exv10w28



 








EXHIBIT 10.28




EXECUTION COPY



 





INVESTMENT NUMBER 24052




RMB LOAN AGREEMENT




among




BEIJING UNITED FAMILY HEALTH CENTER




SHANGHAI UNITED FAMILY HOSPITAL, INC.




(as “Borrowers”)




and




INTERNATIONAL FINANCE CORPORATION




(as “Lender”)




Dated October 10, 2005



 











 



 




TABLE OF CONTENTS




	 	 	 	 	 	 	 
	Article/Section	 	Item	 	Page No.	 
	 
	 	 	 	 	 	 
	ARTICLE I
	 	 	 	 	1	 
	 
	 	 	 	 	 	 
	Definitions and Interpretation	 	 	1	 
	 
	 	 	 	 	 	 
	    Section 1.01.
Definitions	 	 	1	 
	    Section 1.02.
Financial Definitions	 	 	11	 
	    Section 1.03. Financial Calculations	 	 	20	 
	    Section 1.04. Interpretation	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	 	 	 	21	 
	 
	 	 	 	 	 	 
	The Project	 	 	21	 
	 
	 	 	 	 	 	 
	    Section 2.01. The Project	 	 	21	 
	    Section 2.02. Project Cost and Financial Plan	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	 	 	 	21	 
	 
	 	 	 	 	 	 
	The Loan	 	 	21	 
	 
	 	 	 	 	 	 
	    Section 3.01. Amount	 	 	21	 
	    Section 3.02. Disbursement	 	 	22	 
	    Section 3.03. Interest	 	 	22	 
	    Section 3.04. Default Penalty	 	 	23	 
	    Section 3.05. Repayment	 	 	24	 
	    Section 3.06. Prepayment	 	 	24	 
	    Section 3.07. Fees	 	 	24	 
	    Section 3.08. Currency and Place of Payment	 	 	25	 
	    Section 3.09. Taxes	 	 	25	 
	    Section 3.10. Business Day Adjustment	 	 	25	 
	    Section 3.11. Allocation of Partial Payments	 	 	26	 
	    Section 3.12. Unwinding Costs	 	 	26	 
	    Section 3.13. Other Fees and Expenses	 	 	26	 
	    Section 3.14. Joint and Several Obligations	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	 	 	 	27	 
	 
	 	 	 	 	 	 
	Representations and Warranties	 	 	27	 
	 
	 	 	 	 	 	 
	    Section 4.01. Representations and Warranties	 	 	27	 
	    Section 4.02. IFC Reliance	 	 	29	 












 



-ii-


	 	 	 	 	 	 	 
	Article/Section	 	Item	 	Page No.	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 	 	 	 	30	 
	 
	 	 	 	 	 	 
	Conditions of Disbursement	 	 	30	 
	 
	 	 	 	 	 	 
	    Section 5.01.
Conditions of Disbursement	 	 	30	 
	    Section 5.02. Conditions for IFC Benefit	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 	 	 	 	32	 
	 
	 	 	 	 	 	 
	Particular Covenants	 	 	32	 
	 
	 	 	 	 	 	 
	    Section 6.01. Affirmative Covenants	 	 	32	 
	    Section 6.02. Negative Covenants	 	 	36	 
	    Section 6.03. Reporting Requirements	 	 	41	 
	    Section 6.04. Insurance	 	 	43	 
	 
	 	 	 	 	 	 
	ARTICLE VII
	 	 	 	 	46	 
	 
	 	 	 	 	 	 
	Events of Default	 	 	46	 
	 
	 	 	 	 	 	 
	    Section 7.01. Acceleration after Events of Default	 	 	46	 
	    Section 7.02. Events of Default	 	 	46	 
	    Section 7.03. Automatic Acceleration upon Dissolution or Bankruptcy	 	 	50	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 	 	 	 	50	 
	 
	 	 	 	 	 	 
	Miscellaneous	 	 	50	 
	 
	 	 	 	 	 	 
	    Section 8.01. Saving of Rights	 	 	50	 
	    Section 8.02. Notices	 	 	50	 
	    Section 8.03. English Language	 	 	53	 
	    Section 8.04. Term of Agreement	 	 	53	 
	    Section 8.06. Disclosure of Information	 	 	56	 
	    Section 8.07. Successors and Assignees	 	 	57	 
	    Section 8.08. Amendments, Waivers and Consents	 	 	57	 
	    Section 8.09. Counterparts	 	 	57	 












 



-iii-


	 	 	 	 	 
	Article/Section	 	Item	 	 	Page No.
	ANNEX A
	 	 	 	 	59	 
	 
	 	 	 	 
	LIST OF AUTHORIZATIONS
	 	 	59
	 
	 	 	 	 
	ANNEX B
	 	 	 	 	63	 
	 
	 	 	 	 
	MINIMUM INSURANCE REQUIREMENTS
	 	 	63
	 
	 	 	 	 
	ANNEX C
	 	 	 	 	64	 
	 
	 	 	 	 
	EXCLUDED ACTIVITIES
	 	 	64	 
	 
	 	 	 	 
	SCHEDULE 1
	 	 	 	 	65	 
	 
	 	 	 	 
	FORM OF LOAN DISBURSEMENT REQUEST
	 	 	65	 
	 
	 	 	 	 
	SCHEDULE 2
	 	 	 	 	68	 
	 
	 	 	 	 
	FORM OF LOAN DISBURSEMENT RECEIPT
	 	 	68	 
	 
	 	 	 	 
	SCHEDULE 3
	 	 	 	 	69	 
	 
	 	 	 	 
	FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY
	 	 	69	 
	 
	 	 	 	 
	SCHEDULE 4
	 	 	 	 	71	 
	 
	 	 	 	 
	FORM OF LETTER TO BORROWER’S AUDITORS
	 	 	71	 
	 
	 	 	 	 
	SCHEDULE 5
	 	 	 	 	73	 
	 
	 	 	 	 
	FORM OF BORROWERS’ CERTIFICATION ON DISTRIBUTION OF DIVIDENDS
	 	 	73	 
	 
	 	 	 	 
	SCHEDULE 6
	 	 	 	 	75	 
	 
	 	 	 	 
	INFORMATION TO BE INCLUDED IN ANNUAL REVIEW OF OPERATIONS
	 	 	75	 
	 
	 	 	 	 
	SCHEDULE 7
	 	 	 	 	78	 
	 
	 	 	 	 
	FORM OF SERVICE OF PROCESS LETTER
	 	 	78	 













 






RMB LOAN AGREEMENT




     AGREEMENT, dated October 10, 2005, between BEIJING UNITED FAMILY HEALTH
CENTER, a Sino-foreign joint venture company organized and existing under the laws of
the People’s Republic of China (“Borrower 1”), SHANGHAI UNITED FAMILY HOSPITAL, INC, a
Sino-foreign joint venture company organized and existing under the laws of the People’s
Republic of China (“Borrower 2”), and INTERNATIONAL FINANCE CORPORATION (“IFC”), an international
organization established by Articles of Agreement among its member countries.



     Borrower 1 and Borrower 2 shall hereinafter collectively be referred to as the
“Borrowers” and individually as a “Borrower”. IFC and each of the Borrowers shall
hereinafter collectively be referred to as the “Parties” and individually as a
“Party”.



ARTICLE I




Definitions and Interpretation




     Section 1.01. Definitions. Wherever used in this Agreement, the
following terms have the meanings opposite them:



	 	 	 
	“Affiliate”

	 	any Person directly or indirectly controlling, controlled by or under
common control with, the Borrower (for the purposes of this definition,
“control” means the power to direct the management or policies of a Person, directly
or indirectly, whether through the ownership of shares or other securities,
by contract or otherwise, provided that the direct or indirect ownership of fifty
per cent (50%) or more of the voting share capital or equity interest (as the case
may be) of a Person is deemed to constitute control of that Person; and
“controlling” and “controlled” have corresponding meanings);
	 
	 	 
	“Annual Monitoring
Report”

	 	
the report to be submitted to IFC pursuant to Section
6.03(d) of this Agreement from time to time;













 



 - 2 -




	 	 	 
	“Auditors”

	 	with respect to Borrower 1, Beijing Huasong Certified Public
Accountants Co. Ltd. or such other independent public
accounting firm appointed by Borrower 1 as its auditors and
acceptable to IFC;
	 
	 	 
	 

	 	with respect to Borrower 2, Shanghai JaHwa Certified Public
Accountants Co., Ltd. or such other independent public
accounting firm appointed by Borrower 2 as its auditors and
acceptable to IFC;
	 
	 	 
	“Authority”

	 	any national, supranational, regional or local government, or
governmental, administrative or judicial department, commission,
authority, tribunal, agency or entity, or central bank (or any
Person that exercises the functions of the central bank,
whether or not government owned and howsoever constituted or
called);
	 
	 	 
	“Authorization”

	 	any license or approval (howsoever evidenced),
registration, filing or exemption from, by or with any
Authority, and all corporate, creditors’ and shareholders’
approvals or consents;
	 
	 	 
	“Bank Account
Charge Agreements”

	 	

the Chindex Account Charge Agreement and the Onshore
Account Pledge Agreement;
	 
	 	 
	“Business Day”

	 	a day, other than a Saturday or Sunday, on which commercial
banks are open for business in both Beijing and New York;
	 
	 	 
	“China” or “PRC”

	 	the People’s Republic of China;
	 
	 	 
	“Chindex”

	 	Chindex International, Inc., a NASDAQ listed company
incorporated in Delaware with its registered address at
Chindex International, Inc. c/o National Registered Agent,
160 Greentree Drive, Suite 101, Dover, DE 11904;
	 
	 	 
	“Chindex Account
Charge Agreement”

	 	

the agreement entitled “Chindex Account Charge Agreement” dated on or
around the date of this Agreement between Chindex and IFC creating a floating charge over all of its bank
accounts in favor of IFC, except for any such













 



 - 3 -




	 	 	 
	 

	 	accounts which have a pre-existing charge filed prior to the date
of this Agreement in favor of M&T Bank for the
aggregate amount of US$1,900,060;
	 
	“Clinics”

	 	means the following:






	 	 	 	 	 
	 

	 	(i)
	 	the “Shunyi Clinic” located at
No. 1 Lu, Nanxin Yuan, Likan Village, Tianzhu Town,
Shunyi District, Beijing, China;
	 
	 	 	 	 
	 

	 	(ii)
	 	the “Jianguomen Clinic”
located at Sub-level 1, Apartment Building of Beijing
International Hotel Club, No. 21 Jianguomen Wai Street,
Chaoyang District, Beijing, China;
	 
	 	 	 	 
	 

	 	(iii)
	 	the “SRC Minhang Clinic”
located at 555 Jinfeng Road, Minhang District, Shanghai, China; and
	 
	 	 	 	 
	 

	 	(iv)
	 	any other medical clinic
established or to be established by any of entities
within the Group;






	 	 	 
	“Contract
Assignments”

	 	

the contractual assignment, by way of security in favor of IFC, of the
rights and benefits of the Borrowers and/or Chindex under the following commercial
contracts:






	 	 	 	 	 
	 

	 	(i)
	 	the Lease Contracts; and
	 
	 	 	 	 
	 

	 	(ii)
	 	the Technology and Service Contracts;






	 	 	 
	“Country”

	 	the People’s Republic of China;
	 
	 	 
	“Derivative
Transaction”

	 	

any swap agreement, cap agreement, collar agreement, futures
contract, forward contract or similar arrangement with respect to interest
rates, currencies or commodity prices;
	 
	 	 
	“Disbursement”

	 	the disbursement of the Loan;
	 
	 	 
	“Environmental,
Health and
Safety Guidelines”

	 	



the following guidelines:













 



 - 4 -




	 	 	 	 	 
	 

	 	(i)
	 	IFC Occupational Health and
Safety Guidelines dated June 24, 2003;
	 
	 	 	 	 
	 

	 	(ii)
	 	World Bank Group General Environmental
Guidelines dated July, 1998;
	 
	 	 	 	 
	 

	 	(iii)
	 	IFC Environmental and Social Guidelines for
Health Care Facilities, dated May 2003;
	 
	 	 	 	 
	 

	 	(iv)
	 	IFC Life and Fire Safety Guidelines, dated October
2002;
	 
	 	 	 	 
	 

	 	(vi)
	 	IFC Hazardous Materials
Management Guidelines, dated December 2001;






	 	 	 
	 

	 	copies of which have been delivered to, and receipt of
which have been acknowledged by, the Borrowers by letter dated
August 8, 2005;
	 
	 	 
	“Environmental and
Social Policies”

	 	

the following policies:






	 	 	 	 	 
	 

	 	(i)
	 	IFC’s Operational Policy 4.01, Environmental
Assessment (October 1998); and
	 
	 	 	 	 
	 

	 	(ii)
	 	IFC Policy Statement on Child and Forced Labor
(March 1998);
	 
	 	 	 	 
	 

	 	(iii)
	 	Involuntary Resettlement, OD 4.30, dated June
1990;
	 
	 	 	 	 
	 

