Exhibit 10.6

 

EXECUTION VERSION

 

To:NF Unicorn Acquisition Limited (you or the Company)

 

14 June 2019

 

Dear Sirs,

 

Project Unicorn – Commitment Letter

 

We, Shanghai Pudong Development Bank Putuo Sub-Branch (the Original Arranger)
and Shanghai Pudong Development Bank Putuo Sub-Branch (the Original Underwriter,
and together with the Original Arranger, we or us) are pleased to set out in
this letter the terms and conditions on which the Original Arranger and the
Original Underwriter are willing to arrange, underwrite and fund, in proportion
specified next to our names in paragraph 2 (Underwriting commitments) below, the
Facility.

 

You have advised us that the Company, an exempted company incorporated under the
laws of the Cayman Islands with limited liability is proposing to acquire the
entire issued share capital of Healthy Harmony GP, Inc. (the General Partner)
and the certain limited partnership interests in Healthy Harmony Holdings, L.P.
(the Partnership and together with the General Partner, the Targets, together
with its subsidiaries, the Target Group, and each member of the Target Group
being a Target Group Member) pursuant to the transaction agreement (the TA) to
be entered into between, among others, New Frontier Corporation, the Targets,
the Company and the Sellers named and as defined in the TA (collectively, the
Sellers) (the Acquisition), with consummation of the Acquisition (the
Completion) taking place subject to the terms and conditions of the TA. The date
on which Completion and the initial utilisation of the Facility (as defined
below) (the Initial Utilisation Date) occurs is the Closing Date.

 

The Company is a direct wholly owned subsidiary of NF Unicorn Holding Limited,
an exempted company incorporated under the laws of the Cayman Islands with
limited liability (the Parent). The Parent is a direct or indirect subsidiary of
funds, partnerships and/or other entities advised, managed and/or controlled by
New Frontier Corporation and/or any of its affiliates (together the Sponsors).

 

This letter is to be read together with the term sheet attached as Schedule 1
hereto (the Term Sheet). This letter and the Term Sheet are the Commitment
Documents.

 

Unless otherwise defined in this letter or unless the context otherwise
requires, terms defined in the other Commitment Documents shall have the same
meaning when used in this letter. This letter is a Finance Document.

 

1.Commitment

 

1.1You are seeking an underwritten commitment of the RMB equivalent of
US$300,000,000 for a senior term loan facility (the Facility), to be funded to
the Company into a free trade non-resident account opened with the Account Bank
(the transfer of funds in and out of which is not subject to PRC regulatory
approval) or an account in Hong Kong or any other jurisdiction outside of the
PRC which can receive funds in RMB.

 

1.2We confirm that:

 

(a)the Original Arranger hereby agrees to arrange the Facility; and

 

(b)the Original Underwriter hereby agrees to underwrite, provide and fund the
Facility in the amount set out in paragraph 2 (Underwriting commitments) below,

 

solely on the terms and conditions set out in the Commitment Documents.

 

1Project Unicorn - Commitment Letter (SPDB)

 

 

1.3Each of the Original Arranger and the Original Underwriter is a Credit Party
and together they are the Credit Parties.

 

2.Underwriting commitments

 

2.1The Original Underwriter agrees to underwrite and fund the Facility in the
amounts set out opposite its name below (an Underwriting Proportion).

 

Name   Underwriting Proportion of Facility Shanghai Pudong Development Bank
Putuo Sub-Branch   RMB equivalent of USD300,000,000 Total   RMB equivalent of
USD300,000,000

 

2.2Notwithstanding any other provision in the Commitment Documents, the Credit
Parties acknowledge and agree that no later than the date falling 20 Business
Days from the date of your countersignature of this letter (as such date may be
extended from time to time with the prior written consent of the Credit Parties,
acting reasonably and with such consent not to be unreasonably withheld or
delayed):

 

(a)you may mandate and appoint one or more other banks or financial institutions
to join us as an arranger (each an Additional Arranger, together with the
Original Arranger, the Arrangers) and/or underwriter (the Additional
Underwriter, together with the Original Underwriter, the Underwriters, and the
Additional Arranger and the Additional Underwriter, an Additional Credit Party)
in respect of the Facility on the same terms contained within the Commitment
Documents (other than with respect to the amount of our and any Additional
Credit Party’s commitments in respect of the Facility, which may be different)
and with the same economics (on a pro rata basis) as the Credit Parties and with
no more favourable titles (with all fees being split pro rata to the respective
Underwriters’ commitments under their respective adjusted underwriting
proportions) and such that the underwriting proportions of the Original
Underwriter in respect of the Facility are reduced pro rata to their respective
applicable underwriting proportion by the aggregate applicable underwriting
proportions assumed by the Additional Credit Party in respect of such Facility,
provided that:

 

(i)no more than three Additional Arrangers and three Additional Underwriters may
be appointed;

 

(ii)the aggregate underwriting proportions of the Additional Credit Parties
shall not exceed 662⁄3 % of the total amount of the Facility and provided that,
the Original Underwriter shall always hold the single largest underwriting
proportion;

 

(iii)no Additional Credit Party shall receive economics greater than the Credit
Parties (proportionate to their respective underwriting proportions); and

 

(iv)the underwriting proportion assumed by the Additional Underwriter will
reduce the Original Underwriter’s Underwriting Proportion on a pro rata basis,
and

 

2Project Unicorn - Commitment Letter (SPDB)

 

 

(b)the Credit Parties and you will enter into any amendments to the then current
form of the Commitment Documents or Facility Agreement or any new Commitment
Documents or Facility Agreement and/or any other appropriate documentation as
may be mutually agreed (each acting reasonably) to amend or replace the
Commitment Documents, the Facility Agreement, and any other Finance Documents
(as defined in the Facility Agreement) to reflect any changes reasonably
required to reflect the accession of each Additional Credit Party and joining
each Additional Credit Party as a party to the relevant Commitment Document,
Facility Agreement and/or other Finance Document.

 

2.3The obligations of each Credit Party are several and a failure by a Credit
Party to perform its obligations under any of the Commitment Documents shall not
affect the obligations of any other Credit Party. No Credit Party is responsible
for the obligations of another Credit Party.

 

3.Conditions

 

3.1The availability of the Facility and the Credit Parties’ obligations to
arrange, underwrite and fund the Facility in full is subject only to:

 

(a)receipt by us of a copy of this letter countersigned by you; and

 

(b)satisfaction of the Certain Funds Conditions and the Initial Conditions
Precedent set out in the Term Sheet.

 

There are no other conditions, implied or otherwise, to the commitments of the
Credit Parties, their obligations hereunder and their funding of the Facility.

 

3.2Each Credit Party is pleased to confirm that:

 

(a)its credit committee and all other internal bodies or committees have given
full and final approval for arranging, underwriting and/or funding (as the case
may be) the Facility on the “certain funds” basis as described and on the terms
set out in the Commitment Documents, and performing all of its duties, roles and
obligations as contemplated by the Commitment Documents (including but not
limited to all client identification procedures and the collection of all
information required by applicable money laundering rules in respect of the
Sponsors and their Affiliates, the Parent and the Company required in connection
with the Acquisition), the Facility and the transactions contemplated therein
(together, the Transaction) in compliance with applicable laws, regulations and
internal requirements;

 

(b)it has received and reviewed the draft or final Acquisition Documents,
Original Financial Statements, Base Case Model, Reports and Group Structure
Chart (in each case, as defined in the Term Sheet, and together, the Commercial
CPs) and the related conditions precedent set out in the Term Sheet will be
satisfied subject to the delivery of final versions of the Commercial CPs that
are not materially different in respects which are materially adverse to the
interests of the Credit Parties (taken as a whole) under the Commitment
Documents compared to the most recent form of such Commercial CPs delivered to
the Credit Parties on or before the date of this letter or (in the case of all
of the Commercial CPs) are approved by all of the Credit Parties (acting
reasonably with such approval not to be unreasonably withheld or delayed) and it
will promptly confirm this accordingly to the Agent; and

 

(c)there are no outstanding internal approvals, due diligence items or other
internal impediments to it arranging, underwriting and/or funding (as the case
may be) the Facility on the “certain funds” basis as described and on the terms
set out in the Commitment Documents and performing all of its roles, duties and
obligations as contemplated by the Commitment Documents.

 

3Project Unicorn - Commitment Letter (SPDB)

 

 

4.Titles and Roles

 

4.1Subject to paragraph 2.2 above, you:

 

(a)engage and mandate the Original Arranger as exclusive mandated lead arranger
and bookrunner of the Facility;

 

(b)engage and mandate the Original Underwriter as exclusive underwriter of the
Facility; and

 

(c)confirm and agree that: (x) no roles or titles will be conferred on any other
person in respect of the Facility without the written consent of the Original
Arranger (acting reasonably and with such consent not to be unreasonably
withheld or delayed), other than in respect of any facility agent in connection
with the Facility (the Agent), any security agent and trustee in connection with
the Facility (the Security Agent), any hedging provider, any additional arranger
or additional underwriter appointed in accordance with paragraph 2.2 above (and
for the avoidance of doubt, any appointment or designation of account banks
shall comply with the provisions in the Term Sheet in relation to collection
account and cash pooling arrangement requirements), and (y) no compensation
(other than as provided in the Commitment Documents and other than in connection
with any additional appointments referred to in this paragraph 4 (Titles and
Roles) (and which compensation, to the extent relating to any additional
appointments (other than the Agent and the Security Agent), shall be awarded in
accordance with paragraph 2.2 above)) shall be paid to any Lender or Arranger.

 

4.2We hereby confirm that you have appointed Shanghai Pudong Development Bank
Putuo Sub-Branch or its Affiliate to act as Agent and/or Security Agent.

 

5.Finance Documents

 

5.1The Facility shall be documented in the Facility Agreement (to be prepared by
the counsel to the Sponsors) and related Finance Documents, reflecting the terms
and conditions set out in the Term Sheet and other terms as mutually agreed.

 

5.2Each Credit Party agrees to negotiate in good faith to use commercially
reasonable efforts to finalise and enter into the Facility Agreement and all
other Finance Documents that are required to be entered into as a condition
precedent to initial utilisation under the Facility Agreement on terms
consistent with the Commitment Documents promptly after the date of this letter,
and not later than the date falling 30 Business Days after the date on which the
first draft of the Facility Agreement is circulated for our review (as such date
may be extended by you from time to time with the consent of the Credit Parties
(such consent not to be unreasonably withheld or delayed)) (the Agreed Form
Target Date).

 

5.3We agree that the provisions of the Facility Agreement shall, save as
otherwise provided for in the Commitment Documents, having regard (acting
reasonably and in good faith) to any deal specific issues relating to the
Transaction, the operational and strategic requirements of the Group in light of
the proposed business plan, and the business of the Target Group, including,
without limitation the business, conditions (financial or otherwise) or assets
of the Targets and the Target Group, provided that if, despite negotiation in
good faith, we are not able to reach agreement on any provision of the Facility
Agreement, the relevant language included shall be that from the current
standard form Primary (Leveraged) LMA Senior Multicurrency Term and Revolving
Facilities Agreement (the LMA Precedent Facilities Agreement) or if the LMA
Precedent Facilities Agreement is silent on a particular point, the relevant
language shall be that reasonably requested by the Credit Parties or if the
Credit Parties do not specify any language within 5 Business Days of the date of
a written request by you, such language reasonably requested by you.

 

4Project Unicorn - Commitment Letter (SPDB)

 

 

5.4If, despite negotiation in good faith and the use of commercially reasonable
endeavours, the Finance Documents (other than the Facility Agreement) have not
been agreed by the Agreed Form Target Date, each Credit Party undertakes to
sign:

 

(a)the Intercreditor Agreement (to be prepared by counsel to the Sponsors) based
on the most recent LMA Intercreditor Agreement (as published on the LMA website)
having regard (acting reasonably and in good faith) to the provisions of the
Commitment Documents, any deal-specific issues relating to the Transaction and
the business of the Target Group and to any other minor drafting changes which
are required; and

 

(b)the Security Documents (as defined in the Term Sheet) that are required to be
entered into by the Company and/or the Parent as conditions precedent to initial
utilisation under the Facility Agreement based on and subject always to the
Agreed Security Principles (as defined in the Term Sheet) having regard (acting
reasonably and in good faith) to provisions of the Commitment Documents, any
deal-specific issues relating to the Transaction and the business of the Target
Group and to any other minor drafting changes which are required.

 

5.5For the purposes of the Commitment Documents, the principles set out in
paragraph 5.3 shall be the Documentation Principles.

 

5.6If it becomes unlawful in any applicable jurisdiction for any Credit Party to
perform any of its obligations as contemplated by the Commitment Documents or to
fund, issue or maintain its participation under the Facility, that Credit Party
shall (a) promptly notify you upon becoming aware of that event and (b) in
consultation with you, take all reasonable steps to mitigate any circumstances
which arise and which would result in its Underwriting Proportion in respect of
the Facility (if applicable) not being available including (but not limited to)
transferring its rights and obligations under the Commitment Documents to one or
more of its Affiliates. A Credit Party is not obliged to take any steps under
paragraph (b) above if, in its opinion (acting reasonably), to do so might be
materially prejudicial to it. You shall have the right to replace such Credit
Party with any person that is willing to assume the rights and obligations of
such Credit Party under the Commitment Documents and the Finance Documents, each
Credit Party shall, and each Credit Party shall procure the Agent and/or the
Security Agent to, promptly execute such documents as may be necessary or
required by you (acting reasonably) to give effect to such replacement.

 

5.7Each Credit Party undertakes (a) to enter into (and instruct the Agent and/or
the Security Agent to enter into) the Facility Agreement upon five Business Days
prior notice by you of the intended signing date (or such later date as may be
agreed between you and the Credit Parties) and (b) to instruct the Agent or the
Security Agent (as applicable) to promptly execute all documents and other
evidence to which the Agent or the Security Agent (as applicable) is a party
which are in agreed form as at the date hereof and have been delivered by you to
satisfy a condition precedent to initial utilisation under the Facility
Agreement.

 

5.8The Credit Parties undertake to promptly instruct its legal counsel to
deliver all legal opinions referred to in the Facility Agreement as a condition
precedent to initial utilisation under the Facility Agreement and to use all
reasonable endeavours and commit sufficient internal resources to instruct its
legal counsel to work with the Sponsor’s legal counsel with a view to agreeing
the Facility Agreement and the forms of all documents and other evidence
required to be delivered as a condition precedent to initial utilisation under
the Facility Agreement as soon as reasonably practicable after the date of this
letter and, in any event, no later than the date falling 20 Business Days after
the date on which the first draft of the Facility Agreement is circulated for
our review (as such date may be extended by you from time to time with the
consent of the Credit Parties (such consent not to be unreasonably withheld or
delayed)).

 

5Project Unicorn - Commitment Letter (SPDB)

 

 

6.Information

 

6.1You represent and warrant that, to the best of your knowledge:

 

(a)any material written factual information provided to us by or on behalf of
you or any other member of the Group (excluding any forecast, projection,
inference, forward-looking statement or information or general economic and
industrial nature in respect of the Company or any of its subsidiaries) (the
Information), taken as a whole, is true and accurate in all material respects as
at the date it is provided or as at the date (if any) on which it is stated;

 

(b)as at the date when any Information is provided (including when such
Information is updated or supplemented or when the representations and
warranties set out in paragraph 6.1 are being repeated), nothing has occurred or
has been omitted and no information has been given or withheld that results in
the Information, taken as a whole, being untrue or misleading in any material
respect in the context of the transaction as a whole; and

 

(c)any financial projections contained in the Information have been prepared in
good faith on the basis of recent historical information and on the basis of
reasonable assumptions, provided that each Credit Party acknowledges that the
projections and forecasts are subject to significant uncertainties and
contingencies and no assurance can be given that such projections or forecasts
will be realised.

 

6.2The representations and warranties set out in paragraph 6.1 are deemed to be
made by you (a) on the date the relevant information is provided by or on behalf
of you or any other member of the Group; and (b) on the date of this letter by
reference to the facts and circumstances then existing, and the representations
and warranties set out in paragraph 6.1 shall cease upon the signing of the
Facility Agreement.

 

6.3You shall promptly notify us if any representation and warranty set out in
paragraph 6.1 is incorrect or misleading in any material respect and agrees to
supplement the Information promptly from time to time to ensure that each such
representation and warranty is correct in any material respect when made.

 

7.Indemnity

 

7.1Subject to paragraphs 7.2 and 7.3 below, whether or not the Acquisition (in
whole or in part) is consummated or any Finance Document is signed or a
utilisation is made thereunder, you agree to indemnify and hold harmless, within
10 Business Days of demand, each Credit Party and its affiliates and its and
their respective directors, officers, employees and agents (each an Indemnified
Person) against any loss, claim, damages or liability (each a Loss) incurred by
or awarded against such Indemnified Person, in each case, arising out of or in
connection with the entry into and performance by the Credit Parties of their
obligations under the Commitment Documents (including in connection with the
arranging or underwriting of the Facility) or otherwise in respect of any part
of the Transaction (but, in each case, excluding any loss of profit) or any
actual or threatened claim, dispute, proceedings or litigation relating to any
of the foregoing whether or not any Indemnified Person is a party to the same
(including, but not limited to, the reasonable fees and expenses of legal
counsel to such Indemnified Person incurred in investigating or defending any
such loss, claim, damages or liability).

 

6Project Unicorn - Commitment Letter (SPDB)

 

 

7.2As to any Indemnified Person, you will not be liable under paragraph 7.1 of
this paragraph 7 (Indemnity) above for any Loss (including, without limitation,
legal fees) incurred by or awarded against such Indemnified Person arising from
(i) the gross negligence, wilful misconduct or fraud of such Indemnified Person
(as determined by a court of competent jurisdiction) or (ii) any breach by such
Indemnified Person of any terms of the Commitment Documents (as determined by a
court of competent jurisdiction). You shall not be responsible or liable to any
person for indirect or consequential losses or damages.

 

7.3You agree that no Indemnified Person shall have any liability (whether direct
or indirect, in contract or tort or otherwise) to you or any of your affiliates
for or in connection with the transactions contemplated by this letter, except
following your acceptance of this letter, to the extent arising from any
Indemnified Person’s or any of its affiliate’s gross negligence, wilful
misconduct or fraud or any Indemnified Person’s or any of its affiliate’s breach
of any terms of the Commitment Documents (including any failure to perform their
obligations under any Commitment Document) (as determined by a court of
competent jurisdiction). No Indemnified Person shall be responsible or liable to
you or any of your affiliates for indirect or consequential losses or damages.

 

7.4Each Indemnified Person shall promptly notify you upon becoming aware of any
circumstances which may give rise to a claim for indemnification to the extent
permissible by law and without prejudicing their legal privilege.

 

7.5An Indemnified Person may rely on and enforce this paragraph 7 (Indemnity).

 

7.6Your obligations under this paragraph 7 (Indemnity) shall be superseded by
the terms of the indemnities to be contained in the Facility Agreement once the
Facility Agreement has been signed (other than in respect of any prior existing
claims made under this paragraph 6 (Indemnity), which shall continue).

 

7.7You agree that:

 

(a)you are not relying on any communication (written or oral) from any or all of
the Credit Parties (in such capacity) as investment advice or as a
recommendation to enter into the Transaction, it being understood that
information and explanations related to the terms and conditions of the
Transaction shall not be considered investment advice or a recommendation to
enter into the Transaction; and

 

(b)you are capable of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and understands and accepts,
the terms, conditions and risks of the Transaction.

 

8.Confidentiality and Conflicts

 

8.1Neither the Credit Parties nor you may, without the prior written consent of
the other parties to this letter, disclose the Commitment Documents or any of
their terms in whole or in part to any person, other than:

 

(a)to:

 

(i)the Credit Parties, the Sponsors and you;

 

(ii)any of your direct or indirect shareholders and to any actual or potential
direct or indirect investor in you, in each case, by you;

 

(iii)any potential Additional Arranger and any potential Additional Underwriter;

 

7Project Unicorn - Commitment Letter (SPDB)

 

 

(iv)any affiliate (including a head office, branch and representative office)
and each of their (or their respective affiliates’) representative, officer,
employee, insurer, insurance brokers, service providers professional adviser
and/or auditor of any of the foregoing,

 

in each case on a confidential basis in connection with the Acquisition and the
Facility;

 

(b)as required by law or regulation government, quasi-government,
administrative, regulatory or supervisory body or authority, court or tribunal
(including disclosure requirements under applicable stock exchange, listing or
takeover regulations) or if required in connection with any legal,
administrative or arbitration proceedings or other investigations, proceedings
or disputes arising out of or in connection with the Commitment Documents or the
Facility; and

 

(c)in the case of this letter and the Term Sheet only, to the Targets and the
Sellers and their respective affiliates and advisers, on a confidential basis
and provided that the Credit Parties shall not have any responsibility or
liability under the Commitment Documents to any person other than you or any
person you may assign or transfer your rights and obligations under the
Commitment Documents to in accordance with paragraph 11.

 

8.2No Credit Party or its affiliate (each an Arranger Group) shall use
confidential information obtained from you, the Parent, the Target Group, the
Sponsors or any of your affiliates or advisers in relation to the Commitment
Documents, the Transaction or the Facility in connection with the performance of
services for any other persons and will not furnish such information to other
persons except as permitted under this paragraph 8 (Confidentiality and
Conflicts). No member of an Arranger Group has any obligation to use, or furnish
to you or any of your affiliates or any other person, any information obtained
from other persons or any details of such other person in connection with the
Acquisition or its financing and the services being provided to them.

 

8.3All publicity in connection with the Facility shall be managed by the
Arrangers in consultation with you.

