by it
and the performance by it of its obligations hereunder, have been duly
obtained
or granted and are in full force and effect.
Section
4.2 DEG
Reliance. (a) The Guarantor acknowledges that it
makes the representations in Section 4.1 with the intention of inducing
DEG to
enter into this Agreement and the Loan Agreement and that DEG enters into
this
Agreement and the DEG Loan Agreement on the basis of, and in full reliance
on,
each of such representations.
(b) The
Guarantor warrants to DEG that each of such representations is true and
correct
in all material respects as of the date of this Agreement and that none
of them
omits any matter the omission of which makes any of such representations
misleading.
Section
4.3 Rights
and Remedies not Limited. DEG’s rights and remedies in
relation to any misrepresentation or breach of warranty on the part of
the
Guarantor are not prejudiced:
(a) by
any
investigation by or on behalf of DEG into the affairs of the
Guarantor;
(b) by
the
execution or the performance of this Agreement; or
(c) by
any
other act or thing which may be done by or on behalf of DEG in connection
with
this Agreement and which might, apart from this Section, prejudice such
rights
or remedies.
ARTICLE
V
Covenants
Section
5.1 Guarantor’s
Affirmative Covenants. Unless DEG otherwise agrees in writing,
Guarantor shall:
(a) Clinic
Dividends. Ensure that: (i) all dividends and distributable
profits from the Clinics are, to the extent not payable to relevant domestic
joint venture partners or domestic co-investors, distributed directly or
indirectly through an Affiliate to the Borrower or the Guarantor and not
through
any other Person; and (ii) all income from any management contracts between
any
Clinic and the Guarantor or any other company affiliated with the Guarantor
is
paid directly or indirectly to the Guarantor or the Borrower;
(b) Quarterly
Reports. As soon as available or within sixty (60) days after
the end of each quarter of each Financial Year, whichever is later, furnish
to
DEG two (2) copies of its financial statements for such period prepared
on a
Consolidated Basis in accordance with the Accounting Principles, which
requirement is deemed satisfied if such filings have been made publicly
available and a notice has been sent to DEG regarding the availability
of those
filings;
(c) Annual
Reports. As soon as available or within one hundred and twenty
(120) days after the end of each Financial Year, whichever is later, furnish
to
DEG two (2) copies of its financial statements for such Financial Year
(which
are in agreement with its books of account and prepared on a Consolidated
Basis
in accordance with the Accounting Principles), together with an audit report
on
them, all in form reasonably satisfactory to DEG, which requirement is
deemed
satisfied if such filings have been made publicly available and a notice
has
been sent to DEG regarding the availability of those filings;
(d) Auditor
Certification. As soon as available or within one hundred and
twenty (120) days after the end of each Financial Year, whichever is later,
provide a report by the Auditor certifying that, on the basis of its financial
statements, Guarantor was in compliance with financial covenants under
this
Agreement (including a clear methodology of the calculation of such covenants);
and
(e) Filings. Provide
DEG a copy of all filings that have been made by Guarantor with the Securities
and Exchange Commission of the United States and/or other Stock Exchange
on
which Guarantor stock is listed within five (5) Business Days after relevant
filling is made which requirement is deemed satisfied if such filings have
been
made available through ▇▇▇▇▇ and a notice has been sent to DEG regarding
the
availability of those filings in ▇▇▇▇▇.
Section
5.2 Guarantor’s
Negative Covenants. Unless DEG otherwise agrees, Guarantor
shall not:
(a) Financial
Debt. Incur any additional Financial Debt, unless after giving
effect of such debt transaction:
|
(i)
|
the
Liabilities to Tangible Net Worth Ratio is not greater than 1.2;
and
|
|
(ii)
|
The
Peak Debt Service Coverage Ratio is not less than
1.2.
|
(b) Dividends. declare
or pay any cash dividend, make any other cash distribution on its equity,
or
make any payment under any shareholder loans unless:
|
(i)
|
the
Project Physical Completion Date of both Projects has
occurred;
|
|
(ii)
|
first
principal repayment of the Loan has been
made;
|
|
(iii)
|
in
the case of dividends, such payment would be made out of retained
earnings;
|
|
(iv)
|
the
Peak Debt Service Coverage Ratio is not less than 1.2
and
|
|
(v)
|
after
giving effect to such payment:
|
|
(A)
|
no
Event of Default or Potential Event of Default exists or is
continuing;
|
|
(B)
|
the
Current Ratio is not less than 1.5;
and
|
|
(C)
|
the
Liabilities to Tangible Net Worth Ratio is not greater than
1.0.
|
(c) Guarantees. Guarantee
or assume the Liabilities of others except for its Subsidiaries;
(d) Leases. Enter
into leases other than Financial Leases, if the aggregate payments are
in excess
of $2,000,000 in any financial year;
(e) Loans. Make
loans or advances to, deposits (except commercial bank deposits) with or
investments in other persons except for its subsidiaries other than short-term
investment grade marketable securities;
(f) Merger
of
Subsidiaries. Merge, consolidate, reorganize, or dispose of
any of the Borrower or Beijing UFH or Beijing United Family Health Center
or
Shanghai United Family Hospital Inc., or merge, consolidate, reorganize,
or
dispose of any other Subsidiaries if such action has or could reasonably
be
expected to have a Material Adverse Effect;
(g) Practices. Engage
in any corrupt, fraudulent, coercive, collusive or obstructive practice
related
to the Projects; and
(h) Make
any
principal payment of the Tranche B Note or Tranche C Note, each as defined
in
the Security Purchase Agreement by and between Chindex and Magenta Magic
Limited,
dated November 7, 2007, in each case before the maturity of such Tranche
B Note
and Tranche C Note, as the case may be.
(i) Liens
on Equity in the
Borrower. Encumber, mortgage, pledge or otherwise secure any
interest in the registered capital of the Borrower for the benefit of any
third
party, other than to IFC and DEG and in accordance
with
the Share Pledge Agreement.
ARTICLE
VI
Miscellaneous
Section
6.1 Notices. Any
notice, request or other communication to be given or made under this Agreement
to DEG or to the Guarantor shall be in writing and shall be deemed to have
been
duly given or made when it is delivered by hand, airmail, established courier
service or facsimile to the party to which it is required or permitted
to be
given or made at such party’s address specified below or at such other address
as such party has designated by notice to the other party hereto.
For
the
Guarantor:
Chindex
International, Inc.
▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇
▇▇▇▇▇▇, CEO
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, CFO
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
With
a
copy sent by e-mail to the attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, CEO, and
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, CFO, at:
E-mail
addresses: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
and
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
For
DEG:
DEG
–
Deutsche
Investitions-und
Entwicklungsgesellschaft mbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of
Germany
Facsimile: +
49-221- 4986-1290
Section
6.2 English
Language. All documents to be furnished or communications to
be given or made under this Agreement shall be in the English language
or, if in
another language, shall be accompanied by a translation into English
satisfactory to DEG certified by a representative of the Guarantor, which
translation shall be the governing version between the Guarantor and
DEG.
Section
6.3 Expenses. The
Guarantor shall pay to DEG or as DEG may direct:
(a) the
fees
and expenses of DEG’s counsel in the PRC, Delaware and New York incurred in
connection with:
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(i)
|
the
preparation and/or review, execution and, where appropriate,
stamping or
registration of this Agreement;
|
|
(ii)
|
the
giving of any legal opinions required by DEG under this Agreement;
and
|
|
(iii)
|
any
amendment, supplement or modification to, or waiver under, this
Agreement;
and
|
(b) the
costs
and expenses incurred by DEG in relation to the enforcement or protection
or
attempted enforcement or protection of its rights under this Agreement,
including legal and other professional consultants’ fees.
Section
6.4 Remedies
and Waivers. No failure or delay by DEG in exercising any
power, remedy, discretion, authority or other rights under this Agreement
shall
waive or impair that or any other right of DEG. No single or partial exercise
of
such a right shall preclude its additional or future exercise. No
such waiver shall waive any other right under this Agreement. All
waivers or consents given under this Agreement shall be in writing.
Section
6.5 Jurisdiction
and Enforcement. (a) This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
New
York, United States of America.