	 	(iv)
	 	IFC’s Policy on Disclosure of Information, dated
September 1998;






	 	 	 
	 

	 	copies of which have been delivered to, and receipt of
which has been acknowledged by, the Borrowers by letter dated
August 8, 2005;













 



 - 5 -




	 	 	 
	“Equity Pledge
Agreements”

	 	

means:
	 

	 	(i) the agreement entitled “BUFH Pledge Agreement”; and
	 
	 	 
	 

	 	(ii) the agreement entitled “SUFH Pledge Agreement”; each entered
between Chindex and IFC on or around the date of this Agreement
creating a pledge in favor of IFC over Chindex’s interest
in the registered capital of Borrower 1 and Borrower 2
respectively;
	 
	 	 
	“ERS”

	 	the Environmental Review Summary prepared by IFC, approved by the
Borrowers and made available at the InfoShop of the World Bank Group offices in
Washington DC on August 9, 2005, as amended or supplemented from time to time as
appropriate in a manner consistent with the Environmental and Social Policies,
the Environmental, Health and Safety Guidelines, and other provisions of this
Agreement;
	 
	 	 
	“Event of Default”

	 	any one of the events specified in Section 7.02 (Events of
Default);
	 
	 	 
	“Excluded
Activities”

	 	

the list of activities described in Annex C attached hereto;
	 
	 	 
	“Group”

	 	collectively, Chindex, Borrower 1, Borrower 2 and any of their present or future
Affiliates;
	 
	 	 
	“Guarantee
Agreement”

	 	

the agreement entitled “Guarantee Agreement” between Chindex and IFC
dated on or around the date of this Agreement pursuant to which Chindex shall
guarantee the payment obligations of the Borrowers hereunder;
	 
	 	 
	“Interest Payment
Date”

	 	

in any relevant calendar year, the date which is ten (10) Business Days
preceding any “Interest Payment Date” as defined in the terms and conditions of the
Reference Bond;
	 
	 	 
	“Interest Period”

	 	each period of twelve (12) months commencing on an
Interest Payment Date and ending on the day immediately













 



 - 6 -




	 	 	 
	 

	 	before the next following Interest Payment Date, except that: (i) for the first Interest Period, the period shall
commence on the date of the Disbursement; and (ii) for the last
Interest Period, the period shall commence on the Interest
Payment Date immediately preceding the Repayment
Date and end on the day immediately preceding the Repayment Date;
	 
	 	 
	“Interest Rate”

	 	the rate at which interest is payable on the Loan, as
determined in accordance with Section 3.03 (b) (Interest);
	 
	 	 
	“Issue
Date”



	 	the date of issue of the Reference Bond;

	 
	 	 
	“Lease Contracts”

	 	

mean (i) the Building Lease
Contract dated August 18, 2003 and any other contracts between Beijing Post and
Telecommunications Industrial School (as lessor) and
Borrower 1 (as lessee) for lease of the premises currently used
by Borrower 1 as its operation site and (ii) the
Building Lease Contract dated March 1, 2002 between
Shanghai Municipal Changning District Centre Hospital (as lessor)
and US-China Industrial Exchange, Inc. (as lessee) for lease of
the premises currently used by Borrower 2 as its operation site;
	 
	 	 
	“Lien”

	 	any mortgage, pledge, charge, assignment, hypothecation, security interest,
title retention, preferential right, trust arrangement, right of set-off,
counterclaim or banker’s lien, privilege or priority of any kind having the
effect of security, any designation of loss payees or beneficiaries or any similar
arrangement under or with respect to any insurance policy or any preference
of one creditor over another arising by operation of law;
	 
	 	 
	“Loan”


	 	has the meaning set out in Section 3.01 (Amount);

	 
	“Loan Currency”
	 	the lawful currency of the Country;
	 
	“Material
Adverse Effect”

	 	

a material adverse effect on:
	 
	 	 
	 

	 	(i)           either of the Borrowers, their assets or properties;
	 
	 	 
	 

	 	(ii)           either of the Borrowers’
business prospects or financial condition;












 



 - 7 -




	 	 	 	 	 
	 

	 	(iii)
	 	the implementation of the
Project, the Financial Plan or the carrying on of either
of the Borrowers’ business or operations; or
	 
	 	 	 	 
	 

	 	(iv)
	 	the ability of either of the
Borrowers to comply with their obligations under this
Agreement, any other Transaction Documents.






	 	 	 
	“Maturity Date”

	 	the “Maturity Date” as defined in the terms and conditions of the
Reference Bond;
	 
	 	 
	“Mortgage
Agreements”

	 	

agreements between each of the Borrowers and IFC, in form and substance
satisfactory to IFC providing for a first- ranking mortgage in favor of IFC on the
present and future machinery and equipment situated on the Project Sites;
	 
	 	 
	“Official”

	 	any officer of a political party or candidate for political office in the
Country or any officer or employee (i) of the Government (including any legislative,
judicial, executive or administrative department, agency or instrumentality
thereof) or (ii) of a public international organization;
	 
	 	 
	“Onshore Account
Pledge
Agreement”

	 	

the agreement entitled “Onshore Account Pledge Agreement”
dated on or around the date of this Agreement between Borrower 1 and/or Borrower 2
and IFC creating a pledge over the Sinking Fund Account in favor of IFC;
	 
	 	 
	“Person”

	 	any natural person, corporation, company, partnership, firm, voluntary
association, joint venture, trust, unincorporated organization,
Authority or any other entity whether acting in an individual, fiduciary or other
capacity;
	 
	 	 
	“Potential Event
of Default”

	 	

any event or circumstance which would, with notice, lapse of time,
the making of a determination or any combination thereof, become an Event of
Default;
	 
	 	 
	“Prohibited
Payments”

	 	

any offer, gift, payment, promise to pay or authorization of the payment of
any money or anything of value, directly or indirectly, to or for the use or
benefit of any Official













 



 - 8 -




	 	 	 
	 

	 	(including to or for the use or benefit of any other Person if a
Borrower knows, or has reasonable grounds for believing, that the
other Person would use such offer, gift, payment, promise or
authorization of payment for the benefit of any such Official),
for the purpose of influencing any act or decision or omission of
any Official in order to obtain, retain or direct business
to, or to secure any improper benefit or advantage for, a
Borrower, its Affiliates or any other Person; provided that any
such offer, gift, payment, promise or authorization of
payment shall not be considered a Prohibited Payment if, in
IFC’s reasonable opinion, it (i) is lawful under applicable
written laws and regulations or (ii) is made for the purpose of
expediting or securing the performance of a routine governmental
action (as such term is construed under applicable law);
	 
	 	 
	“Project Sites”

	 	means the following sites:






	 	 	 	 	 
	 

	 	(i)
	 	the hospital of Borrower 1 located at No. 2, Jiangtai
Road, Chaoyang District, Beijing, China; and
	 
	 	 	 	 
	 

	 	(ii)
	 	the hospital of Borrower 2 located at 1111 Xian Xia
Road, Changning District, Shanghai, China.;






	 	 	 
	“Reference Bond”

	 	IFC’s inaugural RMB bond to be issued and sold to the Chinese
domestic markets under the Administrative Regulations on the Issuance of
Renminbi Denominated Bonds of International Development Organizations jointly
promulgated by the People’s Bank of China, the Ministry of Finance, the
National Development and Reform Commission and China Securities Regulatory
Commission on February 18, 2005;
	 
	 	 
	“Reference Rate”

	 	the “all-in” interest costs per annum of the Reference Bond, inclusive
of annualized costs of issuance;
	 
	 	 
	“Renminbi” or
“RMB”

	 	

the lawful currency of China;
	 
	 	 
	“Repayment Date”

	 	the date which is ten (10) Business Days immediately preceding
the Maturity Date;













 



 - 9 -




	 	 	 
	“Security”

	 	the security created pursuant to the Security Documents to secure all amounts
owing by the Borrowers to IFC under this Agreement;






	 	 	 	 	 
	“Security
Documents”

	 	(i)
	 	

the Mortgage Agreements;
	 
	 	 	 	 
	 

	 	(ii)
	 	the Contract Assignments;
	 
	 	 	 	 
	 

	 	(iii)
	 	the Guarantee Agreement;
	 
	 	 	 	 
	 

	 	(iv)
	 	the Equity Pledge Agreements; and
	 
	 	 	 	 
	 

	 	(v)
	 	the Bank Account Charge Agreements;






	 	 	 
	“Sinking Fund
Account”

	 	

such bank account to be opened and maintained by Borrower 1 and/or
Borrower 2 pursuant to Section 6.01 (d) with a bank in China acceptable to IFC;
	 
	 	 
	“Subordination
Agreement”

	 	

the agreement entitled “Subordination Agreement” between Chindex, the
Borrowers and IFC dated on or around the date of this Agreement pursuant to which
Chindex and the Borrowers agree to, inter alia, subordinate payments under certain
management and other contracts to the payments by the Borrowers to IFC under this
Agreement;
	 
	 	 
	 

	 	The Subordination Agreement shall include but not limited to the
following terms:
	 
	 	 
	 

	 	(i) The Borrowers shall retain a balance of RMB18
million in payables to Chindex and Chindex affiliates

(other than any of the Borrowers or the Clinics). This amount
may be paid by the Borrower to Chindex and Chindex
affiliates only if after giving effect of such payment:







	 	(A)	 	the Current Ratio will be at least 1.8;
	 
	 	(B)	 	the Balance Sheet Liabilities to Tangible
Net Worth Ratio will be less than 1.4;
	 
	 	(C)	 	the Peak Debt Service Coverage Ratio will not be less than 1.8; and










 



 - 10 -


	 	(D)	 	the balance of the Sinking Fund is at least
RMB29.196 million.





	 	 	 
	 

	 	Provided, this retained amount may, by prior written notice to
IFC, be converted into Chindex’s equity in the Borrowers;
	 
	 	 
	 

	 	(ii) An additional RMB18 million in payables to
Chindex and Chindex affiliates (other than any of the
Borrowers or the Clinics) will be subject to the same
conditions for dividend payments as set out in Section
6.02(a);
	 
	 	 
	 

	 	(iii) Principal payments on all loans and/or notes
payable to Chindex and Chindex affiliates and existing
dividend payables to Chindex will be subject to the same
conditions for dividend payments as set out in Section
6.02(a);
	 
	 	 
	 

	 	(iv) Payment of future management
fees will be (a) capped at the lesser of their current contractual amounts
(adjusted in line with historical increases, which are
described in detail in Appendix 1 of the Subordination
Agreement) or actual and directly allocatible Chindex
overhead costs incurred, as proven to IFC’s satisfaction;
provided after giving effect of such action:
	 
	 	 
	 

	 	•           Current Ratio > 1.15
	 
	 	 
	 

	 	•           Prospective Debt Service Coverage Ratio > 1.8
	 
	 	 
	 

	 	Provided always, no payment of any principal, interests
or fees of any kind may be made by the Borrowers to Chindex or
Chindex affiliates if an Event of Default or Potential Event of
Default has occurred and is continuing;






	 	 	 
	“Subsidiary”

	 	with respect to any Person, any entity:







	 	(i)	 	over 50% of whose capital is
owned, directly or indirectly, by that Person;
	 
	 	(ii)	 	for which that Person may
nominate or appoint a majority of the members of the board
of directors or such other body performing similar
functions; or










 



 - 11 -


	 	(iii)	 	which is otherwise effectively controlled by that
Person;





	 	 	 
	“Technology and
Service Contracts”

	 	

(i) the Technology and Service Agreement effective on January 1,
2002 between Chindex and Borrower 1, including any amendment thereof with
IFC’s prior written consent; and
	 
	 	 
	 

	 	(ii) the Technology and Service Agreement to be
entered into between Chindex and Borrower 2,
including any amendment thereof with IFC’s prior
written consent;
	 
	 	 







	 	 	 	 
	“Transaction Documents”
	(i)	 	this Agreement;
	 
	 
	(ii)	 	the Security Documents;
	 
	 	(iii)	 	the Subordination Agreement;
	 
	 	(iv)	 	the Technology and Service Contracts; and
	 
	 	(v)	 	the Lease Contracts;





	 	 	 
	“US Dollar”
or “US$”

	 	

the lawful currency of the United States of America;
	 
	 	 
	“World Bank”

	 	the International Bank for Reconstruction and
Development, an international organization established by Articles of Agreement
among its member countries.






