Document:

exv10w1

EXHIBIT 10.1

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	 

 

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	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	 

 

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	Article/Section	 	Item	 	 	Page No.
	ANNEX A
	 	 	 	 	58	 
	 
	 	 	 	 
	LIST OF AUTHORIZATIONS
	 	 	58
	 
	 	 	 	 
	ANNEX B
	 	 	 	 	62	 
	 
	 	 	 	 
	MINIMUM INSURANCE REQUIREMENTS
	 	 	62
	 
	 	 	 	 
	ANNEX C
	 	 	 	 	63	 
	 
	 	 	 	 
	EXCLUDED ACTIVITIES
	 	 	63	 
	 
	 	 	 	 
	SCHEDULE 1
	 	 	 	 	64	 
	 
	 	 	 	 
	FORM OF LOAN DISBURSEMENT REQUEST
	 	 	64	 
	 
	 	 	 	 
	SCHEDULE 2
	 	 	 	 	67	 
	 
	 	 	 	 
	FORM OF LOAN DISBURSEMENT RECEIPT
	 	 	67	 
	 
	 	 	 	 
	SCHEDULE 3
	 	 	 	 	68	 
	 
	 	 	 	 
	FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY
	 	 	68	 
	 
	 	 	 	 
	SCHEDULE 4
	 	 	 	 	70	 
	 
	 	 	 	 
	FORM OF LETTER TO BORROWER’S AUDITORS
	 	 	70	 
	 
	 	 	 	 
	SCHEDULE 5
	 	 	 	 	72	 
	 
	 	 	 	 
	FORM OF BORROWERS’ CERTIFICATION ON DISTRIBUTION OF DIVIDENDS
	 	 	72	 
	 
	 	 	 	 
	SCHEDULE 6
	 	 	 	 	74	 
	 
	 	 	 	 
	INFORMATION TO BE INCLUDED IN ANNUAL REVIEW OF OPERATIONS
	 	 	74	 
	 
	 	 	 	 
	SCHEDULE 7
	 	 	 	 	77	 
	 
	 	 	 	 
	FORM OF SERVICE OF PROCESS LETTER
	 	 	77	 

 

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;

 

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	“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

 

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	 	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:

 

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	 	(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;

 

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	“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;

 

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	 	(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

 

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	 	(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;

 

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	“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

 

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	 	(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

 

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	 	(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”);

 

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	“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	 	 

 

- 58 -

Annex A

List of Authorizations

Section (1). Authorizations Already Obtained

	(A)	 	Beijing United Family Health Center (Beijing UFH)

	 	(i)	 	Approval Reply issued by the Ministry of Health approving the
establishment of Beijing UFH;
	 
	 	(ii)	 	Approval Reply issued by the Ministry of Foreign Trade and Economic
Cooperation (“MOFCOM”) approving the establishment of the Beijing UFH and the
approval certificate issued by MOFCOM to Beijing UFH;
	 
	 	(i)	 	Business License issued by State Administration of Industry and Commerce
(“SAIC”) to Beijing UFH;
	 
	 	(ii)	 	Foreign Investment Enterprise Tax Registration Certificate (with respect
to both state and local taxes) issued to Beijing UFH; (iii) Foreign Investment
Enterprise Financial Registration Certificate issued to Beijing UFH;
	 
	 	(iv)	 	Foreign Investment Enterprise Foreign Exchange Registration Certificate
issued to Beijing UFH;
	 
	 	(v)	 	Practising Permit of Medical Institutions issued by the Beijing Municipal
Health Bureau to Beijing UFH; and
	 
	 	(vi)	 	Practising Permit of Maternal and Infant Healthcare Service to Beijing
UFH.

	(B)	 	Shanghai United Family Hospital, Inc. (Shanghai UFH)

	 	(i)	 	Approval Reply issued by the Ministry of Health approving the establishment of the
Shanghai UFH;
	 
	 	(ii)	 	Approval Reply issued by the MOFCOM approving the establishment of the Shanghai UFH
and the approval certificate issued by MOFTEC to Shanghai UFH;
	 
	 	(iii)	 	Business License issued by Shanghai Municipal Administration of Industry and Commerce
(“Shanghai AIC”) to Shanghai UFH;
	 
	 	(iv)	 	Foreign Investment Enterprise Tax Registration Certificate (with respect to both local
and state taxes) issued to Shanghai UFH;
	 
	 	(v)	 	Foreign Investment Enterprise Financial Registration Certificate
issued to Shanghai UFH;

 

- 59 -

	 	(vi)	 	Foreign Investment Enterprise Foreign Exchange Registration
Certificate issued to Shanghai UFH;
	 
	 	(vii)	 	Practising Permit of Medical Institutions issued by the Shanghai
Municipal Health Bureau to Shanghai UFH.

Section (2). Authorizations to be Obtained prior to the Disbursement

	(A)	 	Beijing UFH:

	 	(1)	 	With respect of the Obtaining of IFC Loan

	 	(i)	 	unanimous board approval for obtaining of the IFC Loan

	 	(2)	 	With respect to Giving Security

	 	(a)	 	Mortgage of Equipment
	 
	 	(i)	 	unanimous board approval for mortgage of equipment;
	 
	 	(b)	 	Pledge of Equity Interest
	 
	 	(i)	 	unanimous board approval for the pledge of equity interest in Beijing
UFH;

	(B)	 	Shanghai UFH

	 	(1)	 	With respect to the Obtaining of IFC Loan

	 	(i)	 	unanimous board approval for obtaining of the IFC Loan

	 	(2)	 	With respect to Giving Security

	 	(a)	 	Mortgage of Equipment

	 	(i)	 	unanimous board approval for mortgage of equipment;

	 	(b)	 	Pledge of Equity Interest

	 	(i)	 	unanimous board approval for the pledge of equity interest in
Shanghai UFH;

 

- 60 -

Section (3). Authorizations to be Obtained following Disbursement

	A.	 	Beijing UFH

	 	(1)	 	With respect to Giving Security

	 	(a)	 	Mortgage of Equipment

	 	(i)	 	Approval reply issued by competent customs authority
	 
	 	 	 	approving the mortgage of the equipment currently subject to the Customs
supervision;
	 
	 	(ii)	 	Mortgage Certificate (indicating IFC being the mortgagee)
issued by the competent Administration of Industry and Commerce with respect to
mortgage of the equipment currently subject to the Customs supervision;
	 
	 	 	 	(Note: Items (i) and (ii) above are subject to the Borrowers not being
required to post a bond to the Customs equivalent to the amount of waived
import duties)
	 
	 	(iii)	 	Mortgage Certificate (indicating IFC being the mortgagee)
issued by the competent Administration of Industry and Commerce with respect to
mortgage of equipment not subject to the Customs supervision

	 	(b)	 	Pledge of Equity Interest

	 	(i)	 	MOFCOM approval of the pledge;
	 
	 	(ii)	 	filing of the pledge with SAIC;
	 
	 	(iii)	 	recording of the pledge in the List of the
Shareholders of Beijing UFH.

	 	(2)	 	Others

	 	(i)	 	MOFCOM approval for the change of US-China Industrial
Exchange, Inc. to Chindex International Inc. as the foreign shareholder of
Beijing UFH;

	B.	 	Shanghai UFH

	 	(1)	 	With respect to Giving Security

	 	(a)	 	Mortgage of Equipment

 

- 61 -

	 	(i)	 	Approval reply issued by competent customs authority approving the
mortgage of the equipment currently subject to the Customs supervision;
	 
	 	(ii)	 	a Mortgage Certificate (indicating IFC being the mortgagee) issued
by the competent Administration of Industry and Commerce with respect to mortgage of
the equipment currently subject to the Customs supervision.
	 
	 	 	 	(Note: Items (i) and (ii) above are subject to the Borrowers not being
required to post a bond to the Customs equivalent to the amount of waived
import duties)
	 
	 	(iii)	 	a Mortgage Certificate (indicating IFC being the mortgagee) issued
by the competent Administration of Industry and Commerce with respect to mortgage of
equipment not subject to the Customs supervision;

	 	(b)	 	Pledge of Equity Interest

	 	(i)	 	MOFCOM approval of the pledge;
	 
	 	(ii)	 	filing of the pledge with Shanghai AIC;
	 
	 	(iii)	 	recording of the pledge in the List of the Shareholders of Shanghai UFH.

	 	(2)	 	Others

	 	(i)	 	MOFCOM approval for the change of US-China Industrial Exchange, Inc. to
Chindex International Inc. as the foreign shareholder of Shanghai UFH.

 

- 62 -

ANNEX B 

MINIMUM INSURANCE REQUIREMENTS

	1.	 	EXPANSION PHASE

	 	a)	 	Marine all Risks (including war) in respect of transportation of all critical
machinery/equipment.

	2.	 	ONGOING / OPERATIONAL PHASE

	 	a)	 	Fire and named perils or All Risks, based on new replacement cost of assets
	 
	 	b)	 	Business Interruption
	 
	 	c)	 	Third Party Liability
	 
	 	d)	 	Medical Malpractice
	 
	 	e)	 	Professional Liability in respect of medical training program, once this
commences

	3.	 	AT ALL TIMES

	 	a)	 	All insurances required by local legislation.

 

- 63 -

ANNEX C

EXCLUDED ACTIVITIES

(See Section 1.01 (a) of the Loan Agreement)

	•	 	Production or activities involving harmful or exploitative forms of forced labor1/harmful child
labor.2
	 
	•	 	Production or trade in any product or activity deemed illegal under host country laws or regulations or international
conventions and agreements.
	 
	•	 	Production or trade in weapons and munitions.3
	 
	•	 	Production or trade in alcoholic beverages (excluding beer and wine).3
	 
	•	 	Production or trade in tobacco.3
	 
	•	 	Gambling, casinos and equivalent enterprises.3
	 
	•	 	Trade in wildlife or wildlife products regulated under Convention on International Trade in Endangered Species of Wild
Fauna and Flora.
	 
	•	 	Production or trade in radioactive materials.4
	 
	•	 	Production or trade in or use of unbonded asbestos fibers.5
	 
	•	 	Commercial logging operations or the purchase of logging equipment for use in primary tropical moist forest (prohibited by
the Forestry policy).6
	 
	•	 	Production or trade in products containing PCBs.7
	 
	•	 	Production or trade in pharmaceuticals subject to international phase outs or bans.
	 
	•	 	Production or trade in pesticides/herbicides subject to international phase out.
	 
	•	 	Production or trade in ozone depleting substances subject to
international phase out.8
	 
	•	 	Drift net fishing in the marine environment using nets in excess of
2.5 km. in length.

 

			
	1	 	Forced labor means all work or
service, not voluntarily performed, that is
extracted from an individual under threat
of force or penalty.
	 
	2	 	Harmful child labor means the
employment of children that is economically
exploitive, or is likely to be
hazardous to, or to interfere with, the child’s education, or to be harmful to the child’s health, or physical,
mental, spiritual, moral, or social development.
	 
	3	 	These activities are prohibited only
if a Portfolio Company is substantially
involved in such activities, i.e. the
activity is not considered ancillary to such Portfolio Company’s primary operations.
	 
	4	 	This does not apply to the
purchase of medical equipment, quality
control (measurement) equipment and any equipment
where IFC considers the radioactive source to be trivial and/or adequately shielded.
	 
	5	 	This does not apply to the
purchase and use of bonded asbestos
cement sheeting where the asbestos content
is <20%.
	 
	6	 	See IFC OP 4.36, Forestry
(under review).
	 
	7	 	PCBs: Polychlorinated biphenyls — a
group of highly toxic chemicals. PCBs
are likely to be found in oil-filled
electrical transformers, capacitators and switchgear dating from 1950-1985.
	 
	8	 	Ozone Depleting Substances (ODSs):
Chemical compounds which react with and
deplete stratospheric ozone, resulting in
the widely publicized ‘ozone holes’. The Montreal Protocol lists ODSs and their target
reduction and phase out dates.

 

- 64 -

SCHEDULE 1

Form of Loan Disbursement Request

[LETTERHEAD OF BORROWER 1]

[Date]

International Finance Corporation

2121 Pennsylvania Ave., N.W.

Washington, D.C. 20433

United States of America

Ladies and Gentlemen:

Re: China — Loan No. [                    ]

Request for Loan Disbursement

     1. Please refer to the Loan Agreement dated                     , 2005 (the
“Loan Agreement”) between Beijing United Family Health Center and Shanghai United Family Hospital,
Inc. (the “Borrowers”) and International Finance Corporation (“IFC”). All terms defined in the
Loan Agreement shall bear the same meanings herein.

     2. The Borrowers hereby request the disbursement on or as soon as
practicable following the Issue Date, of the amount of RMB                      under the Loan (the “Disbursement”).

     You are requested to pay such amount to the account in [city] of [Name of
Borrower] [Name of Bank], Account No.                      at [Name and Address of
Bank].

     3. For the purposes of the Loan Agreement, the Borrowers hereby
jointly and severally certify as follows:

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

 

- 65 -

SCHEDULE 1

Page 2 of 3

(b) nothing has occurred which has or could reasonably be expected to have a Material Adverse
Effect and neither of the Borrowers have incurred any material loss or liability;

(c) the representations and warranties made in Article IV of the Loan Agreement are true on the
date of this request and will be true on the date of Disbursement with the same effect as if such
representations and warranties had been made on and as of each such date;

(d) the proceeds of the 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;

(e) after giving effect to the Disbursement, neither of the Borrowers will be in violation of:

	 	(i)	 	its organizational documents;
	 
	 	(ii)	 	any provision contained in any document to which such Borrower is a
party (including the Loan Agreement) or by which such Borrower is bound; or
	 
	 	(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

 

- 66 -

SCHEDULE 1

Page 3 of 3

The above certifications are effective as of the date of this request for Disbursement and shall
continue to be effective as of the date of the Disbursement. If any of these certifications is no
longer valid as of or prior to the date of the requested Disbursement, the Borrower will
immediately notify IFC and will repay the amount disbursed upon demand by IFC if Disbursement is
made prior to the receipt of such notice.

	 	 	 	 	 	 	 

	 	Yours faithfully,	 	 
	 
	 	 	 	 	 	 
	 	BEIJING UNITED FAMILY HEALTH CENTER	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 
	 
	 	 	 	 	 	 
	 	SHANGHAI UNITED FAMILY HOSPITAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 

			
	Copy to:	 	Manager, Financial Operations Unit

International Finance Corporation

 

- 67 -

SCHEDULE 2

Page 1 of 1

Form of Loan Disbursement Receipt

[LETTERHEAD OF BORROWER 1]

[To be dated the date

disbursement is made]

International Finance Corporation

2121 Pennsylvania Ave., N.W.

Washington, D.C. 20433

United States of America

Attention: Manager, Financial Operations Unit

Ladies and Gentlemen:

Re: CHINA — Loan No. [                    ]

Disbursement Receipt

     We, Beijing United Family Health Center and Shanghai United Family
Hospital, Inc., hereby acknowledge receipt of the sum of                      Renminbi
(RMB _______) disbursed to us by International Finance Corporation (“IFC”) under
the Loan provided for in the Loan Agreement dated                     , 2005 signed
between our company and IFC.

	 	 	 	 	 	 	 

	 	Yours faithfully,	 	 
	 
	 	 	 	 	 	 
	 	BEIJING UNITED FAMILY HEALTH CENTER	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 
	 
	 	 	 	 	 	 
	 	SHANGHAI UNITED FAMILY HOSPITAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 

 

- 68 -

SCHEDULE 3

Page 1 of 2

Form of Certificate of Incumbency and Authority

[LETTERHEAD OF BORROWER 1]

[Date]

International Finance Corporation

2121 Pennsylvania Ave., N.W.

Washington, D.C. 20433

United States of America

Attention: Director, Global Manufacturing and Services Department

Ladies and Gentlemen:

Certificate of Incumbency and Authority

     With reference to the Loan Agreement between us, dated                     , 2005
(the “Loan Agreement”), [I/We] the undersigned [Chairman/Director of Beijing United Family
Health Center and Shanghai United Family Hospital, Inc. (the “Borrowers”) duly authorized to do so,
hereby certify that the following are the names, offices and true specimen signatures of the
persons [each] [any two] of whom are and will continue to be (until you receive authorized written
notice from the Borrowers that they, or any of them, no longer continue to be) authorized:

     (a) to sign on behalf of each of the Borrowers the request for the disbursement of funds
provided for in the Loan Agreement and such other certificates, requests and documents required or
permitted to be made thereunder on behalf of the Borrowers; and

 

- 69 -

SCHEDULE 3

Page 2 of 2

     (b) to take, in the name of each of the Borrowers, any other action required or permitted to
be taken, done, signed or executed under the Loan Agreement or any other agreement to which IFC and
the Borrowers may be parties:

					
	 	 	 	 	 
	Name9
	 	Office
	 	Specimen Signature

	 	 	 	 	 	 	 

	 	Yours faithfully,	 	 
	 
	 	 	 	 	 	 
	 	BEIJING UNITED FAMILY HEALTH CENTER	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 
	 
	 	 	 	 	 	 
	 	SHANGHAI UNITED FAMILY HOSPITAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 

 

			
	9	 	As many, or as few, names may be included as the Borrower shall desire.

 

- 70 -

SCHEDULE 4

Page 1 of 2

Form of Letter to Borrower’s Auditors

[LETTERHEAD OF BORROWER 1 AND BORROWER 2]

[Date]

[Auditors]

[Address]

Dear Sirs:

     We hereby authorize and request you to give to International Finance Corporation (“IFC”) of
2121 Pennsylvania Ave., N.W. Washington, D.C. 20433, United States of America, all such information
as IFC may reasonably request with regard to (i) the financial statements of the undersigned
company, both audited and unaudited, and (ii) any management letter and other communications from
you to our company or its management, all of which we have agreed to supply under the terms of the
Loan Agreement between the undersigned Company and IFC dated                     , 2005 (the “Loan Agreement”).
For your information, we enclose a copy of the Loan Agreement.

     For our records, please ensure that you send us (i) a copy of all written communications you
receive from IFC immediately upon receipt thereof and (ii) a copy of all communications made by you
to IFC immediately upon the issue thereof.

	 	 	 	 	 	 	 

	 	 	Yours faithfully,	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF COMPANY]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 

 

- 71 -

SCHEDULE 4

Page 2 of 2

Enclosure

	 	 	 

	cc:

	 	International Finance Corporation
	 

	 	2121 Pennsylvania Ave., N.W.
	 

	 	Washington, D.C. 20433
	 

	 	United States of America
	 

	 	Attention: Director, Global Manufacturing and Services Department

 

- 72 -

SCHEDULE 5

Page 1 of 2

FORM OF BORROWERS’ CERTIFICATION ON DISTRIBUTION OF DIVIDENDS

(See Section 6.02 (a) of the Loan Agreement)

[LETTERHEAD OF BORROWER 1 AND BORROWER 2]

			
	 	 	 
	International Finance Corporation
	 	[Date]
	2121 Pennsylvania Avenue, N.W.	 	 
	Washington, D.C. 20433	 	 
	Attention:                                         
	 	Re:
	[Country/                     ]	 	 

Dear Sirs:

1. Please refer to the Loan Agreement dated                      (the “Loan
Agreement”) between Beijing United Family Health Center, Shanghai United Family Hospital, Inc. (the
“Borrowers”) and International Finance Corporation (“IFC”). Terms defined in the Loan Agreement
have their defined meanings whenever used in this request.

2. This is to inform you that the [insert name of relevant Borrower] plans a
distribution of dividends to its shareholders in the aggregate amount of
                     (                    ), such distribution to commence on or about
                    ,          . Pursuant to Section 6.02 (a) of the Loan Agreement, [insert
name of relevant Borrower] hereby certifies that, as at the date hereof on a Combined Basis:

	 	(a)	 	the proposed distribution will be in the amount not greater than previous
year’s net income, will be entirely out of retained earnings and such retained
earnings do not include any amount resulting from the revaluation of any of the
[insert name of relevant Borrower]’s assets;
	 
	 	(b)	 	no Event of Default or Potential Event of Default has occurred and is
continuing;
	 
	 	(c)	 	after giving effect to the proposed distribution:

 

- 73 -

SCHEDULE 5

Page 2 of 2

	 	(i)	 	the Current Ratio would be at least 1.5
	 
	 	(ii)	 	the Balance Sheet Liabilities to Tangible Net Worth
Ratio would be less than 2.0;
	 
	 	(iii)	 	the Peak Debt Service Coverage Ratio would not be less
than 1.3;
	 
	 	(iv)	 	the Prospective Debt Service Coverage Ratio will not be
less than 2.0;
	 
	 	 	 	and

	 	(A)	 	the retained earnings out of which any
of the payments or distributions will in no event include any
amount resulting from the revaluation of any of such Borrower’s
assets;
	 
	 	(B)	 	[an amount equal to the dividend
payment has been deposited in the Sinking Fund Account pursuant to
Section 6.02(a),] and
	 
	 	(C)	 	after giving effect the dividend
payment or distribution, the Borrowers will have adequate funds to
meet their obligations with respect to the Sinking Fund Account
provided in Section 6.02(d).

3. [insert name of relevant Borrower] undertakes not give effect to the proposed distribution or
any part thereof if, at the time of so doing or after giving effect to it, [insert name of relevant
Borrower] could not certify the matters referred to in section 2 of this certification.

	 	 	 	 	 	 	 

	 	 	          Yours truly,	 	 
	 
	 	 	 	 	 	 
	 	 	[insert name of relevant Borrower]]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 

 

- 74 -

SCHEDULE 6

Page 1 of 3

INFORMATION TO BE INCLUDED IN ANNUAL REVIEW OF OPERATIONS

	(1)	 	Sponsors and Shareholdings. Information on significant changes in share ownership
of the Borrowers, the reasons for such changes, and the identity of major new shareholders.
	 
	(2)	 	Country Conditions and Government Policy. Report on any material changes in local
conditions, including government policy changes, that directly affect the Borrowers (e.g.
changes in government economic strategy, health sector policy, taxation, foreign exchange
availability, price controls, and other areas of regulations.)
	 
	(3)	 	Management and Technology. Information on significant changes in (i) the Borrower’s
or the Co-Borrower’s senior management or organizational structure, and (ii) technology used
by the Borrowers, including technical assistance arrangements.
	 
	(4)	 	Corporate Strategy. Description of any changes to the Borrowers’ corporate or
operational strategy, including changes in service profile, degree of integration, and
business emphasis.
	 
	(5)	 	Markets. Brief analysis of changes in the Borrowers’ market conditions (both primary
and secondary), with emphasis on changes in reimbursement structure, market share and degree
of competition.
	 