(b) For
the
exclusive benefit of DEG, the Guarantor irrevocably agrees that any legal
action, suit or proceeding arising out of or relating to this Agreement
may be
brought by DEG in the courts of the State of New York or of the United
States of
America located in the Southern District of New York. Final judgment
against the Guarantor in any such action, suit or proceeding shall be conclusive
and may be enforced in any other jurisdiction, including the PRC, by suit
on the
judgment, a certified or exemplified copy of which shall be conclusive
evidence
of the judgment, or in any other manner provided by law.
(c) By
the
execution of this Agreement, the Guarantor irrevocably submits to the
non-exclusive jurisdiction of such Court in any such action, suit or proceeding
and designates, appoints and empowers CT Corporation System, with
offices
currently located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
as its authorized agent to receive for and on its behalf service
of the
writ of summons or other legal process in any such action, suit or proceeding
in
the State of New York.
(d) Nothing
in this Agreement shall affect the right of DEG to commence legal proceedings
or
otherwise ▇▇▇ the Guarantor in the PRC or any other appropriate jurisdiction,
or
concurrently in more than one jurisdiction, or to serve process, pleadings
and
other papers upon the Guarantor in any manner authorized by the laws of
any such
jurisdiction.
(e) As
long
as this Agreement remains in force, the Guarantor shall maintain a duly
appointed agent for the service of summons, complaint and other legal process
in
New York, New York, United States of America, for purposes of any legal
action,
suit or proceeding brought by DEG in respect of this Agreement. The Guarantor
shall keep DEG advised of the identity and location of such agent.
(f) The
Guarantor also irrevocably consents, if for any reason the Guarantor’s
authorized agent for service of process of summons, complaint and other
legal
process in any such action, suit or proceeding is not present in New York,
New
York, to service of such papers being made out of those courts by mailing
copies
of the papers by registered United States air mail, postage prepaid, to
the
Guarantor at its address specified in Section 6.1. In such a case,
DEG shall also send by telex or facsimile, or have sent by telex or facsimile,
a
copy of the papers to the Borrowers.
(g) Service
in the manner provided in subsection (f) above in any such action, suit
or
proceeding will be deemed personal service, will be accepted by the Guarantor
as
such and will be valid and binding upon the Guarantor for all purposes
of any
such action, suit or proceeding.
(h) The
Guarantor irrevocably waives to the fullest extent permitted by applicable
law:
(i) any
objection which it may have now or in the future to the laying of the venue
of
any such action, suit or proceeding in any court referred to in this
Section;
(ii) any
claim
that any such action, suit or proceeding has been brought in an inconvenient
forum;
(iii) its
right
of removal of any matter commenced by DEG in the courts of the State of
New York
to any court of the United States of America; and
(iv) any
and
all rights to demand a trial by jury in any such action, suit or proceeding
brought against the Guarantor by DEG.
(i) To
the
extent that the Guarantor may be entitled in any jurisdiction to claim
for
itself or its assets immunity in respect of its obligations under this
Guarantee
from any suit, execution, attachment (whether provisional or final, in
aid of
execution, before judgment or otherwise) or other legal process or to the
extent
that in any jurisdiction such immunity (whether or not claimed), may be
attributed to it or its assets, the Guarantor irrevocably agrees not to
claim
and irrevocably waives such immunity to the fullest extent permitted by
the laws
of such jurisdiction.
(j) The
Guarantor hereby waives any and all rights to demand a trial by jury in
any
action, suit or proceeding arising out of or relating to this Agreement
or the
transactions contemplated by this Agreement brought against DEG in any
forum in
which DEG is not entitled to immunity from a trial by jury.
(k) To
the
extent that the Guarantor may, in any suit, action or proceeding brought
in any
of the courts referred to in paragraph (b) above or a court of the PRC
or
elsewhere arising out of or in connection with this Agreement, be entitled
to
the benefit of any provision of law requiring DEG in such suit, action
or
proceeding to post security for the costs of the Guarantor (cautiojudicatumsolvi),
or to post a
bond or to take similar action, the Guarantor hereby irrevocably waives
such
benefit, in each case to the fullest extent now or in the future permitted
under
the laws of the PRC or, as the case may be, the jurisdiction in which such
court
is located.
Section
6.6 Successors
and Assigns. This Agreement binds and inures to the benefit of
the respective successors and assigns of the parties, except that the Guarantor
may not assign or otherwise transfer all or any part of its rights or
obligations under this Agreement without the prior written consent of
DEG. The benefit of this Agreement may be freely and unconditionally
assigned, transferred or otherwise disposed of, in whole or in part, by
DEG to
any other person, corporate or otherwise.
Section
6.7 Amendment. Any
amendment of any provision of this Agreement shall be in writing and signed
by
the parties.
Section
6.8 Counterparts. This
Agreement may be executed in several counterparts, each of which is an
original,
but all of which together constitute one and the same agreement.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto, acting through their duly authorized
representatives, have caused this Agreement to be signed in their respective
names as of the date first above written.
|
CHINDEX
INTERNATIONAL, INC.
|
||
|
By:
|
||
|
Authorized
Representative
|
||
|
Name:
|
(print)
|
|
|
Title:
|
||
|
DEG
- Deutsche Investitions-und
Entwicklungsgesellschaft
mbH
|
||
|
By:
|
||
|
Authorized
Representative
|
||
|
Name:
|
(print)
|
|
|
Title:
|
||
FORM
OF MORTGAGE
AGREEMENT
Mortgage
Agreement
between
[ONSHORE
BORROWER]
and
[LENDER]
Dated
_________, 200[ ]
MORTGAGE
AGREEMENT
This
MORTGAGE AGREEMENT (the “Agreement”) is made and entered into as of _________,
200[ ], by and between:
|
(1)
|
[Onshore
Borrower] (the
“Borrower”),
a [Chinese-foreign
equity joint
venture enterprise] with
limited liability organized
and existing under the
laws of the People’s
Republic of China (“PRC”)
with its legal address at:
[ ], PRC;
and
|
|
(2)
|
[Lender]
(“Lender”), with its office at
____________________________________________.
|
in
accordance with the PRC Property Rights Law (the “Property Rights Law”), the PRC
Security Law (the “Security Law”), the Law of the PRC on the Administration of
Urban Real Property (the “Real Property Law”), the Provisional Regulations of
the PRC on the Grant and Transfer of State-Owned Land-Use Rights in Cities
and
Townships, the Measures on Movable Assets Mortgage Registration, the
Administrative Measures on Registration of Rights and Ownership of Buildings
in
Cities, as amended, the Notice on Issues Concerning Registration of Land-Use
Rights Mortgage and other relevant laws and regulations of the PRC.
WHEREAS:
(A)
Subject to the terms and conditions of a Loan Agreement dated [ ], 200[ ]
between the Borrower and Lender (the “Loan Agreement”),
Lender
has agreed to
lend the Borrower up to [ ]
Dollars ($ ) (the
“Loan”);
(B)
In consideration of, and as security for, the amounts provided by Lender under the Loan
Agreement the Borrower has agreed to provide certain collateral (the
“Collateral”, as defined in Article 1 below) to Lender, as security for
the
repayment of such amounts and other Secured Obligations (as defined in Article
1
below).