     Section 1.02. Financial Definitions (a) Wherever used in this Agreement,
unless the context otherwise requires, the following terms have the meanings opposite
them:



	 	 	 
	“Accounting
Principles”

	 	

United States Generally Accepted Accounting
Practices (“US GAAP”);












 



 - 12 -


	 	 	 
	“Annual Reviewed
Combined Financial
Statements”

	 	



the annual Combined Financial Statements for a 12 month period ending on the
same date in each year, reviewed by BDO Seidman, LLP or another
internationally reputable accounting firm acceptable to IFC;
	 
	 	 
	“Balance Sheet Liabilities”

	 	

Liabilities reflected in the balance sheet of the
Borrower;
	 
	 	 
	“Balance Sheet Liabilities
to Tangible Net Worth
Ratio”

	 	





the result obtained by dividing Balance Sheet Liabilities by Tangible Net Worth.
For the purpose of this calculation, (i) the balance of the Sinking Fund Account
will be deducted from the IFC Loan amount outstanding for the purposes of the
Balance Sheet Liabilities calculation and the balance in the Sinking Fund Account
will be deducted from Tangible Net Worth in the Tangible Net Worth calculation;
and (ii) the payables to Chindex which will be subordinated according to the terms
of the Subordination Agreement shall be deducted from the Balance Sheet
Liabilities and added to Tangible Net Worth;
	 
	 	 
	“Combined” or
“Combined Basis”

	 	

treating two Borrowers as a single entity;
	 
	 	 
	“Combined Financial
Statements”

	 	

the financial position, results of operations and cash flows of the Borrowers
together as if they were a single entity; accordingly, the combined financial
statements are prepared in accordance with the accounting principles
related to consolidated financial statements but without identifying
parent-subsidiary relationships.
	 
	 	 
	“Consolidated” or
“Consolidated Basis”

	 	

has the meaning provided in Section 1.03 (b);
	 
	 	 
	“Current Assets”

	 	the aggregate of the Borrower’s cash, investments classified as
“held for trading”, investments












 



 - 13 -


	 	 	 
	 

	 	classified as “available for sale”, trade and other
receivables realizable within one year, inventories
and prepaid expenses which are to be charged to income
within one year;
	 
	 	 
	“Current Liabilities”

	 	the aggregate of all liabilities of the Borrower falling
due on demand or within one year (including the portion of Long-term Debt falling
due within one year);
	 
	 	 
	“Current Ratio”

	 	the result obtained by dividing Current Assets (less prepaid expenses)
by Current Liabilities. For the purposes of this ratio calculation, (i) the
balance in the Sinking Fund Account shall be deducted from Current Assets and any
payment due on the Sinking Fund Account within one year shall be added to Current
Liabilities; and (ii) the payables to Chindex which will be subordinated
according to the terms of the Subordination Agreement shall not be
included as Liabilities;
	 
	 	 
	“EBITDA”

	 	for the year most recently ended for which Annual Reviewed Combined
Financial Statements are available, Net Income plus the sum of interest expense,
income taxes, extraordinary items, depreciation, amortization and any other
non-cash expenses (to the extent each was deducted in the calculation of Net Income);
	 
	 	 
	“Financial Debt”

	 	any indebtedness of the Borrower for or in respect of:







	 	(i)	 	borrowed money;
	 
	 	(ii)	 	the
outstanding principal amount of any bonds,
debentures, notes, loan stock,
commercial paper, acceptance credits, bills or
promissory notes drawn, accepted,
endorsed or issued by the Borrower;
	 
	 	(iii)	 	the deferred purchase price of assets or
services (except trade accounts that are
payable in the ordinary course of business
within 90 days of the date they are incurred and
which are not overdue);










 



 - 14 -


	 	(iv)	 	non-contingent
obligations of the Borrower to reimburse any other
person for amounts paid by that person under a
letter of credit or similar instrument (excluding
any letter of credit or similar instrument issued
for the benefit of the Borrower with respect to
trade accounts that are payable in the
ordinary course of business within 90 days of the
date of determination and which are
not overdue);
	 
	 	(v)	 	the amount of any liability in respect of any
Financial Lease;
	 
	 	(vi)	 	amounts raised
under any other transaction having the financial
effect of a borrowing and which would be
classified as a borrowing (and not as an
off-balance sheet financing) under the Accounting
Principles;
	 
	 	(vii)	 	the amount
of the Borrower’s obligations under derivative
transactions entered into in connection with the
protection against or benefit from fluctuation in
any rate or price
(but only the net amount owing by the
Borrower after marking the relevant
derivative transactions to market);
	 
	 	(viii)	 	any premium payable on a redemption or
replacement of any of the foregoing items; and
	 
	 	(xi)	 	the amount of
any liability in respect of any guarantee or
indemnity for any of the foregoing items
incurred by any other person.





	 	 	 
	“Financial Lease”

	 	any lease or hire purchase contract which would, under the Accounting
Principles, be treated as a finance or capital lease;
	 
	 	 
	“Liabilities”

	 	the aggregate of all obligations (actual or contingent) of the
Borrower to pay or repay money, including, without limitation:












 



 - 15 -



	 	(i)	 	Financial Debt;
	 
	 	(ii)	 	the amount of all liabilities of the Borrower
(actual or contingent) under any conditional sale
or a transfer with recourse or obligation to
repurchase, including, without limitation, by
way of discount or factoring of book debts
or receivables;
	 
	 	(iii)	 	taxes (included deferred taxes liabilities);
	 
	 	(iv)	 	trade accounts that are payable in the ordinary
course of business (including letters of
credit or similar instruments issued for the benefit
of the Borrower in respect of such trade accounts);
	 
	 	(v)	 	accrued
expenses, including wages and other amounts due
to employees and other services providers;
	 
	 	(vi)	 	the amount
of all liabilities of the Borrower howsoever
arising to redeem any of its shares; and
	 
	 	(vii)	 	to the extent
not included in the definition of Financial Debt,
the amount of all liabilities of any person to the
extent the Borrower guarantees them or otherwise
obligates itself to pay them.





	 	 	 
	“Long-term Debt”

	 	that part of Financial Debt the final maturity of which, by its
terms or the terms of any agreement relating to it, falls due more than one year
after the date of its incurrence;
	 
	 	 
	“Net Income”

	 	for any financial year, the excess (if any) of gross income over total
expenses (provided that income taxes shall be treated as part of total
expenses) appearing in the audited financial statements for such financial
year;
	 
	 	 
	“Non-Cash Items”

	 	for any financial year, the net aggregate amount
(which may be a positive or negative number) of all












 



 - 16 -


	 	 	 
	 

	 	non-cash expenses and non-cash credits which have been
subtracted or, as the case may be, added in calculating
Net Income during that financial year, including,
without limitation, depreciation, amortization,
deferred taxes, provisions for severance pay
of staff and workers, provisions for bad debt, bad debt
write off and credits resulting from revaluation of the
assets’ book value;
	 
	 	 
	“Peak Debt
Service Coverage
Ratio”

	 	

the ratio obtained by dividing:







	 	(i)	 	the
aggregate, for the financial year most recently
ended prior to the relevant date of calculation
for which Annual Reviewed Combined Financial
Statements are available, of (A)Net
Income for that financial year, (B) Non-Cash
Items and (C) the amount of all payments that were
due during that financial year on account of
interest and other charges on Financial Debt (to the extent deducted from Net Income);
	 
	 	by	 	 
	 
	 	(ii)	 	the aggregate
of (A) the highest aggregate amount, in any
financial year after the financial year described
in clause (i) above until the final scheduled
maturity of the IFC Loan, of all scheduled payments
(including, in the case of the IFC Loan, payments to
be made to the Sinking Fund Account pursuant to
Section 6.01(d) of this agreement and the difference
between the final balloon payment the
scheduled balance in the Sinking Fund
Account) falling due on account of principal
of Long-term Debt and interest and other charges on
all Financial Debt and (B) without double counting
any payment already counted in the preceding
sub-clause (A), any payment required to be made to
any debt service account in such











 



 - 17 -




	 	 	 
	 

	 	financial year under the terms of any
agreement providing for Financial Debt;






	 	 	 
	 

	 	where, for the purposes of clause (ii) above:







	 	(x)	 	subject to sub-clause (y), for the
computation of interest payable
during any period for which the
applicable rate is not yet determined, that
interest shall be computed at the rate in
effect at the time of the relevant date
of calculation;
	 
	 	(y)	 	interest on Short-term Debt in such
financial year shall be computed by
reference to the aggregate amount of
interest thereon paid during the
financial year in which the relevant date of
calculation falls up to the end of the
period covered by the latest quarterly
financial statements prepared by the
Borrower multiplied by a factor of 4, 2 or
4/3 depending on whether the computation is
made by reference to the
financial statements for the first quarter,
the first two quarters or the first three
quarters, respectively;





	 	 	 
	“PRC GAAP”

	 	the Generally Accepted Accounting Principles of the PRC;






	 	 	 
	“Prospective Debt
Service Coverage Ratio”

	 	



the ratio obtained by dividing:







	 	(i)	 	the
aggregate, for the financial year most recently
ended prior to the relevant date of calculation
for which Annual Reviewed Combined
Financial Statements are available, of
(A) Net Income for that financial year, (B)
Non-Cash Items and (C) the amount of all payments
that were due during that financial year on
account of










 



 - 18 -


	 	 	 	interest and other charges on Financial Debt
(to the extent deducted from Net Income);
	 	by	 	 
	 
	 	(ii)	 	the aggregate of (A) all scheduled payments
(including, in the case of the IFC Loan,
payments to be made to the Sinking Fund Account
pursuant to Section 6.01(d) of this agreement
and the difference between the final balloon
payment the scheduled balance in the Sinking Fund
Account) that fall due during the financial
year in which the relevant date of
calculation falls on account of principal of
Long-term Debt and interest and other charges on
all Financial Debt and
(B) without double counting any payment already
counted in the preceding sub-clause
(A), any payment made or required to be made to
any debt service account under the terms of
any agreement providing for Financial Debt;
	 
	 	 	 	where, for the purposes of clause (ii) above:






	 	(x)	 	subject to sub-clause (y) below, for the
computation of interest payable during any
period for which the applicable rate is
not yet determined, that interest shall be
computed at the rate in effect at the
time of the relevant date of calculation;
and
	 
	 	(y)	 	interest on Short-term Debt payable in the
financial year in which the relevant
date of calculation falls shall be computed
by reference to the aggregate amount of
interest thereon paid during that financial
year up to the end of the period covered by
the latest quarterly financial statements
prepared by the Borrower multiplied by a
factor of 4, 2 or 4/3 depending on whether
the computation is made










 



 - 19 -


	 	 	 	by reference to the
financial statements for the first
quarter, the first two quarters or the
first three quarters, respectively;





	 	 	 
	“Short-term Debt”

	 	all Financial Debt other than Long-term Debt; and
	 
	 	 
	“Tangible Net Worth”

	 	

the aggregate of:






	 	 	 	 	 	 	 
	 

	 	(i)
	 	(A)
	 	the amount paid up on the share capital of the
Borrower; and
	 
	 	 	 	 	 	 
	 

	 	 	 	(B)
	 	the amount standing to the credit of the reserves of the Borrower
(including, without limitation, any
share premium account, capital
redemption reserve funds and any
credit balance on the accumulated
profit and loss account);







     after deducting from that aggregate:




	 	(x)	 	any debit balance on the profit and loss
account or impairment of the issued
share capital of the Borrower
(except to the extent that deduction
with respect to that debit balance or
impairment has already been made);
	 
	 	(y)	 	amounts set aside for dividends or taxation (including deferred taxation);
and
	 
	 	(z)	 	amounts attributable to capitalized items
such as goodwill, trademarks, deferred
charges, licenses, patents and other
intangible assets; and





	 	 	 	 	 
	 

	 	(ii)
	 	if
applicable, that part of the net results of
operations and the net assets of any subsidiary
of the Borrower attributable to interests that
are not owned, directly or indirectly, by the
Borrower.













 






- 20 -




     Section 1.03. Financial Calculations. (a) All financial calculations to be
made under, or for the purposes of, this Agreement shall be determined on a Combined
Basis and in accordance with the Accounting Principles and, except as otherwise required
to conform to any provision of this Agreement, be calculated from the then most recent
quarterly financial statements delivered under Section
6.03 (Reporting Requirements) or, where those statements are with respect to the last
quarter of a financial year then, at IFC’s option, from the audited financial statements
for the relevant financial year. Any Material Adverse Effect that occurs after the end
of the period covered by the financial statements used to make the relevant financial
calculations shall also be taken into account in calculating the relevant figures.



     (b) If a financial calculation is to be made under or for the purposes of this
Agreement or any other Transaction Document on a Consolidated Basis, that calculation
shall be made by reference to the sum of all amounts of similar nature reported in the
relevant financial statements of each of the entities whose accounts are to be
consolidated with the accounts of each of the Borrowers plus or minus the consolidation
adjustments customarily applied to avoid double counting of transactions among any of
those entities, including the Borrower.



     (c) For the purpose of financial calculations requiring Annual
Reviewed Combined Financial Statements preceding calendar year 2005, audited financial
statements of Borrower 1 will be used instead.



     Section 1.04. Interpretation. In this Agreement, unless the context
otherwise requires:



     (a) a reference to an Annex, Article, party, Schedule or Section is a reference to
that Article or Section of, or that Annex, party or Schedule to, this Agreement;



     (b) words importing the singular include the plural and vice versa; and




     (c) a reference to a document includes an amendment or supplement to, or
replacement or novation of, that document but disregarding any amendment,
supplement, replacement or novation made in breach of this Agreement.