	(6)	 	Operating Performance. Discussion of major factors affecting the year’s operational
and financial results by facility (sales by value and volume, operating and financial costs,
profit margins, capacity utilization, capital expenditure, etc.). Specifically, the following
operating indicators should be discussed by facility:

 

- 75 -

SCHEDULE

Page 2 of 3

	 	 	 	 	 	 	 	 	 
	 	 	 	Ambulatory	 	Hospital (by
	(a) Indicator	 	 	Facilities	 	facility)
	Operational:
	 	 	 	 	 	 	 	 
	Total o/p visits
	 	 	 	 	 	 	 	 
	Specialist consultations
	 	 	 	 	 	 	 	 
	Corporate check-ups
	 	 	 	 	 	 	 	 
	Lab tests (i/p vs o/p)
	 	 	 	 	 	 	 	 
	Radiology tests (i/p vs o/p)
	 	 	 	 	 	 	 	 
	Other diagn. Procedures (i/p vs o/p)
	 	 	 	 	 	 	 	 
	Total licensed beds
	 	 	N/a	 	 	 	 	 
	Total staffed (available) beds
	 	 	 	 	 	 	 	 
	Total i/p admissions
	 	 	N/a	 	 	 	 	 
	I/p surgical procedures
	 	 	N/a	 	 	 	 	 
	Ambulatory (<24 hrs of stay)
surgical procedures
	 	 	N/a	 	 	 	 	 
	Deliveries
	 	 	N/a	 	 	 	 	 
	Patient census days
	 	 	N/a	 	 	 	 	 
	Average daily census
	 	 	N/a	 	 	 	 	 
	Average length of stay
	 	 	N/a	 	 	 	 	 
	Mortality
	 	 	N/a	 	 	 	 	 
	FTE employees
	 	 	 	 	 	 	 	 
	Financial
	 	 	 	 	 	 	 	 
	Total revenue
	 	 	 	 	 	 	 	 
	I/p revenue (by major service)
	 	 	N/a	 	 	 	 	 
	O/p revenue
	 	 	 	 	 	 	 	 
	Lab revenue (i/p vs o/p)
	 	 	 	 	 	 	 	 
	Radiology revenue (i/p vs o/p)
	 	 	 	 	 	 	 	 
	Pharmacy revenue (i/p vs o/p)
	 	 	 	 	 	 	 	 
	Other revenue
	 	 	 	 	 	 	 	 
	Total costs
	 	 	 	 	 	 	 	 
	Personnel cost
	 	 	 	 	 	 	 	 
	Doctor fees
	 	 	 	 	 	 	 	 
	Materials and supplies
	 	 	 	 	 	 	 	 
	G &A
	 	 	 	 	 	 	 	 
	Marketing
	 	 	 	 	 	 	 	 
	Equipment maintenance
	 	 	 	 	 	 	 	 
	Other costs
	 	 	 	 	 	 	 	 
	Bad debt
	 	 	 	 	 	 	 	 

 

- 76 -

SCHEDULE

Page 3 of 3

	(7)	 	Financial Condition. Key financial ratios for previous year, compared with ratios
covenanted in the Loan Agreement.
	 
	(8)	 	Project Report. An update on the implementation of the items in the Project Cost,
including amount spent versus budget, updated budget, and time table for implementation, as
well as any details on changes to the Project plans and a summary of the external nurse
training program.

 

- 77 -

SCHEDULE 7

Page 1 of 2

FORM OF SERVICE OF PROCESS LETTER

[Letterhead of Agent for Service of Process]

[Date]

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

Attention: Director, Global Manufacturing and Service Department

	 	 	 

	Re: China:

	 	Beijing United Family Health Center
	 

	 	Shanghai United Family Hospital, Inc.

Dear Sirs:

     Reference is made to the Loan Agreement dated                      (the “Loan
Agreement”) between Beijing United Family Health Center, Shanghai United Family Hospital, Inc.
(the “Borrowers”) and International Finance Corporation (“IFC”). Unless otherwise defined herein,
capitalized terms used herein shall have the meaning specified in the Loan Agreement.

     Pursuant to the Loan Agreement, each of the Borrowers have irrevocably
designated and appointed the undersigned, [                    ,] with offices
currently located at [                                                            ,] as its authorized
agent to receive for and on its behalf service of process in any legal action or proceeding with
respect to the Loan Agreement in the courts of the United States of America for the Southern
District of New York or in the courts if the State of New York located in the Borough of
Manhattan.

 

- 78 -

SCHEDULE 7

Page 2 of 2

The undersigned hereby informs you that it has irrevocably accepted the
appointments as process agent as set forth the Loan Agreement from                      10
until                      11 and agrees with you that the undersigned (i) shall inform
IFC promptly in writing of any change of its address in New York, (ii) shall perform its
obligations as such process agent in accordance with the relevant provisions of the Loan
Agreement, and (iii) shall forward promptly to the Borrowers any legal process received by the
undersigned in its capacity as process agent.

     As process agent, the undersigned and its successor or successors agree to discharge the
above-mentioned obligations and will not refuse fulfillment of such obligations as provided under
the Loan Agreement.

	 	 	 	 	 	 	 

	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	[	 

	]	 
	 
	 	 	 	 	 	 
	 

	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	Title:	 	 	 	 

cc: [Borrower 1, Borrower 2]

 

			
	10	 	Insert date of effectiveness of appointment.
	 
	11	 	Insert date which is [three] months after the last repayment of the Loan.exv10w2

Exhibit 10.2

EXECUTION VERSION

 

INVESTMENT NUMBER 26133

Loan Agreement

Between

CHINDEX INTERNATIONAL, INC.

And

INTERNATIONAL FINANCE CORPORATION

Dated December 10, 2007

      

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Article/	 	 	 
	Section               Item	 	Page
No.
	 
	ARTICLE I
	 	 	1	 
	 
	 	 	 	 
	Definitions and Interpretation
	 	 	1	 
	 
	 	 	 	 
	Section 1.01. Definitions
	 	 	1	 
	Section 1.02. Financial Calculations
	 	 	24	 
	Section 1.03. Interpretation
	 	 	25	 
	Section 1.04. Business Day Adjustment
	 	 	25	 
	 
	 	 	 	 
	ARTICLE II
	 	 	26	 
	 
	 	 	 	 
	The Loan
	 	 	26	 
	 
	 	 	 	 
	Section 2.01. The Loan
	 	 	26	 
	Section 2.02. Disbursement Procedure
	 	 	26	 
	Section 2.03. Interest
	 	 	27	 
	Section 2.04. Default Rate Interest
	 	 	28	 
	Section 2.05. Repayment
	 	 	28	 
	Section 2.06. Prepayment
	 	 	29	 
	Section 2.07. Fees
	 	 	30	 
	Section 2.08. Currency and Place of Payments
	 	 	31	 
	Section 2.09. Allocation of Partial Payments
	 	 	32	 
	Section 2.10. Increased Costs
	 	 	32	 
	Section 2.11. Unwinding Costs
	 	 	32	 
	Section 2.12. Suspension or Cancellation by IFC
	 	 	32	 
	Section 2.13. Cancellation by the Onshore Borrower
	 	 	33	 
	Section 2.14. Taxes
	 	 	33	 
	Section 2.15. Expenses
	 	 	34	 
	 
	 	 	 	 
	ARTICLE III
	 	 	35	 
	 
	 	 	 	 
	Representations and Warranties
	 	 	35	 
	 
	 	 	 	 
	Section 3.01. Representations and Warranties
	 	 	35	 
	Section 3.02. IFC Reliance
	 	 	36	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	36	 
	 
	 	 	 	 
	Conditions of Disbursement
	 	 	36	 
	 
	 	 	 	 
	Section 4.01. Conditions of First Disbursement
	 	 	36	 
	Section 4.02. Special Conditions of Disbursement
	 	 	37	 
	Section 4.03. Onshore Borrower’s Certification
	 	 	38	 

 

- ii -

	 	 	 	 	 
	Article/	 	 	 
	Section               Item	 	Page
No.
	 
	Section 4.04. Conditions for IFC Benefit
	 	 	39	 
	 
	 	 	 	 
	ARTICLE V
	 	 	39	 
	 
	 	 	 	 
	Particular Covenants
	 	 	39	 
	 
	 	 	 	 
	Section 5.01. Affirmative Covenants
	 	 	39	 
	Section 5.02. Negative Covenants
	 	 	40	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	41	 
	 
	 	 	 	 
	Events of Default
	 	 	41	 
	 
	 	 	 	 
	Section 6.01. Acceleration after Default
	 	 	41	 
	Section 6.02. Events of Default
	 	 	42	 
	Section 6.03. Bankruptcy
	 	 	45	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	45	 
	 
	 	 	 	 
	Miscellaneous
	 	 	45	 
	 
	 	 	 	 
	Section 7.01. Saving of Rights
	 	 	45	 
	Section 7.02. Notices
	 	 	46	 
	Section 7.03. English Language
	 	 	47	 
	Section 7.04. Term of Agreement
	 	 	47	 
	Section 7.05. Enforcement
	 	 	47	 
	Section 7.06. Disclosure of Information
	 	 	49	 
	Section 7.07. Successors and Assignees
	 	 	50	 
	Section 7.08. Amendments, Waivers and Consents
	 	 	50	 
	Section 7.09. Counterparts
	 	 	50	 
	Section 7.10. Local Loan Agreement; Separate Transactions
	 	 	50	 
	 
	 	 	 	 
	ANNEX A
	 	 	2	 
	PROJECT COST AND FINANCIAL PLAN
	 	 	2	 
	 
	[TO BE ATTACHED AS ANNEX B TO EACH LOCAL LOAN AGREEMENT]
	 	 	4	 
	 
	 	 	 	 
	ANNEX B
	 	 	4	 
	ONSHORE BORROWER/PROJECT AUTHORIZATIONS
	 	 	4	 
	 
	 	 	 	 
	ANNEX C
	 	 	5	 

 

- iii -

	 	 	 	 	 
	Article/	 	 	 
	Section               Item	 	Page
No.
	 
	INSURANCE REQUIREMENTS
	 	 	5	 
	 
	 	 	 	 
	ANNEX D
	 	 	6	 
	ANTI-CORRUPTION GUIDELINES FOR IFC TRANSACTIONS
	 	 	6	 
	 
	 	 	 	 
	SCHEDULE 1
	 	 	9	 
	FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY
	 	 	9	 
	 
	 	 	 	 
	SCHEDULE 2
	 	 	11	 
	FORM OF REQUEST FOR DISBURSEMENT
	 	 	11	 
	 
	 	 	 	 
	SCHEDULE 3
	 	 	14	 
	FORM OF DISBURSEMENT RECEIPT
	 	 	14	 
	 
	 	 	 	 
	SCHEDULE 4
	 	 	15	 
	FORM OF SERVICE OF PROCESS LETTER
	 	 	15	 
	 
	 	 	 	 
	SCHEDULE 5 (A)
	 	 	17	 
	MATTERS TO BE COVERED IN LOCAL COUNSEL’S LEGAL OPINION
	 	 	17	 
	 
	 	 	 	 
	SCHEDULE 6
	 	 	19	 
	FORM OF LETTER TO ONSHORE BORROWER’S AUDITORS
	 	 	19	 
	 
	 	 	 	 
	SCHEDULE 7
	 	 	20	 
	FORM OF ONSHORE BORROWER’S CERTIFICATION ON DISTRIBUTION OF
DIVIDENDS
	 	 	20	 
	 
	 	 	 	 
	SCHEDULE 8
	 	 	22	 
	INFORMATION TO BE INCLUDED IN ANNUAL AND QUARTERLY
	 	 	22	 
	REVIEW OF OPERATIONS
	 	 	22	 
	 
	 	 	 	 
	SCHEDULE 9
	 	 	25	 
	SPECIAL REPRESENTATIONS AND WARRANTIES
	 	 	25	 
	 
	 	 	 	 
	SCHEDULE 10
	 	 	28	 
	SPECIAL COVENANTS
	 	 	28	 

 

- iv -

	 	 	 	 	 
	Article/	 	 	 
	Section               Item	 	Page
No.
	 
	SCHEDULE 11
	 	 	39	 
	SPECIAL CONDITIONS OF DISBURSEMENT
	 	 	39	 
	 
	 	 	 	 
	SCHEDULE 12
	 	 	43	 
	ANNUAL MONITORING REPORT (AMR)
	 	 	43	 
	 
	 	 	 	 
	EXHIBIT 1
	 	 	62	 
	FORM OF GUARANTEE AGREEMENT
	 	 	62	 
	 
	 	 	 	 
	EXHIBIT 2
	 	 	82	 
	FORM OF MORTGAGE AGREEMENT
	 	 	82	 
	 
	 	 	 	 
	EXHIBIT 3
	 	 	114	 
	FORM OF SHARE PLEDGE AGREEMENT
	 	 	114	 
	 
	 	 	 	 
	ANNEX AA
	 	 	128	 
	METHODOLOGY FOR DETERMINATION OF THE BASE FIXED RATE FOR EACH LOAN DISBURSEMENT
	 	 	128	 

 

 

LOAN AGREEMENT

     LOAN AGREEMENT (the “Agreement”) dated December 10, 2007, between CHINDEX INTERNATIONAL
INC., a company organized and existing under the laws of the State of Delaware of the United States
of America (“Chindex”); and INTERNATIONAL FINANCE CORPORATION, an international organization
established by Articles of Agreement among its member countries including the People’s Republic of
China (“IFC”).

RECITALS

     Chindex will form a subsidiary Beijing UFH (as defined below) to undertake the Beijing Project
and will form a subsidiary Guangzhou UFH (as defined below) to undertake the Guangzhou Projects (as
defined below);

     Chindex has requested IFC to provide the loan described in this Agreement to finance the
construction, equipping and placing into operation by each Onshore Borrower (as defined below) of
its Project (as defined below) and certain other costs and expenditures associated with the
development by each Onshore Borrower (as defined below) of the its Project (as defined below) ; and

     IFC is willing to provide the loan to each Onshore Borrower upon the terms and conditions set
forth in this Agreement.

ARTICLE I

Definitions and Interpretation

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

	 	 	 

	“Accounting Standards”

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

	 	any Person directly or indirectly controlling,
controlled by or under common control with, an
Onshore Borrower (for purposes of this definition,
“control” means the power to direct the management
or policies of a Person, directly or indirectly,
whether through the ownership of shares or other
securities, by contract or otherwise, provided that
the direct or indirect ownership of
fifty per cent (50%) or more of the voting share capital of a
Person is deemed to constitute control of that

 

 

- 2 -

	 	 	 

	 

	 	Person, and
“controlling” and “controlled” have corresponding meanings);
	 
	 	 
	“Annual Monitoring
Report”

	 	the current (Project #24052) annual monitoring report
substantially in the form attached as Schedule 13
hereto setting out the specific social,
environmental and developmental impact information to
be provided by the Onshore Borrower in respect of the
Project, as such form of Annual Monitoring Report may
be amended or supplemented from time to time with
IFC’s consent;
	 
	 	 
	“Applicable S&E Law”

	 	all applicable statutes, laws, ordinances, rules and
regulations of the Country, including without
limitation, licenses, permits or other governmental
Authorizations setting standards concerning
environmental, social, labor, health and safety or
security risks of the type contemplated by the
Performance Standards or imposing liability for the
breach thereof;
	 
	 	 
	“Auditors”

	 	BDO Seidman (“BDO”), or its affiliates, or, in the
case of the Onshore Borrowers, Shanghai JaHwa
Certified Public Accountants Co, Ltd, or its
affiliates, or such other firm that Chindex or the
relevant Onshore Borrower, as applicable, appoints
from time to time as its auditors pursuant to Section
5.01 (e) (Affirmative Covenants);
	 
	 	 
	“Authority”

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

	 	any consent, registration, filing, agreement,
notarization, certificate, license, approval, permit,
authority or exemption from, by or with any
Authority, whether given by express action or deemed
given by failure to act within any specified time
period;
	 
	 	 
	“Authorized
Representative”

	 	any natural person who is duly authorized by the
Onshore Borrower to act on its behalf for the
purposes specified in, and whose name and a specimen
of whose

 

- 3 -

	 	 	 

	 

	 	signature appear on, the Certificate of
Incumbency and Authority most recently delivered by
the Onshore Borrower to IFC;
	 
	 	 
	“Base Fixed Rate”

	 	for each Disbursement of each relevant Loan, the rate
determined in accordance with Article II and with the
methodology set out in Annex AA;
	 
	 	 
	“Beijing Hospital”

	 	the hospital and health care facility to be located
in Beijing, as further described in a report dated
October 2006 and revised from time to time provided
by the Chindex to IFC;
	 
	 	 
	“Beijing Project”

	 	the construction, equipping and placing into
operation of a hospital and health care facility to
be located in Beijing, as further described in a
report dated October 2006 and revised from time to
time provided by the Chindex to IFC;
	 
	 	 
	“Beijing UFH”

	 	the entity to be established in Beijing, PRC to
undertake the construction, equipping and operation
of the Beijing Hospital;
	 
	 	 
	“Business Day”

	 	a day when banks are open for business in New York,
New York and Beijing, PRC or, solely for the purpose
of determining the applicable Interest Rate, London,
England;
	 
	 	 
	“CAO”

	 	Compliance Advisor Ombudsman, the independent
accountability mechanism for IFC that impartially
responds to environmental and social concerns of
affected communities and aims to enhance outcomes;
	 
	 	 
	“CAO’s Role”

	 	(i)    to respond to complaints by persons who have been or are likely to be directly
affected by the social or environmental impacts of IFC projects; and

	 
	 	 
	 

	 	(ii)   to oversee audits of
IFC’s social and environmental performance, particularly
in relation to sensitive projects, and to ensure
compliance with IFC’s social and environmental policies,
guidelines, procedures and systems;

 

- 4 -

	 	 	 

	“Certificate of Incumbency
and Authority”

	 	a certificate provided to IFC by the relevant
Onshore Borrower in the form of Schedule 1;
	 
	 	 
	“Charters”

	 	with respect to Chindex, its certificate of
incorporation, and with respect to each of the
Onshore Borrowers, its articles of association;
	 
	 	 
	“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;

	 
	 	 
	“Coercive Practice”

	 	the impairing or harming, or threatening to
impair or harm, directly or indirectly, any party
or the property of the party to influence
improperly the actions of a party;
	 
	 	 
	“Collusive Practice”

	 	an arrangement between two or more parties
designed to achieve an improper purpose,
including to influence improperly the actions of
another party;
	 
	 	 
	“Consolidated” or
“Consolidated Basis”

	 	has the meaning provided in Section 1.02 (c)
(Financial Calculations);
	 
	 	 
	“Corrupt Practice”

	 	the offering, giving, receiving or soliciting,
directly or indirectly, of anything of value to
influence improperly the actions of another
party;
	 
	 	 
	“Country”

	 	the People’s Republic of China;
	 
	 	 
	“Current Assets”

	 	the aggregate of the Chindex’s or the relevant
Onshore Borrower’s, as applicable, cash,
investments classified as

 

- 5 -

	 	 	 

	 

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

	 	the aggregate of all Liabilities of Chindex or
the relevant Onshore Borrower, as applicable,
falling due on demand or within one year
(including the portion of Long-term Debt falling
due within one year);
	 
	 	 
	“Current Ratio”

	 	the result obtained by dividing Current Assets of
such Person (less prepaid expenses) by Current
Liabilities of such Person. For the purposes of
calculating this ratio for Chindex, the balance
in the Sinking Fund Account (as defined in the
IFC RMB Loan Agreement dated October 10, 2005)
shall be deducted from Current Assets and any
payment due on the Sinking Fund Account within
one year shall be added to Current Liabilities;
	 
	 	 
	“DEG Loan”

	 	the loan to be entered into between a Subsidiary
of Chindex and DEG-The German Investment and
Development Company for the primary purpose of
financing the Projects;
	 
	 	 
	“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”

	 	any disbursement of the Loan;
	 
	 	 
	“Disbursement
	 	 
	 
	 	 
	Interest Rate”

	 	for each Disbursement, a rate of interest equal
to the sum of:
	 
	 	 
	 

	 	(i)    the Spread; and

	 
	 	 
	 

	 	(ii)   the Base Fixed Rate;

	 
	 	 
	“Dollars” and “$”

	 	the lawful currency of the United States of America;
	 
	 	 
	“EBITDA”

	 	for the year most recently ended for which Annual
Reviewed Combined Financial Statements of such Person
are available, Net Income plus the sum of interest
expense, income taxes, extraordinary items,
depreciation, amortization and any other non-cash

 

- 6 -

	 	 	 

	 

	 	expenses (to the extent each was deducted in the
calculation of Net Income);
	 
	 	 
	“ESRS”

	 	the Environmental and Social Review Summary dated July
18, 2007, which sets out specific social and environmental measures as actions to be
undertaken by the Borrower, to enable the Project to comply with the Performance Standards, as
such may be amended or supplemented from time to time with IFC’s consent;
	 
	 	 
	“Event of Default”

	 	any one of the events specified in Section 6.02
(Events of Default);
	 
	 	 
	“Financing
Documents”

	 	collectively:
	 
	 	 
	 

	 	(i)     this Agreement;

	 
	 	 
	 

	 	(ii)    the Share Retention Agreement;

	 
	 	 
	 

	 	(iii)   the Security Documents; and

	 
	 	 
	 

	 	(iv)   the Security Sharing Agreement;

	 
	 	 
	“Financial Debt”
	 	any indebtedness of Chindex or the relevant Onshore
Borrower, as applicable, 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
Chindex or such Onshore Borrower, as applicable;

	 
	 	 
	 

	 	(iii)   the deferred
purchase price of assets or services (except trade
accounts incurred and payable in the ordinary course of
business to trade creditors within ninety (90) days of the
date they are incurred and which are not overdue);

	 
	 	 
	 

	 	(iv)   non-contingent
obligations of Chindex or the relevant Onshore Borrower,
as applicable, to reimburse any other person for amounts
paid by that person under a letter of credit or similar
instrument (excluding any letter of credit or similar
instrument issued for the benefit of Chindex or the
relevant Onshore Borrower, as

 

- 7 -

	 	 	 

	 

	 	          applicable, with respect to
trade accounts that are payable in the ordinary course of
business within ninety (90) days of the date of
determination and which are not overdue);

	 
	 	 
	 

	 	(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 Standards;

	 
	 	 
	 

	 	(vii)   the amount of
Chindex’s or the relevant Onshore Borrower’s, as
applicable, 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 Chindex or such Onshore Borrower,
as applicable, after marking the relevant derivative
transactions to market);

	 
	 	 
	 

	 	(viii)  any premium payable on a redemption or replacement of
any of the foregoing items; and

	 
	 	 
	 

	 	(ix)     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 Standards, be treated as a
finance or capital lease;
	 
	 	 
	“Financial Plan”

	 	the proposed sources of financing for the Project as
set out in Annex A (Project Cost and Financial
Plan);
	 
	 	 
	“Financial Year”

	 	the accounting year of Chindex, or such Onshore
Borrower commencing each year on April 1 and ending
on the following March 31, or such other period as
Chindex or such Onshore Borrower, with IFC’s
consent, from time to time designates as its
accounting year;
	 
	 	 
	“Fraudulent Practice”

	 	any action or omission, including misrepresentation,
that knowingly or recklessly misleads, or attempts
to mislead, a party to obtain a financial benefit or
to avoid an obligation;