NOW,
THEREFORE, in
consideration of the promises and the mutual covenants described hereafter,
the
Borrower and Lender
agree as follows:
ARTICLE
I
Definitions
and Interpretation
Section
1.01. Definitions. Unless
otherwise defined, or the context otherwise requires, terms defined in the
Loan
Agreement have the same meanings
when
used
in this Agreement and the following terms shall have the meanings opposite
them:
|
“Approvals”
|
any
consent, registration, filing, agreement, notarization, certificate,
license, approval, permit, authorization, authority or exemption
from, by
or with any Authority, whether given by express action or deemed
given by
failure to act within any specified time period, and all corporate,
creditors’ and shareholders’ approvals or consents or
authorizations;
|
|
“Authority”
|
any
government or governmental, administrative, fiscal, judicial,
or
government-owned body, department, commission, authority, tribunal,
agency
or entity;
|
|
“Board”
|
the
Board of Directors of the
Borrower, as constituted from time to time;
|
|
“Building
Ownership Certificate(s)”
|
the
Building Ownership Certificate(s) in the name of the Borrower
issued by
[ ]
Real Estate Administration Commission evidencing the Borrower’s ownership
of the Buildings, copies of which are attached hereto as part
of Schedule
2;
|
|
“Buildings”
|
the
buildings, plant, improvements, premises, structures, fixtures
and
facilities located on the Project Site, including those under
construction, each as more particularly described in Schedule
2 to this
Agreement and all other buildings, improvements, premises, structures,
fixtures, attachments and facilities now or in the future to
be located on
the Project Site;
|
|
“Business
Day”
|
a
day when banks are open
for business in New York, New York and Beijing, PRC;
|
|
“Certificate
of Other Rights”
|
the
security registration certificate issued by appropriate land
and real
estate administration bureaus in respect of the
Collateral;
|
|
“Collateral”
|
all
or any part of the following: (i) the Land-Use Rights, (ii) the
Buildings;
(iii) the Equipment; and (iv) any cash or other proceeds from
the rental,
sale or other disposition of any of (i), (ii) or (iii)
above;
|
|
“Construction
Contracts”
|
the
agreements entered into or to be entered into by or on behalf
of the
Borrower for the provision of building and civil works of the
Project,
including engineering, procurement, construction, erection, installation
and commissioning;
|
|
“Disbursement”
|
any
disbursement of the Loan;
|
|
“Dollars”
and “$”
|
the
lawful currency of the United States of America;
|
|
“Equipment”
|
certain
equipment and machinery and other movables owned by the Borrower
and
located on the Project Site, including those being installed
and/or
commissioned, each as more particularly described in Schedule
3 to this
Agreement, and all other equipment, machinery and movables now
or in the
future to be located on the Project Site that are or will be
owned by the
Borrower;
|
|
“Event
of Default”
|
has
the meaning ascribed thereto in the Loan Agreement.
|
|
“Investment
Documents”
|
the
Loan Agreement and any and all documents executed by the Borrower
and
Lender in
connection with the Loan Agreement;
|
|
“Land
Grant Contract”
|
[ ]
|
|
“Land-Use
Rights”
|
the
existing granted land-use rights for the Mortgaged Lands as described
in
the Land-Use Rights Certificate(s) and any future granted land
use rights
acquired by the Borrower for the Project;
|
|
“Land-Use
Rights Certificate(s)”
|
the
State-Owned Land-Use Certificate(s) (No.
[ ])
issued by the
[ ]
Municipal Land Administration on
[ ],
|
|
|
covering
an area of [ ] square meters and
located on the
[ ],
China, granting to the Borrower a land use right to the Project
Site for
industrial use during
[ ] and
[ ], a copy of which
is attached as part of Schedule 1 to this Agreement;
|
|
“Lien”
|
any
mortgage, pledge, charge, assignment, hypothecation, security
interest,
title retention, preferential right, trust arrangement, right
of set-off,
counterclaim or banker’s lien, privilege or priority of any kind having
the effect of security, any designation of loss payees or beneficiaries
or
any similar arrangement under or with respect to any insurance
policy or
any preference of one creditor over another arising by operation
of
law;
|
|
“Loan
Agreement”
|
has
the meaning ascribed thereto in the introduction to this
Agreement;
|
|
“Loan”
|
has
the meaning ascribed thereto in the introduction to this
Agreement;
|
|
“Mortgaged
Lands”
|
the
land with a total area of
[ ] square
meters, as more particularly described in the Land-Use Rights
Certificate(s), attached hereto as part of Schedule 1 and any
land
acquired by the Borrower in the future;
|
|
“Mortgage
Registration Certificate”
|
the
security registration certificate issued by appropriate administration
of
industry and commerce in respect of the Collateral;
|
|
“People’s
Court”
|
the
courts in the PRC;
|
|
“Person”
|
any
natural person, corporation, company, partnership, firm, voluntary
association, joint venture, trust, unincorporated organization,
Authority
or any other entity whether acting in an individual, fiduciary
or other
capacity;
|
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“Potential
Event of Default”
|
has
the meaning ascribed thereto in the Loan Agreement;
|
|
“PRC”
|
the
People’s Republic of China;
|
|
“Project”
|
has
the meaning ascribed thereto in the Loan Agreement;
|
|
“Project
Site”
|
the
existing parcel of land designated and identified in the Land
Use Rights
Certificate(s) and any parcel of land acquired by the Borrower
in the
future for the Project;
|
|
“Property
Rights Law”
|
has
the meaning ascribed thereto in the introduction to this
Agreement;
|
|
“Real
Property Law”
|
has
the meaning ascribed thereto in the introduction to this
Agreement;
|
|
“Receiver”
|
any
receiver, agent, administrator or other similar officer appointed
by
Lender for the purpose of taking any action or exercising any
rights in
connection with the enforcement of the security created by this
Agreement,
which Receiver shall exercise his powers hereunder as agent of,
and at the
cost of, the Borrower and provided that Lender shall not be under
any
obligation to appoint a Receiver unless required to do so by
applicable
law;
|
|
“Relevant
Certificates and
|
|
|
Documents”
|
the
certificates and documents relating to the rights, title and/or
interests
in or to the Collateral, including the Land-Use Rights Certificate(s)
the
Building Ownership Certificate(s), the Certificates of Other
Rights，the
Mortgage Registration Certificate and any of the above
documents to be obtained in the future by the Borrower;
|
|
“Secured
Obligations”
|
at
any time and from time to time, all amounts payable by the Borrower
to
Lender in respect of principal, interest, fees and other amounts
or
charges and otherwise (including any amounts in respect of liquidated
damages, compensatory damages and enforcement costs) in respect
of the
Loan under or in connection with the Loan Agreement and any and
all other
agreements, documents or
instruments
|
|
executed
by the Borrower and/or Lender in
connection
with the Loan, all in Dollars;
|
|
|
“Security
Law”
|
has
the meaning ascribed thereto in the introduction to this
Agreement;
|
|
[“[ ]
Customs”
|
the
[ ]
Administration of Customs;]
|
|
“[ ]
AFE”
|
the
[ ]
Municipal Administration of Foreign Exchange;
|
|
“[ ]
AIC”
|
the
[ ]
Municipal Administration of Industry and Commerce;
|
|
“[ ]
BLR”
|
[ ]
Municipal Bureau of Land and Resources; and
|
|
“[ ]
REAC”
|
the
[ ] Municipal Real Estate
Administration Commission.
|
Section
1.02. Interpretation. In
this Agreement,
unless the context otherwise requires:
(a)
headings are for convenience only and do not affect the interpretation of
this
Agreement;
(b)
words importing the singular include the plural and vice versa;
(c)
a reference to a natural person includes any company, partnership, trust,
joint
venture, association, corporation or other body corporate and any governmental
authority or agency;
(d)
a reference to a Section, Article, Schedule, Appendix or party is a reference
to
that Section or Article of, or that Schedule, Appendix or party to, this
Agreement;
(e)
a reference to a document includes an amendment or supplement to, or replacement
or novation of, that document but disregarding any amendment, supplement,
replacement or novation made in breach of this Agreement;
(f)
a reference to a party to any document includes that party’s successors and
permitted assigns;
(g)
the word “including” shall mean “including without limitation” or “including but
not limited to;” and
(h)
all Authorities referred to in this Agreement shall be construed as including
any successor or substitute Authority thereof having the same or substantially
the same functions and powers.
ARTICLE
II
Mortgage
Section
2.01. Mortgage.
As continuing security
for the payment and discharge in full of all the Secured Obligations, the
Borrower hereby grants to Lender a first priority
mortgage over the Collateral in accordance with the Property Rights Law,
the
Security Law and other relevant laws and regulations of the PRC.
Section
2.02. Enforcement. The
security created by
this Agreement shall become enforceable immediately upon the occurrence and
during the continuance of an Event of Default under the Loan
Agreement.