 









 





- 21 -




ARTICLE II




The Project




     Section 2.01.
The Project. The Project consists of the upgrade and
expansion of the Borrowers’ hospital operations in Beijing and Shanghai
respectively.



     Section 2.02. Project Cost and Financial Plan. The total estimated cost
of the Project is one hundred and sixty four million eight hundred and seventy six
thousand Renminbi (RMB164,876,000), and the proposed sources of financing are as follows:



	 	 	 	 	 
	 	 	RMB million
	 	 	equivalent
	Equity
	 	 	 	 
	Chindex
	 	 	34.19
	Cash generation
	 	 	50.12
	Total Equity
	 	 	84.31
	 
	 	 	 	 
	Loans
	 	 	 	 
	Chindex
	 	 	11.83
	Equipment Financing
	 	 	3.86
	IFC
	 	 	64.88
	Total Loans
	 	 	80.57
	TOTAL FINANCING
	 	164.88 million






ARTICLE III




The Loan




     Section 3.01. Amount. Subject to the terms and conditions of
this Agreement, IFC agrees to lend to the Borrowers and the Borrowers agree to borrow on
a joint and several basis, the sum of sixty-four million eight hundred and eighty
thousand Renminbi (RMB64,880,000) (the “Loan”). As agreed between the
Borrowers, RMB21,198,000 of the Loan will be allocated to Borrower 1 and
RMB43,682,000 of the Loan will be allocated to Borrower 2. The agreement on such
allocation between the Borrowers, however, shall not release either of the Borrowers from
its joint and several obligations towards IFC hereunder.



 









 





- 22 -




     Section 3.02. Disbursement. (a) Provided IFC is satisfied that
all conditions of disbursement set forth in Section 5.01 (Conditions of Disbursement) are
satisfied, IFC shall make one (1) Disbursement of the Loan on or as soon as practicable
following the Issue Date. The Disbursement shall be made in the Loan Currency to the
credit of the Borrowers (or either of the Borrowers) at a bank in the Country. The
Borrowers shall notify IFC of the bank no later than two (2) Business Days prior to the
Issue Date.



     (b) The Borrowers shall deliver to IFC a receipt, substantially in the form of
Schedule 2, within five (5) Business Days following the Disbursement.



     (c) IFC may, by written notice to the Borrowers, suspend or cancel the right of the
Borrowers to the Disbursement, with immediate effect: (i) if any Event of Default has
occurred and is continuing or if the Event of Default specified in Section 7.02
(d) (Events of Default) is, in the reasonable opinion of IFC, imminent; (ii) if any event
or condition has occurred which has or can reasonably be expected to have a Material
Adverse Effect; or (iii) on or after September 30, 2005. Upon any cancellation, the
Borrowers shall, subject to paragraph (d) of this Section 3.02, pay to IFC all fees and
other amounts accrued
(whether or not then due and payable) under this Agreement up to the date of that
cancellation.



     (d) Notwithstanding anything contained in this Agreement, IFC may, at any time after
the Issue Date, in its discretion and without request by the Borrowers, disburse the
Loan on the terms set out in this Agreement, by delivering to the Borrowers
notice of such intent at least ten (10) Business Days prior to the Disbursement date.



     Section 3.03. Interest. Subject to Section 3.04 (Default Penalty), the
Borrowers shall pay interest on the principal amount of Loan in accordance with this
Section 3.03:



     (a) Interest on the Loan shall accrue from day to day, be prorated on the basis of a
360-day year, for the actual number of days in the relevant Interest Period and be
payable in arrears on the Interest Payment Date immediately following that
Interest Period; provided that if the Disbursement is made less than fifteen (15) days
before the first Interest Payment Date, interest in respect of the first Interest Period
shall be payable commencing on the second Interest Payment Date following the date of the
Disbursement.



     (b) Subject to subsection (c) below, the Interest Rate for any Interest
Period shall be the rate which is the sum of:



          (i) the loan spread 3.25%; and





 









 








- 23 -




          (ii) the Reference Rate.




     (c) After IFC has received each bank statement indicating the Borrowers have
deposited funds in the Sinking Fund Account in accordance with Section 6.01(d), with
respect to only the outstanding amount of the Loan which is equal to the
aggregate balance in the Sinking Fund Account, the Interest Rate for such amount for
each Interest Period following IFC receipt of such bank statement shall be the
rate which is the sum of:



          (i) the loan spread 0.75%; and




          (ii) the Reference Rate;



provided that no Event of Default has occurred and is continuing on the date IFC
determines the Interest Rate pursuant to this Section 3.03(c). For avoidance of doubt,
this Section 3.03 (c) is not applicable if at any time an Event of Default has occurred
and is continuing, and in which situation, the Interest Rate for the entire amount of the
Loan shall be determined in accordance with Section 3.03(b) from and after the date on
which IFC notifies the Borrowers of the existence of such Event of Default.




     Section 3.04. Default Penalty. (a) Without limiting the remedies
available to IFC under this Agreement or otherwise, if the Borrowers fail to make any
payment of principal or interest (including interest payable pursuant to this Section) or
any other payment when due:




	 	(i)	 	the Borrowers shall pay interest on the
amount of that payment due and unpaid, at the rate which shall be
the sum of two per cent (2.0%) per annum and the interest rate
determined in accordance with Section 3.03 (Interest); and that
interest shall accrue from the date the relevant payment became due
until the date of actual payment (as well after as before judgment),
and shall be payable on demand or, if not demanded, on each Interest
Payment Date thereafter; and
	 
	 	(ii)	 	in addition to the default rate interest
payable by the Borrowers in Section 3.04(i) above, the Borrowers
shall pay all costs and expenses incurred by IFC with respect to the
funding of IFC’s payment obligations to holders of the Reference
Bond, including, but not limited, to any U.S. Dollar or Renminbi
borrowing costs and the costs of any hedging arrangements (in
case that such costs were incurred in U.S. Dollar or any
currency other than the Loan




 









 











- 24 -





	 	 	 	Currency, the payment shall be made in the Loan
Currency).





     (b) If the Borrowers breach their obligation to fund and maintain the Sinking Fund
Account pursuant to Section 6.01(d) below, the Borrowers shall pay to IFC, a penalty of
two per cent (2.0%) per annum on the outstanding principal of the Loan (“Sinking Fund
Penalty”). The Sinking Fund Penalty shall accrue from the date on which such breach
occurred until the date on which such breach is rectified. The Sinking Fund Penalty shall
be payable annually with the first payment due on the first Interest Payment Date
immediately following the breach.



     Section 3.05. Repayment. The Borrowers shall repay to IFC the full amount
of the Loan in one installment on the Repayment Date.



     Section 3.06. Prepayment. The Borrowers agree not to prepay the Loan.



     (b) In the event the Borrowers breach their obligation as set forth in
Section 3.06(a) above, the Borrowers shall pay to IFC the following:




	 	(i)	 	on the date of any such prepayment, a
prepayment penalty equal to the product of: (x) the amount of the
Loan prepaid; (y) the Reference Rate; and (y) the remaining number of years
from the date of prepayment to the final maturity of the Loan;
and provided that for any period less than one year, the
prepayment penalty shall be pro-rated on the basis of a 360-day
year for the actual number of days in such period; and
	 
	 	(ii)	 	within thirty (30) days of IFC’s written
request, the Borrowers shall reimburse IFC for all costs and
expenses incurred by IFC, including, but not limited to, legal fees
and appraisal fees, in connection with the re-lending of amounts
prepaid to other borrowers in China prior to the Repayment Date.





     (c) Notwithstanding the foregoing, the parties agree to meet by end of


2011 to discuss options for the penalty free retirement of the debt of the Borrowers
including the redeployment of the Borrowers’ debt and whether IFC bonds can be
purchased for early retirement of the debt without penalty.



     Section 3.07. Fees. The Borrowers shall pay to IFC the following
amounts in the Loan Currency:



 









 





- 25 -




     (a) a front-end fee of nine hundred seventy-three thousand two hundred
Renminbi (RMB973,200), representing one point five per cent (1.5%) of the principal
amount of the Loan, to be paid upon the earlier of (x) the date which is thirty (30) days
after the date of this Agreement or (y) the Business Day before the date of the
Disbursement;



     (b) a commitment fee at the rate of the Reference Rate on the full amount of the
Loan, which shall begin to accrue from the Issue Date and cease to accrue on the date of
Disbursement; and further shall be calculated on the basis of a 360-day year, and the
actual number of days from the Issue Date to the date of Disbursement (“Commitment Fee”).
The Commitment Fee shall be paid one (1) Business Day immediately following the
date of Disbursement, provided however, that if any Interest Payment Date
occurs before the date of Disbursement, the Commitment Fee shall be payable on
such Interest Payment Date; and



     (c) on each Interest Payment Date, a monitoring and supervision fee of eighty one
thousand one hundred Renminbi (RMB81,100).



     Section 3.08. Currency and Place of Payment. (a) The Borrowers shall make
all payments of principal and interest due to IFC under this Agreement in the Loan
Currency, in same day funds, to such bank account as may be designated by IFC.



     (b) The payment obligations of the Borrowers under this Agreement shall be
discharged or satisfied only to the extent that (and as of the date when) IFC actually
receives funds in the Loan Currency in the account referred to in Section 3.08 (a),
notwithstanding the tender or payment (including by way of recovery under a judgment) of
any amount in any currency other than the Loan Currency.



     Section 3.09. Taxes. The Borrowers shall pay or cause to be paid all, and
make all payments under this Agreement without deducting any, present and future taxes
whatsoever by whomsoever levied or imposed in connection with the payment of any amount
under this Agreement; provided that, if the Borrowers are prevented from making payments
without deduction, the Borrowers shall, in each case, pay an increased amount such that,
after deduction, IFC receives the full amount it would have received had that payment
been made without deduction.



     Section 3.10. Business Day Adjustment. If the due date for any payment
under this Agreement would otherwise fall on a day which is not a Business Day, that
payment shall be due on the next succeeding Business Day, and interest, fees and charges,
if any, on the amount of that payment shall continue to accrue to that next succeeding
Business Day.



 









 





- 26 -




     Section 3.11. Allocation of Partial Payments. If IFC at any time receives
less than the full amount then due and payable under this Agreement, IFC may allocate and
apply the amount received as IFC solely determines, despite any instruction of the
Borrowers to the contrary.



     Section 3.12. Unwinding Costs. If IFC incurs any cost, expense or loss in
unwinding its funding arrangements (including any premium, penalty or expense incurred to
liquidate or obtain third party deposits or borrowings in order to make, maintain or fund
all or any part of the Loan) as a result of (i) the Borrowers’ failure to borrow in
accordance with Section 3.02 (Disbursement) or to prepay in accordance with a notice of
prepayment or (ii) the Borrowers’ prepayment of any part of the Loan other than on an
Interest Payment Date, the Borrowers shall, on IFC’s demand, pay to IFC the amount of any
such cost, expense or loss that IFC notifies to the Borrowers.



     Section 3.13. Other Fees and Expenses. (a) The Borrowers shall pay, or
reimburse IFC any amount paid by IFC on account of, all taxes (including stamp taxes),
duties, fees or other charges payable on or in connection with the execution,
issue, delivery, registration or notarization of the Transaction Documents
and any other documents related to them.



     (b) The Borrowers shall pay to IFC or as IFC may direct:




	 	(i)	 	the fees and expenses of IFC’s counsel
in the Country incurred in connection with:






	 	(A)	 	the preparation of the
investment by IFC provided for under this Agreement and any
other Transaction Document;
	 
	 	(B)	 	the preparation and/or review,
execution and, where appropriate, translation and
registration of the Transaction Documents and any other
documents related to them;
	 
	 	(C)	 	the giving of any legal
opinions required by IFC under this Agreement and any
other Transaction Document;
	 
	 	(D)	 	the administration by
IFC of the investment provided for in this
Agreement or otherwise in connection with any
amendment, supplement or




 









 











- 27 -





	 	 	 	modification to, or waiver under, any of the
Transaction Documents;
	 
	 	(E)	 	the registration (where
appropriate) and the delivery of the evidences of
indebtedness relating to the Loan and its disbursement;
	 
	 	(F)	 	the occurrence of any Event of Default or Potential
Event of Default;






	 	(d)	 	the costs and expenses incurred by IFC in relation to
efforts to enforce or protect its rights under any Transaction Document,
or the exercise of its rights or powers consequent upon or arising out of
the occurrence of any Event of Default or Potential Event of Default,
including legal and other professional consultants’ fees on a full
indemnity basis.





     Section 3.14. Joint and Several Obligations. Notwithstanding anything in
this Agreement to the contrary, the obligations of the Borrowers under this
Agreement (including, without limitation, for repayment of the Loan to IFC) are joint
and several, and each Borrower is jointly and severally liable for the
obligations of the other Borrower hereunder and thereunder. Failure of either Borrower
to carry out its obligations under this Agreement will not relieve the other Borrower of
its obligations hereunder or thereunder.