 

- 8 -

	 	 	 

	“Grace Period”

	 	in respect of each Loan, the period commencing on
the date of first Disbursement of that Loan and
ending on the date which is three years and three
calendar months following the date of such first
Disbursement, subject to Section 1.04 (Business Day
Adjustment);
	 
	 	 
	“Group”

	 	collectively, Chindex, the Onshore Borrowers,
Beijing United Family Health Center, Shanghai United
Family Hospital, and any of their present or future
Subsidiaries or Affiliates;
	 
	 	 
	“Guangzhou Hospital”

	 	the hospital and health care facility to be located
in Guangzhou, as further described in a report dated
October 2006 and revised from time to time provided
by Chindex to IFC;
	 
	 	 
	“Guangzhou Project”

	 	the construction, equipping and placing into
operation of a hospital and health care facility to
be located in Guangzhou, as further described in a
report dated
October 2006 and revised from time to time provided by Chindex
to IFC;
	 
	 	 
	“Guangzhou
UFH”

	 	the entity to be established in Guangzhou, PRC to
undertake the construction, equipping and operation
of the Guangzhou Hospital;
	 
	 	 
	“Guarantee Agreement”

	 	means each agreement entitled “Guarantee Agreement”
between Chindex and the IFC pursuant to which
Chindex shall guarantee the payment obligations of
each Onshore Borrower under its respective Onshore
Borrower Loan Agreement, in each case, substantially
in the form of Exhibit 1 hereto;
	 
	 	 
	“Hospitals”

	 	the Beijing Hospital and the Guangzhou Hospital;
	 
	 	 
	“IFC RMB Loan”

	 	the loan granted by IFC to pursuant to the RMB Loan
Agreement dated October 10, 2005;
	 
	 	 
	“IFC RMB Loan Agreement”

	 	the “RMB Loan Agreement” signed among IFC on the one
hand, and Beijing United Family Health Center and
Shanghai United Family Hospital, Inc. (as co-Onshore
Borrowers) on the other, dated October 10, 2005;

 

- 9 -

	 	 	 

	“IFC Security”

	 	the security created by or pursuant to the Security
Documents to secure all amounts owing by the
relevant Onshore Borrower to IFC under this
Agreement;
	 
	 	 
	“Increased Costs”

	 	the amount certified in an Increased Costs
Certificate to be the net incremental costs of, or
reduction in return to, IFC in the Loan to any
Onshore Borrower in connection with the making or
maintaining of such Loan that result from:
	 
	 	 
	 

	 	(i)    any change in any
applicable law or regulation or directive (whether or not
having the force of law) or in its interpretation or
application by any Authority charged with its
administration; or

	 
	 	 
	 

	 	(ii)  compliance with any
request from, or requirement of, any central bank or other
monetary or other Authority;

	 
	 	 
	 

	 	which, in either case, after the date of this Agreement:
	 
	 	 
	 

	 	(A)   imposes, modifies or makes applicable any
reserve, special deposit or similar requirements
against assets held by, or deposits with or for
the account of, or loans made by, IFC;

	 
	 	 
	 

	 	(B)   imposes a cost on IFC as a result of IFC having
made such Loan or reduces the rate of return on
the overall capital of IFC that it would have
achieved, had IFC not made such Loan;

	 
	 	 
	 

	 	(C)   changes the basis of taxation on payments
received by IFC in respect of such Loan
(otherwise than by a change in taxation of the
overall net income of IFC, if any); or

	 
	 	 
	 

	 	(D)   imposes on IFC any other condition regarding the
making or maintaining of such Loan;

 

- 10 -

	 	 	 

	“Increased Costs
Certificate”

	 	a certificate provided from time to time by IFC to the
applicable Onshore Borrower, certifying:
	 
	 	 
	 

	 	(i)     the circumstances
giving rise to the Increased Costs;

	 
	 	 
	 

	 	(ii)    that the costs of IFC
have increased or the rate of return has been reduced;

	 
	 	 
	 

	 	(iii)   that, IFC, in IFC’s
reasonable opinion, exercised reasonable efforts to
minimize or eliminate the relevant increase or reduction,
as the case may be; and

	 
	 	 
	 

	 	(iv)   the amount of Increased Costs;

	 
	 	 
	 
	 	 
	“Interest Payment Date”

	 	in respect of each respective loan, and in
respect of each year, the following dates:
	 
	 	 
	 

	 	(i)    the first Interest
Payment Date shall be the date which is three years and
three calendar months after the date of first Disbursement
of the Loan; and

	 
	 	 
	 

	 	(ii)   each Interest Payment
Date thereafter shall be the numerically corresponding
date falling six calendar months after the immediately
preceding Interest Payment Date;

	 
	 	 
	 

	 	provided, however, that Section 1.04 (Business Day Adjustment)
shall be disregarded for the purpose of determining the date
pursuant this definition.
	 
	 	 
	“Interest
Rate”

	 	for any particular Onshore Borrower, beginning
on the Loan Consolidation Date, the rate at
which interest is payable on the Loan, as
determined in accordance with Article II;
	 
	 	 
	“Interest Rate
Setting Date”

	 	for each Disbursement, the date on which the
Base Fixed Rate is set pursuant to Section 2.03
(d)
	 
	 	 
	“Joint Venture Agreements”

	 	 the proposed joint venture agreements to be
entered into between Chindex for the
incorporation of the Beijing UFH and Guangzhou
UFH respectively;

 

- 11 -

	 	 	 

	“Liabilities”

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

	 	(i)   Financial Debt;

	 
	 	 
	 

	 	(ii)   the amount of all
liabilities of Chindex or such Onshore Borrower, as the
case may be, (actual or contingent) under any
conditional sale or a transfer with recourse or
obligation to repurchase, including, without limitation,
by way of discount or factoring of book debts or
receivables;

	 
	 	 
	 

	 	(iii)  taxes (including deferred taxes);

	 
	 	 
	 

	 	(iv)   trade accounts
that are payable in the ordinary course of business
within ninety (90) days of the date they are
incurred and which are not overdue (including
letters of credit or similar instruments issued for the
benefit of Chindex or such Onshore Borrower, as the case
may be, with respect to such trade accounts);

	 
	 	 
	 

	 	(v)   accrued expenses,
including wages and other amounts due to employees and
other services providers;

	 
	 	 
	 

	 	(vi)   the amount of all
liabilities of Chindex or such Onshore Borrower, as the
case may be, 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 Chindex
or such Onshore Borrower, as the case may be, guarantees
them or otherwise obligates itself to pay them;

 

- 12 -

	 	 	 

	 
	 	 
	“Liabilities to Tangible
Net Worth Ratio”

	 	the result obtained by dividing Liabilities of
such Person by Tangible Net Worth of such Person.
For the purpose of calculating this ratio based
on the Consolidated Financial Statements of
Chindex, (i) the balance of the Sinking Fund
Account will be deducted from the IFC Loan amount
outstanding for the purposes of the Liabilities
calculation and the balance in the Sinking Fund
Account will be deducted from Tangible Net Worth
in the Tangible Net Worth calculation; (ii) prior
to Maturity, the Tranche B Notes and
Tranche C notes as defined in the Securities
Purchase Agreement by and among Chindex
International Inc. and Magenta Magic Limited
dated November 7, 2007 shall be deducted from the
Liabilities and added to Tangible Net Worth; and
(iii) the letters of credit for the medical
product division of Chindex up to five million US
dollars shall be excluded from the Liabilities.
	 
	 	 
	“Lien”

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

	 	for each Onshore Borrower, the loan specified in
Section 2.01(a) (The Loan) or, as the context
requires, its principal amount from time to time
outstanding;
	 
	 	 
	“Loan Consolidation
Date”

	 	for any particular Onshore Borrower, the first
Interest Payment Date after the Loan for that
Onshore Borrower has been fully disbursed (or the
undisbursed balance of the relevant Loan has
been canceled);
	 
	 	 
	“Loan Currency”

	 	Dollars or $;
	 
	 	 
	“Local Loan Agreement”

	 	has the meaning ascribed to that term in Section
4.02(b) (Loan Agreements with Onshore Borrowers).

 

- 13 -

	 	 	 

	“Long-term Debt”

	 	that part of Financial Debt whose final maturity,
by its terms or terms of any agreement relating
to it, falls due more than one year after the
date it is incurred;
	 
	 	 
	“Management Contract”

	 	the management agreements to be entered into
between Chindex and each of the respective
Onshore Borrowers;
	 
	 	 
	“Material
Adverse Effect”

	 	a material adverse effect on:
	 
	 	 
	 

	 	(i)   the Onshore Borrower, its assets or properties;

	 
	 	 
	 

	 	(ii)   the Onshore
Borrower’s business prospects or financial condition;

	 
	 	 
	 

	 	(iii)   with respect to each
Onshore Borrower, the implementation of the Project of
such Onshore Borrower, the Financial Plan of such Onshore
Borrower or the carrying on of such Onshore Borrower’s
business or operations; or

	 
	 	 
	 

	 	(iv)   the ability of the
Onshore Borrower to comply with its obligations under this
Agreement, or under any other Transaction Document or
Project Document to which it is a party;

	 
	 	 
	“Mortgage Agreements”

	 	the agreements entitled “Mortgage Agreement” to be entered into between IFC
and each of the Onshore Borrowers, pursuant to which, to the extent permitted by applicable
law and reasonably customary for such document in the Country, such Onshore Borrower shall
create a first ranking mortgage over all present and future (i) immovable assets of such
Onshore Borrowers, including all granted land use rights of such Onshore Borrower, buildings
and other rights of such Onshore Borrower associated with these assets; and (ii) machinery and
equipment of such Onshore Borrower, and, in each case, in substantially the form of Exhibit 2
attached hereto;
	 
	 	 
	“Net Income”

	 	for any Financial Year, the excess (if any) of
gross income over total expenses (provided that
income taxes shall be treated as part of total
expenses) appearing in the audited financial
statements for such Financial Year;

 

- 14 -

	 	 	 

	“Non-Cash Items”

	 	for any Financial Year, the net aggregate amount
(which may be a positive or negative number) of all
non-cash expenses and non-cash credits which have
been subtracted or, as the case may be, added in
calculating Net Income during that Financial Year,
including, without limitation, depreciation,
amortization, deferred taxes, provisions for
severance pay of staff and workers, provision f bad
debt, bad debt write off and credits resulting from
revaluation of the assets’ book value;
	 
	 	 
	“Obstructive Practice”

	 	(i) deliberately destroying, falsifying, altering
or concealing of evidence material to the
investigation or making of false statements to
investigators, in order to materially impede a
World Bank Group investigation into allegations of
a Corrupt Practice, Fraudulent Practice, Coercive
Practice or Collusive Practice, and/or threatening,
harassing or intimidating any party to prevent it
from disclosing its knowledge of matters relevant
to the investigation or from pursuing the
investigation, or (ii) acts intended to materially
impede the exercise of IFC’s access to
contractually required information in connection
with a World Bank Group investigation into
allegations of a Corrupt Practice, Fraudulent
Practice, Coercive Practice or Collusive Practice;
	 
	 	 
	“Onshore Borrowers”

	 	Beijing UFH and Guangzhou UFH or either of them as
the context may require;
	 
	 	 
	“Peak Debt
Service Coverage
Ratio”

	 	the ratio obtained by dividing:
	 
	 	 
	 

	 	(i)   the aggregate, for
the Financial Year most recently ended prior to the
relevant date of calculation for which audited financial
statements are available, of Chindex’s or the
relevant Onshore Borrower’s, as applicable, (A) Net
Income, (B) Non-Cash Items and (C) the amount of all
payments that were due during that Financial Year on
account of interest and other charges on Financial
Debt (to the extent deducted from Net Income);

	 
	 	 
	 

	 	by

 

- 15 -

	 	 	 

	 

	 	(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 payments to be made to
the Sinking Fund Account pursuant to Section 6.01(d) of
the IFC RMB Loan Agreement and the difference between the
final balloon payment the scheduled balance in the
Sinking Fund Account) falling due on account of principal
of Long-term Debt and interest and other charges on all
Financial Debt and (B) without double counting any
payment already counted in the preceding sub-clause (A),
any payment required to be made to any debt service
account in such financial year under the terms of any
agreement providing for Financial Debt;

	 
	 	 
	 

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

	 	(x)  subject to sub-clause (y), for the computation of
interest payable during any period for which the
applicable rate is not yet determined, that
interest shall be computed at the rate in effect
at the time of the relevant date of calculation;

	 
	 	 
	 

	 	(y)  interest on Short-term Debt in such Financial
Year shall be computed by reference to the
aggregate amount of interest thereon paid during
the Financial Year in which the relevant date of
calculation falls up to the end of
the period covered by the latest quarterly
financial statements prepared by Chindex or
relevant Onshore Borrower, as applicable,
multiplied by a factor of 4, 2 or 4/3
depending on whether the computation is made
by reference to the financial statements for
the first quarter, the first two quarters or
the first three quarters, respectively; and

 

- 16 -

	 	 	 

	“Performance
Standards”

	 	IFC’s Performance Standards on Social &
Environmental Sustainability, dated April 30,
2006, copies of which have been delivered to
and receipt of which has been acknowledged by
Chindex in the letter dated July 18, 2007;
	 
	 	 
	“Person”

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

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

	 	the Beijing Project and the Guangzhou Project
or either one of them as the context may
requires;
	 
	 	 
	“Project Physical
Completion Date” 

	 	in respect of each of the Projects, the date
in which the following requirements have been
fully satisfied:
	 
	 	 
	 

	 	(i)    no Event of Default
or Potential Event of Default with respect to the
applicable Onshore Borrower has occurred and is
continuing;

	 
	 	 
	 

	 	(ii)   the facilities
included in the applicable Project have been completed and
available for use by the applicable Onshore Borrower;

	 
	 	 
	 

	 	(ii)   the Hospital included
in the applicable Project has been operational and
generating revenues for three (3) consecutive months;

	 
	 	 
	 

	 	(iv)  there are no material
outstanding claims by contractors or supplier in respect
of the construction of the applicable Project (other than
claims being contested in good faith and with respect to
which the applicable Onshore Borrower has made adequate
reserves, such reserves to be reasonably determined by
such Onshore Borrower in accordance with applicable
accounting practices) that has or could be reasonably
expected to have a Material Adverse

 

- 17 -

	 	 	 

	 

	 	Effect and for which
provisions have not been made;

	 
	 

	 	(v)   the business license
and the medical facility practicing permit required for
the operation of such Project has been obtained;

	 
	 	 
	 

	 	(vi)   the sites, equipment
and facilities comprising such Project have been acquired,
developed, constructed and are operational in a manner
consistent with the applicable requirements of the
Performance Standards;

	 
	 	 
	 

	 	(vii)   the applicable
Onshore Borrower’s working capital is not less than the
working capital set forth in Annex A (Project Cost and
Financial Plan);

	 
	 	 
	 

	 	(viii) the applicable Onshore Borrower has delivered to IFC a
notice, signed by an Authorized Representative, certifying
that the requirements set out in paragraphs (i) through
(vii) above are fulfilled and IFC has not notified the
Onshore Borrower that it disputes the certifications made
therein;

	 
	 	 
	“Project Cost”

	 	the total estimated cost of the Project, as set forth
in Annex A (Project Cost and Financial Plan);
	 
	 	 
	“Project Documents”

	 	collectively:
	 
	 	 
	 

	 	(a)   the Management
Contracts;
	 
	 	 
	 

	 	(b)   the Joint Venture
Agreements;
	 
	 	 
	 

	 	(c)   the Charters;
	 
	 	 
	“Prospective Debt
Service Coverage Ratio”

	 	the ratio obtained by dividing:
	 
	 	 
	 

	 	(i)   the aggregate, for
the Financial Year most recently ended prior to the
relevant date of calculation for which audited financial
statements are available, of the Onshore Borrower’s (A)
Net Income, (B) Non-Cash Items and (C) the amount of all
payments that were due during that Financial Year on
account of 

 

- 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 loan
made under the IFC RMB Loan Agreement, payments to be made
to the Sinking Fund Account pursuant to Section 6.01(d) of
the IFC RMB Loan Agreement and the difference between the
final balloon payment of such loan and the scheduled
balance in the Sinking Fund Account) that fall due during
the financial year in which the relevant date of
calculation falls on account of principal of Long-term
Debt and interest and other charges on all Financial Debt
and (B) without double counting any payment already
counted in the preceding sub-clause (A), any payment made
or required to be made to any debt service account under
the terms of any agreement providing for Financial Debt;

	 
	 	 
	 

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

	 	(x)  subject to sub-clause (y) below, for the
computation of interest payable during any period
for which the applicable rate is not yet
determined, that interest shall be computed at
the rate in effect at the time of the relevant
date of calculation; and

	 
	 	 
	 

	 	(y)  interest on Short-term Debt payable in the
Financial Year in which the relevant date of
calculation falls shall be computed by reference
to the aggregate amount of interest thereon paid
during that Financial Year up to the end of the
period covered by the latest quarterly financial
statements prepared by the Onshore Borrower
multiplied by a factor of 4, 2 or 4/3 depending
on whether the computation is made by reference
to the financial statements for the first
quarter, the first 

 

- 19 -

	 	 	 

	 

	 	two quarters or the first
three quarters, respectively;

	 
	“Prospective Debt
Service and Capital
Expenditure
Coverage Ratio”

	 	the ratio obtained by dividing:
	 
	 	 
	 

	 	(i)   the aggregate, for the Financial Year
most recently ended prior to the relevant date of calculation for
which audited financial statements are available, of (A) Net Income
for that Financial Year, (B) Non-Cash Items and (C) the amount of
all payments that were due during that Financial Year on account of
interest and other charges on Financial Debt (to the extent
deducted from Net Income);

	 
	 	 
	 

	 	after deducting from that aggregate the amount of capital
expenditure actually expended to that date or as projected for
the entire Financial Year for the Financial Year in which the
relevant date of calculation falls;

	 
	 	 
	 

	 	by

	 
	 	 
	 

	 	(ii)  the aggregate of (A) all scheduled
payments (including, in the case of the IFC RMB Loan, payments to
be made to the Sinking Fund Account pursuant to Section 6.01 (d)
of the RMB Loan Agreement and the difference between the final
balloon payment the scheduled balance in the Sinking Fund Account)
that fall due during the Financial Year in which the relevant date
of calculation falls on account of principal of Long-term Debt and
interest and other charges on all Financial Debt and (B) without
double counting any payment already counted in the preceding
sub-clause (A), any payment made or required to be made to any debt
service account under the terms of any agreement providing for
Financial Debt (excluding voluntary prepayments);

	 
	 	 
	 

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

	 	(x)  subject to sub-clause (y)
below, for the computation of interest payable during any
period for which the applicable rate is not yet determined,
that interest shall be computed at

 

- 20 -

	 	 	 

	 
	 	 
	 

	 	the rate in effect at the
time of the relevant date of calculation; and

	 
	 

	 	(y)  interest on
Short-term Debt payable in the Financial Year in which the
relevant date of calculation falls shall be computed by
reference to the aggregate amount of interest thereon paid
during that Financial Year up to the end of the period
covered by the latest quarterly financial statements
prepared by the Onshore Borrower multiplied by a factor of
4, 2 or 4/3 depending on whether the computation is made
by reference to the financial statements for the first
quarter, the first two quarters or the first three
quarters, respectively;

	 
	 	 
	“Relevant Spread”

	 	2.75% per annum provided that the Relevant Spread shall be reduced to:
	 
	 	 
	 
	 	 
	 

	 	(i)   2.50% from and as
of the date on which the Project Physical Completion
Dates in respect of both Projects have been attained; and

	 
	 	 
	 

	 	(ii)   provided that the
Project Physical Completion Dates of both Projects have
been attained, 2.00% from and as of the date on which BDO
has issued written confirmation (the “Confirmation”) to
IFC that all of the following ratios have been satisfied
based on the most recent financial statements of Chindex
(calculated on a Consolidated Basis) (the “Confirmation
Date”):

	 
	 	 
	 

	 	(a)   the Current Ratio is at least 1.5;

	 
	 	 
	 

	 	(b)   the
Peak Debt Service Coverage Ratio is not less than
1.2; and

	 
	 	 
	 

	 	(c)   the
Prospective Debt Service Coverage Ratio will be
greater than 1.7.

	 
	 	 
	 

	 	Such reduction in the Relevant Spread shall be effective on the
date immediately succeeding the Confirmation Date, provided
that there has been no manifest error in the Confirmation. For
each such reduction in the Relevant Spread, IFC shall issue written notice to the

 

 

- 21 -

	 	 	 

	 

	 	Onshore Borrower of the reduction, along with
confirmation of the date on which such reduction shall apply;
	 
	 	 
	“RMB”

	 	the lawful currency of the Country;
	 
	 	 
	“Sanctionable Practice”

	 	any Corrupt Practice, Fraudulent Practice,
Coercive Practice, Collusive Practice, or
Obstructive Practice, as those terms are defined
herein and interpreted in accordance with the
Anti-Corruption Guidelines attached to this
Agreement as Annex D;
	 
	 	 
	“S&EA”

	 	the social and environmental assessments prepared
by the Onshore Borrower in accordance with the
Performance Standards;
	 
	 	 
	“S&E
Management System”

	 	the Onshore Borrower’s social and environmental
management system enabling it to identify, assess
and manage Project risks on an ongoing basis;
	 
	 	 
	“Security Documents”

	 	the documents providing for the IFC Security

consisting of:
	 
	 	 
	 

	 	(i)    the Mortgage Agreement;

	 
	 	 
	 

	 	(ii)   the Share Pledge Agreement; and

	 
	 	 
	 

	 	(iii)  the Guarantee Agreement;

	 
	 	 
	“Security
Sharing Agreement”

	 	the agreement entitled “Security Sharing
Agreement” to be entered into between IFC and the
other senior secured creditor providing the loan
financing included in the Financial Plan;
	 
	 	 
	“Share Pledge Agreement”

	 	the agreements entitled “Share Pledge Agreement”
to be entered into between Chindex and IFC, (a)
pursuant to which, to the extent permitted by
applicable law and reasonably customary for such
document in the Country, Chindex shall create a
first ranking pledge over all of its equity
interest in each of the Onshore Borrowers in
favor of IFC to secure such Onshore Borrower’s
and payment obligations to IFC, (b) providing for
its termination in the event that (i) such
Onshore Borrower’s Project Physical Completion
Date has been achieved, (ii) the aggregate cash
generation from such Onshore Borrower for the
preceding

 

- 22 -

	 	 	 

	 

	 	four quarters was at least $2,5000,000, and (iii)
the Peak Debt Service Ratio based on the most
recent Chindex Consolidated Financial Statements
is not less than 1.2, and, (c) in substantially
the form of Exhibit 3attached hereto;
	 
	 	 
	“Share Retention
Agreement”

	 	the agreement entitled “Share Retention
Agreement” to be entered in to between Roberta
Lipson (the “Major Shareholder”) and IFC,
pursuant to which during the Restricted Period,
the Major Shareholder shall not, directly or
indirectly, sell, transfer, assign, or otherwise
dispose of (“Transfer”) any shares of Class B
Common Stock owned by her in the Company or any
right, title or interest therein or thereto to
any third party, except that the Major
Shareholder shall have the right to Transfer no
more than 20,000 shares of Class B Common Stock
owned by her in the Company as of date hereof to
a trust or trusts to be created for the benefit
of any child, or children, of the Major
Shareholder, provided, that the voting power of
the above-mentioned trust(s) shall be retained by
the Major Shareholder and such trust(s) shall be
subject to the same restrictions as the Major
Shareholder under this Agreement.
	 