 

8.4The confidentiality obligations under this paragraph 8 (Confidentiality and
Conflicts) shall survive the termination of this letter and remain in full force
and effect until the date that is two years after the date of this letter but
shall otherwise be superseded by the equivalent confidentiality obligations
included in the Facility Agreement.

 

8.5You acknowledge that members of an Arranger Group may act in more than one
capacity in relation to the transactions contemplated by the Commitment
Documents and may have conflicting interests in respect of such different
capacities. You further acknowledge that members of an Arranger Group may be
full service financial services firms and may provide or engage in, amongst
other business, debt financing, equity capital, financial advisory services,
investment management, equity and debt security trading both for clients and as
principal, securities offerings, brokerage services, hedging, principal
investment and financial planning and benefits counselling in each case to other
persons with whom you or your affiliates may have conflicting interests in this
or other transactions. In the ordinary course of its trading, brokerage and
financing activities or otherwise, a member of an Arranger Group may trade
positions or otherwise effect transactions, for its own account or the account
of customers, in equity, debt, loans or other securities of you or the Target
Group or of any other company from time to time and exercise voting rights as
they see fit.

 

8Project Unicorn - Commitment Letter (SPDB)

 

 

8.6Neither the relationship described in this letter nor the services provided
by any member of an Arranger Group to you on any other matter will give rise to
any fiduciary, advisory, equitable or contractual duties (including, without
limitation, any duty of confidence) which could prevent or hinder any member of
an Arranger Group providing similar services to other customers, or otherwise
acting on behalf of other customers or for their own account. Accordingly,
except for a breach of paragraph 8.2 above, in no circumstances shall any member
of an Arranger Group have any liability by reasons of it or any of its
affiliates conducting such other businesses, acting in their own interests or in
the interests of other clients in respect of matters affecting you or your
affiliates or any other person the subject of this engagement or referred to in
this letter, including where, in so acting, any member of an Arranger Group acts
in a manner which is adverse to the interests of you or any other person which
is the subject of this engagement or which is referred to in this letter.
Furthermore, no member of an Arranger Group will be required to account to you
or any member of the Group for any payment, remuneration, profit or benefit it
obtains as a result of acting in the ways referred to above.

 

9.Period of offer

 

9.1If you do not accept the offer made by the Credit Parties in this letter by
signing and faxing or scanning and emailing countersigned copies of this letter,
marked for the attention of:

 

(a)葛蓓at No.746 Changshou Road, Shanghai, China 200060 (Fax number: 021-62300515)
(Email: gebei@spdb.com.cn); and

 

(b)金文婕 at No.746 Changshou Road, Shanghai, China 200060 (Fax number:
021-62300515) (Email: jinwj@spdb.com.cn);

 

before 11:59 pm Hong Kong time on the date of this letter (the Acceptance Time),
such offer shall terminate at such time unless the Acceptance Time is extended
by us in writing.

 

9.2You agree that, upon your acceptance of this letter in the manner provided in
paragraph 9.1 above, the commitment letter dated 10 May 2019 between Shanghai
Pudong Development Bank Putuo Sub-Branch and New Frontier Corporation (the
Existing Commitment Letter) shall be automatically terminated without any
further action by you or us.

 

10.Termination

 

10.1Following acceptance in writing by you in the manner set out in paragraph 9
(Period of offer) above to the offer in this letter, either the Credit Parties
(in the case of paragraphs (a) to (c) below only) or you (in the case of
paragraphs (a), (b) and (d) below only) may terminate its respective obligations
under the Commitment Documents and such obligations shall terminate immediately
upon written notice to you from the Credit Parties (in the case of paragraphs
(a) to (c) below only) or upon written notice to the Credit Parties from you (in
the case of paragraphs (a), (b) and (d) below only) if:

 

(a)you (or the Sponsors on your behalf) notify the Credit Parties (which it
shall do so as soon as reasonably practicable) that (i) you have conclusively
and definitively withdrawn and terminated your (and any of your Affiliates’) bid
for the entire equity interests in the Targets, (ii) the Sellers have notified
the Sponsors that your (and any of your Affiliates’) offer for the Target Group
is conclusively and definitively rejected, (iii) the Sellers conclusively and
definitively terminate such sale process or (iv) the TA is terminated in full by
the parties thereto;

 

(b)Completion has not occurred by 11.59 pm Hong Kong time on the Outside Date
(as defined in and as specified under the TA, after giving effect to any
extension thereof in accordance with the terms of the TA), which shall be no
later than 12 August 2020, unless otherwise extended from time to time with the
consent of the Credit Parties (such consent not to be unreasonably withheld or
delayed);

 

9Project Unicorn - Commitment Letter (SPDB)

 

 

(c)you fail to comply with any terms of this letter in any material respect and
has not remedied such failure to comply within 10 Business Days of a written
notice from the Original Arranger; or

 

(d)subject to paragraph 10.2 below, any of the Credit Parties fails to comply
with any term of this letter in any material respect or you have requested
(acting reasonably and in good faith) amendments and/or supplements to the
Commitment Documents, the Finance Documents or any other documents delivered
thereunder or in relation thereto (including the TA) that are necessary to
implement or complete the Acquisition or have arisen as part of the negotiations
with senior management or the Sellers in connection with the Acquisition
following the date of this letter or as contemplated pursuant to the TA and
which are not (taken as a whole) materially adverse to the interests of the
Credit Parties and the relevant Credit Party has not consented to such
amendment.

 

10.2Notwithstanding paragraph 10.1 above, if you exercise your termination
rights pursuant to paragraph 10.1(d) in respect of any Credit Party (the
Defaulting Credit Party), your rights against the Credit Party (other than any
Defaulting Credit Party) under the Commitment Documents shall remain in force
and you shall be permitted to appoint, within 30 Business Days of such
termination, an additional bank or other person as additional arranger,
bookrunner and/or underwriter to act with us in relation to all or any of the
Facility and in respect of the respective commitments of the Defaulting Credit
Party (on the same terms contained within the Commitment Documents and on the
same economics as the Defaulting Credit Party).

 

10.3This paragraph 10.3 and paragraphs 8 (Indemnity), 8 (Confidentiality and
Conflicts), 14 (Third Party Rights) and 15 (Governing law and jurisdiction)) of
this letter shall survive any termination or cancellation (for whatever reason)
of this letter.

 

11.Assignments

 

11.1No party may assign or transfer rights or obligations under the Commitment
Documents without the prior consent of the other parties and any attempted
assignment or transfer without such consent is void and unenforceable.

 

12.Miscellaneous

 

12.1The Commitment Documents supersede any prior understanding or agreement
relating to the Facility and comprise the entire agreement between us.

 

12.2The Commitment Documents may not be amended except in writing signed by each
of the parties to the relevant Commitment Document.

 

12.3No failure to exercise, nor delay in exercising any right or remedy under
the Commitment Documents shall operate as a waiver, nor shall any single or
partial exercise of any right or remedy prevent any further or other exercise of
any right or remedy. The rights and remedies provided in each Commitment
Document are cumulative and not exclusive of any rights or remedies provided by
law.

 

12.4Any Commitment Document may be signed in any number of counterparts. This
has the same effect as if the signatures were on a single copy of that
Commitment Document.

 

10Project Unicorn - Commitment Letter (SPDB)

 

 

12.5Each Credit Party may delegate, by prior written notice to you, any or all
of its rights and obligations under the Commitment Documents to any of its
subsidiaries or affiliates (each a Delegate) and may designate any Delegate as
responsible for the performance of any of its appointed functions under the
Commitment Documents provided that each Credit Party shall remain liable to you
and any other Credit Party for the performance of such rights and obligations by
its Delegate and for any loss or liability suffered by you or any other Credit
Party as a result of such Delegate’s failure to perform such obligations. Each
Delegate may rely on this letter.

 

12.6If a term of any Commitment Document becomes illegal, invalid or
unenforceable in any jurisdiction that will not affect the legality, validity or
enforceability of (i) any other term of the Commitment Documents or (ii) that
term in any other jurisdictions.

 

12.7No Credit Party is acting as a fiduciary for, or providing any legal, tax
accounting, actuarial or regulatory advice to, you or any of your affiliates in
connection with the Transaction.

 

12.8You have made your own independent decision to enter into, and are not
relying on any communication from any Credit Party, in its capacity as a Credit
Party, as advice or recommendation to enter into, the transactions contemplated
in the Commitment Documents. The Credit Parties make no representation or
warranty as to the profitability or expected results of the transactions
contemplated in the Commitment Documents.

 

13.No Announcements

 

No party shall make (and shall cause each of its affiliates not to make) any
public announcement regarding any or all of the Transaction or Facility without
the prior consent of each of the other parties (such consent not to be
unreasonably withheld or delayed), except to the extent required by law,
regulation or applicable governmental or regulatory authority (including any
applicable stock exchange). On and after the date on which the Acquisition is
publicly announced or disclosed, each Credit Party may, at its own expense,
disclose its participation in the Facility, including without limitation, the
placement of “tombstone” advertisements in financial and other newspapers,
journals and in marketing materials.

 

14.Third Party Rights

 

14.1Except as expressly stated otherwise in paragraph 7 (Indemnity) above or any
other provision of any Commitment Documents, the terms of any Commitment
Document may be enforced or relied on only by a party to it or such party’s
successors or permitted assigns and the terms of the Contracts (Rights of Third
Parties) Act 1999 are excluded.

 

14.2Notwithstanding the rights of Indemnified Persons under paragraph 8
(Indemnity) above, any of the Commitment Documents may at any time be amended,
waived, rescinded or terminated by the parties thereto without the consent of
any person who is not a party thereto.

 

15.Governing law and jurisdiction

 

15.1The Commitment Documents and all disputes or proceedings and any
non-contractual obligations arising out of or in connection with any of them are
governed by English law.

 

15.2Each party submits, for the benefit of the other parties, to the exclusive
jurisdiction of the English courts for the resolution of any dispute or
proceedings arising out of or in connection with any of the Commitment Documents
(including any dispute relating to non-contractual obligations arising out of or
in connection with any Commitment Documents).

 

To accept this offer please sign and return to the Original Arranger a copy of
this letter.

 

If this offer is not so accepted, you are directed to return the Commitment
Documents (and any copies) to the Credit Parties immediately.

 

Yours faithfully,

 

11Project Unicorn - Commitment Letter (SPDB)

 

 

   

 

For and on behalf of

 

SHANGHAI PUDONG DEVELOPMENT BANK PUTUO SUB-BRANCH as Original Arranger

 

By: Fang Chen       /s/ Fang Chen       (Sealed)  

 

Signature Pages

Project Unicorn - Commitment Letter (SPDB)

 

  

   

 

For and on behalf of

 

SHANGHAI PUDONG DEVELOPMENT BANK PUTUO SUB-BRANCH as Original Underwriter

 

By: Fang Chen       /s/ Fang Chen       (Sealed)  

 

Signature Pages

Project Unicorn - Commitment Letter (SPDB)

 

  

Accepted and Agreed.

 

   

 

For and on behalf of

 

NF UNICORN ACQUISITION LIMITED

 

/s/ Carl Wu  

 

Date: 14 June 2019

 

Signature Pages

Project Unicorn - Commitment Letter (SPDB)

 

 

Schedule 1

 

Term Sheet

 

Project Unicorn - Commitment Letter (SPDB)

 

 

  EXECUTION VERSION

 

PROJECT UNICORN – TERM SHEET

 

PART I - GENERAL Sponsors: New Frontier Corporation (NFC) and funds,
partnerships and/or other entities owned, managed, controlled or advised by NFC
and/or any of its affiliates (but excluding any portfolio company in which such
funds, partnerships or other entities hold an investment or interest in).    
Arrangers: Shanghai Pudong Development Bank Putuo Sub-Branch and any additional
Arranger appointed by the Company in accordance with the terms of the Commitment
Letter.     Underwriters: Shanghai Pudong Development Bank Putuo Sub-Branch and
any additional Underwriter appointed by the Company in accordance with the terms
of the Commitment Letter.     Percentage Underwrite: 100% (subject to scale-back
if the Additional Underwriter is appointed in accordance with the terms of the
Commitment Letter).     Lenders: The Underwriters and any other person who
becomes a Lender in accordance with “Assignments and Transfers” below.    
Issuing Bank: A Lender or an affiliate of a Lender which is selected by the
Company and which, in each case, agrees to be an Issuing Bank.     Agent:
Shanghai Pudong Development Bank Putuo Sub-Branch, or any of its affiliates (or
any other person nominated by the Arrangers in consultation with the Company).  
  Security Agent: Shanghai Pudong Development Bank Putuo Sub-Branch, or any of
its affiliates (or any other person nominated by the Arrangers in consultation
with the Company).     Finance Parties: The Arrangers, the Lenders, any Issuing
Bank, the Agent, the Security Agent and a hedging counterparty (for specified
purposes to be agreed).     Parent: NF Unicorn Holding Limited, an exempted
company incorporated under the laws of Cayman Islands with limited liability,
and a direct wholly-owned subsidiary of NFC.     Company: NF Unicorn Acquisition
Limited, an exempted company incorporated under the laws of Cayman Islands with
limited liability, and a direct wholly owned subsidiary of the Parent.    
Obligors: The Company and each Guarantor.     Obligors’ Agent: The Company.    
NFC Group: Sponsors and its subsidiaries from time to time.     Chindex US:
Chindex International Inc., a Delaware corporation.     Group: Company and its
subsidiaries from time to time, but excluding the HHH Group (each, a Group
Member).     HHH Group: Healthy Harmony Healthcare, Inc. (HHH Inc.) and its
subsidiaries from time to time (each, an HHH Group Member).

 

 1Project Unicorn - Term Sheet (SPDB)

 

Targets: (a) Healthy Harmony GP, Inc., an exempted company incorporated with
limited liability under the laws of the Cayman Islands (the General Partner);
and (b) Healthy Harmony Holdings, L.P., an exempted limited partnership
established under the laws of the Cayman Islands (the Partnership).     Target
Group: Each Target and its subsidiaries.     Acquisition: The acquisition by the
Company of 100 per cent. of the issued share capital of the General Partner and
certain limited partnership interests in the Partnership in accordance with the
Acquisition Documents.     Acquisition Documents:

(a)          The transaction agreement to be entered into by, among others, the
Seller(s) (as defined therein), NFC, the Company, the General Partner, the
Partnership and each Target (the Transaction Agreement);

 

(b)          the Partnership Disclosure Schedule (as defined in the Transaction
Agreement).

 

(c)          Any other documents designated as such by the Company and the
Arrangers.

 

Signing Date: The date of signing the Facility Agreement.     Closing Date: The
date on which completion of the Acquisition occurs.     Utilisation Date: The
date of the utilisation of the Facility.

 

 2Project Unicorn - Term Sheet (SPDB)

 

 

PART II - FACILITY Quantum:

RMB equivalent of US$300,000,000 senior term loan facility (the Facility and the
loans thereunder, the Facility Loan).

 

No more than one Facility Loan may be outstanding.

 

The Facility Loan amount will be funded to the Company into a free trade
non-resident account opened with the Account Bank (the transfer of funds in and
out of which is not subject to PRC regulatory approval) or an account in Hong
Kong or any other jurisdiction outside of the PRC which can receive funds in
RMB.

 

Currency: RMB.     Purposes: To finance: (i) the consideration payable for the
Acquisition pursuant to the Acquisition Documents (the Acquisition
Consideration); and/or (ii) the payment (or reimbursement) of Transaction Costs
in connection with the Acquisition or the Finance Documents as set out in the
Funds Flow Statement.     Borrower: The Company.     Availability Period: From
the Signing Date to the earliest of (i) the first date on which the Transaction
Agreement is terminated or ceases to have effect and has lapsed in accordance
with its terms and conditions, (ii) the Outside Date (as defined in the
Transaction Agreement) after giving effect to any extension thereof in
accordance with the terms of the Transaction Agreement which, in any event,
shall be no later than 12 August 2020, and (iii) the Closing Date and all of the
consideration in respect of the Acquisition (including the Acquisition
Consideration) has been paid in full.     Interest rate: 126.53% of the
applicable PBOC benchmark annual interest rate for loans denominated in RMB and
with the tenors of over five years (the PBOC Benchmark Rate), subject to annual
adjustment to reflect the PBOC benchmark annual interest rate applicable on 1
January each year.  As of the date of the commitment letter, the interest rate
is 6.20% p.a..     Interest Payment Date: Each 21 March, 21 June, 21 September
and 21 December (provided that if such day is not a business day, that Interest
Payment Date will instead fall on the next business day (or such other dates as
may be agreed to by the Lender of the relevant Facility)).     Default interest:
2.00% per annum above the applicable interest rate on unpaid amounts.    
Maturity Date: 7 years from the Utilisation Date.     Repayment: The Facility
will amortise in instalments on each date set forth below.

 

    Months after the Utilisation Date (Repayment Date) Amount
(Percentage of amount drawn on Utilisation Date)     12 0.50%     24 0.50%    
30 2.50%

 

 3Project Unicorn - Term Sheet (SPDB)

 

    36 2.50%     42 4.50%     48 4.50%     54 5.00%     60 5.00%     66 12.50%  
  72 12.50%     78 25.00%     Maturity Date 25.00% (or, if higher, the remaining
outstanding balance)

 

Upfront Fees: None.     Prepayment Fees: None.     Commitment Fees: None.    
Agent/Security Agent fee: As per the Agent Fee Letter.     No deal, no fee:
Unless otherwise provided in the section “Costs and expenses” below, no fees,
costs, expenses or other amounts are due or payable unless the Utilisation Date
occurs.     Costs and expenses: The (a) reasonable and documented out of pocket
costs and expenses incurred by designated legal counsel (in relation to the
legal fees only) and incurred by the Arrangers, Agent and Security Agent in
connection with the negotiation, preparation, execution and perfection of the
Finance Documents and related documents and (b) reasonable third-party costs
(including legal fees) of the Agent and Security Agent incurred in connection
with any amendment or waiver of a Finance Document requested by the Group will
in each case be reimbursed by the Company within 10 Business Days of demand,
subject to any agreed caps and (other than the above legal fees) subject to the
“No deal, no fee” section above.     Voluntary prepayments and cancellations:
Permitted without premium or penalty on five business days’ notice (in minimum
amounts of US$5,000,000 (or its equivalent)), subject to payment of break costs
(to be defined in the Facilities Agreement) if not made on an Interest Payment
Date.  Conditional prepayment notices are permitted subject to the Company
indemnifying the relevant Lenders against cost and liability incurred as a
result of revocation (including break costs (to be defined in the Facilities
Agreement)). Voluntary prepayments may be applied against the Facility and such
repayment instalments as the Company determines in its sole discretion.

 

 4Project Unicorn - Term Sheet (SPDB)

 

Mandatory prepayment: (a)          Excess Cashflow: In respect of the first full
financial year ending after the Closing Date and annually thereafter, a
percentage of Excess Cashflow generated during any such financial year shall be
applied in prepayment by reference to the Net Leverage Ratio for the period
ending on the last day of that financial year calculated on a pro forma basis to
take into account any prepayment required under this section (such that an
amount will be applied at the relevant percentage level until the Net Leverage
Ratio falls into a lower range, following which such lower percentage shall
apply) (Sweep Excess Cashflow) as set out below.     Net Leverage Ratio
Percentage     Greater than 4.50:1 70%     Less than or equal to 4.50:1 but
greater than 3.50:1 50%     Less than or equal to 3.50:1 but greater than 2.50:1
25%     Less than or equal to 2.50:1 0%  

 

Such prepayment shall be made on, in respect of a financial year, the Repayment
Date immediately falling after the last day by which the annual financial
statements is required to be delivered to the Agent, which annual financial
statements are in respect of such financial year evidencing that an amount of
Sweep Excess Cashflow (in respect of such financial year) is required to be
applied in prepayment in accordance with this paragraph (a).

 

From the amount of Sweep Excess Cashflow to be applied in prepayment there shall
be deducted, among others:

 

(i)          such amount as required to maintain a positive cash balance of not
less than US$50,000,000 (or its equivalent) for the Group taken as a whole
(after taking into account any trapped cash);

 

(ii)          the amount on a dollar for dollar basis equal to the amount of all
voluntary prepayments of loans under the Facility Loan (including loans incurred
pursuant to any Permitted Additional Debt Facility in the nature of a term loan
under the Facility Agreement) made during such financial year (unless elected to
reduce any Sweep Excess Cashflow mandatory prepayment in respect of the previous
financial year and except for voluntary prepayments of loans funded by drawing
of loans under the Facility or pursuant to any Permitted Additional Debt) or
until the date of prepayment (without double counting and provided that no such
prepayment may be deducted more than once);

 

(iii)        the cash cost of any permitted debt buy-backs (including any debt
buybacks by the Group) made during such financial year (unless elected to reduce
any Sweep Excess Cashflow mandatory prepayment in respect of the previous
financial year) or until the date of prepayment (without double counting and
provided that no such debt buy-back may be deducted more than once); and

 

(iv)        an amount constituting Completion Opening Cash in the Excess
Cashflow from which that Sweep Excess Cashflow is derived,

 

 5Project Unicorn - Term Sheet (SPDB)

 

 

 

in each case, after taking into account such portion of Excess Cashflow not
required to be prepaid according to the grid above.

 

This paragraph (a) shall not apply in respect of any Sweep Excess Cashflow for
any financial year in respect of which the amount of Sweep Excess Cashflow to be
applied is less than US$10 million (or its equivalent) or in respect of any
Sweep Excess Cashflow generated prior to or attributable to any period prior to
the Closing Date.

 

The requirement to apply Sweep Excess Cashflow in prepayment will apply on a
dollar-for-dollar and entity by entity basis (with no requirement to oversweep
from a non-trapped jurisdiction).