ARTICLE IV




Representations and Warranties




     Section 4.01. Representations and Warranties. Each of the Borrowers
represents and warrants in respect of itself that:



     (a) it is duly incorporated and validly existing under the laws of the PRC and has
the corporate power, and has obtained all required Authorizations, to own its assets,
conduct its business as presently conducted and to enter into, and fulfill its
obligations under, this Agreement;



     (b) this Agreement has been duly authorized and executed by it and constitutes its
valid and legally binding obligation, enforceable in accordance with its terms;




 









 






- 28 -




     (c) neither the making of any Transaction Document to which it is a party nor (when
all the Authorizations referred to in Section 5.01(d) (Conditions of Disbursement) have
been obtained) the compliance with its terms will conflict with or result in a breach of
any of the terms, conditions or provisions of, or constitute a default or require
any consent under, any indenture, mortgage, agreement or other instrument or
arrangement to which it is a party or by which it is bound, or violate any of the terms
or provisions of its organizational documents or any Authorization, judgment, decree or
order or any statute, rule or regulation applicable to it;



     (d) to the best of the Borrower’s knowledge after due inquiry:




	 	(i)	 	the Authorizations specified in Annex A
are all the Authorizations (other than Authorizations that
are of a routine nature and are obtained in the ordinary course of
business) needed by the Borrower to conduct its business, carry out
the Project and execute, and comply with its obligations
under, this Agreement and each of the other Transaction Documents to
which it is a party;
	 
	 	(ii)	 	all Authorizations specified in Section (1) of
Annex A have been obtained and are in full force and effect; and
	 
	 	(iii)	 	the Borrower has applied (or is making
arrangements to apply) for all Authorizations specified in Section
(2) of Annex A, and has no reason to believe that it will not obtain
those Authorizations in a timely manner;





     (e) it has good and marketable title to all of the assets purported to be owned by
it and possesses a valid leasehold interest in all assets which it purports to lease,
in all cases free and clear of all Liens, and no conditional or unconditional
arrangements exist for the creation by it of any Lien, except for the Security;



     (f) to the best of the Borrower’s understanding, the provisions of the Transaction
Documents are effective to create in favor of IFC, legal, valid and enforceable Liens on
or in all of the Security;



     (g) to the extent possible under the applicable law, all necessary consents
have been obtained and all other actions have been taken for creating and perfecting the
Security;



     (h) to the best of its knowledge and belief after due inquiry, it is not in
violation of any statute or regulation of any Authority, and is not engaged in nor




 









 








- 29 -



threatened by any litigation, arbitration or administrative proceedings, the
outcome of which could reasonably be expected to have a Material Adverse Effect; no
judgment or order has been issued which has or may reasonably be expected to have a
Material Adverse Effect;




     (i) since December 31, 2004 it has not suffered any change that has a
Material Adverse Effect or incurred any substantial loss or liability;



     (j) it is not a party to, or committed to enter into, any contract which would or
would be reasonable likely to have a Material Adverse Effect;



     (k) its financial statements for the period ending on December 31,
2004 have been prepared in accordance with the Accounting Principles, and give a true and
fair view of its financial condition as of that date and the results of its operations
during the period then ended;



     (l) except as identified in the ERS:




	 	(i)	 	to the best of its knowledge and belief after
due inquiry, none of the Borrowers are in violation of any
of the Environmental and Social Policies or any of
the Environmental, Health and Safety Guidelines;
	 
	 	(ii)	 	the Borrowers have not received nor are
aware of any existing or threatened complaint, order, directive,
claim, citation or notice from any Authority or any material
written communication from any Person with respect to any aspect of
the compliance with any matter covered by the Environmental
and Social Policies or the Environmental, Health and
Safety Guidelines by each of the Borrowers; and





     (m) none of the Borrowers, none of their Affiliates, or any Person acting on its
or their behalf, has made, with respect to the Project or any transaction
contemplated by this Agreement, any Prohibited Payment;



     (n) none of the representations and warranties in this Section 4.01 omits any matter
the omission of which makes any of such representations and warranties misleading.



     Section 4.02. IFC Reliance. The Borrowers acknowledge that they make the
representations and warranties in Section 4.01 (Representations and
Warranties) with the intention of inducing IFC to enter into this Agreement and that IFC
enters into this Agreement in full reliance on each of them.



 









 





- 30 -




ARTICLE V




Conditions of Disbursement




     Section 5.01. Conditions of Disbursement. The obligation of IFC to make
the Disbursement is subject to the fulfillment prior to or concurrently with the making
of the Disbursement of the following conditions:



     (a) the Transaction Documents, each in form and substance satisfactory
to IFC, have been entered into by all parties to them and have become
(or, as the case may be, remain) unconditional and fully effective in accordance with
their respective terms (except for this Agreement having become
unconditional and fully effective, if that is a condition of any of those
agreements), and IFC has received a copy of each of those agreements to which it is not a
party:



     (b) the Reference Bond has been issued and is outstanding;



     (c) [not used];



     (d) the Borrowers have delivered to IFC copies of all Authorizations listed in
Section (2) of Annex A and such other Authorizations that are or become necessary for
the Loan and the execution of, and performance under, this Agreement and each
Transaction Document; and all those Authorizations are in full force and effect;



     (e) IFC has received a legal opinion, in form and substance
satisfactory to it, of counsel acceptable to IFC, covering such matters relating to the
transactions contemplated in the Transaction Documents as IFC may reasonably
request;



     (f) the Borrowers’ organizational documents are in form and substance
satisfactory to IFC;



     (g) arrangements are in place for the prepayment of the Borrowers’
existing debt from HSBC in form and substance satisfactory to IFC;



     (h) IFC has received from each of the Borrowers: (i) a certificate of incumbency and
authority in the form attached as Schedule 3; and (ii) a copy of a letter in the form
attached as Schedule 4, authorizing its Auditors to communicate directly with IFC and
provide any information regarding the financial condition of the Borrower as IFC may from
time to time request;




 









 








- 31 -




     (i) IFC has received the request for Disbursement substantially in the form attached
hereto in Schedule 1, and the Borrowers’ certifications set out in paragraph 3 of
Schedule 1 are true and accurate;



     (j) each of the Borrowers has delivered to IFC evidence, substantially in the form
of Schedule 7, of appointment of an agent for service of process in New York, New York;



     (k) the Borrower and IFC have agreed on the form of the Annual
Monitoring Report;



     (l) no Event of Default and no Potential Event of Default has occurred and is
continuing;



     (m) the proceeds of the Disbursement are, at the date of the relevant request,
needed by the Borrowers for the purpose of the Project, or will be needed for that
purpose within three (3) months of that date;



     (n) since the date of this Agreement nothing has occurred which has or can
reasonably be expected to have a Material Adverse Effect;



     (o) since December 31, 2004 the Borrowers have not incurred any material loss or
liability (except such liabilities as may be incurred in accordance with Section 6.02
(Negative Covenants));



     (p) the representations and warranties made in Article IV are true and correct in
all material respects on and as of the date of that Disbursement with the same effect as
if those representations and warranties had been made on and as of the date of that
Disbursement (but in the case of Section 4.01(c) (Representations and Warranties),
without the words in parentheses);



     (q) the proceeds of that Disbursement are not in reimbursement of, or to be used
for, expenditures in the territories of any country which is not a member of the World
Bank or for goods produced in or services supplied from any such country;



     (r) after giving effect to that Disbursement, neither of the Borrowers would be in
violation of:




	 	(i)	 	its Articles of Association;
	 
	 	(ii)	 	any provision contained in any document to
which it is a party (including this Agreement) or by which the
Borrower is bound; or






 









 








- 32 -





	 	(iii)	 	any law, rule, regulation, Authorization or
agreement or other document binding on the Borrower directly
or indirectly limiting or otherwise restricting the Borrower’s
borrowing power or authority or its ability to borrow; and





     (s) if IFC so requires, IFC has received the reimbursement of all invoiced
fees and expenses of IFC’s counsel as provided in Section 3.13 (b) (i)


(Other Fees and Expenses) or confirmation that those fees and expenses have been paid
directly to that counsel;



     (t) IFC has received copies of insurance policies covering business interruption and
a certification of the Borrowers’ insurers or insurance agents confirming that those
policies are in full force and effect and all premiums then due and payable under those
policies have been paid; and



     (w) IFC has received the front-end fee provided in Section 3.07(a).



Section 5.02. Conditions for IFC Benefit. The conditions in Section 5.01



(Conditions of Disbursement) are for the benefit of IFC and may be waived only by IFC in
its sole discretion.



ARTICLE VI




Particular Covenants




Section 6.01. Affirmative Covenants. Unless IFC otherwise agrees, the



Borrowers shall:



     (a) within fifteen (15) days following the date of the Disbursement pay IFC all
relevant fees set out in Section 3.13 (Other Fees and Expenses), and all other amounts
then due under this Agreement including but not limited to, reimbursement of all
invoiced fees and expenses of IFC’s counsel;



     (b) within thirty (30) days following the date of the Disbursement, irrevocably
authorize, in the form of Schedule 4, the Auditors (whose fees and expenses shall be for
the account of the individual Borrowers) to communicate directly with IFC at any time
regarding the Borrowers’ accounts and operations, and provide to IFC a copy of that
authorization; and no later than thirty (30) days after any change in Auditors, issue a
similar authorization to the new Auditors and provide a copy thereof to IFC;



     (c) within sixty (60) days following the date of the Disbursement:




 









 








- 33 -





	 	(i)	 	deliver to IFC copies of all Authorizations listed in Section
(3) of Annex A and such other Authorizations that are or become
necessary in order to perfect the Security, and to otherwise
ensure that all of the Transaction Documents become
effective and are enforceable; and
	 
	 	(ii)	 	deliver to IFC copies of all insurance
policies required to be obtained pursuant to Section 6.04
(Insurance) and Annex B , and a certification of the
Borrower’s insurers or insurance agents confirming that those
policies are in full force and effect and all premiums then due and
payable under those policies have been paid;





     (d) establish and maintain the Sinking Fund Account in accordance with the following
terms:




	 	(A)	 	establish and open the Sinking Fund Account
with a bank in China acceptable to IFC by the earlier of (i) January
1,
2009 or (ii) the first payment to the Sinking Fund Account
pursuant to Section 6.02(a);
	 
	 	(B)	 	deposit on or before each Interest Payment Date starting in
2009 an amount necessary to maintain at all times a
minimum balance in the Sinking Fund set out in Table 1:






	 	 	Table 1





	 	 	 	 	 
	Year of Interest	 	Minimum Balance
	Payment Date	 	after Each Interest Payment Date
	 	 	(RMB)
	2009
	 	 	6,488,000	 
	2010
	 	 	12,976,000	 
	2011
	 	 	19,464,000	 
	2012
	 	 	29,196,000	 
	2013
	 	 	38,928,000	 
	2014
	 	 	51,904,000	 
	2015
	 	 	64,880,000	 







	 	 	 	Provided, however, if immediately prior to the Interest
Payment Date in 2009, all of the following ratios shall have been
met based on the most recent Annual Reviewed Combined
Financial Statements, i.e.:






 









 








- 34 -





	 	(i)	 	the Current Ratio is at least 1.8;
	 
	 	(ii)	 	the Balance Sheet Liabilities to Tangible
Net Worth Ratio is less than 1.4;
	 
	 	(iii)	 	the Peak Debt
Service Coverage Ratio is not less than 1.8; and
	 
	 	(iv)	 	Prospective
Debt Service Coverage Ratio will be greater than
2.0






	 	 	 	then, the Borrowers’ obligation to deposit funds in the
Sinking Fund Account will be extended to start from the Interest
Payment Date in 2010, and the required minimum balance in the
Sinking Fund Account shall be determined in accordance with Table
2:
	 
	 	 	 	Table 2





	 	 	 	 	 
	Year of Interest	 	Minimum Balance
	Payment Date	 	after Each Interest Payment Date
	 	 	(RMB)
	2010
	 	 	6,488,000	 
	2011
	 	 	12,976,000	 
	2012
	 	 	25,952,000	 
	2013
	 	 	38,928,000	 
	2014
	 	 	51904000	 
	2015
	 	 	64,880,000	 







	 	(C)	 	ensure that all funds in the Sinking Fund Account shall be
held in:






	 	(i)	 	PRC Government treasury
bonds and/or treasury bills;
	 
	 	(ii)	 	fixed deposit certificates; or
	 
	 	(iii)	 	such other instruments as are acceptable to IFC;





     (e) maintain a minimum cash balance at all times of not less than 3% of the
Borrowers’ annual net revenues per the most recent Annual Reviewed Combined Financial
Statements;



     (f) maintain its existence, comply with its Articles of Association and other
constitutive documents, carry out the Project and conduct its business with due diligence
and efficiency and in accordance with sound engineering, financial and business
practices;



 









 





- 35 -




     (g) cause the financing specified in the Financial Plan to be applied exclusively to
the Project;



     (h) maintain an accounting and control system, management information
system and books of account and other records, which together adequately reflect
truly and fairly the financial condition of the Borrower and the results of its
operations in conformity with the Accounting Principles;