	 	 
	 

	 	For the purposes of the foregoing, the term “Restricted Period”
means the period commencing from the date of this Agreement until
the earlier of:
	 
	 	 
	 

	 	(i)   in the event that
both Hospitals are to be constructed and opened for
operation, then the earlier of:

	 
	 	 
	 

	 	      (x) two years have elapsed since the official
commencement of operation by both of the Hospitals; or

	 
	 	 
	 

	 	      (y) one year has elapsed since both Hospitals have
respectively achieved a break-even EBITDA for any
12-month period ending on a date that is the last day
of a fiscal quarter as evidenced by audited Financial
Statements for such period; or

	 
	 	 
	 

	 	      (z) the fifth anniversary of the date of this
Agreement;

 

- 23 -

	 	 	 

	 

	 	OR
	 
	 	 
	 

	 	(ii)  in the event that
only one Hospital is to be constructed and opened for
operation, then the earlier of:

	 
	 	 
	 

	 	      (x) two years have elapsed since the official
commencement of operation by such Hospital, or

	 
	 	 
	 

	 	      (y) one year has elapsed since such Hospital has
achieved a break-even EBITDA for any 12-month period
ending on a date that is the last day of a fiscal
quarter as evidenced by audited Financial Statements
for such period, or

	 
	 	 
	 

	 	      (z) the fifth anniversary of the date of this
Agreement;

	 
	 	 
	“Short-term Debt”

	 	all Financial Debt other than Long-term Debt;
	 
	 	 
	“Sinking Fund Account”

	 	the bank account opened and maintained by each of Beijing United Family Health Center and Shanghai United
Family Hospital Inc. pursuant to the terms and conditions of the IFC RMB Loan Agreement;
	 
	 	 
	“Subsidiary”

	 	with respect to a Person, an Affiliate over 50% of whose capital is owned, directly or indirectly, by such
Person;
	 
	 	 
	“Tangible Net Worth”

	 	the aggregate of:
	 
	 	 
	 

	 	(i)     (A)    the amount paid up or credited as paid up on the share
capital of Chindex or the relevant Onshore Borrower, as the
case may be; and

	 
	 	 
	 

	 	         (B)    the amount standing to the credit of the
reserves of Chindex or the relevant Onshore
Borrower, as the case may be (including, without
limitation, any share premium account, capital
redemption reserve funds and any credit balance
on the accumulated profit and loss account);

 

- 24 -

	 	 	 

	 

	 	after deducting from the amounts in (A) and (B):
	 
	 	 
	 

	 	(x)  any debit balance on the profit and
loss account or impairment of the issued
share capital of Chindex or the relevant
Onshore Borrower, as the case may be
(except to the extent that deduction
with respect to that debit balance or
impairment has already been made);

	 
	 	 
	 

	 	(y)  amounts set aside for dividends or
taxation (including deferred taxation);
and

	 
	 	 
	 

	 	(z)  amounts attributable to capitalized
items such as goodwill, trademarks,
deferred charges, licenses, patents and
other intangible assets; and

	 
	 	 
	 

	 	(ii)  if applicable, that
part of the net results of operations and the net assets
of any Subsidiary of Chindex or the relevant Onshore
Borrower, as the case may be, attributable to interests
that are not owned, directly or indirectly, by Chindex or
the relevant Onshore Borrower, as the case may be;

	 
	 	 
	“Taxes”

	 	any present or future taxes, withholding
obligations, duties and other charges of whatever
nature levied by any Authority;
	 
	 	 
	“Transaction Documents”

	 	together, the Financing Documents, the Security
Documents, the Security Sharing Agreement
and the Share Retention Agreement;
	 
	 	 
	“World Bank”

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

     Section 1.02. Financial Calculations. (a) All financial calculations to be made
under, or for the purposes of, this Agreement shall be made in accordance with the Accounting
Standards and, except as otherwise required by a provision of this

 

- 25 -

Agreement, shall be calculated from the then most recent consolidated quarterly financial
statements delivered to IFC or, where those statements are with respect to the last quarter of a of
a Financial Year then, at IFC’s option, from the consolidated audited financial statements for the
relevant Financial Year. Any Material Adverse Effect that occurs after the end of the period
covered by the financial statements used to make the relevant financial calculations shall also be
taken into account in calculating the relevant figures.

     (b) Where quarterly financial statements from the last quarter of a Financial Year are used
for the purpose of making certain financial calculations then, at IFC’s option, those calculations
may instead be made from the audited financial statements for such Financial Year.

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

     Section 1.03. Interpretation. In this Agreement, unless the context otherwise
requires:

     (a) headings are for convenience only and do not affect the interpretation of this Agreement;

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

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

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

     (e) a reference to a party to any document includes that party’s successors and permitted
assigns.

     Section 1.04. Business Day Adjustment. (a) When an Interest Payment Date is not a
Business Day, then such Interest Payment Date shall be automatically changed to the next Business
Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

- 26 -

     (b) When the day on or by which a payment is due to be made is not a Business Day, that
payment shall be made on or by the next Business Day in that calendar month (if there is one) or
the preceding Business Day (if there is not).

ARTICLE II

The Loan

     Section 2.01. The Loan. (a) Subject to the provisions of this Agreement, IFC agrees
to lend to Chindex and each of the Onshore Borrowers an aggregate amount of Twenty Five Million
Dollars ($25,000,000) (the “Total Loan Amount”). The rights and obligations of Chindex and each of
the Onshore Borrowers shall be several, not joint.

     (b) The Total Loan Amount shall be allocated between the Onshore Borrowers in accordance with
a notice delivered by Chindex prior to the execution of the Local Loan Agreements (each, an
“Onshore Allocation” or the “Loans”). Unless with the express written consent of IFC, a single
Onshore Allocation for an Onshore Borrower shall not exceed sixty percent (60%) of the Total Loan
Amount.

     (c) Each such Onshore Allocation shall be disbursed directly to the to applicable Onshore
Borrower. In no event shall the sum of the two Onshore Allocations exceed the Total Loan Amount.

     Section 2.02. Disbursement Procedure. (a) Each Onshore Borrower may request
Disbursements of its Loan by delivering to IFC, at least ten (10) Business Days prior to the
proposed date of disbursement, a Disbursement request substantially in the form of Schedule 2.

     (b) All Disbursements of the Loan for a particular Onshore Borrower shall be made directly to
the applicable Onshore Borrower. The maximum aggregate amount of Disbursements to a single Onshore
Borrowers shall not exceed such Onshore Borrower’s Onshore Allocation. Each Disbursement shall be
made by IFC at a bank in New York, New York for further credit to the relevant Onshore Borrower’s
account at a bank in the Country, or any other place acceptable to IFC, all as specified by Chindex
or such Onshore Borrower in the relevant Disbursement request.

     (c) Each Disbursement (other than the last one) shall be made in an amount of not less than
$2,500,000. No more than three (3) Disbursements may be requested in respect of each Onshore
Allocation.

     (d) The relevant Onshore Borrower shall deliver to IFC a receipt, substantially in the form of
Schedule 3, within five (5) Business Days following each Disbursement to such Onshore Borrower.

 

- 27 -

     Section 2.03. Interest. Subject to the provisions of Section 2.04 (Default Rate
Interest), the each Onshore Borrower shall pay interest on its Loan in accordance with this Section
2.03:

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

     (b) Up to the Loan Consolidation Date, an Onshore Borrower shall pay interest on the amount of
each Disbursement outstanding from time to time at the Disbursement Interest Rate applicable to
that Disbursement.

     (c) For the purpose of determining the Disbursement Interest Rate applicable to each
Disbursement, IFC shall, on the relevant Interest Rate Setting Date, determine the Base Fixed Rate
for that Disbursement using the methodology set out in Annex AA, add the Relevant Spread and
promptly notify the Onshore Borrower of the Disbursement Interest Rate applicable to that
Disbursement.

     (d) For each Disbursement, the Onshore Borrower shall specify the date on which to determine
the applicable Base Fixed Rate, which date shall be two (2) Business Days before the proposed date
of such Disbursement. In the event the conditions of disbursement relevant to that Disbursement
have not been fulfilled to IFC’s satisfaction or waived by IFC by the rate-setting date specified
in the relevant request for Disbursement, then, after the relevant conditions of disbursement have
been fulfilled to IFC’s satisfaction or waived by IFC, the Onshore Borrower shall specify a new
date on which to determine the Base Fixed Rate, which shall be two (2) Business Days before the new
proposed date of the requested Disbursement unless otherwise specified by IFC.

     (e) The relevant Onshore Borrower may from time to time at any time in connection with any
proposed Disbursement request from IFC an indication of what the Disbursement Interest Rate would
be for such a Disbursement as of the date of that request. As promptly as practicable after that
request, IFC shall advise the Onshore Borrower of the indicative Disbursement Interest Rate.

     (f) Beginning on and including the applicable Loan Consolidation Date for a particular Onshore
Borrower, the Onshore Borrower shall pay interest at the applicable Interest Rate on the full
amount of the Loan outstanding for that Onshore Borrower from time to time. The “Interest Rate”
for a particular Onshore Borrower shall be the rate calculated by IFC equal to the weighted average
of the Loan Disbursement Interest Rates for the relevant Onshore Borrower, the weighting being
based on the principal amount of each Disbursement to that Onshore Borrower in relation to the
entire principal amount of the Loan for that Onshore Borrower and the average being rounded up to
the nearest two decimal places. IFC shall determine the Interest Rate for each Onshore Borrower
not less

 

- 28 -

than two (2) Business Days before the relevant Loan Consolidation Date and promptly
notify the relevant Onshore Borrower of that rate.

     (g) The determination by IFC of each Disbursement Interest Rate or the Interest Rate, as the
case may be, shall be final and conclusive and bind the Borrower (unless the Borrower shows to
IFC’s reasonable satisfaction that the determination involves manifest error).

     Section 2.04. Default Rate Interest. (a) Without limiting the remedies available to
IFC under this Agreement or otherwise (and to the maximum extent permitted by applicable law), if
any Onshore Borrower fails to make any payment of principal or interest (including interest payable
pursuant to this Section) or any other payment provided for in Section 2.07 (Fees) when due as
specified in this Agreement (whether at stated maturity or upon acceleration), such Onshore
Borrower shall pay interest on the amount of that payment due and unpaid by such Onshore Borrower
at the rate which shall be the sum of two per cent (2%) per annum and the Interest Rate in effect
from time to time.

     (b) Interest at the rate referred to in Section 2.04 (a) shall accrue from the date on which
payment of the relevant overdue amount became due until the date of actual payment of that amount
(as well after as before judgment), and shall be payable by such Onshore Borrower on demand or, if
not demanded, on each Interest Payment Date falling after any such overdue amount became due.

     Section 2.05. Repayment. (a) Subject to Section 1.04 (Business Day Adjustment), in
respect of each Loan made to an Onshore Borrower, such Onshore Borrower shall commence repayment of
the principal of such Loan on the first Interest Payment Date .

     (b) Subject to Section 1.04 (Business Day Adjustment), following completion of the Grace
Period, in respect of each separate Onshore Allocation, the relevant Onshore Borrower shall repay
the principal amount of the Loan made to it in accordance with the following schedule:

	 	 	 	 	 
	12 Month Period	 	 	 	 
	Immediately Following	 	First or Second	 	 
	Completion of Grace	 	Interest Payment Date in	 	 
	Period	 	Relevant 12 Month Period	 	Principal Amount Due
	Year 1
	 	First
	 	961,538.00
	 
	 	Second
	 	961,538.00
	Year 2
	 	First
	 	961,538.00
	 
	 	Second
	 	961,538.00
	Year 3
	 	First
	 	961,538.00

 

- 29 -

	 	 	 	 	 
	12 Month Period	 	 	 	 
	Immediately Following	 	First or Second	 	 
	Completion of Grace	 	Interest Payment Date in	 	 
	Period	 	Relevant 12 Month Period	 	Principal Amount Due
	 
	 	Second
	 	961,538.00
	Year 4
	 	First
	 	961,538.00
	 
	 	Second
	 	961,538.00
	Year 5
	 	First
	 	961,538.00
	 
	 	Second
	 	961,538.00
	Year 6
	 	First
	 	961,538.00
	 
	 	Second
	 	961,538.00
	Year 7
	 	First
	 	961,544.00

     (c) If the outstanding balance of the Loan in respect of any particular Onshore Allocation at
the date of completion of the Grace Period is less than US$12,500,000 million, then the amounts in
the column entitled “Principal Amount Due” in Section 2.05 (b) above, shall be adjusted on a
pro-rata basis.

     (d) Any principal amount of the Loan repaid under this Agreement may not be re-borrowed.

     Section 2.06. Prepayment Without prejudice to Section 2.10 (b) (Increased Costs),
Section 2.14 (Taxes), and Section 5.04 (c) (Insurance):

     (a) each Onshore Borrower may prepay on all or any part of the Loan made to it, on not less
than fifteen (15) days’ prior notice to IFC, but only if:

	 	(i)	 	such Onshore Borrower simultaneously pays all accrued
interest and Increased Costs (if any) on the amount of such Loan to be
prepaid, together with and all other amounts then due and payable by it
under this Agreement;
	 
	 	(ii)	 	for a partial prepayment, that prepayment is an amount
not less than one million Dollars ($1,000,000);
	 
	 	(iii)	 	if requested by IFC, the Onshore Borrower delivers to
IFC, prior to the date of prepayment, evidence reasonably satisfactory to
IFC that all necessary Authorizations for prepayment have been obtained; and

     (iv) the redeployment cost with respect to the amount of the Loan to be prepaid as determined
by IFC in accordance with the methodology set out in Annex BB.

 

- 30 -

     (b) Amounts of principal prepaid under this Section shall be applied by IFC on a pro-rata
basis to the remaining repayment installments of the Loan made to such Onshore Borrower.

     (c) Upon delivery of a notice in accordance with Section 2.06 (a), the relevant Onshore
Borrower shall make the prepayment in accordance with the terms of that notice.

     (d) Any principal amount of the Loan prepaid under this Agreement may not be re-borrowed.

     (e) If any Onshore Borrower prepays any other long-term loans (other than in connection with a
refinancing, replacement or restructuring with similar or better terms) made to it, IFC will have
the right to require prepayment of the Loan made to such Onshore Borrower on a pro-rata basis.

     Section 2.07. Fees. (a) Chindex or the relevant Onshore Borrower shall pay to IFC a
commitment fee:

	 	(i)	 	at the rate of one-half of one per cent (1/2 %) per annum
on that part of such Onshore Borrower’s Onshore allocation that from time to
time has not been disbursed or canceled, beginning to accrue on the date of
this Agreement;

	 	(ii)	 	pro rated on the basis of a 360-day year
for the actual number of days elapsed; and

	 	(iii)	 	payable annually, in arrears, payable:

	 	a.	 	until the first Interest Payment Date,
in arrears on September 28th of each year (the first such payment
to be due on September 28, 2008); and

	 	b.	 	on and after the first Interest
Payment Date, in arrears (A) on such first Interest Payment Date,
and (B) annually thereafter on an Interest Payment Date.

     (b) Chindex or the relevant Onshore Borrower shall pay to IFC:

	 	(i)	 	a front-end fee (“Frond-end Fee”) on each Onshore
Allocation of one point one eight per cent (1.18%) of the amount of the Loan
to be made to such Onshore Borrower, to be paid:

	 	a.	 	40% on the date which is thirty (30)
days after the date of this Agreement; and

	 	b.	 	60% on September 28, 2008;

 

- 31 -

	 	 	the Front-end Fee shall be reduced to 1% if the Borrower has not entered into the
DEG Loan on or before January 31, 2008 and any amounts previously paid to the IFC
which exceed the amounts that would have been paid if the Frond-end Fee had been
1% since the date of this Agreement should be reimbursed by IFC to Chindex.

	 	(ii)	 	a portfolio supervision fee of $10,000 per annum starting
from the year after IFC RMB Loan is fully repaid, provided, however, that
after the date that the Local Loan Agreements become effective this
portfolio fee shall be paid solely by the Onshore Borrowers in an amount of
$5,000 each; and

	 	(iii)	 	if such Onshore Borrower and IFC agree to restructure
all or part of the Loan made to such Onshore Borrower, such Onshore Borrower
and IFC shall negotiate in good faith an appropriate amount to compensate
IFC for the additional work of IFC staff required in connection with such
restructuring.

     Section 2.08. Currency and Place of Payments. (a) Each Onshore Borrower shall make
all payments of principal, interest, fees, and any other amount due to IFC and payable by such
Onshore Borrower under this Agreement in the Loan Currency, in same day funds, to the account of
IFC at Citibank, N.A., 111 Wall Street, New York, New York, U.S.A., ABA#021000089 for credit to
IFC’s account number 36085579, or at such other bank or account in New York as IFC from time to
time designates. Payments must be received in IFC’s designated account no later than 1:00 p.m. New
York time.

     (b) The tender or payment of any amount payable under this Agreement (whether or not by
recovery under a judgment) in any currency other than the Loan Currency shall not novate, discharge
or satisfy the obligation of the applicable Onshore Borrower to pay in the Loan Currency all
amounts payable by it under this Agreement except to the extent that (and as of the date when) IFC
actually receives funds in the Loan Currency;

     (c) Each Onshore Borrower shall indemnify IFC against any losses resulting from a payment
being received or an order or judgment being given under this Agreement in any currency other than
the Loan Currency or any place other than the account specified in, or pursuant to, Section 2.08
(a). Each Onshore Borrower shall, as a separate obligation, pay such additional amount as is
necessary to enable IFC to receive, after conversion to the Loan Currency at a market rate and
transfer to that account, the full amount due to IFC under this Agreement in the Loan Currency and
in the account specified in, or pursuant to, Section 2.08 (a).

     (d) Notwithstanding the provisions of Section 2.08 (a) and Section 2.08 (b), IFC may require
the applicable Onshore Borrower to pay (or reimburse IFC) for any
Taxes, fees, costs, expenses and other amounts payable by such Onshore Borrower under

 

- 32 -

Section 2.14 (a) (Taxes) and Section 2.15 (Expenses) in the currency in which they are payable, if other
than the Loan Currency.

     Section 2.09. Allocation of Partial Payments. If at any time IFC receives less than
the full amount then due and payable to it by an Onshore Borrower under this Agreement, IFC may
allocate and apply the amount received to satisfy the payment obligations of such Onshore Borrower
under this Agreement in any way or manner and for such purpose or purposes under this Agreement as
IFC in its sole discretion determines, notwithstanding any instruction that such Onshore Borrower
may give to the contrary.

     Section 2.10. Increased Costs. On each Interest Payment Date, each Onshore Borrower
shall pay, in addition to interest payable by it, the amount which IFC from time to time notifies
to such Onshore Borrower in an Increased Costs Certificate as being the aggregate Increased Costs
of IFC in connection with the Loan made to such Onshore Borrower which is accrued and unpaid prior
to that Interest Payment Date.

     Section 2.11. Unwinding Costs. (a) If IFC incurs any cost, expense or loss as a
result of any Onshore Borrower:

	 	(i)	 	failing to borrow in accordance with a request for
Disbursement made by such Onshore Borrower pursuant to Section 2.02
(Disbursement Procedure); or

	 	(ii)	 	failing to prepay in accordance with a notice of
prepayment delivered by such Onshore Borrower;

then such Onshore Borrower shall immediately pay to IFC the amount that IFC from time to time
notifies to such Onshore Borrower as being the amount of those costs, expenses and losses incurred.

     (b) For the purposes of this Section, “costs, expenses or losses” include any premium, penalty
or expense incurred to liquidate or obtain third party deposits, borrowings, hedges or swaps in
order to make, maintain, fund or hedge all or any part of any Disbursement or prepayment of the
applicable Loan, or any payment of all or part of the applicable Loan upon acceleration.

     Section 2.12. Suspension or Cancellation by IFC. (a) IFC may, by notice to the
applicable Onshore Borrower, suspend the right of such Onshore Borrower to Disbursements or cancel
the undisbursed portion of the Loan to such Onshore Borrower in whole or in part:

	 	(i)	 	if the first Disbursement to such Onshore Borrower has
not been made by February 1, 2009, or such other later date as the parties
agree;

 

- 33 -

	 	(ii)	 	if any Event of Default has occurred and is continuing;
or

	 	(iii)	 	after January 1, 2011.

     (b) Upon the giving of any such notice, the right of the relevant Onshore Borrower to any
further Disbursement, and its obligation to make any payments of the commitment fee set out in
Section 2.07(a), shall be suspended or canceled, as the case may be. The exercise by IFC of its
right of suspension shall not preclude IFC from exercising its right of cancellation, either for
the same or any other reason specified in Section 2.12 (a) and shall not limit any other provision
of this Agreement. Upon any cancellation the Onshore Borrower shall, subject to paragraph (c) of
this Section 2.13, pay to IFC all fees and other amounts accrued (whether or not then due and
payable) under this Agreement up to the date of that cancellation.

     (c) In the case of partial cancellation of the Loan pursuant to paragraph (a) of this Section
2.12, or Section 2.13 (a), interest on the amount then outstanding of the Loan remains payable as
provided in Section 2.03 (Interest).

     Section 2.13. Cancellation by the Onshore Borrower. (a) Each Onshore Borrower or
Chindex may, by notice to IFC, irrevocably request IFC to cancel the undisbursed portion of the
Loan to be made to it on the date specified in that notice (which shall be a date not earlier than
thirty (30) days after the date of that notice).

     (b) IFC shall, by notice to the applicable Onshore Borrower or Chindex, as the case may be,
cancel the undisbursed portion of the Loan to be made to it effective as of that specified date if:

	 	(i)	 	subject to Section 2.12(c), IFC has received all fees
and other amounts accrued (whether or not then due and payable) to such
Onshore Borrower or Chindex, as the case may be, under this Agreement up to
such specified date; and

	 	(ii)	 	if any amount of the Loan to such Onshore Borrower is
then outstanding, IFC is reasonably satisfied that such Onshore Borrower has
sufficient long-term funding available, on terms satisfactory to IFC, to
cause the Project Physical Completion Date for the Project of such Onshore
Borrower to occur as scheduled.

     (c) Any portion of the Loan that is cancelled under this Section 2.13 may not be reinstated or
disbursed.