 

 

(b)          Change of Control or Total Sale: If required by an individual
Lender in respect of its commitments within 30 days following notification by
the Company that a Change of Control or a disposal of all or substantially all
of the business or assets of the Group has occurred, the Lender must be prepaid
and/or cancelled in full at par on the date that is 30 days from that Lender’s
request.

 

Change of Control means:

 

(i)          any person or group of persons acting in concert (other than New
Frontier Public Holding Limited, its affiliates and group of persons acting in
concert with it) gains direct or indirect control of NFC. For the purpose of
this definition, control of NFC means:

 

A.           the power (whether by way of ownership of shares, proxy, contract,
agency or otherwise) to:

 

a.        cast, or control the casting of, more than one-half of the maximum
number of votes that might be cast at a general meeting of NFC;

 

b.        appoint or remove all, or the majority, of the directors or other
equivalent officers of NFC;

 

c.        give directions with respect to the operating and financial policies
of NFC with which the directors or other equivalent officers of NFC; or

 

B.           the holding beneficially of more than 50% of the issued share
capital of NFC (excluding any part of that issued share capital that carries no
right to participate beyond a specified amount in a distribution of either
profits or capital); and

 

(ii)          the Sponsors collectively ceases to control the Company. For the
purpose of this definition, control of the Company means (i) the ownership
directly or indirectly in aggregate of more than 50% of the issued share capital
or voting interests in the Company and (ii) the power to appoint or remove
directors or other equivalent officers of the Company which control the majority
of votes which may be cast at a meeting of the board of directors of the
Company.

 

acting in concert means, a group of persons who, pursuant to an agreement or
understanding (whether formal or informal), actively co-operate, through the
acquisition directly or indirectly of shares in NFC by any of them, either
directly or indirectly, to obtain or consolidate control of NFC.

 

 6Project Unicorn - Term Sheet (SPDB)

 

 

 

(c)          Sale of assets: In the event that any assets are disposed of by a
Group Member to a person who is not a Group Member in excess of US$5 million (or
its equivalent) for each individual asset sale or disposition and US$15 million
(or its equivalent) in aggregate for any financial year, the net cash proceeds
of such disposal received by a Group Member shall be applied in prepayment.
Agreed exceptions to include, among others:

 

(iii)        proceeds from permitted disposals (other than those referred to in
paragraph (iii) and (vi) of paragraph (k) (Disposals) of Schedule 5
(Undertakings)); and

 

(iv)        proceeds which are elected to be reinvested by a Group Member in the
business of the Group to fund purchase of other assets used in the business,
and/or in financing or refinancing permitted acquisitions, permitted joint
ventures, capital expenditure or any other working capital and/or general
corporate purposes (other than (x) the payment of any Permitted Distribution or
(y) any payment of Permitted Additional Debt, Refinancing Indebtedness or other
permitted Financial Indebtedness) within 12 months of receipt of proceeds (or
within 18 months of receipt of proceeds, if a Group Member enters into a binding
commitment or the board of the relevant Group Member designates to so reinvest
within 12 months of receipt of proceeds).

 

(d)          Claims:

 

(i)          Recovery Proceeds:

 

Following a claim against a Report provider or the seller under the Acquisition
Documents in excess of US$5 million (or its equivalent) for each individual
claim and US$15 million (or its equivalent) in aggregate for any financial year,
the net cash proceeds of such claim shall be applied in prepayment.

 

Agreed exceptions to include (a) proceeds applied in replacing, reinstating or
repairing assets or meeting liabilities (or reimbursing a Group Member who has
discharged such liabilities) in respect of such claim or rectifying any
deficiency (including, but not limited to, settling outstanding tax or costs,
environmental claim, and/or working capital deficiency); and (b) proceeds which
are elected to be reinvested by a Group Member to fund purchase of other assets
used in the business, and/or in financing or refinancing permitted acquisitions,
permitted joint ventures, capital expenditure or any other working capital
and/or general corporate purposes (other than (x) the payment of any Permitted
Distribution or (y) any payment of Permitted Additional Debt, Refinancing
Indebtedness or other permitted Financial Indebtedness), in each case applied
for the purposes described in (a) or (b) above within 12 months of receipt of
proceeds (or within 18 months of receipt of proceeds, if a Group Member enters
into a binding commitment or the board of the relevant Group Member designates
to so reinvest within 12 months of receipt of proceeds).

 

 7Project Unicorn - Term Sheet (SPDB)

 

 

(ii)          Insurance Proceeds:

 

Following a claim under an insurance policy relating to loss of or damage to
assets (other than for third party liability, loss of earnings, or business
interruption or similar insurance) of any Group Member, in excess of US$5
million (or its equivalent) for each individual claim and US$15 million (or its
equivalent) in aggregate for any financial year, the net cash proceeds of such
claim shall be applied in prepayment. Agreed exceptions to include, among
others:

 

C.           proceeds in respect of business interruption, or which are applied
to meet or cover any third party, public liability, personal injury, workers’
compensation, directors’ and officers’ liability or similar claims in respect of
which the claim was made;

 

D.           proceeds applied in replacing, reinstating or repairing assets or
meeting liabilities in respect of such insurance claim (including, but not
limited to, settling outstanding tax or costs, environmental claim, and/or
working capital deficiency or reimbursing a Group Member who has discharged such
liability) within 12 months of receipt of proceeds (or within 18 months of
receipt of proceeds, if a Group Member enters into a binding commitment or the
board of the relevant Group Member designates to so reinvest within 12 months of
receipt of proceeds); and

 

E.           proceeds which are elected to be reinvested by a Group Member to
fund purchase of other assets used in the business, and/or in financing or
refinancing permitted acquisitions, permitted joint ventures, capital
expenditure or any other working capital and/or general corporate purposes
(other than (x) the payment of any Permitted Distribution or (y) any payment of
Permitted Additional Debt, Refinancing Indebtedness or other permitted Financial
Indebtedness) within 12 months of receipt of proceeds (or within 18 months of
receipt of proceeds, if a Group Member enters into a binding commitment or the
board of the relevant Group Member designates to so reinvest within 12 months of
receipt of proceeds).

 

(e)          Others: Other prepayment provisions (relating to illegality, tax
gross-up and increased costs) to be included as per Documentation Principles (as
defined below).

 

Prepayments (other than from any Excess Cashflow, or following a Change of
Control or in accordance with paragraph (e) above) may be made on the first
Interest Payment Date following the expiry of all the periods specified above
for reinvestment, replacement, repaid, reinstatement, compensation or
application.

 

 8Project Unicorn - Term Sheet (SPDB)

 

 

Prepayments generally:

Mandatory prepayments in relation to paragraphs (a) (Excess Cashflow), (c) (Sale
of assets) and (d) (Claims) of the “Mandatory Prepayments” section above are
subject to permissibility under applicable laws (e.g. financial assistance,
corporate benefit, capital maintenance, exchange control rules) and will not be
required where such prepayment or repatriation of cash from any applicable
jurisdiction to a jurisdiction where the relevant Group Member is incorporated
would breach applicable law or regulation, would breach fiduciary or statutory
duty by any relevant officer or director or give rise to a material risk of
personal liability or would result in any Group Member incurring a material
(more than 2.50 % of the principal amount of the prepayment prepaid (or would be
payable should the repayment of an intercompany loan by a given amount have
constituted a dividend of the same amount) cost or expense (including any tax
liability but excluding any amounts in respect of withholding tax in relation to
dividends or intra-group loan repayments made by any Group Member at the rate in
force (after giving effect to any applicable exemption, reduction or relief) or
any interest, prepayment premium and any other amounts associated with
intra-group loan repayments made by any Group Member) or would breach any
contractual restriction (that were not entered into for the purpose of limiting
such prepaying) and for so long as such illegality, breach of duty, or such risk
of cost, expense or liability exists (including, but not limited to, any cost,
expense or tax liability associated with repatriation of cash from PRC or other
applicable jurisdictions). To the extent applying in respect of any Sweep Excess
Cashflow, the applicable portion of such Sweep Excess Cashflow will be deducted
on a dollar-for-dollar basis from the amount required to be applied in
prepayment of the Facility Loan pursuant to the provision above relating to
Excess Cashflow, and no “over-sweep” will be required in respect of cash located
in jurisdictions not subject to such illegality, risk or material cost. Once
such illegality or such risk ceases to exist or repatriation of such net cash
proceeds or Excess Cashflow would not result in any Group Member incurring such
material cost or expense, the Company shall ensure that an amount equal to such
net cash proceeds or Excess Cashflow will be promptly applied (net of any taxes
that would be payable or reserved against if such amounts were actually
repatriated) in prepayment of the Facility Loan on the first Interest Payment
Date ending not less than 10 business days after the date of such notification
by the Company to the Agent or the removal of such restrictions or limitations
provided that such portion of such net cash proceeds or Excess Cashflow (as the
case may be) has not, in the intervening period, been used to prepay other
facilities or loans.

 

All prepayments referred to in the “Mandatory Prepayments” section (other than
any prepayment pursuant to paragraphs (b) and (e)) shall be reduced by the
amount of taxes and costs incurred in effecting such prepayment and shall be
deemed to include any applicable accrued interest and any associated hedge
termination costs and such amounts of principal required to be prepaid shall be
reduced accordingly to fund any applicable accrued interest which shall also
fall due for payment (and any hedge termination costs relating to any
termination of hedging arrangements in whole or in part) as a result of such
prepayment of principal.

 

The Company shall use reasonable efforts (provided that such efforts would not
themselves result in any illegality, breach of duty or result in any Group
Member incurring any such cost or expense) to avoid any such illegality, breach
of duty, cost, expense, liability or contractual restriction.

 

Subject to paragraph (bb) of Schedule 5 (General Undertakings), there shall be
no requirement to charge or retain proceeds of any event triggering a mandatory
prepayment in a blocked account or other specific accounts pending re-investment
or prepayment (as applicable). Trapped amounts or other amounts are not required
to be applied immediately in prepayment shall otherwise be available for general
corporate purposes not prohibited by the Facility Agreement until such time as
such amounts cease to be trapped or are required to be applied in prepayment (as
applicable).)

 

Application:

Mandatory prepayments shall be applied first to the repayment of the Facility
and any Permitted Additional Debt which is a term facility in nature (if any) on
a pro rata basis until repaid in full and then to any Permitted Additional Debt
which is revolving facility in nature (if any) (with the commitment thereunder
cancelled in a corresponding amount).

 

 9Project Unicorn - Term Sheet (SPDB)

 

 

Mandatory prepayments shall be applied against the repayment instalments of the
Facility in the manner directed by the Company and mandatory prepayment in
relation to Sweep Excess Cashflow shall be applied against the repayment
instalments of the Facility in direct order of maturity.

 

Unless otherwise specified, prepayments shall be made at the the next Interest
Payment Date (being, if applicable, the Interest Payment Date immediately after
the date on which such proceeds are received).

 

Permitted Additional Debt:

The Facility Agreement will permit senior secured debt by way of increasing the
amount of and/or adding one or more revolving and/or term loan facilities and/or
borrowing new credit facilities and/or issuing debt securities (whether by way
of notes or bonds or other debt instruments) in lieu, ranking pari passu with
the Facility (each a Permitted Additional Debt Facility) subject to the
following conditions (unless otherwise agreed by the Majority Lenders under the
Facility):

 

(a)          the purposes of such Permitted Additional Debt shall be limited to
Permitted Acquisitions, capital expenditure, working capital and/or general
corporate purposes;

 

(b)          if the repayment profile of such financial indebtedness (other than
any such Financial Indebtedness the purpose of which is to fund working capital)
is a bullet repayment profile, the final maturity date of a Permitted Additional
Debt Facility shall be no earlier than the Maturity Date of the Facility;

 

(c)          if a term facility with amortising repayment, (x) the final
maturity date of a Permitted Additional Debt Facility shall be no earlier than
the Maturity Date of the Facility and (y) the weighted average life of such
Permitted Additional Debt Facility shall not be shorter than the remaining
weighted average life of the Facility, or (z) the Lenders of the Facility are
offered the same amortisation percentage per annum as the proposed amortising
Permitted Additional Debt Facility (if shorter than the amortisation percentage
per annum of the Facility);

 

(d)          a Permitted Additional Debt Facility shall rank pari passu with the
Facility and shall be guaranteed and secured by the same security and guarantees
as secure and guarantee the Facility;

 

(e)          a Permitted Additional Debt shall be on terms no more onerous for
the Group than the Facility or otherwise on terms satisfactory to the Agent
(acting on the instructions of the Majority Lenders (acting reasonably)); and

 

(f)          the Net Leverage Ratio of the Group would be complied with if
recalculated on a pro forma basis, giving effect to the incurrence and full
utilisation of and application of proceeds of such Permitted Additional Debt for
the most recent Test Date as at the date on which such Permitted Additional Debt
is incurred, provided that if such Financial Indebtedness is incurred prior to
the First Test Date, the maximum Net Leverage Ratio for that most recent
Relevant Period shall be deemed to be the maximum Net Leverage Ratio permitted
under the section entitled “Financial covenants” as at the First Test Date;
provided that the aggregate amount of outstanding indebtedness under a Permitted
Additional Debt and the total amount of Permitted PRC Indebtedness shall not at
any time exceed the applicable cap set out in paragraph (o)(v) (Financial
Indebtedness) under Schedule 5 (Undertakings).

 

 10Project Unicorn - Term Sheet (SPDB)

 

Permitted Refinancing: The Finance Documents will permit any refinancing,
exchange or other replacement of all or any part of the Facility, any Permitted
Additional Debt and any other Financial Indebtedness (and of any refinancing or
replacement financing thereof from time to time) (and all fees, costs, expenses,
prepayment premium and similar incurred in connection with such refinancing,
exchange or replacement) (the Refinancing Debt) in accordance with the
indebtedness and liens covenants with one or more secured or unsecured bonds,
notes, loans or other debt instruments (the Refinancing Indebtedness), provided
that in the event that the Facility are being replaced or refinanced in part
only, (a) the average life of the Refinancing Indebtedness shall be no shorter
than the remaining average life of the Facility, (b) the final maturity date of
any such Refinancing Indebtedness shall be no earlier than the Maturity Date of
the Facility, (c) the provider(s) of such Refinancing Indebtedness (or, where
customary for financing of the relevant type, the agent or trustee in respect of
such Refinancing Indebtedness) shall become party to the Intercreditor Agreement
on pari passu or junior basis, (d) any proceeds from such Refinancing
Indebtedness shall be applied towards the purported refinancing only (dollar for
dollar) and any associated Transaction Costs and shall be so applied within 10
Business Days of its incurrence, (e) any Refinancing Indebtedness may only
receive any mandatory prepayments pro rata with or after (and not in priority
to) the Facility, and (f) the Refinancing Indebtedness shall only be guaranteed
and secured by guarantors and security that also guarantee and secure the
Facility (on pari passu or junior basis).

 

 11Project Unicorn - Term Sheet (SPDB)

 

 

PART III - OTHER TERMS Documentation Principles: The Facility will be documented
in a facility agreement (the Facility Agreement) based on recent global sponsor
precedent facilities agreement in the Asian leveraged finance market, amended to
take into account the terms set out in this term sheet (subject to review by and
comments from local counsel and other specialist legal counsel on local law, tax
and US related matters) and having regard (acting reasonably and in good faith)
to any deal specific issues relating to the Transaction, the operational and
strategic requirements of the Sponsors and the Group in light of the proposed
business plan, the jurisdiction of incorporation of the Company (such as
including customary provisions regarding ERISA, margin regulations and
investment company act for a US-incorporated borrower and automatic acceleration
with respect to any Obligor subject to US bankruptcy action) and legal advice
from local counsel and other specialist legal counsel).     Finance Documents:
The Facility Agreement, fee letter(s), intercreditor agreement (the
Intercreditor Agreement), ancillary documents, security documents and, for
specified purposes to be agreed, hedging documents.     Intercreditor Agreement:

The Intercreditor Agreement will rank the Facility, any senior secured Permitted
Additional Debt, Refinancing Debt and any Hedging Debt pari passu and without
any preference between them (including in respect of the Transaction Security).
The Instructing Group for the purposes of decision making under the
Intercreditor Agreement is the majority senior secured creditors (being
creditors in respect of the Facility, any senior secured Permitted Additional
Debt, Refinancing Debt and any Hedging Debt) holding two thirds or more of all
senior secured liabilities.

 

For the purpose of this paragraph, Hedging Debt means any liabilities or
obligations owed by any Obligor to any hedge counterparty under or in connection
with any Secured Hedging, which will rank pari passu with the Facility pursuant
to this Term Sheet.

 

Initial Conditions Precedent: The availability of the Facility is subject to the
Agent (acting reasonably and on the instructions of the Arrangers) having
received or being satisfied it will receive (or having waived the requirement to
receive) the items in Schedule 1 (Initial Conditions Precedent).     Certain
Funds Conditions:

In addition to the Initial Conditions Precedent above, borrowing of the Facility
during the Certain Funds Period will be subject only to:

 

(a)          no Events of Default having occurred and continuing, limited to
non-payment, breach of other obligations (to the extent relating to the
financial indebtedness, restricted payments, negative pledge, disposals, loans
or credit or guarantee, merger, acquisitions, joint ventures, holding companies
and limb (i) of the acquisition documents covenants), misrepresentation (to the
extent relating to status, binding obligations, no-conflict, power and
authority, holding company, authorisations, legal and beneficial ownership, pari
passu ranking and sanctions and anti-money laundering and anti-corruption),
invalidity, unlawfulness and repudiation, insolvency proceedings, insolvency and
creditors’ process in each case in relation to the Parent and the Company only
(and without any application (including by way of procurement obligation) in
respect of the Target or any member of the Target Group);

 

 12Project Unicorn - Term Sheet (SPDB)

 

 

 

(b)          no Change of Control having occurred; and

 

(c)          in relation to a Lender, it has not become illegal for that Lender
to lend the Facility after the date it has become a Lender (provided that this
shall not affect the obligation of any other Lender) and any funding shortfall
created as a result of such illegality is not met by the aggregate of new
funding or commitment provided by one or more new lenders and the Group’s own
funds (including the proceeds of any new equity and/or subordinated debt made
available to the Company).

 

No Lender may exercise any right of cancellation, acceleration, enforcement,
rescission, termination or set-off or any other right to affect or prevent the
making of any utilisation of the Facility during the Certain Funds Period other
than as provided above, provided that immediately upon the expiry of the Certain
Funds Period all such rights, remedies and entitlements shall be available to
the Finance Parties notwithstanding that they may not have been used or been
available for use during the Certain Funds Period. There will be no market or
business material adverse change, rating or financial covenant or any condition
related directly or indirectly to the Target Group as a condition precedent to
borrowing of the Facility during the Certain Funds Period.

 

Certain Funds Period means the period from the Signing Date until (and
including) the last day of the Availability Period in respect of Facility;

 

Financial covenants: Net Leverage Ratio: The Net Leverage Ratio in respect of a
Relevant Period will not exceed the ratio set out opposite such Relevant Period
ending on the date in the table below:

 

    Relevant Period Maximum Net Leverage Ratio   On or before 31 December 2020
6.8:1   On or before 31 December 2021 5.8:1   On or before 31 December 2022
4.5:1   On or before 31 December 2023 4.0:1   On or before 31 December 2024
3.5:1   On or before 31 December 2025 3.0:1   Thereafter 2.5:1

 

 

First Test Date means the last day of the first financial year ending after 12
months from the Utilisation Date.

 

Net Leverage Ratio means, in respect of any Relevant Period, the ratio of (i)
Total Net Debt on the last day of that Relevant Period to (ii) EBITDA for that
Relevant Period.

 

Additional definitions and further details on the financial covenants are set
out in Schedule 4 (Financial Covenants). EBITDA shall be adjusted by giving
effect to any Pro Forma Adjustment (as defined in Schedule 4 (Financial
Covenant)). Except as otherwise provided in this term sheet, the definitions and
provisions relating to financial covenants shall be consistent with the
Documentation Principles.

 

 13Project Unicorn - Term Sheet (SPDB)

 

 

  The financial covenants will be tested semi-annually with the first test
taking place on the First Test Date.       Equity Cure:

The Company has the ability to prevent and/or cure breaches of any financial
covenant by the Parent making a new equity or subordinated debt investment in
the Company in an amount at least sufficient to ensure that the relevant
financial covenant(s) would be complied with if re-tested (an Equity Cure) no
later than the date falling 20 business days after delivery of the compliance
certificate for the Relevant Period in which a financial covenant is in breach.

 

The amount of any Equity Cure shall be added to EBITDA or, at the election of
the Company, pro forma reduction of Total Net Debt as at the start of the
applicable Relevant Period for the purposes of calculating the Net Leverage
Ratio.

 

The amount of any Equity Cure shall be included in financial covenant
calculations until the relevant financial half-year in respect of which it was
made does not fall within a Relevant Period for the purposes of calculating the
financial covenants above (including as “cash” for the purposes of calculating
Net Leverage Ratio, except for the Relevant Period in respect of which the
Equity Cure was made).

 

No more than five Equity Cures over the life of the Facility and Equity Cures
may not be applied in consecutive test periods (provided that, the application
of any cure amount towards the cure of more than one financial covenant in
relation to the same Relevant Period or the same Test Date shall be deemed to
constitute a single application). There is no limit on overcuring. Amount
injected can be used for any working capital and operating expenditure of the
Group, as an Acceptable Funding Source (except for the purpose of “Cashflow” to
the extent in any Relevant Period such amount is already counted in Cashflow as
a result of an Equity Cure), or any other purpose not prohibited by the Finance
Documents (other than making any Permitted Distribution). There is no
requirement to apply any Equity Cure in prepayment and no amount of any Equity
Cure shall be counted towards Excess Cashflow.