Section
2.03. Actions
in Connection with Enforcement. At any time
after the
occurrence of an Event of Default that is continuing under the Loan Agreement,
Lender shall have the
right (which right the Borrower irrevocably consents and agrees to and
acknowledges) to the extent permitted by applicable law, either in person
or
through any Receiver, to take any one or more of the following actions at
Lender’s option:
(a)
to take possession of, get in, collect and receive all or any part of the
Collateral for the purpose (in the opinion of Lender) of converting
all or
any part of the Collateral into value and/or obtaining proceeds from the
auction
or sale of all or any part of the Collateral;
(b)
to convert all or any part of the Collateral into value and/or obtain proceeds
from the auction or sale of all or any part of the Collateral;
(c)
to commission the relevant organization or Authority to auction all or any
part
of the Collateral;
(d)
to apply to the relevant Authority or Authorities for the lawful sale or
disposal of all or any part of the Collateral at a price considered by Lender to be
reasonable;
(e)
with a view to selling all or any part of the Collateral (or offering it
for
sale) to repair, replace, improve and/or develop such Collateral and to apply
for any appropriate permission, license, consent or approval in connection
therewith;
(f)
to sever any attachments or fixtures and to sell them apart from the land
or
buildings on or to which they are attached, and to uninstall, disassemble
or
sever any equipment, machinery or other movables and to sell them apart from
any
other equipment, machinery, other movables, plants or facilities to which
they
are attached or associated;
(g)
for the purpose of converting all or any part of the Collateral into value
and/or obtaining proceeds from the auction or sale of all or any part of
the
Collateral, to sell, exchange, license or otherwise dispose of or in any
way
whatsoever deal with the Collateral for such consideration (if any), including
shares, debentures or any other securities whatsoever, and upon such terms
as
Lender may reasonably
think fit;
(h)
for the purpose of converting all or any part of the Collateral into value
and/or obtaining proceeds from the auction or sale of all or any part of
the
Collateral, to make any leases whatsoever of the Collateral and, with or
without
consideration, to accept or agree to accept surrenders of leases of the
Collateral in such circumstances, for such purposes and upon such terms
whatsoever as Lender may
reasonably think fit, and to vary the terms of any lease affecting the
Collateral and to act in relation to any review of the rent under such lease
in
such manner as Lender
may reasonably think fit;
(i)
to insure, repair, improve, replace, exploit and/or develop the Collateral
in
any manner;
(j)
to bring, defend, submit to arbitration, negotiate, compromise, abandon and/or
settle any claims and/or proceedings concerning the Collateral;
(k)
for the purpose of converting all or any part of the Collateral into value
and/or obtaining proceeds from the auction or sale of all or any part of
the
Collateral, generally to carry out, or cause or authorize to be carried out,
any
transaction or arrangement whatsoever, whether similar or not to any of the
foregoing, in relation to the Collateral which Lender may reasonably consider
expedient as effectively as if Lender were solely and
absolutely entitled to the Collateral;
(l)
in connection with the exercise of any of its powers, to execute or do, or
cause
or authorize to be executed or done, on behalf of or in the name of the Borrower
or otherwise, as Lender
may reasonably think fit, all documents, acts or things which Lender may reasonably consider
appropriate;
(m)
to take such other actions as are appropriate to satisfy the Secured
Obligations, in accordance with the Property Rights Law, the Security Law
and
other relevant laws and regulations;
(n)
to exercise all rights and privileges of the Borrower provided in any or
all of
the Construction Contracts and other contracts or agreements
relating
to
the
Collateral on behalf or in the name of the Borrower, as Lender may reasonably
think
fit;
(o)
to take possession of, collect, manage and use the Collateral and exercise
any
or all the Borrower’s rights and privileges in respect of the Collateral to the
exclusion of the Borrower as if Lender were the beneficial
owner of the Collateral ; and
(p)
in each case, to be compensated in full and in first priority from the funds
and
proceeds obtained through any such actions to the extent of the Secured
Obligations and any expenses related thereto.
Section
2.04. Deficiency
or Surplus.
If the funds obtained as the result of the actions set out in Section 2.03
above
are insufficient to satisfy in full the Secured Obligations and all expenses
related hereto, Lender
shall have the right
to claim the deficiency from the Borrower. If any
balance remains after the payment in full of the Secured Obligations and
all
expenses related hereto, such balance shall be returned to the Borrower or
applied as otherwise required by applicable law, and Lender shall, at the cost
and
expense of the Borrower (including any costs of notarization, registration
and
obtaining of any approvals from any relevant Authority), execute and deliver
to
the Borrower proper instruments evidencing the termination and release of
this
Agreement.
Section
2.05. Appointment
of Attorney. (a) As further
security
for the performance of its obligations under this Agreement and for conferring
on Lender the benefit of
the rights expressed to be conferred hereunder, the Borrower hereby irrevocably
appoints and constitutes, until the Secured Obligations have been paid and
discharged in full, Lender, as the Borrower’s true
and lawful attorney with full power (in the name of the Borrower or otherwise)
to, after the occurrence and during the continuance of an Event of Default,
exercise any or all of the Borrower’s rights and carry out any or all of the
Borrower’s obligations hereunder, to demand and receive any and all moneys and
claims for moneys due or to become due arising out of the Collateral, to
enforce
any provision thereof, to give valid receipts and discharges, and generally
to
file any and all claims or take any and all lawful actions or institute any
and
all proceedings that may be necessary for the purpose of putting into effect
the
intent of this Agreement.
(b)
The Borrower hereby consents, acknowledges and agrees that Lender and its agents
shall
not be liable for any loss, damage, cost, expense, impairment, diminution
or
devaluation of the Collateral caused by or resulting or arising from or in
connection with any act or failure to act by Lender or its respective
agents under this Agreement or in relation to the Collateral, unless directly
caused by the gross negligence or willful misconduct of Lender or such
agents.
Section
2.06. Power
to
Delegate. After notifying
the
Borrower, Lender may at
any time and from time to time delegate by power of attorney or in
any
other
manner to any Person(s) all or any of the rights, powers and discretions
exercisable by any or all of them under Section 2.03 above. Any such delegation
may be made upon such terms (including the power to sub-delegate) and subject
to
such conditions as Lender may deem appropriate
in
its discretion.
Section
2.07. No
Discharge. The obligations
of the
Borrower under this Agreement shall not be discharged or impaired
by:
(a)
any invalidity, unenforceability or other defect relating to any of the
Investment Documents or any security relating to any such documents;
or
(b)
any amendment to or variation of any of the Investment Documents or any security
relating to any such documents, other than amendments made in accordance
with
the terms thereof; or
(c)
any release of or granting of time or any other indulgence to the Borrower
or
any third party, other than a release of, granting of time or any other
indulgence granted by the Lender to the Borrower
in
accordance with the terms of the Investment Documents; or
(d)
any winding up, dissolution, reconstruction or reorganization, legal limitation,
incapacity or lack of corporate power or authority or other circumstances
of, or
any change in the constitution or corporate identity or loss of corporate
identity by, the Borrower or any other Person; or
(e)
any other act, event, neglect or omission which would or might but for this
Section operate to impair or discharge the Borrower’s liability
hereunder.
ARTICLE
III
Representations
and Warranties
Section
3.01. Representations
and Warranties The Borrower
represents
and warrants to Lender
that:
(a)
The Borrower is a Sino-foreign
joint venture enterprise duly incorporated and validly existing under the
laws
of the People’s Republic of China and has the corporate power to enter into, and
comply with its obligations under this Agreement.
(b)
The Land Grant Contract, Land-Use Rights Certificate(s), the Building Ownership
Certificate and the Construction Contracts are each in full force and effect.
The Borrower has the full right to use and enjoy the Project Site and to
own/use
the Collateral, and to assign and mortgage the land use rights for the Project
Site until the expiration of the term as provided the Land Grant Contract
and
the Land-Use Rights Certificate(s). The Borrower has paid, or
made
satisfactory
arrangements for the payment when due all fees for the rights under the Land-Use
Rights Certificate(s), and has performed in a timely manner all other material
obligations that are set out in the Land Grant Contract, Land-Use Rights
Certificate(s), the Building Ownership Certificate(s) and the Construction
Contracts.
(c)
The Borrower (i) is in compliance with the material requirements of the Land
Grant Contract Land-Use Rights Certificate(s) and the Building Ownership
Certificate(s); (ii) has paid or made satisfactory arrangements for the payment
when due, all costs, fees and expenses of and for the development of the
Project
Site and for the procurement, importation, transportation, erection,
installation, testing and commissioning of the Equipment; (iii) has obtained,
or
will obtain when necessary, all Approvals required for the development and
use
of the Project Site; and (iv) has performed all material obligations with
regard
to the use or development of the Project Site in accordance with the
requirements of the Land Grant Contract Land-Use Rights Certificate(s), Building
Ownership Certificate(s), and any other related applicable
Approvals.