     Section 2.14. Taxes. (a) Each Onshore Borrower shall pay or cause to be paid all
Taxes (other than taxes, if any, payable on the overall income of IFC) on or in connection with the
payment of any and all amounts due by it under this Agreement that are now or in the future levied
or imposed by any Authority of the Country or by any

 

- 34 -

organization of which the Country is a member
or any jurisdiction through or out of which a payment by such Onshore Borrower is made.

     (b) All payments of principal, interest, fees and other amounts due under this Agreement shall
be made without deduction for or on account of any Taxes.

     (c) If any Onshore Borrower is prevented by operation of law or otherwise from making or
causing to be made those payments without deduction, the principal or (as the case may be)
interest, fees or other amounts payable by it and due under this Agreement shall be increased to
such amount as may be necessary so that IFC receives the full amount it would have received (taking
into account any Taxes payable on amounts payable by the Onshore Borrower under this subsection)
had those payments been made without that deduction.

     (d) If Section 2.13(c) applies and IFC so requests, the applicable Onshore Borrower shall
deliver to IFC official tax receipts evidencing payment (or certified copies of them) within thirty
(30) days of the date of that request.

     Section 2.15. Expenses. (a) Each Onshore Borrower shall pay or, as the case may be,
reimburse IFC any amount paid by it on account of, all taxes (including stamp taxes), duties, fees
or other charges payable on or in connection with the execution, issue, delivery, registration or
notarization of the Transaction Documents to which such Onshore Borrower is a party and any other
documents related to this Agreement or any other Transaction Document to which such Onshore
Borrower is a party.

     (b) Each Onshore Borrower shall pay to IFC or as IFC may direct:

	 	(ii)	 	the fees and expenses of IFC’s legal 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 to which such Onshore Borrower is a party;

	 	(B)	 	the preparation and/or review,
execution and, where appropriate, translation and registration of
the Transaction Documents to which such Onshore Borrower is a party
and any other documents related to them;

	 	(C)	 	the giving of any legal opinions
required by IFC under this Agreement and any other Transaction
Document to which such Onshore Borrower is a party;

	 	(D)	 	the administration by IFC of the
investment provided for in this Agreement or otherwise in
connection with any

 

- 35 -

	 	 	 	amendment, supplement or modification to, or
waiver under, any of the Transaction Documents to which such
Onshore Borrower is a party;

	 	(E)	 	the registration (where appropriate)
and the delivery of the evidences of indebtedness relating to the
Loan to such Onshore Borrower and its disbursement;

	 	(F)	 	the occurrence of any Event of Default
or Potential Event of Default with respect to such Onshore
Borrower; and

	 	(G)	 	the release of the IFC Security
following repayment in full of the Loan by such Onshore Borrower;
and

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

ARTICLE III

Representations and Warranties

     Section 3.01. Representations and Warranties. Chindex represents and warrants that:

     (a) Organization and Authority. Chindex is a company duly incorporated and validly
existing under the laws of Delaware, United States of America 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 comply with its obligations under, the Transaction Documents to which it is
a party;

     (b) to the best of its knowledge and belief, after due inquiry, there are no material social
or environmental risks or issues in relation to the Project other than those identified by the
S&EA; and

     (c) it has not received nor is aware of (i) any existing or threatened complaint, order,
directive, claim, citation or notice from any Authority or (ii) any material written communication
from any Person, in either case, concerning the Project’s

 

- 36 -

failure to comply with any matter covered
by the Performance Standards which has, or could reasonably be expected to have, a Material Adverse
Effect or any material impact on the implementation or operation of the Project in accordance with
the Performance Standards.

     Section 3.02. IFC Reliance. Chindex acknowledges that it makes the representations
and warranties in Section 3.01 with the intention of inducing IFC to enter into this Agreement and
that IFC enters into this Agreement on the basis of, and in full reliance on, each of such
representations and warranties.

ARTICLE IV

Conditions of Disbursement

     Section 4.01. General Conditions of Initial Disbursement. The obligation of IFC to
make the initial Disbursement to any Onshore Borrower is subject to the fulfillment prior to or
concurrently with the making of that first Disbursement to such Onshore Borrower of the following
conditions:

     (a) Charter Amendments. No amendment has been made to Chindex’s Charter since it was
delivered to the IFC, or if any such amendment was made, IFC has received a copy of Chindex’s
amended Charter and determined, in its reasonable judgment, that it is not inconsistent with the
provisions of the Transaction Documents and does not have or could not reasonably be expected to
have Material Adverse Effect;

     (b) Authorizations. Chindex has obtained all Authorizations that may become necessary
for:

	 	(i)	 	the Loans;

	 	(ii)	 	the due execution, delivery, validity and enforceability
of, and performance by Chindex of its obligations under this Agreement; and

and all those Authorizations are in full force and effect;

     (c) Fees. IFC has received the fees which Section 2.07 (Fees) requires to be paid
before the date of the first Disbursement;

     (d) Legal Fees and Expenses. IFC has received the reimbursement of all invoiced fees
and expenses of IFC’s counsel as provided in Section 2.15 (b) (ii) or confirmation that those fees
and expenses have been paid directly to that counsel, in each

 

- 37 -

case, to the extent an invoice
approved by the IFC has been submitted to the Onshore Borrowers at least five (5) day prior to the
Disbursement;

     (e) Incumbency. IFC has received a Certificate of Incumbency and Authority; and

     (f) Appointment of Agent. Chindex has delivered to the IFC evidence, substantially in
the form of Schedule 4, of appointment of an agent for service of process pursuant to Section 7.05
(Applicable Law and Jurisdiction).

     Section 4.02. Special Conditions of Disbursement. The obligation of IFC to make any
Disbursement to any Onshore Borrower, including the initial Disbursement to such Onshore Borrower,
is subject to the fulfillment prior to or concurrently with the making of such Disbursement of the
following conditions related specifically the Onshore Borrowers, its Hospital and its Project:

     (a) Local Operating Entities.

	 	(i)	 	Such Onshore Borrower has been established as a
Sino-foreign joint venture enterprises under the laws of the People’s
Republic of China, and has been approved to construct, equip and operate its
Hospital;

	 	(ii)	 	Chindex owns no less than a 60% of the equity interest in
the total registered capital of such Onshore Borrower;

	 	(iii)	 	Chindex exercises effective management and operational
control of such Onshore Borrower in a manner consistent with and no less
favorable than, the management and operational control currently exercised
by Chindex over the business and operations of Beijing United Family Health
Center and Shanghai United Family Hospital;

	 	(iv)	 	Chindex has made available to IFC the following
information regarding such Onshore Borrower prior to finalization of
requisite joint venture agreements for the establishment of the Onshore
Borrowers: (A) the proposed capital budget, including
proposed working capital and contingency amounts, the proposed plan for
the construction, commencement of operations, staffing, training and
marketing, (B) a proposed general time schedule for the material
expenditures contemplated in such budget and (C) any other information
that IFC may have reasonably requested regarding such Onshore Borrower;

	 	(v)	 	The joint venture agreements and/or other constituent
documents of such Onshore Borrower shall provide that the joint venture

 

- 38 -

	 	 	 	parties will receive dividend distributions pro rata with their actual
ownership interest in the registered capital of each of such Onshore
Borrowers, and no agreement or arrangement has been entered into between the
Chindex and the minority shareholders of the Onshore Borrowers to the
contrary; and

	 	(vi)	 	The “Guangzhou Clinic” described and included in the
Project Cost table in Annex A shall have been opened and operational.

     (b) Loan Agreements with Onshore Borrowers. The applicable Onshore Borrower has
entered into legally binding and enforceable loan agreements with IFC on terms and conditions
substantially similar to those set forth in this Agreement (“Local Loan Agreements”), save that:

	 	(i)	 	the principal amount of the Loan stipulated under a Local
Loan Agreement shall be the relevant Onshore Allocation for that particular
Onshore Borrower;
	 
	 	(ii)	 	each of the Local Loan Agreements shall have incorporated
the special representations as set forth in Schedule 9 hereto
instead of the representations described in Article III (Representations and
Warranties);
	 
	 	(iii)	 	each of the Local Loan Agreements shall have
incorporated the special covenants as set forth in Schedule 10
hereto instead of the covenants described in Article V (Particular
Covenants) hereto; and
	 
	 	(iv)	 	each of the Local Loan Agreement shall have incorporated
the special Conditions of Disbursement as set forth in Schedule 11
hereto instead of the conditions described in this Article IV (Conditions of
Disbursement).

     (c) Local Loan Conditions Satisfied. In respect of any Disbursement to a particular
Onshore Borrower, all of the conditions of disbursement described in the relevant Local Loan
Agreement for that Onshore Borrower shall have been satisfied.

     Section 4.03. Onshore Borrower’s Certification. The applicable Onshore Borrower
shall deliver to IFC with respect to each request for Disbursement by such Onshore Borrower:

     (a) certifications, in the form included in Schedule 2, relating to the conditions specified
in Section 4.02 (Conditions of All Disbursements) set out in Schedule 11 (other than the condition
in Section 4.02 (f) of Schedule 11) expressed to be effective as of the date of that Disbursement;
and

 

- 39 -

     (b) such evidence as IFC may reasonably request of the proposed utilization of the proceeds of
that Disbursement or the utilization of the proceeds of any prior Disbursement.

     Section 4.04. Conditions for IFC Benefit. The conditions in Section 4.01 through
Section 4.03 are for the benefit of IFC and may be waived only by IFC in its sole discretion.

ARTICLE V

Particular Covenants

     Section 5.01. Covenants. Unless IFC otherwise agrees, and until the Guarantee
Agreement has been duly executed between IFC and Chindex, Chindex shall:

     (a) Clinic Dividends. Ensure that: (i) all dividends and distributable profits from
the Clinics are, to the extent not payable to relevant domestic joint venture partners or domestic
co-investors, distributed directly or indirectly through an Affiliate to the relevant Onshore
Borrower or Chindex and not through any other Person; and (ii) all income from any management
contracts between any Clinic and Chindex or any other company affiliated with Chindex is paid
directly or indirectly to Chindex or the relevant Onshore Borrower;

     (b) Quarterly Reports. As soon as available or within sixty (60) days after the end of
each quarter of each Financial Year, whichever is later, furnish to IFC two (2) copies of its
financial statements for such period prepared on a Consolidated Basis in accordance with the
Accounting Principles, which requirement is deemed satisfied if such filings have been made
publicly available and a notice has been sent to IFC regarding the availability of those filings;

     (c) Annual Reports. As soon as available or within one hundred and twenty (120) days
after the end of each Financial Year, whichever is later, furnish to IFC two (2) copies of its
financial statements for such Financial Year (which are in agreement with its books of account and
prepared on a Consolidated Basis in accordance with the
Accounting Principles), together with an audit report on them, all in form reasonably satisfactory
to IFC, which requirement is deemed satisfied if such filings have been made publicly available and
a notice has been sent to IFC regarding the availability of those filings;

     (d) Auditor Certification. As soon as available or within one hundred and twenty (120)
days after the end of each Financial Year, whichever is later, provide a report by the Auditor
certifying that, on the basis of its financial statements, Chindex was in compliance with financial
covenants under this Agreement (including a clear methodology of the calculation of such
covenants); and

 

- 40 -

     (e) Filings. Provide IFC a copy of all filings that have been made by Chindex with the
Securities and Exchange Commission of the United States and/or other Stock Exchange on which
Chindex stock is listed within five (5) Business Days after relevant filling is made which
requirement is deemed satisfied if such filings have been made available through EDGAR and a notice
has been sent to IFC regarding the availability of those filings in EDGAR.

     Section 5.02. Negative Covenants. Unless IFC otherwise agrees, and until the
Guarantee Agreement has been duly executed between IFC and Chindex, Chindex shall not:

     (a) Financial Debt. Incur any additional Financial Debt, unless after giving effect of
such debt transaction:

	 	(i)	 	the Liabilities to Tangible Net Worth Ratio is not
greater than 1.2; and

	 	(ii)	 	The Peak Debt Service Coverage Ratio is not less than
1.2.

     (b) Dividends. declare or pay any cash dividend, make any other cash distribution on
its equity, or make any payment under any shareholder loans unless:

	 	(i)	 	the Project Physical Completion Date of both Projects has
occurred;
	 
	 	(ii)	 	first principal repayment of the Loan has been made;
	 
	 	(iii)	 	in the case of dividends, such payment would be made out
of retained earnings;
	 
	 	(iv)	 	the Peak Debt Service Coverage Ratio is not less than 1.2
and
	 
	 	(v)	 	after giving effect to such payment:

	 	(A)	 	no Event of Default or Potential Event
of Default exists or is continuing;
	 
	 	(B)	 	the Current Ratio is not less than 1.5; and
	 
	 	(C)	 	the Liabilities to Tangible Net Worth
Ratio is not greater than 1.0.

     (c) Guarantees. Guarantee or assume the Liabilities of others except for its
Subsidiaries;

 

- 41 -

     (d) Leases. Enter into leases other than Financial Leases, if the aggregate payments
are in excess of $2,000,000 in any financial year;

     (e) Loans. Make loans or advances to, deposits (except commercial bank deposits) with
or investments in other persons except for its subsidiaries other than short-term investment grade
marketable securities;

     (g) Merger of Subsidiaries. Merge, consolidate, reorganize, or dispose of any of the
Onshore Borrowers or Beijing United Family Health Center or Shanghai United Family Hospital Inc.,
or merge, consolidate, reorganize, or dispose of any other Subsidiaries if such action has or could
reasonably be expected to have a Material Adverse Effect;

     (h) Use of Proceeds. Use proceeds of the IFC investment in countries which are not
members of the World Bank;

     (i) Practices. Engage in any corrupt, fraudulent, coercive, collusive or obstructive
practice related to the Projects;

     (j) Make any principal payment of the Tranche B Note or Trance C Note, each as defined in the
Security Purchase Agreement by and between Chindex and Magenta Magic Limited, dated November 7,
2007, in each case, before the maturity of such Tranche B Note and Tranche C Note, as the case may
be; and

     (k) Liens on Equity in Onshore Borrowers. Encumber, mortgage, pledge or otherwise secure any
interest in the registered capital of the Onshore Borrowers for the benefit of any third party,
other than to IFC and in accordance with the Share Pledge Agreement.

ARTICLE VI

Events of Default

     Section 6.01. Acceleration after Default. If any Event of Default occurs and is
continuing (whether it is voluntary or involuntary, or results from operation of law or otherwise),
IFC may, by notice to the applicable Onshore Borrower, require such Onshore Borrower to repay the
Loan made to it or such part of the Loan made to it as is specified in that notice. On receipt of
any such notice, the applicable Onshore Borrower shall immediately repay the Loan (or that part of
the Loan specified in that notice) made to it and pay all interest accrued on it, redeployment cost
and any other amounts then payable by such Onshore Borrower under this Agreement. Each Onshore
Borrower

 

- 42 -

waives any right it might have to further notice, presentment, demand or protest with
respect to that demand for immediate payment.

     Section 6.02. Events of Default. It shall be an Event of Default with respect to
each Onshore Borrower, if:

     (a) Failure to Pay Principal or Interest. Such Onshore Borrower fails to pay when due
any part of the principal of, or interest on, the Loan made to it and such failure continues for a
period of five (5) days;

     (b) Failure to Pay Other IFC Loans. Such Onshore Borrower fails to pay when due any
part of the principal of, or interest on, any loan from IFC to such Onshore Borrower other than the
Loan and any such failure continues for the relevant grace period allowed for in the agreement
providing for that loan;

     (c) Failure to Comply with Obligations. Such Onshore Borrower fails to comply with
any of its obligations under this Agreement or any other Transaction Document (other than for the
payment of the principal of, or interest on, the Loan or any other loan from IFC to the Onshore
Borrower), and any such failure continues for a period of thirty (30) days after the date on which
IFC notifies such Onshore Borrower of that failure;

     (d) Failure by Other Parties to Comply with Obligations. The Guarantor or Major
Shareholder fails to observe or perform any of its material obligations under a Transaction
Document to which such a Person is a party, and any such failure continues for a period of thirty
(30) days after the date on which IFC notifies such Onshore Borrower of that failure;

     (e) Misrepresentation. Any representation or warranty made in Article III or in
connection with the execution of, or any request (including a request for
Disbursement) under, this Agreement or any other Transaction Document is found to be incorrect in
any material respect;

     (f) Expropriation, Nationalization, Etc. Any Authority condemns, nationalizes,
seizes, or otherwise expropriates all or any substantial part of the property or other assets of
such Onshore Borrower or of its share capital or assumes custody or control of that property or
other assets or of the business or operations of such Onshore Borrower or of its share capital, or
takes any action for the dissolution or disestablishment of such Onshore Borrower or any action
that would prevent such Onshore Borrower or its officers from carrying on all or a substantial part
of its business or operations;

     (g) Involuntary Proceedings. A decree or order by a court is entered against such
Onshore Borrower:

	 	(i)	 	adjudging such Onshore Borrower bankrupt or insolvent;

 

- 43 -

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

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

     (h) Voluntary Proceedings. Such Onshore Borrower:

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

     (i) Attachment. An attachment or analogous process is levied or enforced upon or
issued against any of the assets of such Onshore Borrower for an amount in excess of the equivalent
of Five Million Dollars ($5,000,000) and is not discharged within forty five (45) days;

     (j) Analogous Events to Bankruptcy. Any other event with respect to such Onshore
Borrower occurs which under any applicable law would have an effect analogous to any of those
events listed in Section 6.02 (g), Section 6.02(h) and Section 6.02 (i);

 

- 44 -

     (k) Cross-Default. Such Onshore Borrower fails to make any payment in respect of any
of its Liabilities (other than the Loan) with an amount exceeding One Million Dollars ($1,000,000)
or to perform any of its obligations under any agreement pursuant to which there is outstanding any
Liability with an amount exceeding One Million Dollars ($1,000,000), and any such failure continues
for more than any applicable period of grace or any such Liability becomes prematurely due and
payable or is placed on demand;

     (l) Failure to Maintain Authorizations. Any Authorization necessary for the Chindex
or such Onshore Borrower to perform and observe its obligations under any Transaction Document, or
to carry out the Project, is not obtained when required or is rescinded, terminated, lapses or
otherwise ceases to be in full force and effect, including with respect to the remittance to 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 such Onshore Borrower
requiring that restoration or reinstatement;

     (m) Revocation, Etc., of Security Documents. Any Security Document or any of its
material provisions:

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

     (n) Revocation of Transaction Documents. Any Transaction Document (other than a
Security Document) or any of its material provisions:

	 	(i)	 	is revoked, terminated or ceases to be in full force and
effect without, in each case, the prior consent of IFC, and that event, if
capable of being remedied, is not remedied to the satisfaction of IFC within
thirty (30) days of IFC’s notice to the Onshore Borrower; or
	 
	 	(ii)	 	becomes unlawful or is declared void; or
	 
	 	(iii)	 	is repudiated and such repudiation is not withdrawn
within thirty (30) days of IFC’s notice to the Onshore Borrower requiring
that withdrawal; provided that no such notice shall be required or,
as 

 

- 45 -

	 	 	 	the case may be, the notice period shall terminate if and when such
repudiation becomes effective;

     (o) Non-Performance of Project Documents. Any of the Project Documents:

	 	(i)	 	is breached by any party to it and such breach has or
could reasonably be expected to have a Material Adverse Effect; or
	 
	 	(ii)	 	is revoked, terminated or ceases to be in full force and
effect without the prior consent of 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 by any party to it; and

     (p) Bankruptcy of Chindex. Any of the events specified in Sections 6.02 (f) through
6.02 (i) occurs to Chindex.

     Section 6.03. Bankruptcy. If any Onshore Borrower is liquidated or declared
bankrupt, the Loan to such Onshore Borrower, all interest accrued on it and any other amounts
payable under this Agreement by such Onshore Borrower will become immediately due and payable
without any presentment, demand, protest or notice of any kind, all of which such Onshore Borrower
waives.

ARTICLE VII

Miscellaneous

     Section 7.01. Saving of Rights. (a) The rights and remedies of IFC in relation to
any misrepresentation or breach of warranty on the part of Chindex or any Onshore Borrower shall
not be prejudiced by any investigation by or on behalf of IFC into the affairs of Chindex or such
Onshore Borrower, by the execution or the performance of this Agreement or by any other act or
thing which may be done by or on behalf of IFC in connection with this Agreement and which might,
apart from this Section, prejudice such rights or remedies.

     (b) No course of dealing or waiver by IFC in connection with any condition of Disbursement of
the Loan under any Local Loan Agreements shall impair any right, power or remedy of IFC with
respect to any other condition of Disbursement under such Local Loan Agreements, or be construed to
be a waiver thereof; nor shall the action of IFC with respect to any Disbursement affect or impair
any right, power or remedy of IFC with respect to any other Disbursement.

 

- 46 -

     (c) Unless otherwise notified to Chindex by IFC and without prejudice to the generality of
Section 7.01 (b), the right of IFC to require compliance with any condition under any Local Loan
Agreement that may be waived by IFC with respect to any Disbursement under such Local Loan
Agreement is expressly preserved for the purposes of any subsequent Disbursement under such Local
Loan Agreement.

     (d) No course of dealing and no failure or delay by IFC in exercising, in whole or in part,
any power, remedy, discretion, authority or other right under this Agreement or any other agreement
shall waive or impair, or be construed to be a waiver of, such or any other power, remedy,
discretion, authority or right under this Agreement, or in any manner preclude its additional or
future exercise; nor shall the action of IFC with respect to any default, or any acquiescence by it
therein, affect or impair any right, power or remedy of IFC with respect to any other default.

     Section 7.02. Notices. Any notice, request or other communication to be given or
made under this Agreement shall be in writing. Subject to Section 5.01 (Covenants) and Section
7.05 (Enforcement), any such communication may be delivered by hand, airmail, facsimile or
established courier service to the party’s address specified below or at such other address as such
party notifies to the other party from time to time, and will be effective upon receipt.

     For the Chindex:

Chindex International, Inc.

4340 East West Highway, Suite 1100

Bethesda, Maryland 20814

Attn: Roberta Lipson, CEO

Lawrence Pemble, CFO

Facsimile: 301-215-7719

502-427-0409

With a copy sent by e-mail to the attention of Roberta Lipson, CEO, and Lawrence Pemble, CFO, at:

E-mail addresses: rlipson@Chindex.com and lpemble@chindex.com

     For IFC:

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

 

- 47 -

United States of America

Facsimile: +1 (202) 974-4792

Attention: Director, Health and Education Department

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

Facsimile: +1 (202) 522-7419

     Section 7.03. English Language. (a) All documents to be provided or communications
to be given or made under this Agreement shall be in the English language.

     (b) To the extent that the original version of any document to be provided, or communication
to be given or made, to IFC under this Agreement or any other Transaction Document is in a language
other than English, that document or communication shall be accompanied by an English translation
certified by an Authorized Representative to be a true and correct translation of the original.
IFC may, if it so requires, obtain an English translation of any document or communication received
in a language other than English at the cost and expense of applicable Onshore Borrower. IFC may
deem any such English translation to be the governing version between the Onshore Borrower and IFC.