 

Irrespective of any Equity Cure, if there is a breach of a financial covenant
and on the next Test Date that financial covenant is satisfied, the previous
breach (and any resulting actual or potential Events of Default) of a financial
covenant will be deemed to have been automatically waived and remedied, provided
that there is no Acceleration Event which is continuing on the next Test Date.

 

Any recalculation made hereunder will be solely for the purpose of curing a
breach of the financial covenants and not for the purposes of calculation of
applicable Margin or for determining the amount of Excess Cashflow to be applied
in prepayment of the Facility for the Test Date on which a Financial Covenant is
breached and shall not count towards any other permission or usage under the
Finance Documents.

 

Representations: See Schedule 2 (Representations).     Information Undertakings:
See Schedule 3 (Information Undertakings).     General Undertakings: See
Schedule 5 (General Undertakings).     Events of Default:

See Schedule 6 (Events of Default).

 

An Event of Default is continuing or outstanding unless it is remedied or
waived.

 

 14Project Unicorn - Term Sheet (SPDB)

 

 

Security and Guarantees:

No guarantee other than the guarantee to be provided by Chindex US within 90
business days of the Closing Date, provided that if the proposed regulations
(the Proposed Regulations) under Section 956 issued by the U.S. Department of
the Treasury and the Internal Revenue Service (IRS) are finalised and passed
(the Trigger Date) such that there is no negative tax implication on any member
of the NFC Group in providing guarantees in relation to the Facility, subject to
the agreed security principles (to be consistent with the Documentation
Principles, the Agreed Security Principles) and the provisions of this section:

 

(a)          guarantees shall be granted by each other direct and indirect
subsidiary of Chindex US as at the Trigger Date (the Initial non-PRC Guarantors)
which is incorporated outside the PRC within 90 business days of the Trigger
Date;

 

(b)          the Company shall ensure that each future direct and indirect
subsidiary of Chindex US which is incorporated outside the PRC and which is or
becomes a Material Subsidiary after the Trigger Date (together with the Initial
non-PRC Guarantors, the non-PRC Guarantors) to become a guarantor within 60
business days of delivery of the compliance certificate demonstrating that such
subsidiary is a Material Subsidiary; and

 

(c)          the Company shall ensure (x) each Group Member incorporated in PRC
the equity interest in which are directly held and wholly-owned by an offshore
Group Member (First Tier WFOE) as at the Trigger Date (each an Initial PRC
Guarantor) becomes a guarantor within 60 business days of the Trigger Date, and
(y) each future direct and indirect subsidiary of Chindex US which is
incorporated in PRC and which is or becomes a Material Subsidiary after the
Trigger Date (each an Subsequent PRC Guarantor, together with Initial PRC
Guarantors, the PRC Guarantors) becomes a guarantor within 60 business days of
delivery of the compliance certificate demonstrating that such subsidiary is a
Material Subsidiary, and, in each case, register such guarantees with relevant
PRC authority (including but not limited to SAFE and MOFCOM) within 180 business
days after the Trigger Date, provided that if it is reasonably expected that any
such PRC Guarantor’s obligation to grant guarantee or register its guarantee
will not be completed within 60 business days or (as applicable) 180 business
days after the Trigger Date (the initial deadline), the Company shall on or
prior to the day falling 30 business days before the last day of such initial
deadline, notify the Agent of such situation and there shall be an extension to
grant such guarantee or complete such guarantee registration until the relevant
guarantee is granted or the relevant guarantee registration is completed (as the
case may be).

 

No ongoing guarantor coverage test.

 

Subject to the Agreed Security Principles and the provisions of this section,
the Pre-Closing Transaction Security Documents (as defined below) will be
required to be granted as a condition precedent to the Utilisation Date and the
following Security will be required to be granted as a conditions subsequent
after the Utilisation Date:

 

(a)          a US law governed first ranking all asset security to be entered
into by Chindex US and the Security Agent in relation to the creation of
security over all of the assets of Chindex (including assignment of rights under
the intercompany loans granted to Chindex US’ offshore subsidiaries by Chindex
US and bank accounts but excluding shares held by Chindex US in any Group
Member);

 

 15Project Unicorn - Term Sheet (SPDB)

 

 

(b)          a HK law governed first ranking share mortgage to be entered into
by Chindex US and the Security Agent in relation to the creation of security
over 65% of all the shares in (i) United Family Hospitals and Clinics Limited
(HK) (HHK (HK)) and (ii) United Family Healthcare Holdings Limited (HK) (UFHK
(HK));

 

(c)          a Mauritius law governed first ranking share mortgage to be entered
into by Chindex US and CHM Mauritius and the Security Agent in relation to the
creation of security over 65% of all the shares in (i) United Family Healthcare
Holdings (Mauritius) (CHM (Mauritius)) and (ii) United Family American Hospital
Ventures (Mauritius) (CAV (Mauritius)) respectively;

 

(d)          a BVI law governed first ranking share mortgage to be entered into
by Chindex US and the Security Agent in relation to the creation of security
over 65% of all the shares in Chindex Medical Holdings Ltd. (CMH (BVI));

 

(e)          PRC law governed first ranking equity pledges to be entered into by
Chindex US and the Security Agent in relation to the creation of security over
65% of all the equity interests in (i) 北京和睦家医疗中心有限公司 (NH) and (ii)
上海和睦家医院有限公司(SHU);

 

(f)          PRC law governed first ranking equity pledges to be entered into by
the HHK (HK) and the Security Agent in relation to the creation of security over
65% of all the equity interests in (i) 天津和睦家医院有限公司 (TJU) and (ii)
北京和睦家医院有限公司(BJU); (iii) 北京和睦家康复医院有限公司(Rehab) and (iv) 青岛和睦家医院有限公司(QDU);

 

(g)          PRC law governed first ranking equity pledges to be entered into by
the Security Agent and (i) the CAV (Mauritius) in relation to the creation of
security over 65% of all the equity interests in 和睦家医疗管理咨询 ( 北京 ) 有限公司
(UFH(WFOE)); (ii) UFH (WFOE) in relation to creation of security over 65% of all
the equity interests in北京爱科汇医院管理有限公司 (Access) and (iii) Access in relation to
the creation of security over 65% of all the equity interests in北京和睦家医院管理有限公司
(SHY) and北京优护佳健康管理有限公司(YHJ);

 

(h)          a BVI law governed first ranking share mortgage to be entered into
by the HHH Inc. and the Security Agent in relation to the creation of security
over all the shares in Healthy Harmony Limited (HH (BVI));

 

(i)          a HK law governed first ranking share mortgage to be entered into
by HH (BVI) and the Security Agent in relation to the creation of security over
all the shares in United Family Healthcare Limited (UFHL (HK)) and United Family
Healthcare (Hong Kong) Limited (UFHHKL (HK)); and

 

(j)          PRC law governed first ranking equity pledges to be entered into by
the Security Agent and UFHL (HK) in relation to the creation of security over
all the equity interests held by UFHL (HK) in (i) 广州和睦家医院有限公司(GZU); (ii)
上海和睦家新城医院有限公司 (PDU) and (iii) 北京和睦家京北妇儿医院有限公司(DTU).

 

(items (a) to (j) are collectively referred to as the Post-Closing Transaction
Security Documents).

 

 16Project Unicorn - Term Sheet (SPDB)

 

 

If the proposed regulations (the Proposed Regulations) under Section 956 issued
by the U.S. Department of the Treasury and the Internal Revenue Service (IRS)
are finalised and passed (the Trigger Date) such that there is no substantive
negative tax implication on any member of the NFC Group in granting share
mortgage over 100% of all of the shares held in a Group Member in relation to
the Facility, subject to the agreed security principles (to be consistent with
the Documentation Principles, the Agreed Security Principles) and the provisions
of this section, the Post-Closing Transaction Security Documents under
paragraphs (b) to (g) above will be in respect of 100% of all of the shares held
by the relevant chargor in relevant charged companies.

 

Subject to the Agreed Security Principles and the provisions of this section,
(A) the transaction security to be provided under paragraphs (a) to (d), (h) and
(i) above shall be put in place within 60 business days of the Utilisation Date;
(B) the transaction security to be provided under paragraphs (f)(iv) and (g)(i)
above shall be put in place within 120 business days of the Utilisation Date and
(C) the transaction security to be provided under paragraphs (e), (f)(i) to
(iii), (g)(ii) to (iii) and (j) above shall be put in place within 180 business
days of the Utilisation Date).

 

Subject to the Agreed Security Principles, permissibility under applicable law
and full cooperation by the Lenders and the Security Agent and the provisions of
this section, in respect of the transaction security under paragraphs (e), (f),
(g) and (j), if it is reasonably expected that (x) the requirement to obtain
minority shareholder’s consent to provide such transaction security will not be
completed within 180 business days of the Utilisation Date or (y) relevant
pledgor’s obligation to grant and/or register such PRC law governed equity
pledges with relevant PRC authority (including but not limited to SAFE and
MOFCOM) will not be completed within 120 business days or, as applicable, 180
business days of the Utilisation Date (the initial deadline), the relevant
Obligors shall, on or prior to the day falling 30 business days before the last
day of such initial deadline, notify the Agent of such situation and there shall
be an extension to complete security registration timeline until the relevant
security registration is completed. The timeline in this paragraph shall also
apply to any amendment of the PRC law governed equity pledges as a result of the
occurrence of the Trigger Date and the increase of the equity interest such to
such pledge as contemplated by the second immediate preceding paragraph.

 

All asset security limited to security over shares / non-PRC bank accounts /
intercompany receivables / rights under the Transaction Agreement / insurance
policies / material fixed assets and inventory subject to Agreed Security
Principles consistent with the Documentation Principles. No security over any
other asset (including real estate) will be provided.

 

No guarantee or security from the Targets or any of its subsidiaries is required
as a condition precedent to the Utilisation Date.

 

A Material Subsidiary is (a) each Obligor and any Group Member (whether a direct
or indirect Subsidiary) whose earnings before interest, tax, depreciation and
amortisation (in each case calculated on the same basis as EBITDA but excluding
intra-group items and investments in Subsidiaries) represents more than 5% of
the consolidated EBITDA of the Group (which shall, in each case, be tested
annually by reference to the Group’s annual audited accounts) or (b) the direct
or indirect holding company of a Material Subsidiary determined in accordance
with paragraph (a) above.

 

Acceleration Event: Subject to “Certain Funds Conditions” above and “Clean Up
Period” below, an Acceleration Event means following an Event of Default that is
continuing, the Agent, acting on the instructions of the Majority Lenders under
the Facility Agreement, gives notice that all outstanding amounts under the
Facility are immediately due and payable (or, declaring that such outstanding
amounts are payable on demand).

 

 17Project Unicorn - Term Sheet (SPDB)

 

 

Clean Up Period:

Until and including the date falling 120 days after the Closing Date (the Clean
Up Period), events or circumstances relating to the Target Group which would
otherwise breach the representations or undertakings or cause an actual or
potential Event of Default (other than an Event of Default resulting from
non-payment, insolvency, insolvency proceedings, creditors’ process,
unlawfulness, non-compliance with security or guarantee undertakings, invalidity
or repudiation) shall not constitute a breach or be an actual or potential Event
of Default or act as a drawstop, unless such event or circumstance:

 

(a)           has a Material Adverse Effect;

 

(b)           was procured or approved by the Company; or

 

(c)           is unremedied at the end of the Clean Up Period,

 

provided that such breach is capable of remedy and reasonable steps are taken to
remedy such breach if Company is aware of the relevant circumstances at the
time.

 

In addition, in the case of any acquisition permitted by the Facility Agreement,
there will be a 120 days “clean-up” period commencing on the date of completion
of such acquisition in respect of circumstances relating only to the acquired
entity or business.

 

Material Adverse Effect:

A material adverse effect (after taking into account all resources, insurance,
indemnity and assurance available to the Group and the timing and likelihood of
recovery) on:

 

(a)          the consolidated business, assets or financial condition of the
Group (taken as a whole);

 

(b)          the ability of the Obligors (taken as a whole) to perform their
payment obligations under any Finance Document; or

 

(c)          subject to legal reservations and any perfection requirements, the
validity or enforceability of any Finance Document in accordance with their
terms or the effectiveness of any Transaction Security granted pursuant to any
of the Finance Documents in any way which is:

 

(i)          materially adverse to the interests of the Lenders taken as a whole
under the Finance Documents (taken as a whole); and

 

(ii)          if capable of remedy, not remedied within 30 business days of the
Company becoming aware of the relevant event or circumstance or being given
notice of the same by the Agent.

 

Hedging: The Group may enter into hedging arrangements in the ordinary course of
business but not for speculative purposes with any person. Any provider of
hedging in connection with the Facility, any Permitted Additional Debt or
Refinancing Indebtedness (not for speculative purpose) shall, subject to
accession to the Intercreditor Agreement as a hedging counterparty, be treated
as a pari passu senior creditor and share in security package (Secured
Hedging).  All hedging contracts will be by way of ISDA documentation. No
minimum hedging requirement and no over-hedging.     Majority Lenders: Lenders
holding 66 2/3% or more of the commitments under the Facility.

 

 18Project Unicorn - Term Sheet (SPDB)

 

 

Super Majority Lenders: Lenders holding more than 75% of the aggregate amount of
commitments under the Facility.     Lender Voting and Amendments:

The Finance Documents may be amended or waived with the consent of the Company
and the Majority Lenders.

 

Matters requiring Super Majority Lenders’ approval will be limited amendments or
waivers to (other than expressly permitted by the provisions of any Finance
Document) the nature or scope of the Transaction Security and the guarantees
provided by the Guarantors (including any release thereof).

 

Matters requiring all Lenders’ approval will be limited to amendments or waivers
to:

 

(a)          the definition of Majority Lenders, Super Majority Lenders or
Structural Adjustment;

 

(b)          provisions that expressly require the consent of all Lenders;

 

(c)          the rights of Lenders to assign or transfer their rights or
obligations under the Finance Documents;

 

(d)          provisions governing the several rights and obligations of Lenders;

 

(e)          (other than expressly permitted by the provisions of any Finance
Document) provisions governing the sharing of recoveries among the Lenders and
partial payments;

 

(f)          (other than expressly permitted by the provisions of any Finance
Document) the manner in which the proceeds of enforcement of the Transaction
Security are distributed;

 

(g)          any requirement that a cancellation of commitments (in respect of
the Facility) reduces the commitments of the Lenders (in respect of such
Facility) rateably;

 

(h)          any change to a Borrower or an Obligor (in each case without
prejudice to the provisions in this term sheet regarding release of guarantees
and Transaction Security) other than in accordance with the Facility Agreement;

 

(i)          any amendment to the order of priority or subordination under the
Intercreditor Agreement;

 

(j)          any amendments to the sections below entitled “Excluded
Commitments” and “Replacement Lender”; and

 

(k)          the governing law provision.

 

Structural Adjustment:

Only affected Lenders’ consent required provided that Majority Lender consent is
obtained for an amendment or waiver that:

 

(a)          makes an increase in or addition to any commitment or any extension
of the availability of any commitment (other than by way of a Permitted
Additional Debt Facility);

 

(b)          makes an extension to the date of payment of any principal,
interest, fees, commission or other amount payable under the Finance Documents;

 

(c)          makes a reduction in the principal, interest rate, fees, commission
or other amount payable under the Finance Documents or redenomination of the
currency of any amount payable thereunder;

 

 19Project Unicorn - Term Sheet (SPDB)

 

 

(d)          introduces any additional loan, commitment or facility under the
Finance Documents (provided that any such additional loan, commitment or
facility shall rank pari passu with, or junior to, the Facility);

 

(e)          makes a reduction of any mandatory prepayment (or makes an
extension of its payment date); or

 

(f)          makes any changes to the Finance Documents (including changes to,
the taking of, or the release coupled with the retaking of, any guarantee or
security) consequential on or required to implement or reflect any of the
foregoing.

 

The ability to implement a Structural Adjustment is without prejudice to the
right to raise any Permitted Additional Debt, Permitted PRC Indebtedness or
Refinancing Indebtedness.

 

Excluded Commitments:

If a Lender:

 

(a)          does not accept or reject, in writing, a request from any Group
Member for any consent, amendment, release or waiver under the Finance Documents
within 15 business days (or, if the Company agrees to a longer time period in
relation to that request or the Company specifies a longer period in that
request during which a Lender may respond, on or prior to the expiry of such
longer period so agreed or specified by the Company) of the date of such request
being made or notifies the Agent in writing that it is abstaining from
responding to such request (such Lender being a Non-Responding Lender); or

 

(b)          becomes a Defaulting Lender,

 

such Non-Responding Lender and any Defaulting Lender’s participations and
commitments shall be excluded from the calculation and shall not be required in
order to achieve the required level or approvals.

 

Replacement Lender:

In the event that a Lender:

 

(a)          seeks to charge or claim any amount pursuant to any illegality, tax
gross up, tax indemnity, increased cost or market disruption provisions of the
Finance Documents (an Increased Costs Lender);

 

(b)          does not consent to any amendment, consent or waiver that requires
more than Majority Lender consent and to which the Majority Lenders have
consented (a Non-Consenting Lender);

 

(c)          has failed to participate in a utilisation it is obliged to make
under the Finance Documents;

 

(d)          has given notice to a Group Member or the Agent that it will not
make, or that it has disaffirmed or repudiated any obligation to participate in,
a utilisation in breach of the Facility Agreement;

 

(e)          has otherwise rescinded or repudiated a Finance Document or any
term of a Finance Document;

 

(f)           is one with respect to which an insolvency event has occurred (a
Lender under paragraph (c), (d), (e) or (f) is a Defaulting Lender);

 

 20Project Unicorn - Term Sheet (SPDB)

 

 

 

(g)         which is or is acting on behalf of any person (other than a Group
Member of a Sponsor Affiliate) that is principally engaged in a business that is
in commercial competition with the core business of the Group (together with
each Affiliate of such person or entity engaged in such activities), provided
that for the avoidance of doubt this shall not include any person or entity (or
any of its Affiliates) which is a bank, financial institution or trust, funds or
other entity whose principal business is investing in debt or who is regularly
engaged in making, purchasing or investing in loans, securities or other
financial assets (and who has been incorporated or established for not less than
6 months) (such person, a Competitor), an investor or equity holder that has
control over a Competitor or any advisor to any such person referred to above,
subject to exceptions to be agreed (Conflicted Lender); and/or;

 

(h)         is a Non-Responding Lender,

 

the Company shall be entitled (but not obliged) to (i) require the transfer of
all of such Lender’s participation at par plus accrued interest and fees to one
or more persons selected by the Company, who is willing to take such transfer,
(ii) prepay (or to procure that another Group Member prepays) all of such
Lender’s participation at par plus accrued interest and fees and/or (iii) cancel
all undrawn commitments of that Lender.

    Assignments and Transfers:

No Transfer permitted until following the Utilisation Date. Transfer means a
transfer, assignment, novation (or any such arrangement having a similar effect,
whether it conveys voting rights or otherwise) or a sub-participation or
sub-contract (which involves a transfer of any voting right, direct or
indirectly, under or in relation to the Finance Document (including as a result
of being able to direct the way that another person exercises its voting
rights)).

 

Each Lender will be free to Transfer its commitments in the Facility at any time
after the Utilisation Date in whole or in part to any bank, financial
institution, fund, trust or other entity which is regularly engaged in or
established for the purpose of making, purchasing or investing in loans,
securities or other financial assets or any other person provided that unless
(x) made to another Lender in the same Facility, an affiliate of a Lender (with
no less than 10 business days’ prior written notice to the Company), (y) to a
person on an agreed whitelist, or (z) while a non-payment, insolvency,
insolvency proceeding or creditors’ process Event of Default is continuing, any
such Transfer shall require the prior written consent of the Company (in the
absolute discretion of the Company). Other transfer provisions to be consistent
with the Documentation Principles. Absolute prohibition (both prior to or post
an Event of Default) on Transfers to Defaulting Lenders, non-commercial lenders
(hedge fund, loan-to-own fund, private equity fund, debt restructuring fund or
activist fund but does not include a Sponsor Affiliate) and Competitors.
Purported transfers in breach of transfer provisions are void.

 

The Lenders will bear all fees, costs and expenses in connection with a Transfer
and the Group will not be required to pay any fees, costs, expenses, taxes,
indemnity payment, gross-up payment, increased cost payment or other payment to
a new Lender (or a Lender lending through a new facility office) in excess of
what it would have been required to pay immediately prior to the Transfer being
effected.

    Debt Buy Backs:

No restriction on members of the Group acquiring loans provided that such
purchase is (a) per the LMA solicitation or open order process and (b) is funded
from paragraphs (i), (ii), (iii) or (iv) of the definition of Acceptable Funding
Sources. 

 

 21Project Unicorn - Term Sheet (SPDB)

 

 

 

The acquired loans must be irrevocably cancelled as soon as reasonably
practicable following completion of the transfer unless the purchaser is not the
Company or cancellation gives rise to adverse tax consequences, provided that
where loans remain outstanding no Group Member shall be permitted to (i)
exercise any voting rights attached to such loans (except in relation to matters
which are materially detrimental (in comparison to the other Lenders) to the
rights and/or interests of that Group Member solely in its capacity as a Lender
(and, for the avoidance of doubt, excluding its interests as a holder of equity
in any portion of the Group or its business), (ii) attend any Lender meeting or
receive any Lender information in its capacity as a holder of such loans or
(iii) transfer any such loans to any person who is not a Group Member.