(d)
The execution and enforcement of this Agreement by the Borrower does not
and
will not violate the provisions of (i) any applicable law, (ii) any relevant
Approval, or (iii) the terms or conditions of the Land Grant Contract, the
Land-Use Rights Certificate(s) or the Building Ownership Certificate(s).
This
Agreement has been duly executed by the, and is the legal, valid and binding
obligation of the Borrower and enforceable against the Borrower in accordance
with the terms hereof.
(e)
All the information and documents provided to Lender in connection with
this
Agreement and the Collateral are true, complete and correct in all material
respects.
(f)
The Borrower has duly obtained , or will obtain when necessary, all required
Relevant Certificates and Documents, including all required certificates,
permits and approvals from applicable Authorities for all Buildings and all
Equipment.
(g)
None of the representations and warranties in this Section 3.01 omits any
information or matter the omission of which makes any of such representations
and warranties inaccurate or misleading in any material respects.
Section
3.02. Reliance. The
Borrower acknowledges and agrees that it makes the representations and
warranties in Section 3.01 above with the intention of inducing Lender to enter into this
Agreement and the Loan Agreement, and that Lender has entered into
this
Agreement and the Loan Agreement on the basis of, and in full
reliance on, each of such representations and warranties being true, accurate
and complete.
Section
3.03. Rights
and Remedies not Limited. The rights
and remedies
of Lender in relation to
any misrepresentations or breach of warranty by the Borrower shall not be
prejudiced by:
(a)
any investigation by or on behalf of any of Lender into the affairs
of the
Borrower;
(b)
the execution or performance of this Agreement; or
(c)
any other act or thing which may be done by or on behalf of Lender in connection with
this
Agreement and which might, apart from this Section, prejudice such rights
or
remedies.
ARTICLE
IV
Covenants
Section
4.01. Affirmative
Covenants. Throughout
the term of
this Agreement, the Borrower covenants and agrees as follows:
(a)
The Borrower shall (i) maintain the Collateral in good repair and condition,
and
(ii) protect the Collateral from any material damage or impairment, normal
wear
and tear excepted.
(b)
The Borrower shall perform in a timely fashion all its material obligations
under the Land Grant Contract, Land-Use Rights Certificate(s) and the Building
Ownership Certificate(s), including the payment of all relevant fees,
considerations, taxes and other amounts payable by the Borrower in respect
of
the Project Site, and shall comply with all applicable laws and regulations
of
the PRC relating to the Project Site.
(c)
To protect and perfect rights of Lender hereunder, including
Lender’s first priority
security interest in the Collateral, the Borrower shall file and register
with
(i) the [ ] REAC and the
[ ] BLR; (ii) the
[ ] AIC; (iii) the
[ ] AFE; (iv) the
[ Customs]; and (v) any other relevant
Authorities: (A) all required documents, executed by the necessary Persons,
to
effect the release of all existing Liens with respect to the Collateral covered
under this Agreement in favour of Persons other than Lender, and such Liens
shall
have been released in accordance with PRC law within five (5) Business Days
after the execution of this Agreement and as an integrated transaction herewith,
(B) this Agreement and all other required documents within five (5) Business
Days after the execution of this Agreement, and (C) each amendment or supplement
to any such document within five (5) Business Days after the signing of such
amendment or supplement, and after completing such registrations shall provide
evidence thereof satisfactory to Lender. The Borrower shall
ensure that all relevant registration and approval documents specifically
name
Lender as the
secured
lender.
The Borrower shall obtain all Approvals necessary for all such registrations
and
for this Agreement and any such amendment and supplement to be legally
effective, valid, binding and enforceable against the Borrower in accordance
with the terms hereof and thereof.
(d)
Promptly upon obtaining of a land use right certificate for any new parcel
of
land acquired by the Borrower after the date of this Agreement, the Borrower
shall execute and deliver to Lender a Supplemental
Mortgage
Agreement in the form of Schedule 4 to this Agreement, and take such other
actions as are necessary, to record and perfect Lender’s first priority
mortgage over such land use rights. Each such Supplemental Mortgage Agreement
shall constitute a supplement to this Agreement.
(e)
Promptly upon the completion of any Building which was not completed prior
to
the date of this Agreement, the Borrower shall obtain the Building Ownership
Certificate pertaining to said Building from the [ ] REAC and/or other relevant
Authority and promptly file and register each such document with the [ ]
REAC, [
] AIC and/or such other relevant Authority and shall execute and deliver
to
Lender a Supplemental
Mortgage Agreement in the form of Schedule 4 to this Agreement, and take
such
other actions as are necessary, to record and perfect Lender’s first priority
mortgage over each such Building. Each such Supplemental Mortgage Agreement
shall constitute a supplement to this Agreement.
(f)
[Immediately after any imported Equipment for the Project is no longer subject
to customs supervision (the details of each item of the Equipment currently
subject to customs supervision and the remaining supervision periods are
described in detail in Schedule 3) ] and promptly upon
the
acquisition of any new Equipment after the date of this Agreement which is
not
subject to the customs supervision, the Borrower shall obtain title
documents or certificates to said Equipment from the relevant Persons and/or
relevant Authorities and promptly file and register, as necessary, each such
document or certificate and shall execute and deliver to Lender a Supplemental Mortgage
Agreement in the form of Schedule 4 to this Agreement, with the
[ ] AIC and/or such other relevant
Authority and take such other actions as are necessary, to record and perfect
Lender’s first priority
mortgage over each such item of Equipment. Each such Supplemental Mortgage
Agreement shall constitute a supplement to this Agreement.
(g)
The Borrower shall promptly obtain all other Approvals, execute all other
documents and instruments and do all other acts and things as Lender may reasonably
request
from time to time to carry out the matters and transactions contemplated
in this
Agreement or in any document required to be delivered in connection herewith,
including such Approvals, executions, acts and things as are necessary to
perfect, protect or enforce the interests of Lender created hereunder
or
intended to be created hereunder or for facilitating the realization of
the
Collateral
or the exercise of any right, power or discretion exercisable by Lender in respect of the
Collateral.
(h)
In respect of any Building that is under construction or any Equipment that
has
not yet been acquired and installed at the Project Site, the Borrower shall
prior to the Supplemental Mortgage Agreement contemplated above in Section
4.01(__) or Section 4.01(__) obtain a duly signed Contractor’s Consent &
Agreement from the relevant contractors in the form attached as Schedule
5 to
this Agreement.
(i)
The Borrower shall ensure that there shall be no claim made against it or
the
Collateral by any contractor pursuant to Article 286 of the Contract Law
of the
PRC.
Section
4.02. Negative
Covenants. Unless Lender
otherwise
consents to
such action or matter in writing in advance, throughout the term of this
Agreement, the Borrower shall not:
(a)
unless otherwise permitted by the Loan Agreement, sell, lease, assign, convey,
transfer or otherwise dispose of any of the Collateral, or agree to do any
of
the foregoing, except for the replacement of items of the Collateral (with
comparable items having a value equal to or greater than the value of the
items
replaced) which are required by normal wear and tear in the ordinary course
of
business or in connection with a casualty event for which insurance proceeds
are
obtained; any purported sale, lease, assignment, conveyance, transfer or
other
disposal of any of the Collateral, except as expressly permitted in this
Section
4.02(a), shall be invalid;
(b)
unless otherwise permitted by the Loan Agreement, waive any rights with respect
to any of the Collateral;
ARTICLE
V
Custody
of Relevant Certificates and Documents
Section
5.01. Custody
of Relevant Certificates and Documents. Except as otherwise
required by any applicable laws or regulations, all Relevant Certificates
and
Documents shall be held by Lender (or a nominee on
behalf
of Lender) during the
term of the Loan Agreement and shall be returned to the Borrower after the
security created by this Agreement has lapsed and been discharged. In order
to
maintain the validity of the Relevant Certificates and Documents and to the
extent required by any applicable laws and regulations, agrees to allow the
Borrower access to such Relevant Certificates and Documents upon request,
and
with reasonable notice, and to present them to the relevant Authorities for
such
purpose. Lender
shall take all
necessary measures to prevent the Relevant Certificates and Documents from
being
lost or damaged when they are in Lender’s custody.