     Section 7.04. Term of Agreement. Each Local Loan Agreement shall continue in force
until all monies payable under it have been fully paid in accordance with its provisions. This
Loan Agreement shall automatically terminate upon the execution and delivery of both Local Loan
Agreements by the IFC by the Onshore Borrowers.

     Section 7.05. Enforcement. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, United States of America.

     (b) For the exclusive benefit of IFC, Chindex irrevocably agrees that any legal action, suit
or proceeding arising out of or relating to this Agreement may be brought in the courts of the
United States of America located in the Southern District of New York or in the courts of the State
of New York located in the Borough of Manhattan. By the execution of this Agreement, Chindex
irrevocably submits to the jurisdiction of any such court in any such action, suit or proceeding.
Final judgment against Chindex 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.

 

- 48 -

     (c) Nothing in this Agreement shall affect the right of IFC to commence legal proceedings or
otherwise sue Chindex or any Onshore Borrower in the Country or any other appropriate jurisdiction,
or concurrently in more than one jurisdiction, or to serve process, pleadings and other legal
papers upon Chindex or any Onshore Borrower in any manner authorized by the laws of any such
jurisdiction.

     (d) Chindex hereby irrevocably designates, appoints and empowers CT Corporation System, with
offices currently located at 111 Eighth Avenue, 13th Floor, New York, New York 10011, 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.

     (e) As long as this Agreement remains in force, Chindex 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. Chindex shall keep IFC advised of the identity and
location of such agent.

     (f) Chindex 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
Chindex, at its address specified pursuant to Section 7.02 (Notices). In such a case, IFC shall
also send by facsimile, or have sent by facsimile, a copy of the papers to Chindex.

     (g) Service in the manner provided in Sections 7.05 (d), (e) and (f) in any action, suit or
proceeding will be deemed personal service, will be accepted by Chindex as such and will be valid
and binding upon the Onshore Borrower for all purposes of any such action, suit or proceeding.

     (h) Chindex 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;
	 
	 	(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

 

- 49 -

	 	(iv)	 	any and all rights to demand a trial by jury in any
such action, suit or proceeding brought against such party by IFC.

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

     (j) Chindex hereby acknowledges 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. Chindex
hereby waives any and all rights to demand a trial by jury in any action, suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated by this Agreement,
brought against IFC in any forum in which IFC is not entitled to immunity from a trial by jury.

     (k) To the extent that Chindex may, in any action, suit or proceeding brought in any of the
courts referred to in Section 7.05 (b) or a court of the Country or elsewhere arising out of or in
connection with this Agreement or any other Transaction
Document to which Chindex is a party, 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 Chindex, or to post a bond
or to take similar action, Chindex hereby irrevocably waives such benefit, in each case to the
fullest extent now or in the future permitted under the laws of the Country or, as the case may be,
the jurisdiction in which such court is located.

     Section 7.06. Disclosure of Information. (a) IFC may disclose any documents or
records of, or information about, this Agreement or any other Transaction Document, or the assets,
business or affairs of Chindex to:

	 	(i)	 	its outside counsel, auditors and rating agencies,
	 
	 	(ii)	 	any Person who intends to purchase a participation in a
portion of the Loan or any Participant, and
	 
	 	(iii)	 	any other Person as IFC may deem appropriate in
connection with any proposed sale, transfer, assignment or other disposition
of IFC’s rights under this Agreement or any Transaction Document or
otherwise for the purpose of exercising any power, remedy, right, authority,
or discretion relevant to this Agreement or any other Transaction Document.

 

- 50 -

     (b) Chindex acknowledges and agrees that, notwithstanding the terms of any other agreement
between Chindex and IFC, a disclosure of information by IFC in the circumstances contemplated by
Section 7.06 (a) does not violate any duty owed to Chindex under this Agreement or under any such
other agreement.

     Section 7.07. Successors and Assignees. This Agreement binds and benefits the
respective successors and assignees of the parties. However, Chindex may not assign or delegate any
of its rights or obligations under this Agreement without the prior consent of IFC.

     Section 7.08. Amendments, Waivers and Consents. Any amendment or waiver of, or any
consent given under, any provision of this Agreement shall be in writing and, in the case of an
amendment, signed by the parties.

     Section 7.09. Counterparts. This Agreement may be executed in several counterparts,
each of which is an original, but all of which together constitute one and the same agreement.

     Section 7.10. Local Loan Agreement; Separate Transactions. It is the intention of
the parties that the transactions contemplated hereby be documented under separate Local Loan
Agreements, and related Transaction Documents, for each Onshore Borrower as
soon as such Onshore Borrower is formed and validly existing. Accordingly, upon execution of a
Local Loan Agreement by any Onshore Borrower, Chindex’s obligations hereunder with respect to such
Onshore Borrower shall immediately terminate.

[Signature pages to follow]

 

 

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

	 	 	 	 	 	 	 

	 	 	CHINDEX INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Roberta Lipson	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	Roberta Lipson	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	Chief Executive Officer	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	INTERNATIONAL FINANCE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Guy Ellena	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	Guy Ellena, Director	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	Health and Education Department 

International Finance Corporation	 	 
	 

	 	 	 	 

	 	 

 

- 2 -

ANNEX A1

Page 1 of 2

PROJECT COST AND FINANCIAL PLAN

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Project Costs	 	 	 	 	 	 	 	 	 
	USD ‘000	 	2008	 	 	2009	 	 	Total	 
	 
	BJU2
	 	 	 	 	 	 	 	 	 	 	 	 
	Building
	 	 	11,847	 	 	 	15,006	 	 	 	26,853	 
	Equipment
	 	 	—	 	 	 	11,382	 	 	 	11,382	 
	Interest
	 	 	385	 	 	 	1,187	 	 	 	1,572	 
	Working Capital
	 	 	—	 	 	 	6,019	 	 	 	6,019	 
	Startup / Contingency
	 	 	1,266	 	 	 	1,266	 	 	 	2,532	 
	 
	 	 	 	 	 	 	 	 	 
	Total BJU2
	 	 	13,498	 	 	 	34,860	 	 	 	48,358	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	GZU
	 	 	 	 	 	 	 	 	 	 	 	 
	Building
	 	 	10,008	 	 	 	13,167	 	 	 	23,174	 
	Equipment
	 	 	—	 	 	 	11,382	 	 	 	11,382	 
	Interest
	 	 	385	 	 	 	1,187	 	 	 	1,572	 
	Working Capital
	 	 	—	 	 	 	5,443	 	 	 	5,443	 
	Startup / Contingency
	 	 	1,266	 	 	 	1,266	 	 	 	2,532	 
	 
	 	 	 	 	 	 	 	 	 
	Total GZU
	 	 	11,659	 	 	 	32,445	 	 	 	44,104	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	GZ Clinic
	 	 	3,603	 	 	 	278	 	 	 	3,881	 
	 
	 	 	 	 	 	 	 	 	 
	Total Uses of Funds
	 	 	28,760	 	 	 	67,583	 	 	 	96,343	 
	 
	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financing Plan	 	 	 	 	 	 	 	 	 
	USD ‘000	 	2008	 	 	2009	 	 	Total	 
	 
	Equity:
	 	 	 	 	 	 	 	 	 	 	 	 
	JPM
	 	 	50,000	 	 	 	—	 	 	 	50,000	 
	IFC
	 	 	10,000	 	 	 	—	 	 	 	10,000	 
	DEG
	 	 	—	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 
	Total Equity
	 	 	60,000	 	 	 	—	 	 	 	60,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Debt:
	 	 	 	 	 	 	 	 	 	 	 	 
	IFC
	 	 	12,500	 	 	 	12,500	 	 	 	25,000	 
	DEG
	 	 	7,500	 	 	 	7,500	 	 	 	15,000	 
	 
	 	 	 	 	 	 	 	 	 
	Total Debt
	 	 	20,000	 	 	 	20,000	 	 	 	40,000	 
	Total External Financing
	 	 	80,000	 	 	 	20,000	 	 	 	100,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Internal Cash Generation
	 	 	—	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 
	Total Sources of Funds
	 	 	80,000	 	 	 	20,000	 	 	 	100,000	 
	 
	 	 	 	 	 	 	 	 	 

 

			
	1	 	Project Costs and Working Capital Requirements
for this Annex A were estimated in RMB and, thereafter converted into Dollars.
Notwithstanding such conversion, in determining compliance with the provisions
of the Loan Agreement and the other Transaction Documents all amounts set forth
above for Project Costs and Working Capital Requirements shall be converted
from Dollars to RMB at the following exchange rate US$1=RMB7.9.

 

- 3 -

ANNEX A

Page 2 of 2

Working Capital Requirements:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Working Capital Needs	 	 	 	 	 	 	 	 	 
	USD ‘000	 	2008	 	 	2009	 	 	Total	 
	 
	BJU2
	 	 	—	 	 	 	6,019	 	 	 	6,019	 
	GZU
	 	 	—	 	 	 	5,443	 	 	 	5,443	 
	 
	 	 	 	 	 	 	 	 	 
	Total
	 	 	—	 	 	 	11,462	 	 	 	11,462	 
	 
	 	 	 	 	 	 	 	 	 

 

- 4 -

[To Be Attached as Annex B to each Local Loan Agreement]

ANNEX B

Page 1 of 1

ONSHORE BORROWER/PROJECT AUTHORIZATIONS

(See Sections 3.01 (d) and 4.01 (c) of the Loan Agreement)

	 	 	 

	Section (1).

	 	Authorizations Already Obtained
	 
	 	 
	(a)

	 	                    
	 
	 	 
	(b)

	 	                    
	 
	 	 
	(c)

	 	                    
	 
	 	 
	Section (2).

	 	Authorizations to be Obtained Prior to First Disbursement
	 
	 	 
	(d)

	 	                    
	 
	 	 
	(e)

	 	                    
	 
	 	 
	(f)

	 	                    
	 
	 	 
	(g)

	 	                    
	 
	 	 
	(h)

	 	                    
	 
	 	 
	(i)

	 	                    
	 
	 	 
	Section (3).

	 	Authorizations to be Obtained no Later than [          ],
	 
	 	 
	(j)

	 	                    
	 
	 	 
	(k)

	 	                    
	 
	 	 
	(l)

	 	                    
	 
	 	 
	(m)

	 	                    

 

- 5 -

[To Be Attached as Annex C to each Local Loan Agreement]

ANNEX C

Page 1 of 1

INSURANCE REQUIREMENTS

(See Section 5.04 (a) of the Loan Agreement)

IFC to be named as (i) a loss payee on policies insuring assets forming part of the Security
and on business interruption policies and (ii) an additional named insured on liability policies.

MINIMUM INSURANCE REQUIREMENTS

	1.	 	CONSTRUCTION/EXPANSION PHASE

	 	a)	 	Construction All Risks, based on full contract value and including:

	 	i)	 	Riot and Strike
	 
	 	ii)	 	Debris Removal
	 
	 	iii)	 	Extra Expenses

iv) Maintenance
	 
	 	v)	 	Third Party Liability

	 	b)	 	Marine all Risks (including war) in respect of transportation of all critical
machinery/equipment.

	2.	 	ONGOING / OPERATIONAL PHASE

	 	a)	 	Fire and named perils or All Risks, based on new replacement cost of assets
	 
	 	b)	 	Business Interruption
	 
	 	c)	 	Third Party Liability
	 
	 	d)	 	Medical Malpractice
	 
	 	g)	 	Professional Liability in respect of medical training program, once this commences

	3.	 	AT ALL TIMES
	 
	a)	 	All insurances required by local legislation.

 

- 6 -

ANNEX D

Page 1 of 3

ANTI-CORRUPTION GUIDELINES FOR IFC TRANSACTIONS

The purpose of these Guidelines is to clarify the meaning of the terms “Corrupt Practices”,
“Fraudulent Practices”, “Coercive Practices”, “Collusive Practices” and “Obstructive Practices” in
the context of IFC operations.

	1.	 	Corrupt Practices

A “Corrupt Practice” is the offering, giving, receiving or soliciting, directly or indirectly, of
anything of value to influence improperly the actions of another party.

     Interpretation

	 	A.	 	Corrupt practices are understood as kickbacks and bribery. The conduct in
question must involve the use of improper means (such as bribery) to violate or
derogate a duty owed by the recipient in order for the payor to obtain an undue
advantage or to avoid an obligation. Antitrust, securities and other violations of
law that are not of this nature are excluded from the definition of corrupt practices.
	 
	 	B.	 	It is acknowledged that foreign investment agreements, concessions and other
types of contracts commonly require investors to make contributions for bona fide
social development purposes or to provide funding for infrastructure unrelated to the
project. Similarly, investors are often required or expected to make contributions to
bona fide local charities. These practices are not viewed as Corrupt Practices for
purposes of these definitions, so long as they are permitted under local law and fully
disclosed in the payor’s books and records. Similarly, an investor will not be held
liable for corrupt or fraudulent practices committed by entities that administer bona
fide social development funds or charitable contributions.
	 
	 	C.	 	In the context of conduct between private parties, the offering, giving,
receiving or soliciting of corporate hospitality and gifts that are customary by
internationally-accepted industry standards shall not constitute corrupt practices
unless the action violates applicable law.
	 
	 	D.	 	Payment by private sector persons of the reasonable travel and entertainment
expenses of public officials that are consistent with existing practice under relevant
law and international conventions will not be viewed as Corrupt Practices.
	 
	 	E.	 	The World Bank Group does not condone facilitation payments. For the
purposes of implementation, the interpretation of “Corrupt Practices” relating to
facilitation payments will take into account relevant law and international
conventions pertaining to corruption.

	2.	 	Fraudulent
Practices

A “Fraudulent Practice” is any action or omission, including misrepresentation, that knowingly or
recklessly misleads, or attempts to mislead, a party to obtain a financial benefit or to avoid an
obligation.

     Interpretation

 

- 7 -

	 	A.	 	An action, omission, or misrepresentation will be regarded as made recklessly
if it is made with reckless indifference as to whether it is true or false. Mere
inaccuracy in such information, committed through simple negligence, is not enough to
constitute a “Fraudulent Practice” for purposes of this Agreement.
	 
	 	B.	 	Fraudulent Practices are intended to cover actions or omissions that are
directed to or against a World Bank Group entity. It also covers Fraudulent Practices
directed to or against a World Bank Group member country in connection with the award
or implementation of a government contract or concession in a project financed by the
World Bank Group. Frauds on other third parties are not condoned but are not
specifically sanctioned in IFC, MIGA, or PRG operations. Similarly, other illegal
behavior is not condoned, but will not be considered as a Fraudulent Practice for
purposes of this Agreement.

	3.	 	 Coercive Practices

A “Coercive Practice” is impairing or harming, or threatening to impair or harm, directly or
indirectly, any party or the property of the party to influence improperly the actions of a party.

     Interpretation

	 	A.	 	Coercive Practices are actions undertaken for the purpose of bid rigging or
in connection with public procurement or government contracting or in furtherance of a
Corrupt Practice or a Fraudulent Practice.
	 
	 	B.	 	Coercive Practices are threatened or actual illegal actions such as personal
injury or abduction, damage to property, or injury to legally recognizable interests,
in order to obtain an undue advantage or to avoid an obligation. It is not intended to
cover hard bargaining, the exercise of legal or contractual remedies or litigation.

	4.	 	Collusive Practices

A “Collusive Practice” is an arrangement between two or more parties designed to achieve an
improper purpose, including to influence improperly the actions of another party.

	 	 	Interpretation
	 
	 	 	Collusive Practices are actions undertaken for the purpose of bid rigging or in connection
with public procurement or government contracting or in furtherance of a Corrupt Practice
or a Fraudulent Practice.
	 
	5.	 	Obstructive Practices

An “Obstructive Practice” is (i) deliberately destroying, falsifying, altering or concealing of
evidence material to the investigation or making of false statements to investigators, in order to
materially impede a World Bank Group investigation into allegations of a corrupt, fraudulent,
coercive or collusive practice, and/or threatening, harassing or intimidating any party to prevent
it from disclosing its knowledge of matters relevant to the investigation or from pursuing the
investigation, or (ii) acts intended to materially impede the exercise of IFC’s access to
contractually required information in connection with a World Bank Group investigation into
allegations of a corrupt, fraudulent, coercive or collusive practice .

     Interpretation

 

- 8 -

	 	 	Any action legally or otherwise properly taken by a party to maintain or preserve its
regulatory, legal or constitutional rights such as the attorney-client privilege,
regardless of whether such action had the effect of impeding an investigation, does not
constitute an Obstructive Practice.

	 	 	General Interpretation

	 	 	A person should not be liable for actions taken by unrelated third parties unless the first
party participated in the prohibited act in question.

 

- 9 -

SCHEDULE 1

Page 1 of 2

FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY

(See Section 1.01 and Section 4.01(j) of the Loan Agreement)

[Onshore Borrower’s Letterhead]

[Date]

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

United States of America

Attention: Director, ____________ Department

Ladies and Gentlemen:

Certificate of Incumbency and Authority

     With reference to the Loan Agreement between us, dated ________, ___ (the “Loan Agreement”),
I, the undersigned [OFFICER’S TITLE] of [INSERT NAME OF APPLICABLE ONSHORE BORROWER] (the “Onshore
Borrower”), duly authorized to do so, hereby certify that the following are the names, offices and
true specimen signatures of the persons [each] [any two] of whom are, and will continue to be,
authorized:

     (a) to sign on behalf of the Onshore Borrower the requests for the disbursement of funds
provided for in Section 2.02 of the Loan Agreement;

     (b) to sign the certifications provided for in Section 4.02 and Section 4.03 of the Loan
Agreement; and

 

- 10 -

SCHEDULE 1

Page 2 of 2

     (c) to take any other action required or permitted to be taken, done, signed or executed under
the Loan Agreement or any other agreement to which IFC and the Onshore Borrower may be parties.

	 	 	 	 	 
	Name*	 	Office	 	Specimen Signature
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 

     You may assume that any such person continues to be so authorized until you receive written
notice from an Authorized Representative of the Onshore Borrower that they, or any of them, is no
longer so authorized.

	 	 	 	 	 
	 	Yours truly,

[APPLICABLE ONSHORE BORROWER]

 	 
	 	By  	 	 
	 	 	[OFFICER’S TITLE] 	 
	 	 	 	 
	 

 

			
	*	 	Designations may be changed by the Onshore
Borrower at any time by issuing a new Certificate of Incumbency and
Authority authorized by the Board of Directors of the Onshore Borrower
where applicable.

 

- 11 -

SCHEDULE 2

Page 1 of 3

FORM OF REQUEST FOR DISBURSEMENT

(See Section 2.02 and Section 4.03 of the Loan Agreement)

[Onshore Borrower’s Letterhead]

[Date]

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

United States of America

Attention: [Director, ____________ Department]

Ladies and Gentlemen:

Investment No. ____

Request for Loan Disbursement No. [     ]*

1. Please refer to the Loan Agreement (the “Loan Agreement”) dated ___________, ___, between
[INSERT NAME OF APPLICABLE ONSHORE BORROWER] (the “Onshore Borrower”) and International Finance
Corporation (“IFC”). Terms defined in the Loan Agreement have their defined meanings whenever used
in this request.

2. The Onshore Borrower irrevocably requests the disbursement on ____________, ____ (or as soon as
practicable thereafter) of the amount of ____________ (____________) under the Loan (the
“Disbursement”) in accordance with the provisions of Section 2.02 of the Loan Agreement. You are
requested to pay such amount to the account in [New York] of [INSERT NAME OF APPLICABLE ONSHORE
BORROWER] [Name of correspondent Bank], Account No. ____________ at [Name and Address of Bank] [for
further credit to the Onshore Borrower’s Account No. ________ at [Name and address of Bank] in
[city and country].

3. For the purpose of Section 4.02 and Section 4.03 of the Loan Agreement, the Onshore Borrower
certifies as follows:

 

			
	*	 	Each to be numbered in series.

 

- 12 -

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

     (b) the proceeds of the Disbursement are at the date of this request needed by the Onshore
Borrower for the purpose of the Project, or will be needed for such purpose within six (6) months
of such date;

     (c) since the date of the Loan Agreement nothing has occurred which has or could reasonably be
expected to have a Material Adverse Effect;

     (d) since [insert date] [the date of the Loan Agreement]** the Onshore Borrower has
not incurred any material loss or liability (except such liabilities as may be incurred by the
Onshore Borrower in accordance with Section 5.02 of the Loan Agreement);

     (e) the representations and warranties made in Article III of the Loan Agreement are true on
the date of this request and will be true on the date of Disbursement with the same effect as if
such representations and warranties had been made on and as of each such date;

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

 

			
	**	 	The date should be the same as is used in Section 3.01
(h) (i). Use the second formulation if the Onshore Borrower is a start-up
company which did not deliver meaningful financial statements prior to the
date of the Loan Agreement.

 

- 13 -

SCHEDULE 2

     (g) after giving effect to the Disbursement, the Onshore Borrower will not be in violation of:

	 	(i)	 	its Charter;
	 
	 	(ii)	 	any provision contained in any document to which the Onshore
Borrower is a party (including the Loan Agreement) or by which the Onshore
Borrower is bound; or
	 
	 	(iii)	 	any law, rule, regulation, Authorization or agreement or
other document binding on the Onshore Borrower directly or indirectly,
limiting or otherwise restricting the Onshore Borrower’s borrowing power or
authority or its ability to borrow; and

     The above certifications are effective as of the date of this Request for Disbursement and
shall continue to be effective as of the date of the Disbursement. If any of these certifications
is no longer valid as of or prior to the date of the requested Disbursement, the Onshore Borrower
undertakes to immediately notify IFC.

	 	 	 	 	 
	 	Yours truly,

[INSERT NAME OF APPLICABLE ONSHORE BORROWER]

 	 
	 	By  	 	 
	 	 	Authorized Representative 	 
	 	 	 	 
	 

	Copy to:	 	Director, Department of Financial Operations

International Finance Corporation

 

- 14 -

SCHEDULE 3

Page 1 of 1

FORM OF DISBURSEMENT RECEIPT

(See Section 2.02 of the Loan Agreement)

[Onshore Borrower’s Letterhead]

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

United States of America

Attention: Director, Department of Financial Operations

Ladies and Gentlemen:

Investment No. ____

Disbursement Receipt No. [     ]*

     We, [INSERT NAME OF APPLICABLE ONSHORE BORROWER] hereby acknowledge receipt on the date
hereof, of the sum of ___________ (___) disbursed to us by International Finance Corporation
(“IFC”) under the Loan of __________ (___) provided for in the Loan Agreement dated ______, ____
between our company and International Finance Corporation.

	 	 	 	 	 
	 	Yours truly,

[INSERT NAME OF APPLICABLE ONSHORE BORROWER.]

 	 
	 	By  	 	 
	 	 	Authorized Representative** 	 
	 	 	 	 
	 

 

			
	*	 	To correspond with number of the Disbursement
request. See Schedule 2.
	 