     (i) appoint and maintain at all times a firm of recognized independent public
accountants acceptable to IFC as Auditors of the Borrower;



     (j) upon IFC’s request, such request to be made with reasonable prior notice to
such Borrower (except no such reasonable prior notice shall be necessary if an
Event of Default or Potential Event of Default is continuing or if special circumstances
so require), permit representatives of IFC, during normal office hours, to:




	 	(i)	 	visit any of the sites and premises where the business of the
Borrower is conducted;
	 
	 	(ii)	 	inspect any of the Borrower’s sites,
facilities, plants and equipment;
	 
	 	(iii)	 	have access to the Borrower’s books of
account and all records; and
	 
	 	(iv)	 	have access to those employees, agents,
contractors and subcontractors of the Borrower who have or
may have knowledge of matters with respect to which IFC
seeks information;





     (k) through its employees, agents, contractors and subcontractors, design,
construct, operate, maintain and monitor all of its sites, plants, equipment and
facilities:




	 	(i)	 	in accordance with the Environmental and
Social Policies and the Environmental, Health and Safety Guidelines;
	 
	 	(ii)	 	in compliance with the ERS; and
	 
	 	(iii)	 	in compliance with applicable environmental,
involuntary resettlement, occupational health and safety
requirements, and any child labor and forced labor laws,
rules and




 









 











- 36 -





	 	 	 	regulations, including any international treaty obligations of
the Government of the Country and the local authorities;





     (l) make the ERS, or, as appropriate, information contained in the
ERS, available to all those who request it from the Borrower;



     (m) periodically review the form of the Annual Monitoring Report and advise IFC as
to whether modification of the form is necessary based on any changes in the Project, and
revise the form as agreed with IFC;



	 	 	 	 	 	 	 
	 

	 	(n)
	 	(A)
	 	obtain and maintain in force (and where appropriate, renew
in a timely manner) all Authorizations, including without limitation the
Authorizations specified in Annex A, which are necessary for the
implementation of the Project, the carrying out of the Borrower’s
business and operations generally and the compliance by the Borrower with
all its obligations under the Transaction Documents; and
	 
	 	 	 	 	 	 
	 

	 	 	 	(B)
	 	comply with all the conditions and
restrictions contained in, or imposed on the Borrower by, those
Authorizations;






     (o) from time to time, execute, acknowledge and deliver or cause to be executed,
acknowledged and delivered such further instruments as may reasonably be
requested by IFC for perfecting or maintaining in full force and effect the Security or
for re-registering the Security or otherwise to enable the Borrower to comply with its
obligations under the Transaction Documents; and



     (p) ensure that: (i) all dividends and distributable profits of the Clinics are,
to the extent not payable to relevant domestic joint venture partners or
domestic co-investors, distributed directly or indirectly through an Affiliate to the
relevant Borrower and not other Person; and (ii) all income from any clinic management
or technology services contracts (in whatever name) with Chindex or any other company
affiliated with Chindex are paid directly or indirectly to the relevant Borrower and not
any other Person or entity within the Group.



     Section 6.02. Negative Covenants. Unless IFC otherwise agrees, each of
the Borrowers shall not:



     (a) declare or pay any dividend to Chindex (or its successor) or make any
distribution on its share capital (other than dividends or distributions payable in shares of such Borrower), or purchase, redeem or otherwise acquire any shares of such
Borrower or any option over them unless the proposed payment or distribution
is out of retained earnings, not greater than previous year’s net income, and
the Borrower, no earlier than sixty (60) days nor later than thirty (30)



 









 





- 37 -



days prior to doing so, certifies to IFC in writing, in the form attached as
Schedule 5, that:





	 	(i)	 	no Event of Default or Potential Event
of Default has occurred and is continuing; and
	 
	 	(ii)	 	after giving effect to any such action:






	 	(A)	 	the Current Ratio will be at least 1.5
	 
	 	(B)	 	the Balance Sheet Liabilities to Tangible Net
Worth Ratio will be less than 2.0;
	 
	 	(C)	 	the Peak Debt Service
Coverage Ratio will not be less than 1.3; and
	 
	 	(D)	 	the Prospective Debt Service
Coverage Ratio will not be less than 2.0.






	 	 	 	provided always that:






	 	(A)	 	the retained earnings out
of which any of the payments or distributions referred
to in this sub- section may be made should in no event
include any amount resulting from the revaluation of
any of such Borrower’s assets;
	 
	 	(B)	 	such Borrower shall not
make any payments or distributions of the type
referred to in this sub- section if, after giving effect
to it, the Borrowers could not certify the matters referred
to in Section
6.02 (a) (i) and (ii);
	 
	 	(C)	 	no dividend payment or
distribution in whatever form may be made under this
Section 6.02(a) before December 31, 2007;
	 
	 	(D)	 	from January 1, 2008 till the
Interest Payment Date in 2009, no dividend payment or
distribution in whatever form may be made under this
Section
6.02(a) unless the Borrowers shall have deposited at
least an equal amount in the Sinking Fund Account, and




 









 











- 38 -





	 	(E)	 	after giving effect to any
form of dividend payment or distribution under this
Section 6.02(a), the Borrowers shall have adequate funds
to meet their obligations with respect to the
Sinking Fund Account provided in Section 6.02(d);





     (b) on a Combined Basis, incur expenditures or commitments for expenditures
for fixed or other non-current assets, other than those required for carrying out the
Project in an aggregate amount not exceed 50% of EBITDA in any consecutive four financial
quarters based on the Annual Reviewed Combined Financial Statements, provided that the
foregoing exception shall not apply if an Event of Default or Potential Event of Default
has occurred and is continuing;



     (c) incur, assume or permit to exist any Debt except:




	 	(i)	 	the Loan;
	 
	 	(ii)	 	other Debt specified in the Financial Plan;
	 
	 	(iii)	 	on a Combined Basis, Short-term Debt
incurred in the ordinary course of business which, when aggregated
with contingent liabilities arising from the discounting of trade
receivables, would not exceed at any one time outstanding the
equivalent of RMB4,000,000.





     (d) on a Combined Basis and except for the Lease Contracts, enter into any agreement
or arrangement to lease any property or equipment of any kind, except leases with
respect to which the aggregate lease payments do not exceed the equivalent of
RMB2,500,000 in any Financial Year;



     (e) enter into any Derivative Transaction or assume the obligations of any party to
any Derivative Transaction;



     (f) enter into any agreement or arrangement to guarantee or, in any way or under any
condition, assume or become obligated for all or any part of any financial or other
obligation of another Person;



     (g) create or permit to exist any Lien on any property, revenues or other assets,
present or future, of the Borrower, except for:




	 	(i)	 	the Security;
	 
	 	(ii)	 	the naming of IFC as loss payee
under the Borrower’s insurance policies, as per Section
6.04(b)(iv) ;






 









 








- 39 -





	 	(iii)	 	the existing Lien in favor of Siemens A G for
its financing in an aggregate amount equivalent to RMB6,581,546 for
the machinery and equipment of the Borrowers;
	 
	 	(iv)	 	any Lien arising from any tax,
assessment or other governmental charge or other Lien arising by
operation of law, in each case if the obligation underlying any such
Lien is not yet due or, if due, is being contested in good faith by
appropriate proceedings so long as:






	 	(A)	 	those proceedings do not
involve any substantial danger of the sale, forfeiture or
loss of any part of the Project, title thereto or any
interest therein, nor interfere in any material respect
with the use or disposition thereof or the
implementation of the Project or the carrying on of the
business of such Borrower; and
	 
	 	(B)	 	such Borrower has set
aside adequate reserves sufficient to promptly pay in full
any amounts that the Borrower may be ordered to pay
on final determination of any such proceedings;





     (h) enter into any transaction except in the ordinary course of business on the
basis of arm’s-length arrangements (including, without limitation, transactions
whereby such Borrower might pay more than the ordinary commercial price
for any purchase or might receive less than the full ex-works commercial price (subject
to normal trade discounts) for its products);



     (i) establish any sole and exclusive purchasing or sales agency;



     (j) enter into any partnership, profit-sharing or royalty agreement or other similar
arrangement whereby such Borrower’s income or profits are, or might be, shared with any
other Person;



     (k) enter into any management contract or similar arrangement whereby its
business or operations are managed by any other Person; the foregoing is not
intended to prevent the Borrowers from outsourcing departmental functions which are
common practice for the type of business carried out by the Borrowers;



     (l) form or have any Subsidiary except for the clinics that are or will become part
of the hospital network of the Borrowers;




 









 








- 40 -




     (m) make or permit to exist loans or advances to, or deposits (except commercial
bank deposits in the ordinary course of business) with, other Persons or investments in
any Person or enterprise other than short-term investment grade marketable securities
acquired solely to give temporary employment to its idle funds;



     (n) change its Articles of Association in any manner which would be inconsistent
with the provisions of any Transaction Document;



     (o) change its Financial Year;



     (p) change the nature or scope of the Project or change the nature of its present
business or operations;



     (q) sell, transfer, lease or otherwise dispose of all or a substantial part of its
assets, other than inventory, whether in a single transaction or in a series of
transactions, related or otherwise;



     (r) undertake or permit any merger, spin-off, consolidation or
reorganization;



     (s) prepay (whether voluntarily or involuntarily) or repurchase any Long-term Debt
pursuant to any provision of any agreement or note with respect to that Long-term Debt
unless that Long-term Debt is refinanced using new Long- term Debt on terms and
conditions (as to interest rate, other costs and tenor) at least as favorable to the
Borrower as those of the Long-term Debt being refinanced; or



     (t) use the proceeds of the Disbursement in the territories of any country
which is not a member of the World Bank or for reimbursements of expenditures in those
territories or for goods produced in or services supplied from any such country; or



     (u) amend the ERS without IFC’s consent, unless the amendment is consistent the
Environmental and Social Policies, the Environmental, Health and Safety Guidelines, and
other provisions of this Agreement;



     (v) make (and shall not authorize or permit any Affiliate or any other Person acting
on its behalf to make) with respect to the Project or any transaction contemplated by
this Agreement, any Prohibited Payment. The Borrowers further covenant that should IFC
notify the Borrowers of their concerns that there has been a violation of the provisions
of this Section or of Section 6.01(p) of this Agreement, it shall cooperate in good faith
with IFC and its representatives in




 









 








- 41 -



determining whether such a violation has occurred, and shall respond promptly and in
reasonable detail to any notice from IFC, and shall furnish documentary support for such
response upon IFC’s request;




     (w) substantially amend the terms of, or grant any waivers in respect of any Lease
Contract or the Technology and Service Contracts;



     (y) carry out any of the Excluded Activities;



     (z) withdraw any fund from the Sinking Fund Account; or



     (aa) make any payment directly or indirectly to Chindex except under the terms of
the Subordination Agreement.



     Section 6.03. Reporting Requirements. Unless IFC otherwise agrees, each of
the Borrowers shall:



     (a) as soon as available but in any event within sixty (60) days after the end of
each quarter of each Financial Year, deliver to IFC:




	 	(i)	 	two (2) copies of such Borrower’s
complete financial statements for such quarter prepared, on a
Consolidated Basis, in accordance with the Accounting Principles;
	 
	 	(ii)	 	a report containing the information specified
in the form attached as Schedule 6, including any factors that have
or could reasonably be expected to have a Material Adverse Effect;
and
	 
	 	(iii)	 	a statement of all transactions during that
quarter between the Borrower and each of its Affiliates, if
any, and a certification by an Authorized Representative
that those transactions were on the basis of
arm’s-length arrangements;





     (b) as soon as available but in any event within one hundred and twenty (120) days
after the end of each Financial Year, deliver to IFC:




	 	(i)	 	two (2) copies of its complete and
audited financial statements for that Financial Year (which are in
agreement with its books of account and prepared, on an Consolidated
Basis, in accordance with the Accounting Principles, together
with the Auditors’ audit report on them, all in form satisfactory to
IFC;






 









 








- 42 -





	 	(ii)	 	a management letter and such other
communication from the Auditors commenting, with respect to that
Financial Year, on, among other things, the adequacy
of the Borrower’s financial control procedures,
accounting systems and management information system;
	 
	 	(iii)	 	a report by the Auditors certifying that, on
the basis of its financial statements, the Borrower was in
compliance with the covenants contained in Section 6.02
(Negative Covenants) as of the end of that Financial Year or, as the
case may be, detailing any non-compliance;
	 
	 	(iv)	 	a statement by the Borrower of all
transactions between such Borrower and each of its Affiliates, if
any, during that Financial Year, and a certification by an
Authorized Representative that those transactions were on the basis
of arm’s-length arrangements; and
	 
	 	(v)	 	Annual Reviewed Combined Financial Statements;





     (c) deliver to IFC, promptly following receipt, a copy of any management
letter or other communication sent by the Auditors (or any other accountants retained by
the Borrower) to the Borrower or its management in relation to the Borrower’s financial,
accounting and other systems, management or accounts, if not provided pursuant to Section
6.03 (b) (ii);