ARTICLE
VI
Effectiveness
Section
6.01. Effectiveness. Unless
otherwise provided by PRC law, the security created by this Agreement shall
become effective against the various items of Collateral when the relevant
registrations referred to in Section 4.01(b) for such Collateral have been
completed.
ARTICLE
VII
Miscellaneous
Section
7.01. Notices. Any
notice, request or
other communication to be given or made under this Agreement shall be in
writing. The notice, request or other communication may be delivered by hand,
airmail, facsimile or established courier service to the party’s address
specified below or at such other address as such party notifies to the other
parties from time to time. Any notice, request or other communication from
the
Borrower shall only be effective upon receipt by Lender or, in the case
of
delivery by hand or by established courier service, upon refusal to accept
delivery when delivered to Lender during normal business
hours. Any notice, request or other communication from Lender shall be effective
upon
receipt by the Borrower, or when deemed to be received by the Borrower (a)
in
the case of delivery by hand or by established courier service, upon refusal
to
accept delivery when delivered to the Borrower during normal business hours,
or
(b) in the case of delivery by facsimile, on the day it is transmitted, provided
that transmission is proved, in the case of a facsimile, by the appearance
of
the Borrower’s facsimile number on the facsimile transmission report of Lender’s facsimile
machine.
For
the
Borrower:
[ ]
Attention:
[ ]
Facsimile: 0086-[ ]
For
Lender:
[
]
Facsimile: [ ]
Attention: [ ]
With
a copy (in the case of
communications relating to payments) sent to the attention of
________________________, at:
Facsimile: [ ]
With
a
copy to:
Facsimile: [ ]
Attention: [ ]
Section
7.02. Language. Any
notice, request or
other communication to be given or made under this Agreement shall be in
English, or if in another language, shall, if Lender so requests, be
accompanied by a translation into English satisfactory to the Lender and certified by
an
Authorized Representative of the Borrower, which translation shall be the
governing version among the relevant parties.
Section
7.03. Termination
of Agreement. This Agreement
shall
continue in force until all the Secured Obligations have been paid and
discharged in full in accordance with the terms of the Loan
Agreement.
Section
7.04. Applicable
Law and Jurisdiction. (a) This
Agreement is
governed by and shall be construed in accordance with the laws of the
PRC.
(b)
In the event of any dispute in the interpretation or enforcement of this
Agreement, Lender shall
be entitled to commence a legal action in the People’s Court of relevant
jurisdiction to interpret or enforce the provisions hereof.
Section
7.05. Severability. Any
provision of this
Agreement which is prohibited or unenforceable by reason of any present or
future law in any jurisdiction shall, as to such jurisdiction, be ineffective
to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability
in any
jurisdiction shall not invalidate or render unenforceable such provision
in any
other jurisdiction.
Section
7.06. Successors
and Assigns. This Agreement binds and benefits the respective
successors and assigns of the parties. However, the Borrower may not assign
or
delegate any of its rights or obligations under this Agreement without Lender’s prior written
consent.
Section
7.07. Amendment. Any
amendment of any
provision of this Agreement shall be in writing and signed by the
parties.
Section
7.08. Borrower’s
Waiver. The Borrower hereby waives all objections, denials and
challenges to the validity and binding force of this Agreement.
Section
7.09. Execution
Copies. This Agreement
has been
written in Chinese and English in [ ] ( ) originals
each, all of which constitute one and the same agreement. Each party shall
hold
one (1) set of Chinese and English originals. Both language versions shall
be
equally authentic.
Section
7.10. Remedies
and Waivers. No forbearance, extension of time limit or delay
on the part of Lender in
exercising its rights, powers and discretions hereunder against any default
or
delay on the part of the Borrower shall prejudice, affect or limit any of
the
rights, powers and discretions to which Lender is entitled under
this
Agreement and as a creditor under the general law, nor shall it be deemed
as
consent on its part to a breach of this Agreement, nor will it constitute
a
waiver by Lender or be
deemed to constitute a waiver of its rights to take action against any breach
of
this Agreement in the future. No single or partial exercise of such a right
shall preclude its additional or future exercise. No such waiver shall waive
any
other right under this Agreement. All waivers or consents given under this
Agreement shall be in writing.
Section
7.11. Article
35 of the Security Law. To the extent the total value of Collateral is at
any time less than the value of the Secured Obligations, Lender may, in its sole
discretion, for the purpose of Article 35 of the Security Law, divide its
loan
into separate tranches and deem separate items or groups of items constituting
parts of the Collateral and having a value greater than that of a tranche
or
tranches of that loan as severally constituting security for such tranche
or
tranches.
Section
7.12. Costs
and Expenses. The Borrower shall pay or, as the case may be,
reimburse Lender any
amount paid by on account of, all taxes (including stamp taxes), duties,
fees or
other charges payable on or in connection with the preparation and/or review
execution, issue, delivery, registration or notarization of this Agreement
and
any other documents related to this Agreement and the reasonable fees and
expenses incurred by Lender
(including legal
counsel fees) in connection with (i) any legal opinions
required in connection with this Agreement; (ii) administration by Lender of its investments
or
otherwise in connection with any amendment, supplement or modification to,
or
waiver under, this Agreement; (iii) the registration (where appropriate)
and the
delivery of the evidences of indebtedness relating to the Loan Agreements
and
their disbursements and (iv) the costs and expenses incurred by Lender in relation to
efforts
to enforce or protect its rights under any Investment Documents, or the exercise
of its rights or powers consequent upon or arising out of the occurrence
of any
Event of Default or Potential Event of Default, including legal and other
professional consultants’ fees on a full indemnity basis.
IN
WITNESS WHEREOF, this Agreement is entered into by the parties, acting through
their duly authorized representatives, as of the date first above
written.
| [ONSHORE BORROWER] | |||
|
|
By:
|
||
|
|
Name:
|
||
|
|
Title:
|
||
FORM
OF SHARE PLEDGE
AGREEMENT
Share
Pledge Agreement
between
CHINDEX
INTERNATIONAL, INC.
and
[LENDER]
Dated ,
200[ ]
SHARE
PLEDGE AGREEMENT
AGREEMENT
is made
on 200[
]
between
|
|
(1)
|
CHINDEX
INTERNATIONAL, INC.
(“Chindex”), a NASDAQ listed company incorporated in Delaware with
its registered address
[ ];
and
|
|
|
(2)
|
[LENDER]
(“Lender”);
|
In
accordance with the Property Rights Law of the People’s Republic of China, the
Security Law of the People’s Republic of China, the Variation Regulations (as
defined in Article 1) and other relevant laws and regulations of the People’s
Republic of China.
Whereas
(A)
Chindex is one of the shareholders of [Onshore Borrower] (the “Borrower”), a
company organized and existing under the laws of the People's Republic of
China.
(B)
As of the date hereof, Chindex has paid US$[ ] million to the registered
capital
of the Borrower and thus holds [ ] % equity interest in the Borrower (the
“Equity Interest”).
(C)
In accordance with the terms of the Borrower’s Articles of Association, Chindex
is obligated to pay an additional US$[ ] million in
registered capital (“Additional Equity Interest”)
(D)
By an agreement dated December [ ], 200[ ] (the “Loan Agreement”) between the
Borrower and Lender,
Lender
has agreed to
lend the Borrower up to
[ ]
($[ ]) (the “Loan”).
(E)
It is a condition of the first Disbursement under the Loan Agreement that
the
parties enter into this Agreement.