	**	 	As named in the Onshore Borrower’s
Certificate of Incumbency and Authority (see Schedule 1).

 

- 15 -

SCHEDULE 4

Page 1 of 2

FORM OF SERVICE OF PROCESS LETTER

[Letterhead of Agent for Service of Process]

(See Section 4.01 (j) of the Loan Agreement)

New York Law Version

[Date]

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

Attention: _______________

Re: [Country/_________]

Dear Sirs:

     Reference is made to [(i)] Section 7.05(d) of the Loan Agreement dated _______ (the “Loan
Agreement”) between [INSERT NAME OF APPLICABLE ONSHORE BORROWER] (the “Onshore Borrower”) and
International Finance Corporation (“IFC”), [and] [(ii) Section ___ of the ______ dated _______
between the Onshore Borrower, ________ and IFC]. Unless otherwise defined herein, capitalized
terms used herein shall have the meaning specified in the Loan Agreement.

     Pursuant to [each of] Section 7.05(d) of the Loan Agreement [and Section _(_) of the
____________,] the Onshore Borrower has irrevocably designated and appointed the undersigned, [CT
Corporation System,] with offices currently located at [111 Eighth Avenue, 13th Floor,
New York, New York 10011,] as its authorized agent to receive for and on its behalf service of
process in any legal action or proceeding with respect to [each of] the Loan Agreement [and the
__________] in the courts of the United States of America for the Southern

 

- 16 -

SCHEDULE 4

Page 2 of 2

District of New York or in the courts of the State of New York located in the Borough of Manhattan.

     The undersigned hereby informs you that it has irrevocably accepted that appointment as
process agent as set forth in [each of] Section 7.05(d) of the Loan Agreement [and Section _(_) of
the ____________], [in each case] from _______ until ___________ and agrees with you that the
undersigned (i) shall inform IFC promptly in writing of any change of its address in [New York],
(ii) shall perform its obligations as such process agent in accordance with the relevant provisions
of [each of] Section 7.05 of the Loan Agreement [and Section _(_) of the ____________], and (iii)
shall forward promptly to the Onshore Borrower any legal process received by the undersigned in its
capacity as process agent.

     As process agent, the undersigned and its successor or successors agree to discharge the
above-mentioned obligations and will not refuse fulfillment of such obligations as provided under
[any of] Section 7.05 (d) of the Loan Agreement [and Section _(_) of the ____________].

	 	 	 	 	 
	 	Very truly yours,

[CT Corporation System]

 	 
	 	By  	 	 
	 	 	     Title: 	 
	 	 	 	 
	 

cc: [Onshore Borrower]

 

- 17 -

Alternative Version

SCHEDULE 5 (A)

Page 1 of 2

MATTERS TO BE COVERED IN LOCAL COUNSEL’S LEGAL OPINION

(See Section 4.01 (d) of the Loan Agreement)

The legal opinion of IFC’s counsel in the Country should cover the following matters:

	 	(a)	 	the organization, existence and operations of the Onshore Borrower and its
authorized and subscribed capital stock;
	 
	 	(b)	 	the matters referred to in subsections (a), (b) and (c), of Section 4.01 of
the Loan Agreement;
	 
	 	(c)	 	the title of the Onshore Borrower to, or other interest of the Onshore
Borrower in, [the assets which are the subject of the IFC Security Onshore Borrower’s
immovable and moveable assets;
	 
	 	(d)	 	the title of the Guarantor to and in their shares in the Onshore Borrower;
	 
	 	(e)	 	the authorization, execution, validity and enforceability of this Agreement,
each of the other Transaction Documents (Except for Security Documents) and any other
documents necessary or desirable to the implementation of any of those agreements or
documents (other than those authorizations which can be expected to be obtained in the
ordinary course of business and which it would be unreasonable to require at the time
of the first Disbursement);
	 
	 	(f)	 	the compliance with all obligations referred to in Section 2.16 (a)
(Expenses);
	 
	 	(g)	 	the liens, priorities or privileges, if any, that creditors of the Onshore
Borrower, other than IFC, may have by reason of law;

 

- 18 -

SCHEDULE 5 (A)

Page 2 of 2

	 	(h)	 	IFC’s repatriation rights in respect of the Loan and the IFC Security; and
	 
	 	(i)	 	such other matters relating to the transactions contemplated by this
Agreement as IFC reasonably requests.

 

 

- 19 -

SCHEDULE 6

FORM OF LETTER TO ONSHORE BORROWER’S AUDITORS

(See Section 4.01(h) and Section 5.01(e) of

the Loan Agreement)

[Onshore Borrower’s Letterhead]

[Date]

[NAME OF AUDITORS]

[ADDRESS]

Ladies and Gentlemen:

     We hereby authorize and request you to give to International Finance Corporation of 2121
Pennsylvania Avenue, N.W., Washington, D.C. 20433, United States of America (“IFC”), all such
information as IFC may reasonably request with regard to the financial statements (both audited and
unaudited). We have agreed to supply that information and those statements under the terms of a
Loan Agreement between the undersigned company and IFC dated ___________, ____ (the “Loan
Agreement”). For your information we enclose a copy of the Loan Agreement.

     For our records, please ensure that you send to us a copy of every letter that you receive
from IFC immediately upon receipt and a copy of each reply made by you immediately upon the issue
of that reply.

Yours truly,

	 	 	 	 	 
	 	[INSERT NAME OF APPLICABLE ONSHORE

BORROWER.]

 	 
	 	By  	 	 
	 	 	Authorized Representative 	 
	 	 	 	 
	 

Enclosure

			
	cc:	 	Director

[Name of Department]

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

United States of America

 

- 20 -

SCHEDULE 7

Page 1 of 2

FORM OF ONSHORE BORROWER’S CERTIFICATION

ON DISTRIBUTION OF DIVIDENDS

(See Section 5.02 (a) of the Loan Agreement)

[Onshore Borrower’s Letterhead]

	 	 	 

	International Finance Corporation

	 	[Date]
	2121 Pennsylvania Avenue, N.W.
	 	 
	Washington, D.C. 20433
	 	 
	Attention:                                         

	 	Re: [Country/                                        ] 

Dear Sirs:

1. Please refer to the Loan Agreement (the “Loan Agreement”) dated ____________, ____ between
[INSERT NAME OF APPLICABLE ONSHORE BORROWER.]] (the “Onshore Borrower”) and International
Finance Corporation (“IFC”). Terms defined in the Loan Agreement have their defined meanings
whenever used in this request.

2. This is to inform you that the Onshore Borrower plans a distribution of dividends to its
shareholders in the aggregate amount of ______________ (______), such distribution to commence on
or about _________, _. Pursuant to Section 5.02 (a) of the Loan Agreement, the Onshore Borrower
hereby certifies that, as at the date hereof:

	 	(a)	 	the proposed distribution will be out of retained earnings and such retained
earnings do not include any amount resulting from the revaluation of any of the
Onshore Borrower’s assets;
	 
	 	(b)	 	the Project Physical Completion Date has occurred;
	 
	 	(c)	 	such payment is made within ninety (90) days after an Interest Payment Date;
	 
	 	(d)	 	after giving effect to the proposed distribution:

 

- 21 -

SCHEDULE 7

Page 2 of 2

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

	(ii)	 	cash balance is not less than the next principal payment
amount of the IFC Loan.

3. The Onshore Borrower undertakes not to give effect to the proposed distribution
or any part thereof if, at the time of so doing or after giving effect to it, the
Onshore Borrower could not certify the matters in section 2 of this certification.

Yours truly,

[INSERT NAME OF APPLICABLE ONSHORE BORROWER]

	 	 	 	 	 	 	 

	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 

 

- 22 -

SCHEDULE 8

Page 1 of 3

INFORMATION TO BE INCLUDED IN ANNUAL AND QUARTERLY

REVIEW OF OPERATIONS 

(See Sections 5.03 (a) (ii) and (d) of the Loan Agreement)

	(1)	 	Sponsors and Shareholdings. Information on significant changes in share
ownership of the Onshore Borrowers, the reasons for such changes, and the identity of
major new shareholders.

	(2)	 	Country Conditions and Government Policy. Report on any material
changes in local conditions, including government policy changes, that directly affect
the Onshore Borrowers (e.g. changes in government economic strategy, health sector
policy, taxation, foreign exchange availability, price controls, and other areas of
regulations.)

	(3)	 	Management and Technology. Information on significant changes in (i)
the Onshore Borrower’s senior management or organizational structure, and (ii)
technology used by the Onshore Borrowers, including technical assistance arrangements.

	(4)	 	Corporate Strategy. Description of any changes to the Onshore
Borrowers’ corporate or operational strategy, including changes in service profile,
degree of integration, and business emphasis.

	(5)	 	Markets. Brief analysis of changes in the Onshore Borrowers’ market
conditions (both primary and secondary), with emphasis on changes in reimbursement
structure, market share and degree of competition.

 

- 23 -

	(6)	 	Operating Performance. Discussion of the following operating
indicators by Chindex on a consolidated basis, MPD, UFH business by
markets, eg, Shanghai, Beijing and Guangzhou, etc.

	 	 	 	 	 	 	 	 	 
	Financial Information to be	 	 	 	 	 	 	 
	Provided on a Quarterly Basis	 	 	 	 	 	 	 
	(Including Previous Quarter	 	 	 	 	 	 	 
	for Comparison)	 	 	 	 	 	 	 
	Indicator	 	[__]Q 2[___]	 	 	[__]Q 2[___]	 
	OPERATIONAL:
	 	 	 	 	 	 	 	 
	Outpatient visits per day
	 	 	 	 	 	 	 	 
	Inpatient Admissions
	 	 	 	 	 	 	 	 
	Inpatient Days
	 	 	 	 	 	 	 	 
	Beds in Service
	 	 	 	 	 	 	 	 
	Occupancy Rate
	 	 	 	 	 	 	 	 
	ALOS
	 	 	 	 	 	 	 	 
	Number of Physicians
	 	 	 	 	 	 	 	 
	Number of Nurses
	 	 	 	 	 	 	 	 
	Number of Employees
	 	 	 	 	 	 	 	 
	Revenue/Inpatient Day (Admission)
	 	 	 	 	 	 	 	 
	Revenue/Outpatient Visit
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	FINANCIAL
	 	 	 	 	 	 	 	 
	Revenue
	 	 	 	 	 	 	 	 
	EBITDA
	 	 	 	 	 	 	 	 
	SWB as a % of Revenue
	 	 	 	 	 	 	 	 
	Net Profit
	 	 	 	 	 	 	 	 
	Current Assets
	 	 	 	 	 	 	 	 
	Total Assets
	 	 	 	 	 	 	 	 
	Current Liabilities
	 	 	 	 	 	 	 	 
	Total Liabilities
	 	 	 	 	 	 	 	 
	Short Term Debt
	 	 	 	 	 	 	 	 
	Long Term Debt
	 	 	 	 	 	 	 	 
	Change in Working Capital
	 	 	 	 	 	 	 	 
	A/R Days
	 	 	 	 	 	 	 	 
	Inventory Days
	 	 	 	 	 	 	 	 
	A/P Days
	 	 	 	 	 	 	 	 
	Total Operating Cash Flow
	 	 	 	 	 	 	 	 
	Capex (both maintenance and
discretionary)
	 	 	 	 	 	 	 	 

	(7)	 	Financial Condition. Key financial ratios for previous year,
compared with ratios covenanted in the Loan Agreement.
	 
	(8)	 	Project Plan: Proposed plan prior to the finalizing of the
applicable principal joint venture contract:

 

- 24 -

	 	a.	 	the proposed capital budget, including proposed working
capital and contingency amounts, the proposed plan for the construction,
commencement of operations, staffing, training and marketing;
	 
	 	b.	 	a proposed general time schedule for the material
expenditures contemplated in such budget; and
	 
	 	c.	 	any other information that IFC may reasonably request
regarding the new JV hospitals.

	(9)	 	Progress Report: a project progress report in respect of each
hospital and clinic project then under construction as generally compared with the
relevant budget for that project including but not limited to:

	 	a.	 	Cost changes — changes in estimated costs of major costs
elements in Project Cost Data, and reasons for these changes;
	 
	 	b.	 	Timetable changes — revision in the estimated project
completion date and the reasons for the revision;
	 
	 	c.	 	Additional financing arranged or under negotiation —
sources of additional financing to cover cost changes; and
	 
	 	d.	 	Other matters of importance — issues that were not
anticipated but came to light since the end of the previous reporting
period. Examples are rework needed after failing to pass building
inspections and longshoremen’s strikes preventing the loading and delivery
of imported machinery.

	(10)	 	Approval Status Report: an update on the status of receipt or
expected receipt of material permits, approvals, consents obtained and to be obtained
from any Governmental Authority for the construction, development and operation of
each of each new hospital or clinic.

	(11)	 	Development Impact Report: an annual report for each hospital and
clinic project within 120 days of the financial year including:

	 	a.	 	EBITDA for the past 12 months;
	 
	 	b.	 	Taxes paid to the government (both business taxes and
income taxes) for the past 12 months;
	 
	 	c.	 	Number of employees;
	 
	 	d.	 	Number of outpatients served;
	 
	 	e.	 	Number of inpatients treated;
	 
	 	f.	 	Value of training provided to staff for the past 12
months (both an average per staff member and an aggregate amount); and
	 
	 	g.	 	Value of free or discounted treatment provided to
patients for the past 12 months.

 

- 25 -

SCHEDULE 9

SPECIAL REPRESENTATIONS AND WARRANTIES

[to be inserted as Section 3.01 of each Local Loan Agreement]

     (a) Organization and Authority. The Onshore Borrower is a Sino-foreign joint
venture enterprise duly incorporated and validly existing under the laws of the People’s Republic
of China and has the corporate power and has obtained all required Authorizations to own its
material assets, conduct its business as presently conducted and to enter into, and comply with its
obligations under, the Transaction Documents to which it is a party or will, in the case of any
Transaction Document not executed as at the date of this Agreement, when that Transaction Document
is executed, have the corporate power to enter into, and comply with its obligations under, that
Transaction Document;

     (b) Validity. Each Transaction Document to which the Onshore Borrower is a party has
been, or will be, duly authorized and executed by the Onshore Borrower and constitutes, or will
when executed, or where the relevant approval or registration is required for such document to be
legally valid, when such approval or registration is obtained, constitute, a valid and legally
binding obligation of the Onshore Borrower, enforceable in accordance with its terms and none of
the Project Documents has been, or will be, amended or modified except as permitted under this
Agreement;

     (c) No Conflict. Neither the making of any Transaction Document to which the Onshore
Borrower is a party nor (when all the Authorizations referred to in Section 4.01(c) (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 the
Onshore Borrower is a party or by which it is bound, or violate any of the terms or provisions of
the Onshore Borrower’s Charter or any Authorization, judgment, decree or order or any statute, rule
or regulation applicable to the Onshore Borrower;

     (d) Status of Authorizations. (i) To the best of the Onshore Borrower’s knowledge,
after due inquiry:

	 	(A)	 	the Authorizations specified in Annex B
are all the material Authorizations (other than Authorizations that
are of a routine nature and are obtained in the ordinary course of
business) needed by the Onshore 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;
	 
	 	(B)	 	all Authorizations specified in Section
(1) of Annex B have been obtained and are in full force and effect;
and
	 
	 	(C)	 	the Onshore Borrower has applied (or is
making arrangements to apply) for all Authorizations specified in
Section (2) of

 

- 26 -

	 	 	 	Annex B, and has no reason to believe that it will not obtain
those Authorizations in a timely manner;

	 	 	 	and
	 
	 	(ii)	 	except for rights that can reasonably be expected to be
obtained on commercially reasonable terms at the time required, the Project
Documents contain all rights that are necessary for:

	 	(A)	 	the construction, completion, operation
and ownership of the Project, and
	 
	 	(B)	 	the conduct of the business of the
Onshore Borrower as contemplated by the Transaction Documents;

	 	 	and have not been amended in any material respect.

     (e) No Amendments to Charter. The Onshore Borrower’s Charter has not been amended
since the date of its establishment.

     (f) No Immunity. Neither the Onshore Borrower nor any of its property enjoys any right
of immunity from set-off, suit or execution with respect to its assets or its obligations under any
Transaction Document;

     (g) Financial Condition. Since the date of its establishment, the Onshore Borrower has
not suffered any change that has a Material Adverse Effect.

     (h) Financial Statements. The financial statements of the Chindex for the period
ending on July 1, 2007:

	 	(i)	 	have been prepared in accordance with the Accounting
Standards, and give a true and fair view of the financial condition of
Chindex as of the date as of which they were prepared and the results of the
Chindex’s operations during the period then ended;
	 
	 	(ii)	 	disclose all material liabilities (contingent or
otherwise) of the Chindex, and the reserves, if any, for such liabilities
and all unrealized or anticipated liabilities and losses arising from
commitments entered into by the Chindex (whether or not such commitments
have been disclosed in such financial statements);

     (i) Title to Assets and Permitted Liens. The Onshore Borrower 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, other than
Permitted Liens, and no contracts or arrangements, conditional or unconditional, exist for the
creation by the Onshore Borrower of any Lien, except for the IFC Security;

     (k) Taxes. All tax returns and reports of the Onshore Borrower required by law to be
filed have been duly filed and all Taxes, obligations, fees and other governmental charges upon

 

- 27 -

the Onshore Borrower, or its properties, or its income or assets, which are due and payable or to be
withheld, have been paid or withheld, other than those presently payable without penalty or
interest, other than such Taxes that are being contested in good faith and Onshore Borrower shall
have made adequate reserves;

     (l) Litigation.

	 	(i)	 	The Onshore Borrower is not engaged in nor, to the best
of its knowledge, after due inquiry, threatened by, any litigation,
arbitration or administrative proceedings, the outcome of which would
reasonably be expected to have a Material Adverse Effect; and
	 
	 	(ii)	 	no judgment or order has been issued which has would
reasonably be expected to have a Material Adverse Effect;

     (m) Compliance with Law. To the best of its knowledge and belief after due inquiry,
the Onshore Borrower is not in violation of any applicable statute or regulation of any applicable
Authority;

     (n) Environmental Matters.

	 	(i)	 	to the best of its knowledge and belief, after due
inquiry, there are no material social or environmental risks or issues in
relation to the Project other than those identified by the S&EA; and
	 
	 	(ii)	 	it has not received nor is aware of either (A) any
existing or threatened complaint, order, directive, claim, citation or
notice from any Authority or (B) any material written communication from any
Person concerning the Project’s failure to comply with any matter covered by
the Performance Standards which failure has, or could reasonably be expected
to have, a Material Adverse Effect;

     (o) Labor Matters. There are no ongoing or, to the best knowledge of the Onshore
Borrower after due inquiry, threatened, strikes, slowdowns or work stoppages by employees of the
Onshore Borrower or any contractor with respect to the Project, in each case, which could
reasonably be expected to have a Material Adverse Effect;

     (p)  Sanctionable Practices. Neither of the Onshore Borrower, the Guarantor
or any Affiliates, nor any Person acting on its or their behalf, has committed or engaged in, with
respect to the Project or any transaction contemplated by this Agreement, any Sanctionable
Practice; and

     (q) No Material Omissions. None of the representations and warranties in this Section
3.01 omits any matter the omission of which makes any of such representations and warranties
misleading in any material respect.

 

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SCHEDULE 10

SPECIAL COVENANTS

     Section 5.01. Affirmative Covenants. Unless IFC otherwise agrees in writing,
the Onshore Borrower shall:

     (a) Corporate Existence; Conduct of Business. Maintain its corporate existence,
comply with its Charter, and implement the Project and conduct its business with due diligence and
efficiency and in accordance with sound financial and business practices;

     (b) Use of Proceeds. Cause the financing specified in the Financial Plan to be
applied exclusively to the Project and related costs and expenses;

     (c) Compliance with Laws; Taxes:

	 	(i)	 	conduct its business in compliance, in all material
respects, with all applicable requirements of law; and
	 
	 	(ii)	 	file by the date due all returns, reports and filings in
respect of Taxes required to be filed by it and pay, when due, all Taxes due
and payable by it, unless the payment of such Taxes are being contested in
good faith and Onshore Borrower shall have made adequate reserves;

     (d) Accounting and Financial Management. Promptly install and maintain an accounting
and control system, management information system and books of account and other records, which
together adequately give a fair and true view of the financial condition of the Onshore Borrower
and the results of its operations in conformity with the Accounting Standards;

     (e) Auditors.

	 	(i)	 	Appoint and maintain at all times a firm of recognized
independent public accountants acceptable to IFC as auditors of the Onshore
Borrower, provided that Shangai JaHwa Certified Public and its affiliates,
or any other Chinese accounting firm of similar reputation, shall be deemed
acceptable to IFC; and
	 
	 	(ii)	 	irrevocably authorize, in the form of Schedule 6, the
Auditors (whose fees and expenses shall be for the account of the Onshore
Borrower) to communicate directly with IFC at any time regarding the Onshore
Borrower’s financial statements (both audited and unaudited), and provide to
IFC a copy of that authorization; and
	 
	 	(iii)	 	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;

     (f) Access. Upon IFC’s request, and with reasonable prior notice to the Onshore
Borrower, permit representatives of IFC and the CAO, during normal office hours, to:

 

- 29 -

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

provided that all communications from IFC, CAO or their representatives shall be directed through
Roberta Lipson, Lawrence Pemble or another person designated by them.

Notwithstanding the foregoing paragraph, (i) no such reasonable prior notice shall be necessary if
an Event of Default is continuing;

     (g) Environmental Matters. (i) Review of Annual Monitoring Report.
Periodically review the form of the Annual Monitoring Report and advise IFC as to whether revision
of the form is necessary or appropriate in light of changes to the Onshore Borrower’s business or
operations, or in light of environmental or social risks identified by the Onshore Borrower’s S&E
Management System; and revise the form as agreed with IFC; (ii) Use all commercially reasonable
efforts to ensure the continuing implementation and operation of the S&E Management System to
assess and manage the social and environmental performance of the Project in a manner consistent
with the Performance Standards; (iii) Use all reasonable efforts to ensure that the design,
construction, operation, maintenance, management and monitoring of the Project’s sites, plants,
equipment, operations and facilities are undertaken, in all material respects, compliance with the
Performance Standards and the ESRS.

     (i) Authorizations.

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

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

     (j) Security; Further Assurances. Perfect the IFC Security no less than one (1)
Business Day prior to the date on which the Onshore Borrower issues to IFC a Disbursement Request
in the form attached as Schedule 2; and 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 IFC Security or for
re-registering the IFC Security or otherwise and, if necessary, create and perfect

 

- 30 -

additional Security, to enable the Onshore Borrower to comply with its obligations under the
Transaction Documents.