     (d) within ninety (90) days after the end of each Financial Year, deliver
to IFC an annual monitoring report in a form consistent with Sections
5.01(k) and 6.01(m), confirming compliance with the Environmental and Social Policies,
the Environmental, Health and Safety Guidelines, the ERS, the applicable
national and local requirements, and Section 6.01(k) or, as the case may be, detailing
any non-compliance, and setting out the action being taken to ensure compliance;



     (e) as soon as possible but no later than three (3) days after its
occurrence, notify IFC of any incident or accident within the Project area or areas
otherwise within the Borrower’s management or control, which has or may
reasonably be expected to have a material adverse effect on the environment, health or
safety, including, without limitation, explosions, spills or workplace accidents which
result in death, serious or multiple injury or major pollution, specifying, in each case,
the nature of the incident or accident, the on-site and off- site impacts arising or
likely to arise therefrom and the measures such Borrower is




 









 








- 43 -



taking or plans to take to address those impacts; and keep IFC informed of the on- going
implementation of those measures;




     (f) give notice to IFC, concurrently with such Borrower’s notification to its
shareholders, of any meeting of its shareholders, such notice to include the agenda of
the meeting; and, as soon as available, deliver to IFC two (2) copies of:




	 	(i)	 	all notices, reports and other
communications of the Borrower to its shareholders,
whether any such communication has been made on an individual
basis or by way of publication in a newspaper or other communication
medium; and
	 
	 	(ii)	 	the minutes of all shareholders’ meetings;





     (g) promptly notify IFC of any proposed change in the nature or scope of the Project
or the business or operations of the Borrower and of any event or condition which has or
may reasonably be expected to have a Material Adverse Effect;



     (h) promptly upon becoming aware of any litigation or administrative proceedings
before any Authority or arbitral body which has or may reasonably be expected to have a
Material Adverse Effect, notify IFC by facsimile of that event specifying the nature of
that litigation or those proceedings and the steps such Borrower is taking or proposes to
take with respect thereto;



     (i) promptly upon the occurrence of an Event of Default or Potential Event of
Default, notify IFC by facsimile specifying the nature of that Event of Default or
Potential Event of Default and any steps the Borrower is taking to remedy it;



     (j) provide to IFC, in a timely manner, the insurance certificates and other
information referred to in Section 6.04 (d) (Insurance);



     (k) promptly provide to IFC such other information as IFC from time to time requests
about the Borrower, its assets and the Project; and



     (l) provide or cause to be provided to IFC all the bank statement of the Sinking
Fund Account within 10 days from the date of the relevant statement.



     Section 6.04. Insurance.



     (a) Insurance Requirements and Borrower’s Undertakings.




 









 








- 44 -





Unless IFC otherwise agrees, the Borrower shall:-




	 	(i)	 	insure and keep insured, with financially sound and
reputable insurers, all its assets and business against all insurable losses
to include the insurances specified in Annex B and any insurance required by
law;
	 
	 	(ii)	 	punctually pay any premium, commission and any other amounts
necessary for effecting and maintaining in force each insurance policy;

	 
	 	(iii)	 	promptly notify the relevant insurer of any claim by the Borrower under any
policy written by that insurer and diligently pursue that claim;

	 
	 	(iv)	 	comply with all warranties under each policy of insurance;
	 
	 	(v)	 	not do or omit to do, or permit to be done or not done, anything which might
prejudice the Borrower’s, or, where IFC is a loss payee or an additional named
insured, IFC’s right to claim or recover under any insurance policy; and

	 
	 	(vi)	 	not vary, rescind, terminate, cancel or cause a material change to any
insurance policy;






          provided always that if at any time and for any reason any insurance required to be
maintained hereunder shall not be in full force and effect, then IFC shall thereupon or
at any time while the same is continuing be entitled (but have no such obligation) on its
own behalf to procure such insurance at the expense of the Borrower and to take all such
steps to minimize hazard as IFC may consider expedient or necessary.




	(b)	 	Policy Provisions





          Each insurance policy required to be obtained pursuant to this Section shall be on
terms and conditions acceptable to IFC, and shall contain provisions to the effect that:




	 	(i)	 	no policy can expire nor can it be canceled or suspended by
the Borrower or the insurer for any reason (including failure to renew the
policy or to pay the premium or any other amount) unless IFC and, in the
case of expiration or if cancellation or suspension is initiated by the
insurer, the Borrower receive at least thirty (30) days notice (or such
lesser period as IFC may agree in respect of cancellation, suspension or
termination in the event of war and




 









 











- 45 -





	 	 	 	kindred peril) prior to the effective date of
termination, cancellation or suspension;
	 
	 	(ii)	 	IFC is named as additional named insured on all liability policies;
	 
	 	(iii)	 	where relevant, all its provisions (except those relating to
limits of liability) shall operate as if they were a separate policy
covering each insured party; and
	 
	 	(iv)	 	on every insurance policy on the Borrower’s assets which are
the subject of the IFC Security and for business interruption, IFC is named
as loss payee for any claim of, or any series of claims arising with respect
to the same event whose aggregate amount is, the equivalent of one million
US Dollars (US$1,000,000) or more.






	(c)	 	Application of Proceeds






	 	(i)	 	At its discretion, IFC may remit the proceeds of any insurance
paid to it to the Borrower to repair or replace the relevant damaged assets
or may apply such proceeds towards any amount payable to IFC under this
Agreement, including to repay or prepay all or any part of the Loan in
accordance with Section 3.06 (Prepayment);
	 
	 	(ii)	 	The Borrower shall use any insurance proceeds it receives
(whether from IFC or directly from the insurers) for loss of or damage to
any asset solely to replace or repair that asset.






	(d)	 	Reporting Requirements
	 
	 	 	Unless IFC otherwise agrees, the Borrower shall provide to IFC the
following:-






	 	(i)	 	as soon as possible after its occurrence, notice of any event
which entitles the Borrower to claim for an aggregate amount exceeding the
equivalent of five hundred thousand US Dollars (US$500,000) under any one or
more insurance policies;
	 
	 	(ii)	 	within thirty (30) days after any insurance policy is issued
to the Borrower, a copy of that policy incorporating any loss payee
provisions required under Section 6.04 (b) (iv) (unless that policy has
already been provided to IFC pursuant to Section 5.01 (t));
	 
	 	(iii)	 	not less than ten (10) days prior to the expiry date of any
insurance policy (or, for insurance with multiple renewal dates, not less
than






 









 








- 46 -





	 	 	 	ten (10) days prior to the expiry date of the policy on the principal
asset), a certificate of renewal from the insurer, insurance broker or
agent confirming the renewal of that policy and the renewal period, the
premium, the amounts insured for each asset or item and any changes in
terms or conditions from the policy’s issue date or last renewal, and
confirmation from the insurer that provisions naming IFC as loss payee
or additional named insured, as applicable, remain in effect;
	 
	 	(iv)	 	such evidence of premium payment as IFC may from time to time
request; and
	 
	 	(v)	 	any other information or documents on each insurance policy as
IFC requests from time to time.





ARTICLE VII




Events of Default




     Section 7.01.
Acceleration after Events of Default. If any Event of
Default occurs and is continuing (whether it is voluntary or involuntary, or results from
operation of law or otherwise), IFC may, by notice to the Borrowers, require the
Borrowers to repay the Loan as specified in that notice. On receipt of any such notice,
the Borrowers shall immediately repay the Loan and all accrued interest on it, the
prepayment fees specified in Section 3.06 (Prepayment) on the amount of the Loan whose
payment is accelerated and any other amounts payable under this Agreement. The Borrowers
waive any right that they might have to further notice, presentment, demand or protest
for that demand for immediate payment;



     Section 7.02.
Events of Default. It shall be an Event of Default if:



     (a) either of the Borrowers fail to pay when due any principal of, interest on, or
other amounts due in respect of, the Loan and such failure continues for five
(5) days;



     (b) either of the Borrowers fails to pay when due any part of the principal of, or
interest on, any loan from IFC to the Borrower other than the Loan and any such failure
continues for the relevant period of grace provided for in the agreement providing for
that loan;




 









 








- 47 -




     (c) either of the Borrowers fails to maintain the minimum balance in the Sinking
Fund Account pursuant to Section 6.01(d) and such failure constitutes for five (5) days;



     (d) either of the Borrowers fail to comply with any of their obligations under this
Agreement or any other Transaction Document or any other agreement between the Borrowers
and IFC (other than for payment of the principal of, or interest on, the Loan or any
other loan from IFC to the Borrowers) and such failure continues for a period of thirty
(30) days after the date on which IFC notifies the Borrowers of such failure;



     (e) any party to a Transaction Document (other than IFC or the Borrowers)
fails to observe or perform any of its obligations under that Transaction
Document, and any such failure continues for a period of thirty (30) days after the date
on which IFC notifies the Borrowers of that failure;



     (f) any representation or warranty made in Article IV or in connection with the
execution of, or any request (including request for disbursement) under, this Agreement,
or any Transaction is found to be incorrect in any material respect;



     (g) any Authority condemns, nationalizes, seizes, expropriates or otherwise
assumes custody or control of, all or any substantial part of business, operations,
property or other assets of the either of the Borrowers or of their share capital, or
takes any action for the dissolution of either of the Borrowers or any action that would
prevent either of the Borrowers or its officers from carrying on all or a substantial
part of its business or operations;



     (h) a decree or order by a court is entered against either of the
Borrowers:





	 	(i)	 	adjudging such Borrower bankrupt or insolvent;
	 
	 	(ii)	 	approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of, or with respect to, such Borrower under any
applicable law;
	 
	 	(iii)	 	appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of
the Borrower or of any substantial part of its property or other
assets; or
	 
	 	(iv)	 	ordering the winding up or liquidation of its affairs;






 









 








- 48 -



or any petition is filed seeking any of the above and is not dismissed within thirty
(30) days;




     (i) either of the Borrowers:




	 	(i)	 	requests a moratorium or suspension of payment
of debts from any court;
	 
	 	(ii)	 	institutes proceedings or takes any form of
corporate action to be liquidated, adjudicated bankrupt or
insolvent;
	 
	 	(iii)	 	consents to the institution of
bankruptcy or insolvency proceedings against it;
	 
	 	(iv)	 	files a petition or answer or consent seeking
reorganization or relief under any applicable law, or consents to
the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar
official) of such Borrower or of any substantial part of its
property;
	 
	 	(v)	 	makes a general assignment for the benefit of creditors; or
	 
	 	(vi)	 	admits in writing its inability to pay its
debts generally as they become due or otherwise becomes insolvent;





     (j) an attachment or analogous process is levied or enforced upon or issued against
any of the assets of either of the Borrowers for an amount in excess of the equivalent of
US$750,000 and is not discharged within thirty (30) days;



     (k) any other event occurs which under any applicable law would have an effect
analogous to any of those events listed in Section 7.02 (g) through Section 7.02 (j);



     (l) either of the Borrowers fails to pay any Liabilities (other than the Loan or any
other loan from IFC to the Borrowers) or to perform any of its obligations under any
agreement pursuant to which there is outstanding any Debt, and any such failure continues
for more than any applicable period of grace or any such Debt becomes prematurely due
and payable or is placed on demand;



     (m) any Authorization necessary for either of the Borrowers to perform and observe
their obligations under any Transaction Document, or to carry out the Project, is not
obtained when required or rescinded, terminated, lapses or otherwise ceases to be
in full force and effect, including with respect to the




 









 








- 49 -



remittance to IFC or its assignees, in the Loan Currency, of any amounts payable under
any Transaction Document, and is not restored or reinstated within thirty
(30) days of notice by IFC to the Borrower requiring that restoration or
reinstatement ;




     (n) any Security Document or any of its provisions:




	 	(i)	 	is revoked, terminated or ceases to be in full
force and effect or ceases to provide the security intended,
without, in each case, the prior consent of IFC;
	 
	 	(ii)	 	becomes unlawful or is declared void; or
	 
	 	(iii)	 	is repudiated or its validity or
enforceability is challenged by any Person and any such
repudiation or challenge continues for a period of thirty (30)
days and during which period such repudiation or challenge has no
effect;





     (o) any Transaction Document (other than a Security Document) or any of its
provisions:




	 	(i)	 	is revoked, terminated or ceases to be in full
force and effect without, in each case, the prior consent of IFC,
and such event, if capable of being remedied, is not remedied to the
satisfaction of IFC within thirty (30) days of IFC’s notice to
the Borrowers; or
	 
	 	(ii)	 	becomes unlawful or is declared void;





     (p) any Transaction Document (other than a Security Document) is repudiated or the
validity or enforceability of any of its provisions at any time is challenged by any
Person and such repudiation or challenge is not withdrawn within thirty (30) days of
IFC’s notice to the Borrower requiring that withdrawal; provided that no such notice
shall be required or, as the case may be, the notice period shall terminate if and
when such repudiation or challenge becomes effective;



     (q) any of the Lease Contracts or the Technology and Service
Contracts





	 	(i)	 	is breached by any party to it and that breach
has or could reasonably be expected to have a Material Adverse
Effect; or






 









 








- 50 -





	 	(ii)	 	is revoked, terminated or ceases to be in full
force and effect without the prior consent of IFC, or performance of
any of the material obligations under any such agreement becomes
unlawful or any such agreement is declared to be void or is
repudiated or its validity or enforceability at any time is
challenged by any party to it;





     (r) any of the events listed in Section 7.02 (g) through Section 7.02 (j)
occurs to Chindex or any of its Subsidiaries; or



     (s) the joint venture term for business operation of Borrower 1 is expired and not
renewed or extended.