NOW,
THEREFORE, in consideration of the promises and the mutual covenants described
hereafter, Chindex and Lender
agree as follows:
ARTICLE
I
Definitions
and Interpretation
Section
1.01. General
Definitions. Unless otherwise
defined, or the context otherwise requires, terms defined in the Loan Agreement
have the same meanings when used in this Agreement and the following terms
have
the following meanings:
|
"Additional
Equity Interest"
|
the
meaning given to it in Recital (C);
|
|
"Approval
Authority"
|
the
examination and approval authority for the Borrower, which as at
the date
hereof is the
[ ];
|
|
"Capital
Contribution Certificate"
|
any
certificate(s) issued by the Borrower to Chindex from time to time
in
respect of Chindex’s contributions to the registered capital of the
Borrower;
|
|
"Collateral"
|
the
Equity Interest and all the right, title and interest in and to
the Equity
Interest;
|
|
"Default
Notice"
|
the
meaning given to it in Section 4.02;
|
|
"Equity
Interest"
|
the
meaning given to it in Recital (B);
|
|
"Secured
Amounts"
|
at
any time and from time to time all principal, interest, fees and
other
amounts expressed to be payable by the Borrower under ▇▇▇.▇▇▇▇
Agreement
and all amounts expressed to be payable by Chindex under Section
7.02;
and
|
|
"Variation
Regulations"
|
the
Certain Regulations
on
Variations to Equity Interests of Investors in Foreign Investment
Enterprises issued by the former Ministry of Foreign Trade and
Economic Cooperation and the State Administration of Industry and
Commerce
on May 28, 1997 and the Implementing
Rules on Certain
Issues of Law Application in relation to the Administration of
Approval
and Registration of Foreign-invested Enterprises jointly issued by
the Ministry of Commerce, the State Administration of Industry
and
Commerce, the General Administration of Customs and the State
Administration of Foreign Exchange on April 24,
2006.
|
Section
1.02. Interpretation. In
this Agreement,
unless the context otherwise requires:
(a)
headings are for convenience only and do not affect the interpretation of
this
Agreement;
(b)
words importing the singular include the plural and vice versa;
(c)
a reference to a Section, Article, Schedule or party is a reference to that
Section or Article of, or that Schedule or party to, this
Agreement;
(d)
a reference to a document includes an amendment or supplement to, or
restatement, replacement or novation of, that document but disregarding any
amendment, supplement, restatement, replacement or novation made in breach
of
this Agreement; and
(e)
a reference to a party to any document includes that party's successors and
permitted assigns.
ARTICLE
II
Pledge
Section
2.01. Pledge.
(a) As
continuing security for the payment and discharge in full of all the Secured
Amounts, Chindex hereby pledges to Lender the
Collateral.
(b)
For the avoidance of doubt, the security hereby created does not create or
impose upon Lender any
liability or obligation to perform or fulfill any of the obligations of Chindex
under or in respect of the Collateral.
Section
2.02. Negative
Pledge. Chindex
hereby
undertakes to Lender
that, unless Lender
otherwise agrees in
writing, it shall not:
(a)
assign or purport to assign, transfer or otherwise deal with any interest
of
Chindex in the Collateral, the Additional Equity Interest or any other equity
interest of Chindex in the Borrower; or
(b)
create, agree to create or permit to exist any Lien (howsoever ranking in
priority) of any nature whatsoever (other than under this Agreement or arising
by operation of law) on or over the Collateral, the Additional Equity Interest
or any other equity interest of Chindex in the Borrower.
Section
2.03. Discharge. The
security hereby created shall lapse and be discharged upon the satisfaction
of
the following conditions: (i) the Borrower's Project Physical Completion
Date
has been achieved; (ii) the aggregate cash generation from the Borrower for
the
preceding four quarters was at least $2,5000,000; and (iii) the Peak Debt
Service Ratio based on the most recent Chindex Consolidated Financial Statements
is not less than 1.2
Section
2.04 Surplus. If
any amount remains after the indefeasible payment and discharge in full of
all
the Secured Amounts, the balance standing to the credit of Chindex shall
be
returned to Chindex and Lender shall at the cost
of
Chindex (including any cost of notarization, registration and obtaining of
any
Authorization from any Authority) execute and deliver to Chindex the necessary
instruments to evidence the discharge of the security hereby
created.
ARTICLE
III
Perfection
of Security
Section
3.01. Approval. In
accordance with the
Variation Regulations, Chindex shall, promptly after the execution of this
Agreement (and in any event within fifteen (15) days or such other statutory
period required by the applicable laws of the People’s Republic of China),
submit this Agreement for approval to the Approval Authority, together with
all
such documents as the Approval Authority may require in connection therewith,
including without limitation:
(a)
a resolution of the board of directors of the Borrower substantially in the
form
of Schedule 1;
(b)
the Capital Contribution Certificate; and
(c)
a capital contribution verification report in respect of the Borrower issued
by
a registered firm of accountants in the People’s Republic of China acceptable to
Lender.
Section
3.02. Registrations. Chindex
shall promptly:
(a)
after the execution of this Agreement, procure the recording of the pledge
of
Chindex’s equity interest in the shareholder register of the Borrower and
deliver two (2) certified copies of the relevant page of such register to
Lender; and
(b) after
receiving
approval of the Approval Authority (and in any event within thirty (30) days
or
such other statutory period required by the applicable laws of the People’s
Republic of China), procure the registration of this Agreement with the
[ ] Municipal Administration for Industry and Commerce
and provide evidence of the completion of such registration to Lender
Section
3.03. Additional
Capital Contributions. If, after
the date of
this Agreement, Chindex pays in any additional contribution to, or otherwise
acquires any additional portion of, the registered capital of the Borrower,
including but not limited to the Additional Equity Interest, Chindex shall
promptly enter into and submit for approval and registration as required
by
applicable laws of the PRC such amendments or supplements to this Agreement
as
Lender may require with
respect to such additional capital contribution or acquisition.
Section
3.04. Further
Assurances. Chindex
undertakes to
take whatever action (including obtaining any Authorizations, executing any
documents, effecting any registrations and giving any notices, orders,
instructions or directions) Lender may reasonably
require
for:
(a)
perfecting or protecting the security created or intended to be created by
this
Agreement over the Collateral; or
(b)
facilitating the realization of the Collateral or the exercise of any right,
power or discretion exercisable by Lender in respect of the
Collateral;
including
without limitation causing the Borrower to take the following steps as
contemplated in the Variation Regulations, namely:
|
|
(i)
|
making
an application to the Approval Authority for modifications
to the
ownership rights of investors in the
Borrower;
|
|
|
(ii)
|
submitting
to the Approval Authority the Charter, together with any amendment
agreements to reflect the interest of Lender in the
Borrower;
|
|
|
(iii)
|
submitting
to the Approval Authority copies of the original approval certificate
and
business license of the Borrower; and
|
|
|
(iv)
|
submitting
to the Approval Authority a list of the members of the board of
directors
as it will be after the proposed changes to the shareholding rights
of the
investors in the Borrower are made.
|
ARTICLE
IV
Enforcement
Section
4.01. Chindex's
Rights Prior to Enforcement of the Pledge. Until service
of a
Default Notice, Chindex shall be entitled, subject to and in a manner consistent
with the provisions of this Agreement and the other Transaction
Documents:
(a)
to receive all dividends, profits or other distributions, interest and other
income derived from or paid in respect of the Collateral, in each case,
unencumbered by the security interest granted hereunder; and
(b)
to exercise any voting or other rights and powers attached to the Collateral,
to
the exclusion of Lender.
Section
4.02. Enforcement. The
security created by this Agreement shall become enforceable by Lender immediately, during
the
continuance of an Event of Default, upon the service of a notice to Chindex
by
Lender (a “Default
Notice”), and Lender
shall be entitled
to exercise all rights, powers and discretions in
respect of the Collateral, to the exclusion of Chindex, and to take all action
and pursue all remedies available to Lender at law to enforce
such
security, subject to obtaining all necessary Authorizations from the Approval
Authority.
Section
4.03. No
Discharge. The obligations
of
Chindex under this Agreement shall not be discharged or impaired
by:
(a)
any invalidity, unenforceability or other defect relating to the Loan Agreement
or any of the other Transaction Documents or any security relating to any
such
documents;
(b)
any amendment to or variation of the Loan Agreement or any of the other
Transaction Documents or any security relating to any such
documents;
(c)
any release of or granting of time or any other indulgence to the Borrower
or
the other Sponsors or any third party;
(d)
any winding up, dissolution, reconstruction or reorganization, legal limitation,
incapacity or lack of corporate power or authority or other circumstances
of, or
any change in the constitution or corporate identity or loss of corporate
identity by, the Borrower or Chindex or any other Person; or
(e)
any other act, event, neglect or omission which would or might but for this
Section operate to impair or discharge Chindex’s liability
hereunder.