 

No restrictions on Sponsors or their affiliates acquiring the Facility, provided
that the relevant Lender (but excluding for these purposes any debt fund falling
within the proviso of the definition of Sponsor Affiliate) shall be subject to
customary restrictions on voting, attending meetings and receiving information.

 

Basket Increases: If EBITDA increases on any Test Date (to be determined by
reference to Annual Financial Statements most recently delivered pursuant to
paragraph (a)(i) of Schedule 3 (Information Undertakings)) by reference to the
agreed base case or as a result of a Permitted Acquisition (after taking into
account any Pro Forma Adjustments obtainable as a result of such acquisition),
all baskets expressed in a monetary limit (including baskets for permitted
business acquisitions, permitted disposals, permitted financial indebtedness,
permitted guarantees, permitted loans, permitted sale and leasebacks and
permitted security but excluding baskets for Permitted Distributions) will be
permanently increased by the same percentage to which Adjusted EBITDA exceeds
EBITDA by reference to the base case model or as a result of a Permitted
Acquisition.  Company may redesignate between baskets at its discretion.  Any
unused basket can be carried forward and spent first in the next relevant
period, and up to 30% of any annual basket can be carried back to the
immediately preceding relevant period with a corresponding reduction for that
next relevant period.     Tax: Customary tax gross-up provisions to apply.  No
Obligor will be required to pay additional amounts (relating to Tax Gross-up or
Increased Costs) as a result of a transfer or change in lending office by a
Lender after the Signing Date.  No gross-up or indemnity for any deductions in
respect of FATCA.     Excluded Matters:

None of the steps, transactions, reorganisations or events set out in or
expressly contemplated by the Structure Memorandum (as defined below) or, in
each case, the actions or intermediate steps necessary to implement any of those
steps, actions or events shall constitute a breach of any representation and
warranty or undertaking in the Facility Agreement or any of the other Finance
Documents or result in the occurrence of an actual or potential Event of Default
or a Certain Funds Default and shall be expressly permitted under the terms of
the Facility Agreement and the other Finance Documents.

 

Prior to the Closing Date (and subject at all times to the certain funds
provisions), no breach of any representation, warranty, undertaking or other
term of (or actual or potential Event of Default (however so described) under)
any document relating to the existing financing arrangements of any member of
the Target Group shall constitute a breach of any representation and warranty or
undertaking in the Facility Agreement or any of the other Finance Documents or
result in the occurrence of an actual or potential Event of Default.

    Management Input: This term sheet has been negotiated without the full
involvement of management of the Target Group and all parties agree to negotiate
in good faith any amendments that may be required to the terms of the Facility
Agreement, following a more detailed review by management.

 

 22Project Unicorn - Term Sheet (SPDB)

 

 

No Investor Recourse: No Finance Party will have any recourse to any Investor
Affiliate (excluding the Parent, any HHH Group Member and any Group Member but,
in respect of the Parent and any HHH Group Member, on a limited recourse basis
and with respect to assets the subject of security only) in respect of any term
of any Finance Document, any statements by Investor Affiliates, or otherwise
(save for fraud in which case liability shall be determined in accordance with
applicable law).  No director, officer or employee of the Investor Affiliates or
any Group Member (or of any affiliate thereof) shall be personally liable for
any representation, statement, certificate or other document required to be
delivered or made under a Finance Document (save for fraud in which case
liability shall be determined in accordance with applicable law).     Sponsor
Affiliate:

(a)         Any Sponsor, each of their respective affiliates, any trust of which
any Sponsor or any of their respective affiliates is a trustee, any partnership
of which any Sponsor or any of their respective affiliates is a partner and any
trust, fund or other entity which is managed or is advised by, or is under the
control of, the Advisor, any Sponsor or any of their respective affiliates; and

 

(b)         any person acting in concert with any party listed in paragraph (a)
above,

 

provided that any such trust, fund or other entity which has been established
for the purpose of making, purchasing or investing in loans or debt securities
and which is managed or controlled independently from all other trusts, funds or
other entities managed or controlled by the Advisor, any Sponsor or any of their
respective affiliates which have been established for the primary purpose or
main purpose of investing in the share capital of companies, in each case, shall
not constitute a Sponsor Affiliate.

 

For the purposes of this definition:

 

A person is acting in concert with another person if: (i) they are a shareholder
in the Advisor, any Sponsor or any of their respective affiliates; and (ii) in
relation to such shareholding, they, whether pursuant to any agreement or
understanding, formal or informal or otherwise, actively co-operate to obtain,
maintain, consolidate or exercise control over that company or control of the
voting rights attaching to their holding of shares in that company to a greater
extent than would be possible by reason of their individual shareholdings alone.

    Investors: The Sponsors, any Sponsor Affiliate, management, employees and
any other person holding an interest in the Group pursuant to a management
incentive plan, incentive scheme or similar arrangement, any co-investor agreed
with the Arrangers and any other person approved by the Majority Lenders, in
each case, including their respective successors, assigns and transferees.    
Investor Affiliate: An Investor, any affiliate of an Investor, any trust of
which an Investor or any of its respective affiliates is a trustee, any
partnership of which an Investor or any of its affiliates is a partner and any
trust, fund or other entity which is managed by, or is under the control of, an
Investor or any of its respective affiliates (in each case, including their
respective successors, assigns and transferees), provided that any such trust,
fund or other entity which has been established for the purpose of making,
purchasing or investing in loans or debt securities and which is managed or
controlled independently from all other trusts, funds or other entities managed
or controlled by an Investor or any of its respective affiliates which have been
established for the primary purpose or main purpose of investing in the share
capital of companies, in each case, shall not constitute an Investor Affiliate.

 

 23Project Unicorn - Term Sheet (SPDB)

 

 

Exchange Rate Fluctuations
and Basket Reclassification:

When applying baskets, thresholds and other exceptions to the Representations,
Undertakings and Events of Default, the equivalent amount of a currency shall be
calculated as at the date of the relevant Group Member incurring, committing to
or making the relevant disposal, acquisition, investment, payment, debt or other
relevant action. No actual or potential Event of Default or breach of
Representation or Undertaking shall arise merely as a result of a subsequent
change in the currency equivalent of any relevant amount due to fluctuations in
exchange rates.

 

In the event that any amount or transaction meets the criteria of more than one
of the baskets or exceptions set out in the Finance Documents, the Company, in
its sole discretion, may classify and may from time to time reclassify that
amount or transaction to a particular basket or exception and will only be
required to include that amount or transaction in one of those baskets or
exceptions (and, for the avoidance of doubt, an amount or transaction may at the
option of the Company be split between different baskets or exceptions).

 

For the purpose of calculating Cash and Cash Equivalent Investments, it shall be
included in the calculation such amount of Cash and Cash Equivalent Investments
used for cash collateralizing and/or supporting borrowings.

    Boilerplate: The relevant Facility Agreement will contain customary
provisions relating to set off (following an Acceleration Event), indemnities
(cost of investigating matters not proving to be Default to be for the account
of the relevant Lenders), illegality, market disruption (40% of Lenders),
increased costs (excluding any Basel II costs, Basel III costs, Dodd-Frank
costs, to the extent the relevant Lender is required to apply laws in connection
with such costs on the date on which it becomes a Lender), break costs (to be
defined in the Facilities Agreement), Defaulting Lenders and payment mechanics.
    Construction:

(a)         A Default or an Event of Default or a Certain Funds Default will be
remedied (and cease to be continuing) where the underlying circumstances giving
rise to the Default or Event of Default or Certain Funds Default (as the case
may be) cease to exist or where actions have been taken which have addressed the
underlying circumstances in each case with the effect that those underlying
circumstances (after giving effect to the taking of such actions) no longer
constitute a Default or an Event of Default or a Certain Funds Default (as the
case may be), provided that if an Acceleration Event has occurred, then such
Event of Default is no longer capable of being remedied and will be continuing
unless it has been waived.

 

(b)         An Acceleration Event is continuing if the relevant Acceleration
Event has occurred and the underlying notice of acceleration has not been
withdrawn by the Agent.

 

(c)         In addition to paragraph (a) above and subject to paragraph (b)
above, if a Default (including an Event of Default and a Certain Funds Default)
occurs for a failure to deliver a required certificate, notice or other document
in connection with another default (an Initial Default) then at the time such
Initial Default is remedied or waived, such Default (including an Event of
Default and a Certain funds Default) for a failure to report or deliver a
required certificate, notice or other document in connection with the Initial
Default will also be cured without any further action further action. Any
Default (including an Event of Default and a Certain funds Default) for the
failure to comply with the time periods prescribed in Schedule 3 (Information
Undertakings), or otherwise to deliver any notice, certificate or other
document, as applicable, even though such delivery is not within the prescribed
period specified in the Facility Agreement or any other Finance Document, shall
be deemed to be cured upon the delivery of any such report required by such
covenant or notice, certificate or other document, as applicable, even though
such delivery is not within the prescribed period specified in the Facility
Agreement or any other Finance Document.

 

 24Project Unicorn - Term Sheet (SPDB)

 

 

  (d)         Knowledge means, in respect of an Obligor, the Parent or a Group
Member, to the best of the knowledge and belief of the directors of such Obligor
or, the Parent or such Group Member (as the case may be) (after due and careful
enquiry).

 

    Law: English law.     Counsel to the Sponsors Kirkland & Ellis.     Counsel
to the Arrangers,
Lenders and Agent: White & Case.

 

 25Project Unicorn - Term Sheet (SPDB)

 

 

Schedule 1

Initial Conditions Precedent

 

Unless otherwise mentioned, the following are to be in form and substance
satisfactory to the Arrangers (acting reasonably).

 

(a)Corporate: Copies of incorporation and constitutional documents, board (and,
if required under local law, shareholder) resolutions, customary officer’s
certificates (including confirmation that borrowing, guaranteeing and security
limits will not be breached) and specimen signatures for each of the Parent and
the Company and customary registers and certificates of good standing and
solvency certificates.

 

(b)Finance Documents: Copies of the Facility Agreement, the Intercreditor
Agreement and Fee Letter(s) executed by the Parent and/or the Company.

 

(c)Security Documents: A copy of each of the following security documents (the
Pre-Closing Transaction Security Documents) executed by the Parent and the
Company, together with customary deliverables:

 

(i)a Cayman law governed first ranking share mortgage to be entered into by the
Parent and the Security Agent in relation to the creation of security over all
the shares in the Company and the completion of any perfection or other
requirements in respect to such security;

 

(ii)a Cayman or English law governed first ranking assignment agreement to be
entered into by the Parent and the Security Agent in relation to assignment of
any intercompany loans made to the Company by the Parent and the completion of
any perfection or other requirements in respect to such security;

 

(iii)a Cayman or English law governed first ranking all asset security to be
entered into by the Company and the Security Agent in relation to the creation
of security over all of the assets of the Company (including assignment of
rights under the Transaction Agreement and intercompany loans granted by the
Company to its subsidiaries).

 

(iv)a Cayman law governed first ranking share mortgage to be entered into by the
Company and the Security Agent in relation to the creation of security over all
the shares in the General Partner and all limited partnership interests in the
Partnership, provided that neither the General Partner nor the Partnership shall
be required to sign or deliver any documents, notices, instruments, deliverables
or take any steps prior to Closing Date (as a condition precedent or otherwise),
and any perfection or other requirements involving the General Partner or the
Partnership shall be a condition subsequent to be completed after the Closing
Date;

 

(v)a signed and undated US law governed first ranking share mortgage to be
entered into by the Company and the Security Agent in relation to the creation
of security over all the shares in Chindex US provided that Chindex US shall not
be required to sign or deliver any documents, notices, instruments, deliverables
or take any steps prior to Closing Date (as a condition precedent or otherwise),
and any perfection or other requirements involving Chindex US shall be a
condition subsequent to be completed after the Closing Date; and

 

(vi)a signed and undated Cayman law governed first ranking share mortgage to be
entered into by the Company and the Security Agent in relation to the creation
of security over all the shares in HHH Inc., provided that HHH Inc. shall not be
required to sign or deliver any documents, notices, instruments, deliverables or
take any steps prior to Closing Date (as a condition precedent or otherwise),
and any perfection or other requirements involving HHH Inc. shall be a condition
subsequent to be completed after the Closing Date.

 

(d)Legal opinions: Customary legal opinions from counsel to the Arrangers and
where customary in the relevant jurisdiction, from counsel to the Obligors,
substantially in the form distributed to the Arrangers on or prior to Signing
Date.

 

 26Project Unicorn - Term Sheet (SPDB)

 

 

(e)Due diligence: A copy of each of the following due diligence reports on a
non-reliance basis (collectively, the Reports):

 

(i)financial due diligence report dated 23 April 2019 prepared by
PricewaterhouseCoopers;

 

(ii)tax due diligence report dated 5 April 2019]prepared by
PricewaterhouseCoopers;

 

(iii)commercial due diligence report dated February 2019 prepared by McKinsey &
Company;

 

(iv)summary of offshore legal due diligence report dated 5 April 2019 prepared
by Simpson Thacher & Bartlett LLP;

 

(v)onshore legal due diligence report dated 22 April 2019 prepared by Global Law
Office (环球律师事务所); and

 

(vi)the tax structure memorandum prepared by PricewaterhouseCoopers dated 12 May
2019 incorporating transaction steps (Structure Memorandum),

 

provided that the Reports listed at paragraphs (i) to (v) above are delivered
for information purposes only and provided further that this condition precedent
will be satisfactory to the Agent if the Reports are provided in the draft form
each dated on the date referred to in the definition of “Reports” (the Original
Version) and the final forms are not materially different in respects that are
materially adverse to the interest of the Finance Parties (taken as a whole)
compared to such Original Version of such Report or are approved by the
Arrangers (acting reasonably).

 

(f)Acquisition Documents: A copy of each executed Acquisition Document provided
that commercially sensitive items may be redacted and provided further that this
condition precedent will be satisfactory to the Agent if the Acquisition
Documents are provided in the form received and approved by the Arrangers prior
to the Signing Date save for any amendments or waivers which are not materially
adverse to the interests of the Finance Parties (taken as a whole) under the
Finance Documents or any other changes or additions approved by the Arrangers
(acting reasonably).

 

(g)Closing certificate: a certificate from the Company confirming that:

 

(i)each of the conditions to the Acquisition Documents have been satisfied or
waived (other than payment of the purchase price under the Acquisition Documents
or any other matter or condition which cannot be satisfied until Completion or
following Completion or to the extent it is not reasonably likely to materially
and adversely affect the interests of the Lenders or with the consent of the
Agent (acting on the instruction of the Majority Lenders, such consent not to be
unreasonably withheld or delayed), and Completion will occur promptly following
the Utilisation Date and no other term of the Acquisition Documents (or any
Acquisition Document itself) has been amended, varied, novated, supplemented,
superseded, terminated, waived or repudiated other than as permitted (or not
prohibited) by the Facility Agreement; and

 

(ii)it has received, prior to the Utilisation Date:

 

(A)the Minimum Equity Investment (as defined below), and the aggregate of the
Minimum Equity Investment and the proceeds of the Initial Term Loans to be drawn
on the Utilisation Date will be sufficient to pay the amount of Acquisition
Consideration due on the Closing Date in accordance with the terms of the
Acquisition Documents. For the purpose of this paragraph, Minimum Equity
Investment shall in any event include:

 

(I)the cash proceeds contributed by the Sponsors of not less than US$633,000,000
to be applied for payment of the Acquisition Consideration, and

 

 27Project Unicorn - Term Sheet (SPDB)

 

 

(II)Rollover Equity Consideration (being the portion of the Acquisition
Consideration that is agreed by the recipient thereof, whether pursuant to the
Acquisition Documents or otherwise, to be reinvested in the Sponsor by way of
subscription for certain Sponsor shares), and

 

(B)the cash proceeds contributed by the Sponsors of not less than US$100,000,000
to be applied in the form of foreign debt through one or more Account Banks for
expenditure or any other working capital and/or general corporate purposes in
respect of Group Member after the Closing Date.

 

(h)Base case model: A financial model (Base Case Model) in the form agreed by
the Company and the Arrangers on or prior to the Signing Date (save for any
amendments or waivers which are not materially adverse to the interests of the
Finance Parties (taken as a whole) under the Finance Documents) or as amended or
supplemented with the consent of the Arrangers (acting reasonably and such
consent shall not be unreasonably withheld or delayed).

 

(i)Group structure: Unless included in one of the Reports and specified by (or
on behalf of) of the Company as being the group structure chart (the Group
Structure Chart) for the purposes of this Schedule 1, a group structure chart
showing the Group assuming the Closing Date has occurred (provided that such
group structure chart shall not be required to be in form and substance
satisfactory to the Agent and/or Arrangers).

 

(j)Original financial statements: Copies of the combined management accounts of
Chindex International, Inc. for the financial years ending on 31 December 2018
made available to the Company and copies of the audited annual consolidated
financial statements of the Group for the financial year ending on 31 December
2018 provided that the financial statements shall not be required to be in form
and substance satisfactory to the Agent and/or Arrangers (the Original Financial
Statements).

 

(k)Funds Flow: A copy of the funds flow statements (the Funds Flow Statement)
provided that this condition precedent shall not be disclosed to any person
other than the Arrangers and the Agent (not any other Finance Party), and it
will be satisfactory to the Agent if it shows payments to and by the Company as
contemplated in the Acquisition Documents and the Finance Documents and the
payment of fees as contemplated in the Fee Letters and contains an up to date
sources and uses table.

 

(l)KYC: Copies of any information and evidence related to each of the Parent and
the Company, as reasonably requested by any Lender no later than five business
days prior to Signing Date required in order to comply with “know your client” /
anti-money laundering requirements under applicable laws and any internal policy
requirements.

 

(m)Process agent: English service of process agent appointment.

 

 28Project Unicorn - Term Sheet (SPDB)

 

 

Schedule 2

Representations

 

Each Obligor will make the following representations in respect of itself (and,
where consistent with the Documentation Principles, in respect of the relevant
Group Member), and the Parent shall make the following representations marked
with v in respect of itself, subject to materiality, qualifications, baskets and
other exceptions to be agreed, consistent with the Documentation Principles. All
representations made on or prior to the Closing Date with respect to any member
of the Target Group shall be qualified by the knowledge of the Company. The
contents of the Reports are disclosed against and qualify the representations in
this Schedule 2.

 

(a)Status v

 

(b)Binding obligations v

 

(c)Non-conflict with other obligations v

 

(d)Power and authority v

 

(e)Authorisations v

 

(f)Governing law and enforcement v

 

(g)Insolvency v

 

(h)No filing or stamp taxes

 

(i)No default v

 

(j)Information Package and Base Case Model

 

(i)Save to the extent disclosed to the Arranger in writing on or prior to the
Signing Date and to the Company’s Knowledge:

 

(A)any material factual information (other than information of a general
economic nature) relating to the Group supplied by the Group and contained in
the Information Package (taken as a whole) (the Information) was true and
accurate in all material respects as at the date of applicable Report, the Base
Case Model and the Information Memorandum or, if earlier, the date the
information is expressed to be to be given;

 

(B)no Information was omitted from the Information Package where the omission
results in the Information Package, taken as a whole, being misleading in any
material respect in the context of the transaction as a whole; and

 

(C)no event or circumstance has occurred since the date of the Information
Memorandum or any Report (as the case may be) that results in the Information
Package, taken as a whole, being untrue or inaccurate or misleading in any
material respect in the context of the transaction as a whole;

 

(D)all other written information provided by any Group Member to a Finance Party
pursuant to any express provision of any Finance Document on or after the
Signing Date is, taken as a whole, true, complete and accurate in all material
respects and is, taken as a whole, not misleading in any respect (in each case)
as at the date on which such information is provided,

 

provided that the Company is not required to review or make any enquiry in
relation to matters within the technical or professional expertise of the
provisions of the relevant Reports.

 

 29Project Unicorn - Term Sheet (SPDB)

 

 

(ii)Any financial projections or forecasts contained in the Base Case Model or
the Information Memorandum were prepared on the basis of recent historical
information and assumptions (or grounds for opinions) believed by the Company in
good faith to be reasonable at the time of being prepared (it being understand
that such financial projections or forecasts are subject to significant
uncertainties and contingencies many of which may be beyond the control of the
Group and that no assurances can be given that such financial projections or
forecasts will be realised.

 

For the purpose of this paragraph:

 

Information Memorandum means the document (if any) in the form approved by the
Company concerning the Company and the Target Group which, at the request of the
Company and on its behalf was prepared in relation to this transaction, approved
by the Company.

 

Information Package means the Information Memorandum, the Base Case Model and
the Reports.

 

(k)Accounts

 

To the Company’s Knowledge and save as otherwise disclosed to the Arranger or
the Agent in writing:

 

(i)the Annual Financial Statements most recently delivered pursuant to paragraph
(a)(i) of Schedule 3 (Information Undertakings) were prepared on a basis
consistent in all material respects with the applicable Accounting Principles
and present a true and fair view of the consolidated financial position of the
Group, as at the date to which they were prepared and for the Financial Year
then ended;

 

(ii)the Semi-Annual Financial Statements most recently delivered pursuant to
paragraph (a)(i) of Schedule 3 (Information Undertakings):

 

(A)were prepared on a basis consistent in all material respects with the
applicable Accounting Principles; and

 

(B)fairly present the consolidated financial position of the Group as at the
date to which they were prepared and for the Relevant Period then ended,

 

in each case (a) save as set out therein or the notes thereto, (b) having regard
to the fact they are management accounts prepared for management purposes and
not subject to audit procedures and (c) subject to customary year-end
adjustments; and

 

(iii)the Original Financial Statements in the form provided to the Arranger are
accurate in all material respects (save as referred to in the statements and
notes thereto), and (if audited) present a true and fair view of the
consolidated financial position of the Group or (if unaudited) fairly present
the consolidated financial position of the Group, in each case, as at the date
to which they were prepared.