     Section 7.03.
Automatic Acceleration upon Dissolution or Bankruptcy. If either of
the Borrowers commence winding up proceedings, is dissolved, or is declared bankrupt or
insolvent, the Loan and all other amounts payable under this Agreement shall become
immediately due without any presentment, demand, protest or notice of any kind, all
of which the Borrowers waive.



ARTICLE VIII




Miscellaneous




     Section 8.01.
Saving of Rights. (a) The rights and remedies of IFC in relation to
any misrepresentation or breach of warranty on the part of the Borrowers shall
not be prejudiced by any investigation by or on behalf of IFC into the affairs of either
of the Borrowers, by the execution or the performance of this Agreement or by any other
act or thing by or on behalf of IFC which might, apart from this Section, prejudice such
rights or remedies.



     (b) No course of dealing and no failure or delay by IFC in exercising any power,
remedy, discretion, authority or other right under this Agreement or any other
agreement shall impair, or be construed to be a waiver of or an acquiescence
in, that or any other power, remedy, discretion, authority or right under this Agreement,
or in any manner preclude its additional or future exercise.



     Section 8.02. Notices. Any notice, request or other communication to be
given or made under this Agreement to IFC or to the Borrowers shall be in writing and
shall be deemed to have been duly given or made when it is delivered by hand, airmail,
established courier service or facsimile to the party to which it is required or
permitted to be given or made at such party’s address specified below or at such other
address as such party has designated by notice to the other party hereto.



 









 





- 51 -




For Borrower 1:



BEIJING UNITED FAMILY HEALTH CENTER

No. 2 Jiangtai Road, Chaoyang District

Beijing, China 100016



Attention: General Manager



Alternative address for communications by facsimile:

(8610) 6431-5836




For Borrower 2:



SHANGHAI UNITED FAMILY HOSPITAL INC.



1111 Xian Xia Road, Changming District

Shanghai, China 200336



Attention: General Manager



Alternative address for communications by facsimile:



(8621) 5133-1919



With a copy sent to the attention of Vice President, Finance and

Health Care Services Division, Chindex International, Inc. at:



Facsimile: (301) 215-7719




For IFC:



International Finance Corporation

2121 Pennsylvania Ave., N.W.

Washington, D.C. 20433

United States of America



Attention:
Director, Global Manufacturing and Services Department



Alternative address for communications by facsimile:



(202) 974-4792




 









 








- 52 -





With a copy (in the case of communications relating to payments) sent
to the attention of the Senior Manager, Financial Operations Unit, at:




Facsimile: (202) 974-4371



     Section 8.03. English Language. (a) All documents to be provided or
communications to be given or made under this Agreement shall be in the English language.



     (b) To the extent that the original version of any document to be provided, or
communication to be given or made, to IFC under this Agreement or any other Transaction
Document is in a language other than English, that document or communication
shall, where appropriate, be accompanied by an English translation.



     Section 8.04. Term of Agreement. This Agreement shall continue in force
until all monies payable under it have been fully paid in accordance with its provisions.



     Section 8.05. Applicable Law and Jurisdiction. (a) This Agreement shall
be governed by and construed in accordance with the laws of the State of New York, United
States of America.



     (b) Without limitation to any other rights or remedies afforded to IFC under this
Agreement, at IFC’s option, any dispute, controversy or claim arising out of or relating
to this Agreement or its breach, termination or invalidity (each a
“Dispute”) which cannot be settled amicably may be finally and conclusively settled by
arbitration under the Rules of Conciliation and Arbitration (the “ICC Rules”) of the
International Chamber of Commerce (“ICC”). The arbitral award shall be final and
binding. The parties expressly waive their right to any form of appeal or recourse from
or against such arbitral proceedings or arbitral award to any judicial authority, except
as provided by the Convention on the Recognition and Enforcement of Foreign Arbitral
Awards of June 10, 1958, and acknowledge that any arbitral award rendered as provided in
this Section shall be subject to such Convention. The arbitral tribunal shall not be
authorized to take or provide, and the Borrowers shall not be authorized to seek from any
judicial authority, any interim or conservative measures or pre-award relief against IFC.
Each party shall bear its own expenses, including costs of experts that it
retains, travel expenses and legal fees; provided that, in apportioning costs under
Article 31 of the ICC Rules, if the arbitral tribunal finds that any party shall have
acted in bad faith or caused unnecessary expenses to be incurred by the other party in
the arbitration, it may, in its discretion, award all or a part of such expenses of




 









 








- 53 -



another party against any party that has so acted, and shall, in addition, take such
conduct into account in apportioning the other costs of the arbitration.




     (c) The arbitral tribunal shall consist of one (1) arbitrator appointed by the Court
of International Arbitration of the ICC, in accordance with the ICC Rules.



     (d) If any Dispute raises issues which are substantially the same as or connected
with issues raised in a Dispute which has already been referred to arbitration (an
“Existing Dispute”), or arises out of substantially the same facts as are the subject
of an Existing Dispute (a “Related Dispute”), the arbitrator appointed or to be
appointed in respect of any such Existing Dispute shall, upon request of IFC, also be
appointed as the arbitrator in respect of any Related Dispute. If requested by a party,
the arbitral tribunal shall decide, finally, whether the issues meet the criteria set
forth herein.



     (e) Upon the request of IFC, the arbitral tribunal shall join any party to this
Agreement to any reference to arbitration proceedings in relation to a Dispute and may
make a single, final award determining all Disputes between or among them. The Borrowers
hereby consent to be joined in any reference to arbitration proceedings in relation to
any Dispute at the request of IFC.



     (f) Unless otherwise agreed by the parties to the arbitration, the place of
arbitration shall be in New York, New York. The language of the arbitration and all
pleadings, written statements, documents and decisions shall be English. Any award shall
be made and paid in Dollars.



     (g) Notwithstanding Section 8.05(b), for the exclusive benefit of IFC, the Borrowers
irrevocably agree that any legal action, suit or proceeding arising out of or relating to
this Agreement may be brought in the courts of the United States of America located in
the Southern District of New York or in the courts of the State of New York located in
the Borough of Manhattan. By the execution of this Agreement, the Borrowers irrevocably
submit to the jurisdiction of any such court in any such action, suit or proceeding.
Final judgment against the Borrowers in any such action, suit or proceeding shall be
conclusive and may be enforced in any other jurisdiction, including the Country, by suit
on the judgment, a certified or exemplified copy of which shall be conclusive evidence of
the judgment, or in any other manner provided by law.



     (h) Nothing in this Agreement shall affect the right of IFC to commence
legal proceedings or otherwise sue the Borrowers (or any one of them) in the Country or
any other appropriate jurisdiction, or concurrently in more than one jurisdiction, or to
serve process, pleadings and other legal papers upon the




 









 








- 54 -



Borrowers (or any one of them) in any manner authorized by the laws of any such
jurisdiction.




     (i) Each of the Borrowers hereby irrevocably designates, appoints
and empowers Gary Simon, Esq., with offices currently located at Hughes Hubbard
& Reed, LLP, 1 Battery Park Plaza, New York, NY 1004-1481, as its authorized agent solely
to receive for and on its behalf service of any summons, complaint or other legal process
in any action, suit or proceeding IFC may bring in the State of New York in respect of
this Agreement.



     (j) As long as this Agreement remains in force, each of the Borrowers shall maintain
a duly appointed and authorized agent to receive for and on its behalf service of any
summons, complaint or other legal process in any action, suit or proceeding IFC may bring
in New York, New York, United States of America, with respect to this Agreement. The
Borrowers shall keep IFC advised of the identity and location of such agent.



     (k) Each of the Borrowers also irrevocably consents, if for any reason its
authorized agent for service of process of summons, complaint and other legal process in
any action, suit or proceeding is not present in New York, New York, to the service of
such papers being made out of the courts of the United States of America located in the
Southern District of New York and the courts of the State of New York located in the
Borough of Manhattan by mailing copies of the papers by registered United States air
mail, postage prepaid, to the Borrowers, at their addresses specified pursuant to Section
8.02 (Notices). In such a case, IFC shall also send by facsimile, or have sent by
facsimile, a copy of the papers to the Borrowers.



     (l) Service in the manner provided in Sections 8.05(i), (j) and (k) in any action,
suit or proceeding will be deemed personal service, will be accepted by the Borrowers as
such and will be valid and binding upon the Borrowers for all purposes of any such
action, suit or proceeding.



     (m) Each of the Borrowers irrevocably waives to the fullest extent permitted by
applicable law:




	 	(i)	 	any objection which it may have now or in the
future to the laying of the venue of any action, suit or proceeding
in any court referred to in this Section;
	 
	 	(ii)	 	any claim that any such action, suit or
proceeding has been brought in an inconvenient forum;






 









 








- 55 -





	 	(iii)	 	its right of removal of any matter commenced
by IFC in the courts of the State of New York to any court of the
United States of America; and
	 
	 	(iv)	 	any and all rights to demand a trial by jury
in any such action, suit or proceeding brought against such party by
IFC.





     (n) To the extent that either of the Borrowers may be entitled in any jurisdiction
to claim for itself or its assets immunity in respect of its obligations under this
Agreement or any Transaction Document from any suit, execution, attachment (whether
provisional or final, in aid of execution, before judgment or otherwise) or other legal
process or to the extent that in any jurisdiction that immunity (whether or not claimed)
may be attributed to it or its assets, such Borrower irrevocably agrees not to claim and
irrevocably waives such immunity to the fullest extent permitted now or in the
future by the laws of such jurisdiction.



     (o) The Borrowers hereby acknowledge that IFC shall be entitled under
applicable law, including the provisions of the International Organizations Immunities
Act, to immunity from a trial by jury in any action, suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby brought against IFC in
any court of the United States of America. The Borrowers hereby waive any and all rights
to demand a trial by jury in any action, suit or proceeding arising out of or relating to
this Agreement or the transactions contemplated by this Agreement, brought against IFC in
any forum in which IFC is not entitled to immunity from a trial by jury.



     (p) To the extent that the Borrowers may, in any action, suit or
proceeding brought in any of the courts referred to in Section 8.05 (g) or a court of the
Country or elsewhere arising out of or in connection with this Agreement or any
Transaction Document be entitled to the benefit of any provision of law requiring IFC in
such action, suit or proceeding to post security for the costs of either of the
Borrowers, or to post a bond or to take similar action, the Borrowers hereby irrevocably
waive such benefit, in each case to the fullest extent now or in the future permitted
under the laws of the Country or, as the case may be, the jurisdiction in which such
court is located.



     Section 8.06. Disclosure of Information. IFC may, notwithstanding the
terms of any other agreement between the Borrowers and IFC, disclose any
documents or records or information about any Transaction Document, or the assets,
business or affairs of the Borrowers to (i) its outside counsel, auditors and rating
agencies, and (ii) any other person as IFC may deem appropriate for the




 









 








- 56 -



purpose of exercising any power, remedy, right, authority, or discretion relevant to any
Transaction Document.




     Section 8.07.
Successors and Assignees. This Agreement shall bind and
inure to the benefit of the respective successors and assigns of the parties hereto,
except that neither of the Borrowers may assign or otherwise transfer all or any part of
their rights or obligations under this Agreement without the prior written consent of
IFC.



     Section 8.08. Amendments, Waivers and Consents. Any amendment or waiver
of, or any consent given under, any provision of this Agreement shall be in writing and,
in the case of an amendment, signed by the parties.



     Section 8.09. Counterparts. This Agreement may be executed in several
counterparts, each of which is an original, but all of which constitute the same
agreement.



[signatures on following page]





 









 








- 57 -




     IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized
representatives, have caused this Agreement to be signed in their respective
names as of the date first above written.



	 	 	 	 	 	 	 
	 	 	BEIJING UNITED FAMILY HEALTH CENTER	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roberta Lipson	 	 
	 

	 	 	 	 

Authorized Representative
	 	 
	 	 	Name (print): Roberta Lipson	 	 
	 	 	Title: Board Chair	 	 
	 
	 	 	 	 	 	 
	 	 	SHANGHAI UNITED FAMILY HOSPITAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roberta Lipson	 	 
	 

	 	 	 	 

Authorized Representative
	 	 
	 	 	Name (print): Roberta Lipson	 	 
	 	 	Title: Board Chair	 	 
	 
	 	 	 	 	 	 
	 	 	INTERNATIONAL FINANCE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Karin Finkelston	 	 
	 

	 	 	 	 

Authorized Representative
	 	 
	 	 	Name (print): Karin Finkelston	 	 
	 	 	Title: Associate Director