ARTICLE
V
Representations
and Warranties
Section
5.01. Representations
and Warranties. Chindex
represents and
warrants to Lender
that:
(a)
it is a company duly organized under the laws of the Delaware, United States
of
America and is in good standing and has the corporate power to execute and
deliver this Agreement and to perform fully and completely all its obligations
and liabilities hereunder;
(b)
this Agreement has been duly authorized, executed and delivered by it and
constitutes its valid and legally binding obligations, enforceable in accordance
with the terms hereof;
(c)
the execution, delivery and performance by it of this Agreement will not
violate
any provision of any existing published law or regulation applicable to it
or
order or decree of any Authority having jurisdiction over it or of its charter
documents, or of any contract, undertaking or agreement to which it is a
party
or which is binding upon it or any of its property or assets and will not
result
in the imposition or creation of any Lien (other than the Lien created hereby)
on any part thereof pursuant to the provisions of any such contract, undertaking
or agreement;
(d)
its contribution to the registered capital of the Borrower is fully paid
in to
the extent reflected in the Capital Contribution Certificate provided to
Lender hereunder;
(e)
it
is the
sole legal and beneficial owner of the Collateral;
(f)
no Lien exists over the Collateral at the date of execution of this Agreement;
and
(g)
the copy of the Charter provided to Lender prior to the date
hereof is a true, complete and correct copy.
Section
5.02 Undertaking. Chindex
acknowledges
and agrees that it will not exercise any rights of subrogation that may accrue
to Chindex arising out of the exercise by Lender of any of its rights,
powers and discretions under this Agreement, and that Chindex shall have
no
rights of action arising out of this Agreement against the Borrower, Lender or any third party
to
whom the Collateral may be transferred, in each case, until the Secured Amounts
have been paid and discharged in full in accordance with the terms of the
Loan
Agreement and this Agreement. Chindex undertakes to Lender that it will not
seek
to enforce repayment or exercise any other rights or remedies of any kind
against the Borrower, Lenderor any third party
to
whom the Collateral may be transferred which may accrue to Chindex, whether
by
way of subrogation or otherwise in respect of any amount due to Chindex from
the
Borrower until all the Secured Amounts have been paid or discharged in full
in
accordance with the terms of the Loan Agreement and this Agreement, and in
the
event of the liquidation or winding up of the Borrower, Chindex will not
prove
in competition with Lender on any account
whatsoever in respect of any moneys owing to Chindex.
Section
5.03. Reliance.
(a)
Chindex acknowledges to Lender that it has made
the
representations and warranties in Section 5.01 with the intention of inducing
Lender to enter into the
Loan Agreement; and that Lender has entered into
the
Loan Agreement on the basis of, and in full reliance on, each of such
representations and warranties.
(b)
Chindex warrants to Lender that each of such
representations is true and correct in all material respects as of the date
of
this Agreement and that none of them omits any matter the omission of which
makes any of such representations misleading.
Section
5.04. Rights
and Remedies not Limited. The rights
and remedies
of Lender in relation to
any misrepresentations or breach of warranty on the part of Chindex shall
not be
prejudiced:
(a)
by any investigation by or on behalf of Lender into the affairs
of
Chindex;
(b)
by
the
execution or the performance of this Agreement; or
(c)
by any other act or thing which may be done by or on behalf of Lender in connection with
this
Agreement and which might, apart from this Section, prejudice such rights
or
remedies.
Section
5.05. Receipt
of Moneys. Subject to the provisions of the other Transaction
Documents and Section 4.01, Chindex shall procure that
all
moneys received by Chindex or any other Person constituting, or arising from
or
in connection with, the Collateral shall be paid forthwith to Lender.
ARTICLE
VI
Effectiveness
Section
6.01. Effectiveness. The
security created by this Agreement over the Collateral shall become effective
upon approval by the Approval Authority as provided in Section 3.01 and when
all
the registrations referred to in Section 3.02 have been duly
completed.
ARTICLE
VII
Miscellaneous
Section
7.01. Appointment
of Attorney. Subject
to the
provisions of Section 4.01, Chindex hereby
irrevocably appoints Lender as Chindex’s attorney
with full power (in the name of Chindex or otherwise) to, upon the occurrence
and during the continuance of an Event of Default, carry out any of Chindex's
obligations hereunder, and to exercise all the rights of Chindex in connection
with the Collateral and to file any claims or take any lawful action or
institute any proceedings which may be necessary for the purpose of putting
into
effect the intent of this Agreement. The Borrower shall ratify and
confirm all things done and all documents executed by any attorney in the
exercise or purported exercise of all or any of his powers pursuant to this
Section 7.01.
Section
7.02. Expenses. Chindex
shall on demand
pay:
(a)
all
reasonable and documented costs, and all fees and expenses and taxes in
connection with:
(i)
all
approvals and registrations referred to in Sections 3.02 and 3.03 or otherwise
incurred in connection with the perfection or protection of the security
created
by this Agreement; and
(ii)
the
obtaining of all necessary Authorizations relating to the execution and
performance by the Borrower of this Agreement; and
(b)
all expenses (including legal and out-of-pocket expenses) incurred by Lender in connection with
the
preservation or enforcement of any of their rights under this
Agreement;
and
shall
keep Lender indemnified
against any failure or delay in paying the same.
Section
7.03. Notices. Any
notice, request or other
communication to be given or made under this Agreement shall be in writing.
Any
such communication may be delivered by hand, airmail,
facsimile or
established courier service to the party's address specified below or at
such
other address as such party notifies to the other party from time to time,
and
will be effective upon receipt.
For
Chindex:
Chindex
International, Inc.
▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇▇▇▇▇▇, CEO
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇,
CFO
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
With
a copy sent by e-mail to the
attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, CEO, and
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, CFO, at:
E-mail
addresses: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ and
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
For
Lender:
[
]
Attention:
[
]
With
a copy (in the case of
communications relating to payments) sent to the attention of
______________________, at:
Facsimile: [
]
Section
7.04. English
Language. Any notice,
request or
other communication to be given or made under this Agreement shall be in
the
English language or, if in another language, shall, if Lender so requests, be
accompanied by a translation into English satisfactory to Lender, which translation
shall be the governing version between the relevant parties.
Section
7.05. Applicable
Law and Jurisdiction. (a) This
Agreement is
governed by and shall be construed in accordance with the laws of the People’s
Republic of China.
(b)
In the event of any dispute in the interpretation or enforcement of this
Agreement, Lender shall
be entitled to commence a legal action in the competent Chinese court to
interpret or enforce the provisions hereof.
Section
7.06. Severability. Any
provision of this
Agreement which is prohibited or unenforceable by reason of any present or
future law in any jurisdiction shall, as to such jurisdiction, be ineffective
to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability
in any
jurisdiction shall not invalidate or render unenforceable such provision
in any
other jurisdiction.
Section
7.07. Successors
and Assigns. This Agreement binds and benefits the respective
successors and assigns of the parties. However, Chindex may
not
assign
or
delegate any of its rights or obligations under this Agreement without the
consent of Lender.
Section
7.08. Amendment. Any
amendment of any
provision of this Agreement shall be in writing, signed by the parties and
approved by the Approval Authority.
Section
7.09. Execution
Copies. This Agreement
has been
written in Chinese and English in five (5) originals each, all of which
constitute one and the same agreement. Chindex shall hold two (2)
sets of Chinese and English originals, Lender shall hold two
(2) sets
of Chinese and English originals and the remaining set of Chinese and English
originals shall be submitted to the Approval Authority. Both the
Chinese and English versions shall have equal effect.
Section
7.10. Remedies
and Waivers. No failure or delay by Lender in exercising
any
power, remedy, discretion, authority or other rights under this Agreement
shall
waive or impair that or any other right of Lender. No single
or partial exercise of such right shall preclude its additional or future
exercise. No such waiver shall waive any other right under this
Agreement. All waivers or consents given under this Agreement shall
be in writing.
Section
7.11. Entire
Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter of this Agreement.
AS
WITNESS this Agreement is entered into by the parties,
acting through their duly authorized representatives, as of the date first
above
written.
| CHINDEX INTERNATIONAL, INC. | ||
|
By:
|
||
| Authorized Representative | ||
| [LENDER] | ||
|
By:
|
||
| Authorized Representative | ||
11