 

(l)Disputes

 

(m)Compliance with law v

 

(n)Environmental laws

 

(o)Taxation

 

(p)Security, Financial Indebtedness and guarantees v

 

(q)Good title to assets

 

 30Project Unicorn - Term Sheet (SPDB)

 

 

(r)Legal and beneficial ownership v

 

(s)Shares v

 

(t)Intellectual property

 

(u)Group Structure Chart (*)

 

(v)Pari passu ranking

 

(w)Acquisition Documents

 

(x)Holding Companies v

 

(y)Ranking of security

 

(z)Deduction of tax

 

(aa)Sanctions and anti-money laundering and anti-corruption

 

(*) subject to knowledge qualification.

 

 31Project Unicorn - Term Sheet (SPDB)

 

 

Schedule 3

Information Undertakings

 

(a)Accounts:

 

(i)Annual Accounts: Commencing with the financial year ending on 31 December
2020, deliver annual audited consolidated financial statements of the Group (the
Annual Financial Statements) no later than 120 days (or 180 days in case of the
financial year ending on 31 December 2020) after each financial year end.

 

(ii)Semi-Annual Accounts: Subject to paragraph (c) below, commencing with the
first full financial half-year following the Closing Date, deliver semi-annual
unaudited consolidated financial statements of the Group (the Semi-Annual
Financial Statements) no later than 90 days (or 150 days in case of the first
full financial half year ending after the Closing Date) after the end of each
financial first half-year.

 

(iii)Until the last day of the first full financial year following the Closing
Date, the accounts in the form currently prepared by Chindex US may be supplied
and such accounts may be unconsolidated or on a combined or aggregated, rather
than consolidated basis.

 

(b)Compliance certificates: deliver a compliance certificate with each set of
Annual Accounts and Semi-Annual Accounts showing computations relating to
compliance with financial covenants, and confirming that (so far as it is aware)
no actual Event of Default is outstanding, commencing with the First Test Date.

 

(c)Other reporting: Other customary reporting requirements including notice of
defaults, notice of litigation or environmental claims reasonably likely to have
a Material Adverse Effect, notice of any event triggering any mandatory
prepayment under the Facility Agreement, copies of documents required by law to
be sent to creditors generally, other information on the financial condition and
performance of, the Group (other than any budget, projections, forward-looking
information, forecast or opinion or any additional financial statements or any
disclosure in the ordinary course of business), as reasonably requested by the
Agent (acting on the instructions of the Majority Lenders), subject to any
confidentiality, privilege, legal or regulatory restrictions on disclosure
(including stock exchange or listing rules).

 

(d)KYC: Information reasonably requested in order to comply with internal
requirements for the purposes of complying with applicable “know your customer”
laws and regulations introduced after the Signing Date.

 

 32Project Unicorn - Term Sheet (SPDB)

 

 

Schedule 4

Financial Covenants

 

(a)Calculation: The financial covenants will be calculated in accordance with
the agreed accounting principles and will be tested by reference to the most
recent compliance certificate, accounts, and valuation reports delivered under
the Facility Agreement.

 

(b)Adjustments:

 

(i)When calculating (or projecting) financial covenant compliance (and when
calculating the Net Leverage Ratio where relevant in any provisions in the
Facility Agreement), the Company:

 

(A)shall include in determining EBITDA for any period (including the portion
thereof occurring prior to the relevant acquisition) the earnings before
interest, tax, depreciation and amortisation (calculated on the same basis as
EBITDA, mutatis mutandis) for the period of any person, property, business or
material fixed asset acquired by any Group Member during such period (each such
person, property, business or asset acquired and not subsequently disposed of,
an Acquired Entity or Business);

 

(B)shall exclude in determining EBITDA for any period the earnings before
interest, tax depreciation and amortisation (calculated on the same basis as
EBITDA, mutatis mutandis) of any person, property, business or material fixed
asset sold, transferred or otherwise disposed of by any Group Member during such
period (including the portion thereof occurring prior to such sale, transfer or
disposition) (each such person, property, business or asset so sold or disposed
of, a Sold Entity or Business);

 

(C)may include in determining EBITDA the Pro Forma Adjustment in respect of any
Acquired Entity or Business, Sold Entity or Business and any restructuring,
reorganisation, cost-savings or other similar initiative (a Group Initiative)
committed to be undertaken during such period (without double counting); and

 

(D)may exclude any non-recurring costs and other expenses arising directly or
indirectly as a consequence of acquiring an Acquired Entity or Business,
disposing a Sold Entity and Business, or a Group Initiative,

 

and so that no amount shall be included (or excluded) more than once.

 

(ii)Pro Forma Adjustment means for any Relevant Period that includes the date on
which an acquisition, entry into a joint venture, disposal or Group Initiative
occurred or was implemented (without double counting), the pro forma increase in
EBITDA projected by the Company after taking into account the effect of all
reasonably identifiable and factually supportable cost-savings and synergies
(without duplication with any cost-savings and synergies actually achieved)
which the Company (acting reasonably and as certified in writing by a senior
officer of the Group) believes can be obtained as a result of such acquisition,
entry into a joint venture, disposal or Group Initiative in the 18 month period
after that acquisition, entry or disposal or Group Initiative occurred or was
implemented (and where cost savings and synergies will be obtained during such
period it may be assumed that such cost-savings and synergies will be obtained
during the entire such period at the full rate the Company reasonably believes
can be achieved at any time during that period) provided that where such
projected cost-savings or synergies exceed 15% of EBITDA (as adjusted for the
acquisition, entry into a joint venture, disposal or Group Initiative) for such
Relevant Period they must be supported by reporting or commentary by one of the
“big four” accountants.

 

(c)Total Net Debt: To the extent the Net Leverage Ratio or any other financial
definition used in the financial covenants is used as the basis (in whole or
part) for permitting any transaction or making any determination under the
Facility Agreement (including on a pro-forma basis) at any time after a Test
Date, Total Net Debt shall be reduced to take into account any repayment of
Financial Indebtedness made on or before the relevant date and shall be
increased to take into account any incurrence or assumption of Financial
Indebtedness made on or before the relevant date.

 

 33Project Unicorn - Term Sheet (SPDB)

 

 

(d)Financial Definitions: The following financial definitions will be included
in the Facility Agreement. Financial definitions used (but not defined in this
Schedule 4) shall be determined in accordance with the Documentation
Principles).

 

Acceptable Funding Sources means without double counting, the aggregate of
amounts constituting:

 

(i)Permitted Sponsor Amounts;

 

(ii)New Shareholder Injections;

 

(iii)any Retained Excess Cashflow;

 

(iv)any Retained Net Proceeds;

 

(v)De Minimis Proceeds;

 

(vi)amounts constituting Completion Opening Cash;

 

(vii)investment grants (including subsidies) and landlord incentives received by
members of the Group;

 

(viii)any prepayments waived by the Lenders to the extent stated how the waived
amount is to be used in the relevant waiver request made by the Company to the
Lenders (and only in relation to such use set out therein); and

 

(ix)amounts which are funded from any Permitted Financial Indebtedness incurred
from a person that is not a Group Member,

 

in each case, which have not been and which are not required to be applied in
prepayment of the Facility and to the extent not otherwise already allocated or
utilised for a purpose not restricted under the Finance Documents.

 

Accounting Principles means, in respect of:

 

(i)a Group Member incorporated in a jurisdiction which has generally accepted
accounting principles, standards and practices, the generally accepted
accounting principles, standards and practices in that jurisdiction or IFRS; or

 

(ii)the consolidated Group or a Group Member incorporated in a jurisdiction
which does not have generally accepted accounting principles, standards and
practices, IFRS.

 

Borrowings means, at any time, the aggregate outstanding principal, capital or
nominal amount of any Financial Indebtedness of Group Members excluding (a)
indebtedness owed by one Group Member to another Group Member, (b) all pension
related liabilities, (c) Financial Indebtedness under paragraph (f) of the
definition thereof or under paragraph (l) thereof (to the extent relating to
Financial Indebtedness under paragraph (f) thereof), and (d) Financial
Indebtedness which constitutes Parent Liabilities.

 

Capital Expenditure means any expenditure or obligation in respect of
expenditure which, in accordance with the Accounting Principles, is treated as
capital expenditure (including the capital element of any expenditure or
obligation incurred in connection with Capitalised Lease Obligations) but
excluding any non-cash expenditure and only taking into account the actual cash
payment made where assets are replaced and part of the purchase price is paid by
way of part exchange.

 

 34Project Unicorn - Term Sheet (SPDB)

 

 

Capitalised Lease Obligations means, with respect to any person, any rental
obligation (including any hire purchase payment obligation) which, under the
Accounting Principles, would be required to be treated as a Finance Lease or
otherwise capitalised in the audited financial statements of that person, but
only to the extent of that treatment and excluding, for the avoidance of doubt,
any cash expenditure arising from an operating lease or lease which, in
accordance with the Accounting Principles, is treated as an operating lease.

 

Cash means, at any time, cash in hand or at bank and (in the latter case)
credited to an account in the name of a Group Member with an approved bank and
to which a Group Member is alone (or together with other Group Members)
beneficially entitled and for so long as:

 

(a)that cash is repayable within 30 days after the relevant date of calculation;

 

(b)repayment of that cash is not contingent on the prior discharge of any other
Financial Indebtedness of any Group Member or of any other person whatsoever or
on the satisfaction of any other condition outside the control of the Group
Members;

 

(c)there is no Security over that cash except for certain permitted security to
be defined in the Facility Agreement; and

     

(d)that cash is denominated in US dollars, RMB, HKD or other freely transferable
and freely convertible currency and (except as mentioned in paragraphs (a)
and/or (c) above) immediately available to the applicable Group Member (or, in
the case of any term deposit, available at the expiry of the applicable term of
such deposit or at any time subject to any loss of interest upon breaking the
applicable term of such deposit),

 

and shall include cash in tills and cash in transit.

 

Cash Equivalent Investments means at any time:

 

(a)(i) certificates of deposit or time deposits (in each case) maturing within
one year, or (ii) structured deposits or investments maturing within six months,
(in each case) after the relevant date of calculation and issued by (A) any
national commercial bank in the PRC; or (B) an approved bank;

 

(b)any investment in marketable debt obligations maturing within one year after
the relevant date of calculation which is not convertible or exchangeable to any
other security, issued or guaranteed by a government, governmental agency or
multilateral intergovernmental organisation which is rated at least A-1 by S&P
Global Ratings, F1 by Fitch Ratings Ltd. or P-1 by Moody's Investors Service
Limited;

 

(c)any investment in debt securities maturing within one year after the relevant
date of calculation which is not convertible into any other security and is
rated either A-1 or higher by S&P Global Ratings, F1 or higher by Fitch Ratings
Ltd. or P-1 or higher by Moody's Investors Service Limited (or, if no rating is
available in respect of such debt securities, the issuer of which has, in
respect of its long-term debt obligations, an equivalent rating);

 

(d)commercial paper not convertible or exchangeable to any other security:

 

(i)for which a recognised trading market exists;

 

(ii)which matures within one year after the relevant date of calculation; and

 

(iii)which has a credit rating of either A-1 or higher by S&P Global Ratings, F1
or higher by Fitch Ratings Ltd. or P-1 or higher by Moody's Investors Service
Limited, or, if no rating is available in respect of such commercial paper, the
issuer of which has, in respect of its long-term unsecured and non-credit
enhanced debt obligations, an equivalent rating;

 

 35Project Unicorn - Term Sheet (SPDB)

 

 

(e)investments accessible within three months in money market funds which:

 

(i)have a credit rating of either A-1 or higher by S&P Global Ratings, F-1 or
higher by Fitch Ratings Ltd. or P-1 or higher by Moody's Investors Service
Limited; and

 

(ii)invest substantially all of their assets in securities or investments of the
types described in paragraphs (a) to (d) above;

 

(f)time deposit accounts, certificates of deposit and money market deposits
(which mature within one year after the relevant date of calculation) with:

 

(i)any approved bank; or

 

(ii)any other bank or trust company organised under the laws of the PRC whose
long-term debt is rated as high as or higher than any of those entities referred
to in paragraph (f)(i) above; or

 

(g)any other debt security approved by the Agent (acting on the instructions of
the Majority Lenders, with each Lender acting reasonably),

 

in each case, denominated in US dollars, RMB, HKD or other freely transferable
and freely convertible currencies and which any Group Member is alone (or
together with other Group Members) beneficially entitled at that time and which
is not issued or guaranteed by any Group Member or subject to any Security
(other than certain exceptions to be agreed in the Facility Agreement).

 

Cashflow means, in respect of any Relevant Period, EBITDA for that Relevant
Period without any double counting:

 

(i)plus (to the extent not included in EBITDA) the amount of any rebate, credit
or indemnity payment in respect of any Tax actually received in cash by any
Group Member during that Relevant Period and minus all amounts of Tax actually
paid by any Group Member during that Relevant Period;

 

(ii)plus (to the extent not included in EBITDA) the amount of any dividends or
other profit distributions or loan repayments received in cash by any Group
Member during that Relevant Period from any Non-Group Entity and minus (to the
extent not already deducted in determining EBITDA) the amount of any dividends
or other profit distributions or loan repayments paid in cash during that
Relevant Period by Group Members (other than the Company) to non-controlling
interests in Group Members;

 

(iii)minus all Capital Expenditure and any Permitted Acquisitions actually
funded by Group Members during that Relevant Period;

 

(iv)plus any decrease and minus any increase of Working Capital between the
beginning and end of that Relevant Period;

 

(v)minus all non-cash credits and release of provisions and plus all non-cash
debits and other non-cash charges and provisions (in each case) included in
establishing EBITDA for that Relevant Period;

 

(vi)plus any Exceptional Items received by any Group Member in cash during that
Relevant Period and minus any Exceptional Items which are paid by any Group
Member in cash during that Relevant Period (in each case) to the extent not
already taken into account in calculating EBITDA for that Relevant Period;

 

(vii)plus all cash receipts received by and minus all payments in cash made by
any Group Member during that Relevant Period in relation to any pensions or
post- employment benefit scheme to the extent that those cash receipts or cash
payments are not already taken into account in calculating EBITDA for that
Relevant Period;

 

 36Project Unicorn - Term Sheet (SPDB)

 

 

(viii)plus the proceeds of business interruption insurance received in cash by
the Group during that Relevant Period to the extent that those proceeds are not
already taken into account in calculating EBITDA for that Relevant Period;

 

(ix)minus any Permitted Payments made by a Group Member (other than those paid
to a Group Member) and any fees paid by any Group Member to the Agent, the
Security Agent or any agent or security agent in respect of any Financial
Indebtedness (owing to a person that is not a Group Member) during that Relevant
Period;

 

(x)minus any pre-operating expenses, start-up losses for new entities or
operations and losses related to discontinued operations paid in cash by any
Group Member and any restructuring charges related to employee terminations,
closings of facilities and relocations of plant, property and equipment,
hospital facilities and clinics paid in cash by any Group Member, in each case
during that Relevant Period;

 

(xi)minus all payments in cash by any Group Member during that Relevant Period
of Interest Payable plus all payments in cash received by a Group Member during
that Relevant Period of Interest Income, in each case which is not taken into
account in Net Cash Interest Costs;

 

(xii)excluding (to the extent otherwise included in the calculation of EBITDA or
in any other paragraph of this definition) the effect of all cash movements
associated with the Acquisition, any transactions expressly contemplated in the
Structure Memorandum, or any Transaction Costs;

 

(xiii)minus (to the extent added back or not deducted in the calculation of
EBITDA) any fees, expenses or charges of a non-recurring nature paid in cash by
a Group Member in relation to (whether or not successful) any equity or debt
securities offering, investment, acquisition, disposal or indebtedness;

 

(xiv)plus the amount of any cash receipts by Group Members, and minus the amount
of any cash payments by Group Members, under Treasury Transactions during that
Relevant Period (including any one off cash payment, premia, fees, costs and
expenses in connection with the purchase of any Treasury Transaction), in each
case to the extent not taken into account in the calculation of EBITDA or
pursuant to paragraph (xi);

 

(xv)adding (to the extent deducted in computing EBITDA) the amount of any
non-cash loss or deducting (to the extent included in computing EBITDA) the
amount of any non-cash gain, under hedging transactions incurred by the Group
during that period; and

 

(xvi)minus all payments of fees, costs or charges related to or incurred in
connection with an employee or management equity plan, incentive scheme or
similar arrangement or any compensation payments to management,

 

save, at the election of the Company, to the extent an amount that would
otherwise be deducted under any of the preceding paragraphs is certified in the
relevant Compliance Certificates as having been funded or reimbursed from
Acceptable Funding Sources.

 

Completion Opening Cash means the aggregate Cash and Cash Equivalent Investments
held by members of the Group immediately after completion of the Acquisition
occurs.

 

Current Assets means the aggregate (on a consolidated basis) gross value of
inventory, trade and other receivables of each Group Member including sundry
debtors (but excluding Cash and Cash Equivalent Investments) maturing within 12
months from the date of computation and including lease prepayments but
excluding amounts in respect of:

 

 37Project Unicorn - Term Sheet (SPDB)

 

 

(i)receivables in relation to rebates for tax on profits;

 

(ii)Insurance Claims;

 

(iii)Exceptional Items and other non-operating items; and

 

(iv)any accrued Interest owing to any Group Member.

 

Current Liabilities means the aggregate (on a consolidated basis) of all
liabilities (including trade creditors, accruals, provisions, prepayments,
unearned revenues and sundry creditors) of each Group Member falling due within
12 months from the date of computation but excluding amounts in respect of:

 

(i)liabilities for Financial Indebtedness (including the costs of raising that
Financial Indebtedness) and Interest Payable;

 

(ii)liabilities for tax on profits;

 

(iii)liabilities for Capital Expenditure; and

 

(iv)Exceptional Items and other non-operating items.

 

De Minimis Proceeds means amounts which are excluded from the Group’s obligation
to mandatorily prepay the Facility out of or by reference to Proceeds and which
are permitted to be received and retained by the Group, in each case, due to the
de minimis thresholds set out in the Facility Agreement.

 

Debt Service means, in respect of any Relevant Period, the aggregate of:

 

(i)Net Cash Interest Costs for that Relevant Period;

 

(ii)the aggregate of all scheduled payments of principal of any Borrowings of
Group Members that actually fell due during that Relevant Period but:

 

(A)excluding any amounts falling due under any overdraft or revolving facility
and which were available for simultaneous redrawing (or available for redrawing
subject to any clean down or similar obligation) according to the terms of that
facility but for any voluntary cancellation;

 

(B)excluding any such payments owing by a Group Member to another Group Member;
and

 

(C)excluding any voluntary or mandatory prepayment of those Borrowings,

 

and taking into account any reduction in those scheduled payments resulting from
any voluntary or mandatory prepayment; and

 

(iii)the amount of the capital element of any payments in respect of that
Relevant Period payable by any Group Member under any Capitalised Lease
Obligations,

 

but, in each case, excluding (A) any repayment or prepayment (including by way
of acquisition) of any Financial Indebtedness as part of or in connection with
(1) any Permitted Acquisition, where such Financial Indebtedness constitutes
Financial Indebtedness of any person (that is not a Group Member prior to such
Permitted Acquisition but becomes a Group Member upon or following such
Permitted Acquisition) or (2) any refinancing of any Borrowings and (B) any
amount that would (but for this part (B)) be included in any of paragraphs (i)
to (iii) above to the extent attributable to (1) any person that becomes a Group
Member during that Relevant Period pursuant to a Permitted Acquisition and (2)
that part of that Relevant Period falling prior to the date when such person
became a Group Member.

 

 38Project Unicorn - Term Sheet (SPDB)

 

 

EBITDA means, for any Relevant Period, the consolidated operating profit of the
Group for that Relevant Period without double counting:

 

(i)before deducting Interest Payable (for the purpose of this deduction only,
including capitalised Interest and amortisation of arrangement, underwriting and
participation fees and similar issue costs, agency fees, repayment and
prepayment premiums, and fees or costs);

 

(ii)before deducting any amount of tax paid, payable or accruing for payment by
any Group Member during that Relevant Period;

 

(iii)after adding back (to the extent otherwise deducted) any amount
attributable to amortisation or impairment of intangible assets (including
amortisation, impairment or write-down of any goodwill, intangible asset or
equity investment arising on the Acquisition, any Permitted Acquisition or any
permitted Joint Venture investment and of any Transaction Costs) and
depreciation or impairment of tangible assets;

 

(iv)after adding back (to the extent otherwise deducted) any non-cash provision,
charge, cost or expense in each case related to (i) any stock option incentive
or management equity plan or (ii) any share, equity, phantom equity, warrant or
option-based compensation of officers, directors or employees of Group Members
accrued during that Relevant Period;

 

(v)excluding (to the extent included) Interest Income;

 

(vi)excluding any Exceptional Items;

 

(vii)after adding back the amount of (to the extent otherwise deducted) profit
(or deducting the loss (to the extent otherwise not deducted)) of any Group
Member (for such Relevant Period) which is attributable to any non-wholly owned
interests in any subsidiary of the Company;

 

(viii)after deducting the amount of profit of any Non-Group Entity to the extent
that the amount of such profit which is included in the financial statements of
the Group exceeds the amount received or receivable in cash by Group Members
through distributions by that Non-Group Entity (including any return from a
joint venture (including by way of redemption of interest, repayment of, or
payment of interest on, a loan, dividend or distribution and return of assets
transferred) or similar return from any other Non-Group Entity) and after adding
back, to the extent not already included in EBITDA, the amount received or
receivable in cash by Group Members through distributions by Non-Group Entities
(including any return from a joint venture (including by way of redemption of
interest, repayment of, or payment of interest on, a loan, dividend or
distribution and return of assets transferred) or similar return from other
Non-Group Entity) during such Relevant Period to the extent it exceeds the
amount of profit of such Non- Group Entities which is included in the financial
statements of the Group;

 

(ix)after adding back (to the extent otherwise deducted) any loss, or after
deducting (to the extent otherwise included) any gain, constituted by any
mark-to-market or similar valuation adjustment implemented as a result of equity
accounting with respect to any interest of any Group Member in any Non-Group
Entity;

 

(x)before taking into account any realised or unrealised gains or losses on any
derivative instrument (without, in each case, double counting with reference to
the definition of Net Cash Interest Costs);

 

(xi)before taking into account any income or charge (including any deemed
finance charge) attributable to a pension or post-employment benefit scheme
other than the current service costs attributable to that scheme;

 

 39Project Unicorn - Term Sheet (SPDB)

 

 

(xii)after adding back (to the extent otherwise deducted) Transaction Costs and
any fee, commission, cost, charge or expense in each case related to any actual
or attempted equity or debt offering or financing, investment (including any
Joint Venture Investment), acquisition (including any Permitted Acquisition and
any permitted Joint Venture Investment), disposal or incurrence of permitted
Financial Indebtedness (whether or not, in each case, consummated);

 

(xiii)before taking into account and without any double counting any gains or
losses arising on:

 

(A)disposals or write downs of non-current assets; or

 

(B)litigation settlements;

 

(xiv)before taking into account the amount of any loss and gain against book
value arising on (i) a disposal (other than in the ordinary course of trading)
or (ii) revaluation, of any asset during that Relevant Period;

 

(xv)after adding back (to the extend otherwise deducted) any permitted payments
and any other fees permitted to be paid to the Investors, the Agent, the
Security Agent or any agent or security agent in respect of any Financial
Indebtedness during that Relevant Period;

 

(xvi)before taking into account any pre-operating expenses, start-up losses,
relocation costs for new entities, hospitals, clinics or operations and losses
related to discontinued operations and any restructuring charges and costs
related to employee terminations, closings of facilities and relocations of
plant, property and equipment, hospital facilities and clinics;

 

(xvii)after deducting (to the extent otherwise included) any other non-cash
gain, and after adding back (to the extent otherwise deducted) any other
non-cash expense provided that, to the extent that any non-cash expense is added
back in the calculation of EBITDA for any Relevant Period and such expense
becomes a cash expense of a Group Member or otherwise becomes payable in cash by
a Group Member in any subsequent Relevant Period, such expense shall be deducted
in the calculation of EBITDA for such subsequent Relevant Period;

 

(xviii)after adding back (to the extent otherwise deducted) any expense in
relation to amounts paid by any Group Member in respect of the purchase of
shares (or rights in respect of shares) in Group Members from directors,
officers or employees of the Group upon termination of the employment of such
employees with the Group;

 

(xix)after adding (to the extent otherwise deducted) any amounts that are paid
or accrue in favour of any Group Member during that Relevant Period under
business interruption insurance in respect of lost earnings (or its equivalent);

 

(xx)before taking into account any exchange rate gains or losses arising due to
the retranslation of balance sheet items;

 

(xxi)excluding any gains or losses in connection with any debt purchase
transactions pursuant to the terms of the Facility Agreement;

 

(xxii)after adding back (to the extent otherwise deducted) any fees, costs or
charges related to or incurred in connection with an employee or management
equity plan, incentive scheme or similar arrangement or any compensation
payments to management; and

 

(xxiii)after adding back the amount of any rental income during the Relevant
Period.

 

 40Project Unicorn - Term Sheet (SPDB)

 

 

Exceptional Items means any exceptional, one off, non-recurring or extraordinary
items which represent gains or losses including those arising on:

 

(i)the restructuring of the activities of an entity and costs (including for the
avoidance of doubt, all costs and expenses relating to rationalization,
re-branding, start-up, relocation, redundancy, compliance costs and expenses,
closure and make-good costs, asset relocation costs not capitalised,
consultants' and recruitment fees, legal fees, compensation to departing
management and head-count reduction, and asset write-downs and temporary costs
associated with transactional services and costs of new personnel or other
adjustments for sold businesses and creation or reversal of any related
provisions) and reversals of any provision for the cost of restructuring;

 

(ii)the opening of new clinics, the relocation of existing hospital facilities
and clinics and related start-up costs, relocation costs (including in relation
to the hospitals, clinics and related property, plant and equipment), closure
and make-good costs and any temporary and/or one-off costs associated with the
opening and/or the relocation of hospital facilities and clinics;

 

(iii)disposals (including any gain or loss over or against book value arising in
favour of or incurred by a Group Member), revaluations or impairment of
non-current assets;

 

(iv)disposals of assets associated with discontinued operations;

 

(v)initial integration costs following the consummation of the Acquisition
(including, but not limited to audit costs for the first Financial Year
following the Closing Date, costs for establishing customer relationship
management system and information system at the Group and recruiting costs for
the Group); and/or

 

(vi)actual or preparatory costs incurred in connection with any investment,
acquisition, disposal, debt or equity financing, litigation, claims,
investigations or settlements (and in each case whether or not successful).

 

Excess Cashflow means, in respect of any Financial Year (the Excess Cashflow
Financial Year), Cashflow for that Excess Cashflow Financial Year:

 

(i)less Debt Service for the Excess Cashflow Financial Year;

 

(ii)less the aggregate amount of mandatory prepayments of Financial Indebtedness
by Group Members during the Excess Cashflow Financial Year, but, in the case of
any mandatory prepayment of any Loan(s), (a) excluding any mandatory prepayment
of any of the Facility Loan on account of Excess Cashflow; (b) including in the
deduction any other mandatory prepayment of any of the Facility Loan as a result
of disposal, claims or recoveries only to the extent that the proceeds (as the
case may be) giving rise to such mandatory prepayment were included within
Cashflow for the Excess Cashflow Financial Year and (c) including in the
deduction all repayments made as a result of illegality, market disruption or a
Lender requesting a tax gross-up or tax indemnity or indemnity for increased
costs and ignoring any exclusions from the definition of Interest;

 

(iii)less any amount forming part of Cashflow for the Excess Cashflow Financial
Year which is or represents an Acceptable Funding Source;

 

(iv)less any cure amount applied to EBITDA or Cashflow pursuant to cure
provisions in the Facility Agreement;

 

(v)less (to the extent included in Cashflow) amounts claimed but not received
under business interruption or similar insurance during the Excess Cashflow
Financial Year;

 

(vi)less (to the extent not otherwise deducted in Cashflow) any permitted
payments (in favour of persons that are not Group Members) during the Excess
Cashflow Financial Year;

 

 41Project Unicorn - Term Sheet (SPDB)

 

 

(vii)less all Transaction Costs paid by Group Members during the Excess Cashflow
Financial Year to the extent disregarded in the calculation of Cashflow for the
Excess Cashflow Financial Year (except those funded in accordance with the Funds
Flow Statement from the Minimum Equity Investment and/or a Loan);

 

(viii)less (unless already deducted in Cashflow) the amount of any tax the
liability for which was booked and incurred in the Excess Cashflow Financial
Year but where payment of such Tax is not due and paid until after the expiry of
the Excess Cashflow Financial Year and plus the amount of any payment made in
respect of such Tax which was booked and incurred and deducted pursuant to this
paragraph (h) in the previous Excess Cashflow Financial Year but not actually so
paid in the current Excess Cashflow Financial Year;

 

(ix)less (unless already deducted in Cashflow) all amounts in respect of annual
employee bonuses accrued in the Excess Cashflow Financial Year but where payment
of the same is due and paid after the expiry of the Excess Cashflow Financial
Year and plus the amount of any payment made in respect of such employee bonuses
which was deducted pursuant to this paragraph (i) in the previous Excess
Cashflow Financial Year but not actually made in the current Excess Cashflow
Financial Year);

 

(x)less (to the extent not already deducted in Cashflow for such Excess Cashflow
Financial Year) the aggregate amount (if any) paid in cash by Group Members in
that Excess Cashflow Financial Year in respect of Capital Expenditure, any
Permitted Acquisitions and permitted Joint Venture Investments, in each case
funded or reimbursed from Acceptable Funding Sources to the extent that such
amount, if it had not been funded (or reimbursed, as the case may be) from
Acceptable Funding Sources could have been spent by the Group in that Excess
Cashflow Financial Year without breaching any of the provisions of this
Agreement;

 

(xi)plus any amounts claimed by Group Members in respect of a previous Financial
Year from business interruption insurance (or its equivalent) but not received
in cash by Group Members by the date of determination of Excess Cashflow for
that previous Financial Year (and is hence not included in the calculation of
Excess Cashflow for that previous Financial Year) which are received in cash in
the Excess Cashflow Financial Year (to the extent not already included in the
Cashflow for the Excess Cashflow Financial Year);

 

(xii)less any payments accruing during that Excess Cashflow Financial Year in
connection with stock-based awards, partnership interest-based awards, awards of
profits interests, deferred compensation awards; and

 

(xiii)less, without duplication of amounts deducted from Excess Cashflow in
prior periods, any planned cash expenditures (the Planned Expenditures), in each
case relating to acquisitions, investments (including joint ventures) or capital
expenditures to be consummated or made, plus any restructuring cash expenses,
pension payments or tax contingency payments expected to be made, in each case
during the period of four consecutive financial quarters following the end of
such period; provided that to the extent the aggregate amount of cash actually
utilised to finance such acquisition, investment, capital expenditures,
restructuring cash expenses, pension payments or tax contingency payments during
such period of four consecutive financial quarters is less than the Planned
Expenditures, the amount of such shortfall shall be added to the calculation of
Excess Cashflow at the end of such period of four consecutive financial
quarters.

 

Financial Indebtedness means at any time any indebtedness for or in respect of
(without double counting):

 

(i)moneys borrowed and debit balances at banks or other financial institutions;

 

(ii)any acceptance under any acceptance credit facility (or dematerialised
equivalent);

 

 42Project Unicorn - Term Sheet (SPDB)

 

 

(iii)any note purchase facility or the issue of bonds, notes, debentures, loan
stock or any similar instrument (but, in each case, excluding Trade
Instruments);

 

(iv)any Capitalised Lease Obligations;

 

(v)receivables sold or discounted (other than any receivables to the extent they
are sold on a non-recourse (as regards the ability of the debtor of the relevant
receivables to pay) basis or, if sold on a recourse basis, to the extent of such
recourse only);

 

(vi)any Treasury Transaction (and, when calculating the value of that Treasury
Transaction, only the marked to market value (or, if any actual amount is due as
a result of the termination or close-out of that Treasury Transaction, that due
amount) as at that time shall be taken into account);

 

(vii)any counter-indemnity obligation in respect of a guarantee, bond, standby
or documentary letter of credit or any other instrument issued by a bank or
financial institution (but, in each case, excluding Trade Instruments) in
respect of an underlying liability of an entity which is not a Group Member
which liability would fall within one of the other paragraphs of this
definition;

 

(viii)the acquisition cost of any asset where the deferred payment (including
deferred consideration) is arranged primarily as a method of raising finance and
is treated as a borrowing in accordance with the Accounting Principles and/or in
circumstances where the due date for payment is more than 120 days after the
expiry of the period customarily allowed by the relevant supplier (save where
such payment deferral results from non or delayed satisfaction of contract terms
by the supplier or from contract terms establishing payment schedules tied to
total or partial contract completion and/or to the results of operational
testing procedures);

 

(ix)the sale price of any asset to the extent paid by the person liable before
the time of sale or delivery where such advance payment is arranged primarily as
a method of raising finance and is treated as a borrowing in accordance with the
Accounting Principles;

 

(x)any amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a borrowing and required to
be classified as a borrowing under the Accounting Principles;

 

(xi)shares which are expressed to be redeemable (otherwise than solely at the
option of the issuer thereof) prior to the date falling six months after the
Maturity Date; and

 

(xii)without double counting, the amount of any liability in respect of any
guarantee for any of the items referred to (and subject to the limitations set
out) in paragraphs (i) to (xi) above.

 

Financial Year means the annual accounting period of the Group ending on or
about 31 December in each year.

 

Interest means interest and amounts in the nature of interest paid or payable in
respect of any Borrowings including:

 

(i)the interest element of Capitalised Lease Obligations;

 

(ii)discount and acceptance fees payable (or deducted) in respect of any
Borrowings;

 

(iii)fees payable in connection with the issue or maintenance of any bond,
letter of credit, guarantee or other assurance against financial loss which
constitutes Borrowings and is issued by a third party on behalf of a Group
Member; and

 

(iv)commitment, utilisation and non-utilisation fees payable or incurred in
respect of Borrowings,

 

 43Project Unicorn - Term Sheet (SPDB)

 

 

but excluding all arrangement, underwriting and participation fees and similar
issue costs, agency fees, premia, fees and costs payable on repayment or
prepayment of Borrowings, Acquisition costs, Transaction Costs, costs relating
to any Permitted Acquisition and any amortisation of any such fees, costs or
premia, any fronting arrangements, any capitalised interest or other non-cash
return, any withholding tax on interest received or paid, any amounts that are
payable in respect of any Borrowings that are repaid (including by way of
acquisition) as part of the Acquisition or any other Permitted Acquisition
(relating to any future acquisition target that is not a Group Member prior to
such Permitted Acquisition but that becomes a Group Member or becomes owned by a
Group Member pursuant to such Permitted Acquisition), any realised or unrealised
gains or losses on any financial instrument (other than any derivative
instrument which is accounted for on a hedge accounting basis) and any interest
cost or expected return on plan assets in relation to any pension or
post-employment benefit scheme.

 

Interest Income means, for a period, the amount of Interest accrued (whether or
not received) due to Group Members during that period and any interest payable
to a Group Member during that Relevant Period, including any interest on any
Cash or Cash Equivalent Investments (in each case on a consolidated basis).

 

Interest Payable means, for a period, the aggregate of Interest, commission and
other recurrent financial expenses accrued (whether or not paid or capitalised)
in respect of any Borrowings of any Group Member during that period but
excluding any Interest which is capitalised, pay-in-kind or rolled-up or
otherwise not currently payable in cash, the amount of any discount amortised,
any other non-cash Interest charges during that Relevant Period and calculated
on the basis that:

 

(v)the amount of Interest accrued will be increased by an amount equal to any
amount payable by Group Members under interest rate hedging agreements in
relation to that period, but for the avoidance of doubt does not include any
unrealised gains or losses;

 

(vi)the amount of Interest accrued will be reduced by an amount equal to any
amount payable to Group Members under interest rate hedging agreements in
relation to that period, but for the avoidance of doubt does not include any
unrealised gains or losses.

 

Net Cash Interest Costs means, for any period, the Interest Payable for that
period after deducting any Interest Income for that period.

 

New Equity means the cash proceeds of fully paid ordinary or non-redeemable
preference shares in the Company or fully paid redeemable shares in the Company
with a redemption date at least six Months after the Termination Date, which are
issued to the Parent for cash whether prior to, on or after the Closing Date
(but excluding the Minimum Equity Investment received by the Company from the
Parent on or prior to the Closing Date).

 

New Parent Liabilities means Parent Liabilities arising after the Closing Date.

 

New Shareholder Injections means the aggregate amount of New Equity and/or New
Parent Liabilities.

 

Non-Group Entity means any investment or entity (which is not itself a Group
Member (including associates and Joint Ventures)) in which any Group Member has
an ownership interest.

 

Parent Liabilities means all present and future liabilities and obligations,
whether actual or contingent and whether incurred solely or jointly, of the
Company to the Parent.

 

Permitted Sponsor Amounts means, at any time, any amounts that the Group may, at
that time, pay to one or more of the Sponsors in accordance with the terms of
the Facility Agreement (to the extent not actually paid to the Sponsors and not
otherwise utilised for any other purpose under the Facility Agreement).

 

Relevant Period means each period of 12 months ending on a Test Date (falling on
or before the Maturity Date) starting with the First Test Date.

 

 44Project Unicorn - Term Sheet (SPDB)

 

 

Retained Excess Cashflow means any amount of Excess Cashflow which is not
required to be applied in prepayment of the Facility (including any amount
deducted) in accordance with the mandatory prepayment provisions in this term
sheet.

 

Retained Net Proceeds means proceeds of disposals, claims, or recoveries which
is not (or are not) required to be applied in prepayment of the Facility or are
elected to be applied in reinvestment in the business, in each case, pursuant to
the terms set forth under the heading Mandatory Prepayments in this term sheet.

 

Test Date means the First Test Date and a date falling on 30 June and 31
December in each year thereafter.

 

Total Net Debt means, at any time, the aggregate amount of all obligations of
Group Members for or in respect of Borrowings at that time (without double
counting) but deducting (a) the aggregate amount of Cash and Cash Equivalent
Investments held by any Group Member at such time; and (b) the amount of cash
collateral securing or supporting Borrowings at that time.

 

Transaction Costs means the Acquisition Costs and costs, fees, commissions and
expenses payable in connection with any Permitted Acquisition, permitted
disposal, permitted share issue or permitted transaction.

 

Treasury Transactions means any derivative transaction entered into in
connection with protection against or benefit from fluctuation in any rate or
price.

 

Working Capital means, on any date, Current Assets less Current Liabilities.

 

 45Project Unicorn - Term Sheet (SPDB)

 

 

Schedule 5
Undertakings

 

Each Obligor shall (and shall, where indicated, procure the relevant Group
Members will) comply with the following undertakings and the Parent shall comply
with the undertakings marked with * below, subject to materiality,
qualifications, baskets and other customary exceptions to be agreed.

 

(a)Authorisations*: Obtain and maintain authorisations required (i) to execute
and perform the Finance Documents, (ii) subject to legal reservations and
perfection requirements to ensure the Finance Documents are legal, valid,
binding and enforceable and (iii) to own property and carry on business, in each
case, where failure to do so would have a Material Adverse Effect.

 

(b)Compliance with laws: Comply with laws to which it (and each Group Member) is
subject where failure to do so would have Material Adverse Effect.

 

(c)Taxes: Pay taxes where failure to do so would have a Material Adverse Effect.

 

(d)Mergers: Restriction on mergers except as part of permitted acquisitions,
disposals or reorganisations.

 

(e)Change of business: No material change to the general business of the Group
taken as a whole, provided that there shall be no future development,
establishment or acquisition of new hospitals by any Group Member (unless such
development, establishment or acquisition of new hospitals is permitted to the
extent funded from paragraphs (i) and (ii) of the definition of Acceptable
Funding Sources).

 

(f)Acquisitions: Restrictions on acquisitions other than, amongst others, any
acquisition by a Group Member of at least a majority stake in an acquired entity
which is not located or organized within a sanctioned country in violation of
application sanctions (a Permitted Acquisition) where (i) no non-payment,
insolvency, insolvency proceeding or creditors’ process Event of Default is
continuing or would occur as a result of completion of such acquisition (which
is determined on the date of any Group Member’s entry into a legally binding
commitment to make such acquisition), (ii) after giving pro forma effect to such
acquisition (taking into account any cost savings and synergies (calculated on
the same basis as Adjusted EBITDA)) and as if the consideration for such
acquisition had been paid and the Financial Indebtedness incurred or to be
incurred in connection with such acquisition had been fully utilized and applied
towards such acquisition at the last day of that most recent Relevant Period,
the Group is in compliance with the Net Leverage Ratio required for the most
recently ended testing period for which accounts are required to have been
delivered, (iii) the principal business of the acquired entity falls within the
general nature of the business of the Group or the acquired entity is in a line
of business that is similar, complementary, compatible or related to the Group’s
core business or is reasonably related, synergistic, incidental or ancillary to,
the core business, (iv) any debt incurred to finance such acquisition is
permitted financial indebtedness under the Facility Agreement, and (v) if the
total cash consideration payable is greater than US$10million (or its
equivalent), any due diligence reports (to the extent prepared) are provided to
the Finance Parties on a non-reliance basis, provided that no Group Member shall
acquire any additional hospitals (unless such acquisition is funded from
paragraphs (i) and (ii) of the definition of Acceptable Funding Sources),
provided further that the considerations paid by the Group Members for any
Permitted Acquisition to or in respect of a HHH Group Member shall be subject to
the General Basket and other restrictions provided in paragraph (z) (General
Restrictions).

 

(g)Joint Ventures: Restrictions on joint ventures. Permitted joint ventures to
include any joint venture where:

 

(i)a Group Member is already a member of or party to the Joint Venture provided
that subject to paragraph (iii) below any further investment in such Joint
Venture after the Utilisation Date is contractually committed by the Group as at
the Utilisation Date and to the extent disclosed to the Arrangers on or prior to
the Utilisation Date;

 

 46Project Unicorn - Term Sheet (SPDB)

 

 

(ii)such investment in any Joint Venture was made by any person which becomes a
Group Member in accordance with the terms of the Facility Agreement, after the
Utilisation Date and subject to paragraph (iii) below, any further investment is
committed on or prior to the date on which such person becomes a Group Member;
or

 

(iii)where, after giving pro forma effect to:

 

(A)amounts subscribed for shares in or invested in (net of all redemptions) or
lent to (net of any repayment) all such Joint Ventures by any Group Member;

 

(B)the contingent liabilities of any Group Member under any guarantee given in
respect of the liabilities of any such Joint Venture; and

 

(C)the market value of any assets transferred by any Group Member to any such
Joint Venture (not being sales or purchases for cash made between a Group Member
and any such Joint Venture in the ordinary course of trade and on arm’s lengths
terms),

 

(the Joint Venture Investment), the Group is in compliance with the Net Leverage
Ratio for the most recently ended testing period for which accounts are required
to have been delivered,

 

provided that (x) no non-payment, insolvency, insolvency proceeding or
creditors’ process Event of Default is continuing or would occur as a result of
completion of a Joint Venture Investment (which is determined on the date of any
Group Member’s entry into a legally binding commitment to make such Joint
Venture Investment), (y) the aggregate amount of Joint Venture shall be subject
to the General Basket and other restrictions provided in paragraph (z) (General
Restrictions) and (y) the joint venture is not in any sanctioned jurisdiction
and its principal business falls within the general nature of the business of
the Group or the joint venture is in a line of business that is similar,
complementary, compatible or related to the Group’s core business or is
reasonably related, synergistic, incidental or ancillary to, the core business,
provided further that no Group Member shall make any Joint Venture Investment
into any hospitals (unless such investment is funded from paragraphs (i) and
(ii) of the definition of Acceptable Funding Sources).

 

For the avoidance of doubt, any reference in paragraph (iii) above to a Joint
Venture Investment shall be a reference to that Joint Venture Investment as
renewed, extended or otherwise replaced from time to time (provided that any
increase in the amount of that investment must otherwise be permitted under
paragraph (iii)).

 

For the purpose of this paragraph, Joint Venture means any joint venture entity,
whether a company, unincorporated firm, undertaking, association, joint venture
or partnership or any other entity.

 

(h)Preservation of assets: Shall maintain in good working order all assets
necessary for conduct of business, where failure to do so would have a Material
Adverse Effect;

 

(i)Pari passu: Pari passu ranking, except for obligations mandatorily preferred
by law.

 

(j)Negative pledge*: Restriction on granting of security by any Group Member.
Permitted exceptions to include (but not limited to):

 

(i)security in respect of Financial Indebtedness mentioned in paragraphs (o)(i)
(limited to existing security in respect of such Financial indebtedness only and
is removed or discharged within four months of that person's becoming a Group
Member (save to the extent that such security constitutes Permitted Security
under another paragraph of this definition)), (iii), (iv) or (v) or (vi) below;

 

(ii)general security basket where the aggregate outstanding principal amount of
secured liabilities do not exceed an amount to be agreed at the time of
incurrence; and

 

(iii)security in connection with permitted finance leases and sale and
leasebacks, over the asset subject to such arrangement (parameters to be agreed
in the Facility Agreement).

  

 47Project Unicorn - Term Sheet (SPDB)

 

 

(k)Disposals: Restriction on disposals of assets by any Group Member to any
person that is not an Obligor. Permitted exceptions (subject to customary
restrictions on value transfer from Obligors to non-Obligors to be agreed in the
Facility Agreement) to include (but not limited to):

 

(i)disposals in the ordinary course of trading, disposals between members of the
Group or disposals of assets no longer required for the operation of the
business, exchanges of assets for comparable or superior type, value or quality
(provided that the assets become subject to transaction security following
exchange (if subject to transaction security prior to exchange));

 

(ii)finance leases, hire purchase or similar transactions and any permitted sale
and leasebacks, any sale, factoring or discounting or securitisation of
receivables;

 

(iii)any disposals of assets (other than any shares or material intellectual
property necessary for the business of the Group) on normal commercial terms
where the proceeds are reinvested in the business of the Group, to fund purchase
of other assets used in the business of the Group, to finance or refinance
permitted acquisitions, permitted joint ventures, capital expenditure or any
other working capital or general corporate purposes (but not prepayment of
debt), in each case within 12 months of receipt (or within 18 months, if a Group
Member enters into a binding commitment or the board of the relevant Group
Member designates to so reinvest within 12 months) or are applied in prepayment
of the Facility (and Permitted Additional Debt, Permitted PRC Indebtedness or
Refinancing Indebtedness, provided that such proceeds shall be allocated between
the Facility and such indebtedness in a manner directed by the Borrower
(provided that the amount allocated to the Facility shall be not less than its
pro rata share, subject to any waivers by Lenders)) in accordance with the
Finance Documents, as applicable;

 

(iv)the sale, factoring or discounting of receivables (or of any contracts,
guarantees or other obligations in respect of such receivables and other related
assets customarily transferred in connection with such sale, factoring or
discounting of receivables) on arm’s length terms (provided that it is permitted
receivables financing if on recourse terms, in each case to the extent that any
Financial Indebtedness arising thereby (if any) is permitted);

 

(v)disposals to a joint venture permitted under the Facility Agreement; and

 

(vi)general disposals basket where the aggregate net consideration, per
financial year, does not exceed an amount to be agreed at the time of disposal;

 

(l)Arm’s length basis: Restrictions on material transactions with the Investor,
any Investor Affiliate or any holding company of the Parent or any HHH Group
Member except on arm’s length terms or better (from the perspective of the
Group) subject to exceptions to be agreed.

 

(m)Loans, credit or guarantees: Restrictions on loans, credits or guarantees to
be made by any Obligor or any Group Member or any HHH Group Member, subject to
exceptions to be agreed (including any loan or guarantee made to a joint venture
permitted under paragraph (g) above and intercompany loans made by or guarantees
granted by (i) a Group Member to or in favour of another Group Member or a HHH
Group Member or (ii) by a HHH Group Member in respect of the obligations of, to
or in favour of, any member of the NFC Group), provided that (x) no Group Member
shall provide any guarantee to or in favour of any HHH Group Member, and (y) the
aggregate amount of intercompany loans or entrustment loans made by the Group
Members using operating cashflow generated after the Closing Date to the HHH
Group Members shall be subject to the General Basket and other restrictions
provided in paragraph (z) (General Restrictions).

 

 48Project Unicorn - Term Sheet (SPDB)

 

 

(n)Dividends and other restricted payments: Restriction on payment of dividends
or other distributions in respect of its share capital, payments in respect of
subordinated shareholder debt and redemptions of share capital. Permitted
exceptions to include (but not limited to) (each, a Permitted Distribution):

 

(i)(A) customary holding company taxes, expenses and corporate existence costs,
loans to directors and MEP-related payments, non-executive director fees,
management fees (B) payment of annual sponsor advisory or consulting fees and
expenses (including bona fide M&A and transaction advisory fees in relation to
any debt raising or M&A activity) and (C) any other restricted payments;
provided that the aggregate amount of distributions made pursuant to this
paragraph (i) shall not exceed an annual amount to be agreed (provided that any
amount which is not paid in any financial year may be carried over into (and
paid during) subsequent financial years);

 

(ii)the making of any Restricted Payment to minority interests parties of any
Group Member incorporated in the PRC;

 

(iii)without limitation to (i) and (ii) above, dividends and other upstream
payments at any time if on the most recent Test Date prior to such payment, (A)
the cash available to the Group is sufficient to meet any obligation to make the
next repayment instalment and the next interest payment and (B) the Net Leverage
Ratio does not exceed 2.0:1 (calculated on a pro forma basis taking into account
the proposed dividend or upstream payment and any Financial Indebtedness
incurred or to be incurred to finance such proposed dividend or upstream
payment), or, if such pro forma Net Leverage Ratio is greater than 2.0:1 but
equal to or less than 3.25:1 (calculated on a pro forma basis taking into
account the proposed dividend or upstream payment and any Financial Indebtedness
incurred or to be incurred to finance such proposed dividend or upstream
payment), any dividends and other upstream payments provided that at least 50%
of such dividends or upstream payments are funded from Acceptable Funding
Sources (other than New Shareholder Injections which are used to fund an Equity
Cure), or, if the Net Leverage Ratio is greater than 3.25:1 (calculated on a pro
forma basis taking into account the proposed dividend or upstream payment and
any Financial Indebtedness incurred or to be incurred to finance such proposed
dividend or upstream payment), no such dividends or upstream payments are
permitted.

 

(o)Financial Indebtedness: Restriction on the incurrence of Financial
Indebtedness by Group. Permitted exceptions to include (but not limited to):

 

(i)indebtedness of any person acquired by the Group (or indebtedness attaching
to the assets of such person) pursuant to a Permitted Acquisition (whether
secured on pari passu basis with the Facility or on a junior basis or senior
unsecured, guaranteed or unguaranteed) subject to compliance of the financial
covenants then required as of the last day of the most recently ended Relevant
Period (pro forma for such incurrence, full utilisation of and application of
proceeds of such indebtedness), which is in existence at the time of acquisition
and not incurred or increased in contemplation of the acquisition and is
discharged within 4 months of completion of the acquisition unless otherwise
permitted to remain outstanding pursuant to another paragraph of this
definition);

 

(ii)(A) indebtedness between members of the Group, (B) group cash pooling and
daylight exposures under ordinary course banking and treasury activities, (C)
vendor financing and (D) deferred consideration in connection with acquisitions
(earn-outs or similar arrangements and deposits held on behalf of clients shall
not be considered indebtedness); and

 

(iii)any Permitted Additional Debt (provided that, the outstanding principal
amount of such Permitted Additional Debt, when aggregated with outstanding
principal amount of the Permitted PRC Indebtedness, shall not exceed
US$45,000,000 (or its equivalent));

 

(iv)any Refinancing Indebtedness;

 

 49Project Unicorn - Term Sheet (SPDB)

 

 

(v)any secured or unsecured financial indebtedness of any Group Member in the
PRC, provided that the Net Leverage Ratio of the Group would be complied with if
recalculated on a pro forma basis, after giving effect to the incurrence of such
financial indebtedness, full utilisation of and application of proceeds of such
indebtedness for the most recent Test Date as at the date on which such
Financial Indebtedness is incurred, provided that if such Financial Indebtedness
is incurred prior to the First Test Date, the maximum Net Leverage Ratio for
that most recent Relevant Period shall be deemed to be the maximum Net Leverage
Ratio permitted under the section entitled “Financial covenants” as at the First
Test Date, and provided further that, the outstanding principal amount of such
Permitted PRC Indebtedness, when aggregated with outstanding principal amount of
the Permitted Additional Debt, shall not exceed US$45,000,000 (or its
equivalent)) (Permitted PRC Indebtedness); and

 

(vi)a general indebtedness basket for any other Financial Indebtedness, where
the aggregate outstanding principal amount does not exceed an amount to be
agreed at the time of incurrence.

 

Any Permitted Financial Indebtedness in connection with loans made by a Group
Member to another Group Member over a threshold to be agreed and any shareholder
debt shall be subordinated to the Facility at the terms of the Intercreditor
Agreement or at terms otherwise satisfactory to the Agent.

 

Any Permitted Financial Indebtedness in connection with a Permitted Acquisition
may be on a certain funds basis, and the applicable requirements shall be tested
(and may be deemed satisfied) as at the time of the agreement to acquire the
relevant target.

 

(p)Acquisition Documents and constitutional documents: The Company (i) shall not
amend, vary, novate, supplement, supersede, waive or terminate any term of any
Acquisition Document to which it is a party in a manner that would be materially
prejudicial to the interest of the Lenders (taken as a whole) under the Finance
Documents other than with the consent of the Arrangers; (ii) shall (to the
extent it considers it to be in its commercial interest to do so) take (in its
reasonable opinion) all steps to preserve and enforce its rights (or the rights
of any other Group Member) and pursue any material claims and remedies arising
under any Acquisition Documents to which it is a party (if any are available)
and (iii) shall promptly pay all amounts payable under the Acquisition Documents
to which it is a party as and when they become due (except to the extent that
any such amounts are being contested in good faith by a Group Member and where
adequate reserves are set aside for any such payment). No Obligor whose shares
are subject to Transaction Security shall amend its constitutional documents in
a manner that would be materially adverse to the interests of the Finance
Parties.

 

(q)Insurances: The Company shall ensure the Group maintains insurance cover
customary for similar businesses, where failure to do so would have a Material
Adverse Effect.

 

(r)Further assurances*: Further assurances on security and guarantee to be
provided by the Parent, the Company or a Material Subsidiary or an HHH Group
Member in respect of a Transaction Security, subject to Agreed Security
Principles.

 

(s)Holding companies*

 

(t)Share capital

 

(u)Treasury transactions

 

(v)Sanctions/AML/Anti-corruption*

 

(w)Pensions

 

(x)Intellectual Property

 

 50Project Unicorn - Term Sheet (SPDB)

 

 

(y)Environmental Compliance

 

(z)General Restrictions:

 

(i)The aggregate consideration paid by the Group Members for any permitted
acquisitions and permitted joint ventures to or in respect of any HHH Group
Member and the aggregate intercompany loans made by the Group Members to the HHH
Group Members shall not at any time exceed RMB800,000,000 or the equivalent
during the life of the Facility, except for (i) any equity injection or
shareholder loan made by NFC (or its affiliate) to any Group Member, and (ii) an
aggregate amount up to US$150,000,000 funded by NFC (or its affiliate) to any
Group Member by way of the equity injection, which is further provided by such
Group Member to any HHH Group Member by way of equity injection or intercompany
loan for the purpose of financing or refinancing the capital expenditure of HHH
Group (the General Basket).

 

(ii)In respect of each Group Member, the making of any Permitted Acquisition,
Joint Venture Investment or Restricted Payment, or the provision of intercompany
loans, entrustment loans or guarantees permitted under the Facility Agreement,
shall not have any Material Adverse Effect on the Borrower’s ability to comply
with its payment obligations under the Finance Documents, or in respect of any
operating expenses in the ordinary course of business in any material respect,
or its ability to comply with financial covenants under the Facility Agreement.

 

(aa)Liquidity Support: within 3 months after the Closing Date, NFC shall provide
cash to the Group in the form of foreign debt through one or more Account Banks
in the aggregate amount of not less than US$50,000,000 to be applied for
expenditure or any other working capital and/or general corporate purposes in
respect of Group Members located in the PRC; for the avoidance doubt, such cash
is in addition to the cash proceeds contemplated by paragraph (b) of the
definition of Minimum Equity Investment, and shall not be calculated as part of
the Acceptable Funding Sources.

 

(bb)Collection Account and Cash Pooling Arrangement:

 

(i)Each of the Company and any other Group Member shall within 150 days after
the Closing Date, open and maintain an unblocked revenue collection account
(each Collection Account) with Shanghai Pudong Development Bank Putuo Sub-Branch
or one of its affiliates (an Account Bank) and enter into a cash pooling
agreement with such Account Banks so that all collections of revenues generated
from the Group will be subject to such cash pooling agreements.

 

(ii)The Borrower shall ensure that in respect of the Chindex Group:

 

(A)within 180 days after the Closing Date, the Collection Ratio is not less than
50%;

 

(B)within 240 days after the Closing Date, the Collection Ratio is not less than
70%; and

 

(C)within 330 days after the Closing Date, the Collection Ratio is not less than
90%.

 

(iii)The Borrower shall ensure that all operating expenses and capital
expenditures of each of the Borrower and all other members of the Group will be
paid directly through its Collection Account.

 

(iv)The Borrower shall ensure that for each financial quarter, the aggregate
cash balance standing to the credit of the Collection Accounts of the Borrower
and all other Group Members on the last day of each financial quarter is not
less than 80% of the total amount of all cash balance of the Group in all of
their bank accounts as set out in the latest management accounts of the Group.

 

(v)Each of HHH Group Member shall within 150 days after the Closing Date, open
and maintain an unblocked revenue account with an Account Bank (each a HHH
Collection Account) and enter into a cash pooling agreement with such Account
Banks so that all collections of revenues generated from the HHH Group will be
subject to such cash pooling agreements.

 

 51Project Unicorn - Term Sheet (SPDB)

 

 

(vi)The Borrower shall ensure that in respect of the HHH Group:

 

(A)within 180 days after the Closing Date, the Collection Ratio is not less than
40%;

 

(B)within 240 days after the Closing Date, the Collection Ratio is not less than
60%; and

 

(C)within 330 days after the Closing Date, the Collection Ratio is not less than
80%.

 

(vii)The Borrower shall ensure that all operating expenses and capital
expenditures of each of the HHH Group Members will be paid directly through its
HHH Collection Account.

 

(viii)The Borrower shall ensure that for each financial quarter, the aggregate
cash balance standing to the credit of the Collection Accounts of all HHH Group
Members on the last day of each financial quarter is not less than 80% of the
total amount of all cash balance of the HHH Group in all of their accounts as
set out in the latest management accounts of the Group.

 

(ix)All funds generated from issuance of new shares by NFC or any of its
subsidiary (including the Borrower) permitted under the Facility Agreement shall
be collected and deposited into a Collection Account designated by the Agent.

 

For the purpose of this paragraph (aa), Collection Ratio means, in respect of
each of the Group and the HHH Group, the total amount of revenues collected and
deposited into the Collections Accounts to the total amount of revenues of the
Group or HHH Group (as the case may be), for any period.

 

 52Project Unicorn - Term Sheet (SPDB)

 

 

Schedule 6
Events of Default

 

Each of the following is an Event of Default. Subject to materiality,
qualifications, thresholds and other customary exceptions to be agreed.

 

(a)Non-payment: Failure to pay, subject to (i) (in the case of non-payment of
principal or interest) three business days’ grace period if such failure to pay
is caused by administrative or technical error, and (ii) (in the case of any
other non-payment) seven business days’ grace period.

 

(b)Financial Covenant: Breach of financial covenant subject to equity cure.

 

(c)Post-Closing Guarantee and Security: Failure to provide or perfect the
guarantee or transaction security within the required time period (subject to
any permitted extensions thereof).

 

(d)Other breach: Breach of other undertakings, subject to 20 business days’
remedy period.

 

(e)Misrepresentation: Representations materially incorrect, subject to 20
business days’ remedy period.

 

(f)Cross-default: Cross-default and/or cross-acceleration in respect of
third-party Financial Indebtedness of an Obligor, a Group Member or the Parent
(other than for debt supported by a standby letter of credit or similar), of
more than an amount to be agreed.

 

(g)Insolvency: Insolvency or moratorium or by reason of financial difficulties
commencing negotiations with one or more of its creditors (other than any
Finance Party) with a view to any general debt rescheduling of the Parent, any
Obligor or (in the case of the Facility Agreement) a Material Subsidiary, or the
Parent, any Obligor or (in the case of the Facility Agreement) a Material
Subsidiary is unable or admits inability to pay its debt as they fall due (other
than solely as result of balance sheet liabilities exceeding assets), or the
Parent, any Obligor or (in the case of the Facility Agreement) a Material
Subsidiary suspends or threatens to suspend making payments on its debt.

 

(h)Insolvency proceedings: Insolvency-related formal corporate action or formal
legal proceedings relating to the Parent, any Obligor or a Material Subsidiary,
subject to 20 business days’ period for staying or discharging if contesting in
good faith or frivolous or vexatious claims.

 

(i)Creditors process: Attachment, sequestration, execution or similar
possession, subject to a threshold in line with cross-acceleration threshold,
over all of the assets of the Parent, any Obligor or a Material Subsidiary
subject to 20 business days’ period for staying or discharging or frivolous or
vexatious claims.

 

(j)Invalidity, unlawfulness, repudiation: Subject to legal reservations and
perfection requirements, it becomes unlawful for the Parent or an Obligor or any
other Group Member to perform its obligations under Finance Documents, or any of
its material obligations cease to be legal, valid and enforceable, or an Obligor
rescinds or repudiates (or purports to) any Finance Document, in each case after
the date of execution and to an extent which is materially adverse to the
interests of the Lenders taken as a whole under the Finance Documents, subject
to 20 business days’ remedy period.

 

(k)Cessation of business: The Group suspends or ceases to carry on all of its
business (other than as a result of a transaction permitted under the Facility
Agreement) and such suspension or cessation has a Material Adverse Effect.

 

(l)Expropriation: All or substantial part of the assets of any Obligor or any
Material Subsidiary are subject to any seizure, nationalisation or restriction
by or on behalf of any governmental, regulatory or other public authority and
such event has a Material Adverse Effect.

 

 53Project Unicorn - Term Sheet (SPDB)

 

 

(m)Litigation: Any litigation, arbitration, administrative, governmental,
regulatory or other investigations, proceedings or disputes are commenced
against any Group Member, or its assets which in any such case has a Material
Adverse Effect.

 

(n)Material Adverse Change: Any other event or circumstance occurs which has a
Material Adverse Effect.

 

(o)Audit Qualification: The auditors of the Group qualify the Annual Financial
Statements on the grounds that (a) the information supplied to the auditors was
unreliable or inadequate or (b) they are unable to prepare the Financial
Statements on a going concern basis, and, in either case, such qualification is
materially adverse to the interests of the Finance Parties under the Finance
Documents (but excluding any qualification by reference to any possible future
compliance with or breach of any Finance Documents) provided that an Event of
Default will not occur under this paragraph if: (i) the auditors state that such
qualification is of a minor or technical nature; (ii) the qualification relates
to the non-adoption of acquisition accounting in respect of any Annual Financial
Statements or is otherwise in terms or as to issues which, in each case, could
not reasonably be expected to be materially adverse to the interests of the
Finance Parties under the Finance Documents; or (iii) where the circumstances
giving rise to such qualification are capable of remedy and are remedied within
30 Business Days of the date of notification of the qualification by the
auditors to any Group Member.

 

(p)Intercreditor Agreement: Any party to the Intercreditor Agreement (other than
a Finance Party or an Obligor) fails to comply with the material provisions of
the Intercreditor Agreement, where the interests of the Lenders are materially
prejudiced by such failure, provided that an Event of Default will not occur
under this paragraph in relation to any failure to comply if such failure to
comply is capable of remedy and is remedied within 30 days of the earlier of the
Agent giving notice to the relevant party to the Intercreditor Agreement (and
the Company) in relation to such failure and the Company becoming aware of such
failure.

 

 54Project Unicorn - Term Sheet (SPDB)