     (k) Insurance. Maintain insurance coverages for the business and assets of the
Onshore Borrower, as specified in Annex C; and

     (l) Assignment of Shareholder Loans. Include IFC as a signatory and beneficiary under
any shareholder loan agreement to be entered into between the Onshore Borrower and Chindex, and
include terms reasonably satisfactory to IFC providing the IFC, during the continuance of an Event
of Default hereunder, the right to accelerate the shareholder loan and requiring the Onshore
Borrower to repay all principal and interest directly to IFC, in each case, upon the delivery of
the IFC of a notice that an Event of Default hereunder has occurred, provided however, that (i)
such rights shall terminate with immediate effect upon the termination of the Share Pledge
Agreement; and (ii) IFC’s right to receive payment of shareholders loans shall in no event exceed
the aggregate amount of any principal and interest on the Loan outstanding under the Local Loan
Agreement at the time of any such notice of the occurrence of an Event of Default hereunder.

     Section 5.02. Negative Covenants. Unless IFC otherwise agrees, the Onshore Borrower
shall not:

     (a) Distributions. Declare or pay any dividend or make any cash distribution on its
share capital or make a payment under any subordinated Financial Debt (including shareholder loans)
unless:

	 	(i)	 	the Project Physical Completion Date has occurred;
	 
	 	(ii)	 	such payment is made within ninety (90) days after an
Interest Payment Date;
	 
	 	(iii)	 	in case of dividends, the proposed payment or
distribution is out of retained earnings; provided always that the retained
earnings out of which any of the payments or distributions referred to in
this paragraph (iii) may be made should in no event include any amount
resulting from the revaluation of any of the Onshore Borrower’s assets;
	 
	 	(iv)	 	after giving effect to any such action:

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

	 	(B)	 	cash balance is not less than the next
principal payment amount of the Loan.

	 	(v)	 	no earlier than sixty (60) days nor later than thirty
(30) days prior to doing so, the Onshore Borrower certifies to each of the
matters referred to in Section 5.02 (a) (i)-(iv) hereto to IFC in writing,
in the form attached as Schedule 7;

 

- 31 -

     (b) Capital Expenditures. Other than the Project, incur expenditures or commitments
for expenditures for fixed or other non-current assets except that after the Project Physical
Completion Date such capital expenditures may be made if after giving effect to such expenditures
the Prospective Debt Service and Capital Expenditure Coverage Ratio based on the most recent
Consolidated Financial Statements of Chindex is not less than 1.0;

     (c) Permitted Financial Debt. Incur, assume or permit to exist any Financial Debt
except:

	 	(i)	 	the Loan;
	 
	 	(ii)	 	additional Financial Debt specified in the Financial Plan;
	 
	 	(iii)	 	subordinated Financial Debt (including shareholder
loans) with its terms acceptable to IFC
	 
	 	(iv)	 	Short-term Debt incurred in the ordinary course of
business not exceeding RMB 2 million; and
	 
	 	(vi)	 	equipment finance after Project Physical Completion Date
provided that after taking into effect the transaction,

(a) the Liabilities to Tangible Net Worth Ratio based on the most recent
Chindex Consolidated Financial Statements is not greater than 1.2;

(b) Peak Debt Service Coverage Ratio based on the most recent Chindex
Consolidated Financial Statements is not less than 1.2.

(c) the Liabilities to Tangible Net Worth Ratio based on the most recent
Onshore Borrower’s financial statements is not greater than 1.2; and

(d) the Peak Debt Service Coverage Ratio based on the most recent
Onshore Borrower’s financial statements is not less than 1.0].

     (d) Leases. Enter into any agreement or arrangement to lease any property or
equipment of any kind, except (i) Financial Leases, and then only to the extent permitted under the
other provisions of this Section 5.02 and (ii) otherwise only to the extent the aggregate payments
under all such agreements or arrangements do not exceed RMB 1,500,000 in any Financial Year.

     (e) Derivative Transactions. Enter into any Derivative Transaction other than any
derivative transaction which is in the ordinary course of business and which is not speculative in
nature and is intended solely to hedge interest rate or currency risk related to existing or future
liabilities or assets of the Onshore Borrowers, or assume the obligations of any party to any
Derivative Transaction;

 

- 32 -

     (f) Guarantees and Other Obligations. 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) Permitted Liens. Create or permit to exist any Lien on any property, revenues or
other assets, present or future, of the Onshore Borrower, except for:

	 	(i)	 	the IFC Security;
	 
	 	(ii)	 	the naming of IFC as loss payee or other named insured
under the Onshore Borrower’s insurance policies;
	 
	 	(iii)	 	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
the Onshore Borrower; and
	 
	 	(B)	 	the Onshore Borrower has set aside
adequate reserves ,.Such reserves to be reasonably determined by
such Onshore Borrower in accordance with applicable accounting
principles; and

     (h) Arm’s Length Transactions. Enter into any transaction except in the ordinary
course of business on the basis of arm’s-length arrangements (including, without limitation,
transactions whereby the Onshore 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) Purchasing or Sales Agency. Establish any sole and exclusive purchasing or sales
agency, other than group purchasing arrangements with Chindex and/or its Subsidiaries;

     (j) Profit Sharing Arrangements. Enter into any partnership, profit-sharing or
royalty agreement or other similar arrangement whereby the Onshore Borrower’s income or profits
are, or might be, shared with any other Person, if the revenue is in excess of $5,000,000 in any
Financial Year;

     (k)Management Contracts. Enter into any management contract or similar arrangement
whereby its business or operations are managed by any other Person other than the Management
Contract with Chindex and/or its Subsidiaries (which, however, is not intended to prevent the
Onshore Borrower from outsourcing departmental functions which are common practice for the type of
business carried out by the Onshore Borrower);

 

- 33 -

     (l) Subsidiaries. Form or have any Subsidiary;

     (n) Fundamental Changes. Change:

	 	(i)	 	its Charter in any manner which would be inconsistent
with the provisions of any Transaction Document;
	 
	 	(ii)	 	its Financial Year; or
	 
	 	(iv)	 	the nature or scope of the Project or change the nature
of its present or contemplated business or operations;

     (o) Asset Sales. 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;

     (p) Merger, Consolidation, Etc. Undertake or permit any merger, spin-off,
consolidation or reorganization;

     (q) Amendments, Waivers, Etc., of Material Agreements. Terminate, amend or grant any
waiver with respect to any provision of the Transaction Documents in any material respect:

     (r) Prepayment of Long-Term Debt. Prepay (whether voluntarily or involuntarily) or
repurchase any Long-term Debt (other than the Loan) pursuant to any provision of any agreement or
note with respect to that Long-term Debt unless:

	 	(i)	 	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 Onshore Borrower as those of the Long-term Debt
being refinanced; or
	 
	 	(ii)	 	the Onshore Borrower gives IFC at least thirty (30) days’
advance notice of its intention to make the proposed prepayment and, if IFC
so requires, the Onshore Borrower contemporaneously prepays a proportion of
the Loan equivalent to the proportion of the part of the Long-term Debt
being prepaid, such prepayment to be made in accordance with the provisions
of Section 2.07 (Prepayment) except that there shall be no minimum amount or
advance notice period for that prepayment;

     (s) Use of Proceeds. Use the proceeds of any Disbursement in the territories of any
country that 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;

     (u) Sanctionable Practices. Engage in (and shall not authorize any Affiliate or any
other Person acting on its behalf to engage in) with respect to the Project or any transaction
contemplated by this Agreement, any Sanctionable Practice. The Onshore Borrower further covenants
that should IFC notify the Onshore Borrower of its concerns that there has been a

 

- 34 -

violation of the
provisions of this Section or of Section 3.01(p) of this Agreement, it shall cooperate in good
faith with IFC and its representatives in 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;

     (v) Loans and Deposits. Make loans or advances to, deposits (except commercial bank
deposits) with or investments in any other Person other than short-term investment grade marketable
securities; and

     (w) Payment of Subordinated Financial Debt. Make any payment of management fees to
Chindex and make any principal or interest payment on any shareholder loans from Chindex if any
Event of Default has occurred or is continuing.

     Section 5.03. Reporting Requirements. Unless IFC otherwise agrees, the Onshore
Borrower shall:

     (a) Quarterly Financial Statements and Reports. 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 the Onshore Borrower’s unaudited
complete financial statements for such quarter prepared on a Consolidated
Basis, in accordance with the Accounting Standards, certified by the Onshore
Borrower’s chief financial officer;
	 
	 	(ii)	 	a report by the Onshore Borrower on its operations during
that quarter, in the form of, and addressing the topics listed in, Schedule
8, including any factors that have or could reasonably be expected to have a
Material Adverse Effect;
	 
	 	(iii)	 	a statement of all transactions during that quarter
between the Onshore Borrower and each of its Affiliates, and a certification
by an Authorized Representative that those transactions were on the basis of
arm’s-length arrangements.

     (b) Annual Financial Statements and Reports. 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 Standards, together with the Auditors’ audit report on them, all
in form satisfactory to IFC;
	 
	 	(ii)	 	a statement by the Onshore Borrower of all transactions
between the Onshore Borrower and each of its Affiliates, if any, during that
Financial Year, and a certification by the Onshore Borrower’s

 

- 35 -

	 	 	 	Authorized Representative that those transactions were on the basis of arm’s-length
arrangements; and
	 
	 	(iii)	 	a capital and operating budget for the next Financial
Year.

     (d) Annual Monitoring Report. Within ninety (90) days after the end of each Financial
Year, deliver to IFC the corresponding Annual Monitoring Report in the form attached as Schedule 13
hereto in a form consistent with the requirements of this Agreement confirming compliance with the
Action Plan, the social and environmental covenants set forth in Sections 5.01 and 5.02 and
Applicable S&E Law, or, as the case may be, identifying any non-compliance or failure, and the
actions being taken to remedy it;

     (e) Notice of Accidents, Etc. Within ten (10) days after its occurrence, notify IFC
of any social, labor, health and safety, security or environmental incident, accident or
circumstance having, or which could reasonably be expected to have, a Material Adverse Effect or
material adverse impact on the implementation or operation of the Project in accordance with the
Performance Standards, specifying in each case the nature of the incident, accident, or
circumstance and any effect resulting or likely to result therefrom, and the measures the Onshore
Borrower is taking or plans to take to address them and to prevent any future similar event; and
keep IFC informed of the on-going implementation of those measures and plans, in each case, if and
to the extent permitted by applicable law. 

     (f) Shareholders Matters. Give notice to IFC, concurrently with the Onshore
Borrower’s notification to its shareholders, of any board meeting of its directors, such notice to
include the agenda of the meeting; and, as soon as available, deliver to IFC two (2) copies of: all
notices, reports and other communications of the Onshore 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;

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

     (h) Litigation, Etc. Promptly upon becoming aware of any litigation or administrative
proceedings before any Authority or arbitral body which has or would 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 the Onshore Borrower is taking or proposes to take
with respect thereto;

     (i) Default. 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 Onshore Borrower is taking to remedy it;

     (j) Other Information. Promptly provide to IFC such other information as IFC from time to
time reasonably requests about the Onshore Borrower, its assets and the Project; and

     (k) Insurance Information. provide to IFC, in a timely manner of any obtained
insurance certificates and other insurance information.

 

- 36 -

     Section 5.04. Insurance.

     (a) Insurance Requirements and Onshore Borrower’s Undertakings. Unless IFC otherwise
agrees, the Onshore Borrower shall:

	 	(i)	 	insure and keep insured, with financially sound and
reputable insurers, all its assets and business against all insurable
losses, including the insurances specified in Annex C 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
Onshore 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 Onshore 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 under this Agreement 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 obligation) on its own behalf to procure that insurance at the expense of
the Onshore 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 Onshore 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 Onshore Borrower receive at least forty-five (45) days’
notice (or such lesser period as IFC may agree with respect to cancellation,
suspension or termination in the event of war and kindred peril) prior to
the effective date of termination, cancellation or suspension;
	 
	 	(ii)	 	IFC (and all contractors working at the Project site) are
named as additional named insured on all liability policies;

 

- 37 -

	 	(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;
	 
	 	(iv)	 	on every insurance policy on the Onshore Borrower’s
assets which are the subject of the IFC Security and for business
interruption, IFC is named as loss payee for any claim, or any series of
claims arising with respect to the same event, whose aggregate amount is the
equivalent of one million Dollars ($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 Onshore Borrower to repair or replace the
relevant damaged assets or may apply those 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 2.07 (Prepayment); provided that
there shall be no minimum amount or notice period for any such prepayment.
	 
	 	(ii)	 	The Onshore 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 Onshore Borrower shall
provide to IFC the following:

	 	(i)	 	as soon as possible after its occurrence, notice of any
event which entitles the Onshore Borrower to claim for an aggregate amount
exceeding the equivalent of five hundred thousand Dollars ($500,000) under
any one or more insurance policies;
	 
	 	(ii)	 	within thirty (30) days after any insurance policy is
issued to the Onshore Borrower, a copy of that policy incorporating any loss
payee provisions required under Section 5.04 (b) (iv) (unless that policy
has already been provided to IFC pursuant to Section 4.01(g) (Conditions of
First Disbursement);
	 
	 	(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 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

 

- 38 -

	 	(v)	 	any other information or documents on each insurance
policy as IFC requests from time to time.

 

- 39 -

SCHEDULE 11

SPECIAL CONDITIONS OF DISBURSEMENT

     Section 4.01. Conditions of First Disbursement. IFC shall have no obligation to
make the first Disbursement unless the following conditions are fulfilled:

     (a) Transaction Documents. The Transaction Documents 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) Charter Amendments. The Onshore Borrower has certified to IFC that no amendment
has been made to the Onshore Borrower’s Charter since [ ], or if any such amendment was made,
IFC has received a copy of the Onshore Borrower’s amended Charter and determined, in its reasonable
judgment, that it is not inconsistent with the provisions of any Transaction Document and does not
have or could not reasonably be expected to have a Material Adverse Effect;

     (c) Authorizations. The Onshore Borrower has obtained, and provided to IFC copies of,
all Authorizations listed in Section (1) and Section (2) of Annex B, and such other material
Authorizations not listed in those Sections that may be necessary for:

	 	(i)	 	the Loan;
	 
	 	(ii)	 	the business of the Onshore Borrower as it is presently
carried on and is contemplated to be carried on;
	 
	 	(iii)	 	the Project and the implementation of the Financial
Plan;
	 
	 	(iv)	 	the due execution, delivery, validity and enforceability
of, and performance by the Onshore Borrower of its obligations under, this
Agreement and the other Transaction Documents (except for the Security
Documents), and any other documents necessary to the implementation of any
of those agreements or documents; and
	 
	 	(v)	 	the remittance to IFC or its assigns in Dollars of all
monies payable with respect to the Transaction Documents;

and all those Authorizations are in full force and effect;

     (d) Legal Opinions. IFC has received a legal opinion substantially in the form set
out in Schedule 5 (A), from IFC’s counsel in the Country, and covering such other matters relating
to the transactions contemplated by this Agreement as IFC may reasonably request;

     (e) Insurance. IFC has received copies of all insurance policies required to be
obtained pursuant to Section 5.04 (Insurance) and Annex C and a certification of the Onshore

 

- 40 -

Borrower’s insurers or insurance agents confirming that such policies are in full force and effect
and all premiums then due and payable under those policies have been paid;

     (f) Fees. IFC has received the fees which Section 2.07 (Fees) requires to be paid
before the date of the first Disbursement;

     (g) Legal Fees and Expenses. IFC has received the reimbursement of all invoiced fees
and expenses of IFC’s counsel as provided in Section 2.15 (b) (ii) or confirmation that those fees
and expenses have been paid directly to that counsel in each case, to the extent an invoice
approved by IFC has been submitted to the Onshore Borrower at least five (5) days prior to the
Disbursement;

     (h) Authorization of Auditors. IFC has received a copy of the authorization to the
Auditors referred to in Section 5.01(c) (Affirmative Covenants);

     (i) Incumbency. IFC has received a Certificate of Incumbency and Authority;

     (j) Appointment of Agent. The Onshore Borrower has delivered to IFC evidence,
substantially in the form of Schedule 4, of appointment of an agent for service of process pursuant
to Section 7.05 (Applicable Law and Jurisdiction);

     (k) Equity Disbursement. All equity and quasi-equity provided for in the Financial
Plan have been disbursed;

     (l) Environmental Matters. (i) The Onshore Borrower had updated IFC on its
development and use of its planned template for integrating environmental and health and safety
issues into the design, construction and operation of its healthcare facilities, and provide a copy
of the template to IFC; (ii) The Onshore Borrower has updated IFC on the implementation and
certification of its integrated management system for environmental, health and safety, life and
fire safety and social issues at its new facilities to the Joint Commission International
Accreditation (JCIA) standard; and (iii) (The Onshore Borrower has updated IFC on the land
acquisition process once the site(s) are selected and confirmed (but prior to any movement of
people or construction) and provided records of consultations undertaken and compensation provided
to demonstrate compliance with Performance Standard (PS) on Compensation and Resettlement. As per
PS the sponsor will need to complete a Resettlement Action Plan (RAP) for the affected people,
documenting numbers of affected people and assets, an entitlement matrix, consultation with
affected people, grievance mechanisms, timeline for implementation, budgets and reporting and
monitoring of the RAP; and

     (m) Security. The IFC Security, to the extent permitted by applicable law, has been
duly created as first priority security interests in all assets and rights subject to the Security
Documents;

     Section 4.02. Conditions of All Disbursements. The obligation of IFC to make any
Disbursement, including the first Disbursement, is also subject to the conditions that:

     (a) No Default. No Event of Default and no Potential Event of Default has occurred
and is continuing;

     (b) Use of Proceeds. The proceeds of that Disbursement:

 

- 41 -

	 	(i)	 	are, at the date of the relevant request, needed by the
Onshore Borrower for the purpose of the Project, or will be needed for that
purpose within six (6) months of that date; and
	 
	 	(ii)	 	are not in reimbursement of, or to be used for,
expenditures in the territories of any country that is not a member of the
World Bank or for goods produced in or services supplied from any such
country;

     (c) No Material Adverse Effect. Since the date of this Agreement nothing has occurred
which has or can reasonably be expected to have a Material Adverse Effect;

     (d) No Material Loss or Liability. Since the date of this Agreement the Onshore
Borrower has not incurred any material loss or liability (except such liabilities as may be
incurred in accordance with Section 5.02 (Negative Covenants));

     (e) Representations and Warranties. The representations and warranties made in Article
III 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;

     (f) Legal Opinions. IFC has received (if it so requires) a legal opinion or opinions
in form and substance satisfactory to IFC, of IFC’s counsel in the Country, with respect to any
matters relating specifically to that Disbursement and not otherwise covered in legal opinions
previously delivered in connection with this Agreement;

     (g) No Violations. After giving effect to that Disbursement, the Onshore Borrower
would not be in violation of:

	 	(i)	 	its Charter;
	 
	 	(ii)	 	any provision contained in any document to which the
Onshore Borrower is a party (including this Agreement) or by which the
Onshore Borrower is bound; or
	 
	 	(iii)	 	any law, rule, regulation, Authorization or agreement or
other document binding on the Onshore Borrower directly or indirectly
limiting or otherwise restricting the Onshore Borrower’s borrowing power or
authority or its ability to borrow;

     (h ) Financial Ratios. (Without limiting the generality of Section 4.02 (g)), after
giving effect to the Disbursement, the Current Ratio would not be less than 1.5 and the Liabilities
to Tangible Net Worth Ratio would not exceed 1.2] based on the most recent Consolidated Financial
Statements of Chindex; and

     (i) Pro-Rata Disbursement. The Disbursement is made pro rata with the
disbursement of any other senior long-term loans forming part of the Financial Plan; and

 

- 42 -

     (j) Legal Fees and Expenses. Legal fees and expenses of IFC’s counsel have been paid,
to the extent an invoice approved by IFC has been submitted to the Onshore Borrower at least five
(5) days prior to the Disbursement.

     Section 4.03. Onshore Borrower’s Certification. The Onshore Borrower shall deliver
to IFC with respect to each request for Disbursement:

     (a) certifications, in the form included in Schedule 2, relating to the conditions specified
in Section 4.02 (Conditions of All Disbursements) (other than the condition in Section 4.02 (f))
expressed to be effective as of the date of that Disbursement, and

     (b) such evidence as IFC may reasonably request of the proposed utilization of
the proceeds of that Disbursement or the utilization of the proceeds of any prior
Disbursement.

 

 

- 43 -

SCHEDULE 12

International Finance Corporation

Environmental and Social Performance

Annual Monitoring Report (amr)

 

- 44 -

United Family Hospital

People’s Republic of China

24052

SEPARATE REPORTS TO BE SUBMITTED FOR UFH’S BEIJING AND SHANGHAI FACILITIES

or

DATA TABLES CAN BE COPIED TO ADDRESS EACH FACILTIY WITHIN THE SAME AMR

Reporting Period: (month/year) through (month/year)

amr completion date: (day/month/year) 

Environment and Social Development Department

2121 Pennsylvania Avenue, NW

Washington, DC 20433 USA

www.ifc.org/enviro

 

- 45 -

Introduction

The Annual Monitoring Report

IFC’s Investment Agreement requires United Family Hospital (UFH) to prepare a comprehensive
Annual Monitoring Report (AMR) for its Beijing and Shanghai’s facilities and operations. This
document comprises IFC’s preferred format for environmental and social performance reporting. The
AMR informs the Environment and Social Development Department about the environmental and social
state of the investment.

Preparation Instructions

The following points should assist you in completing this form. Please be descriptive in your
responses and attach additional information as needed.

	 	•	 	IFC’s Investment Agreement requires designated UFH personnel to complete and
submit annual environmental and social monitoring reports in compliance with the
schedule stipulated in the Investment agreement.
	 
	 	•	 	UFH must report qualitative and quantitative project performance data each year of the
investment for the environmental and social monitoring parameters included in this report
format.
	 
	 	•	 	The main purpose of completing this form is to provide the following information:

	 	1.	 	Environmental and Social Management
	 
	 	2.	 	Occupational Health and Safety (OHS) Performance
	 
	 	3.	 	Significant Environmental and Social Events
	 
	 	4.	 	General Information and Feedback
	 
	 	5.	 	Sustainability of Project and Associated Operations
	 
	 	6.	 	Compliance with World Bank Group and local environmental
requirements as specified in the Investment Agreement
	 
	 	7.	 	Compliance with World Bank Group and local social requirements as
specified in the Investment Agreement
	 
	 	8.	 	Data Interpretation and Corrective Measures

Specialist Contact Information

If you have any questions regarding the AMR or wish to discuss completion of the AMR please
contact the following Investment Officer or Portfolio Manager.

 

- 46 -

	 	 	 

	Investment Officer

	 	Name: Chris McCahan
	 

	 	Telephone Number: (66-2) 650-9253, ext. 655
	 

	 	Facsimile Number: (66-2) 650-9259
	 

	 	Email: cmccahan@ifc.org

	 	 	 

	Portfolio Manager

	 	Name: Chris McCahan
	 

	 	Telephone Number: (66-2) 650-9253, ext. 655
	 

	 	Facsimile Number: (66-2) 650-9259
	 

	 	Email: cmccahan@ifc.org

1 ENVIRONMENTAL AND SOCIAL MANAGEMENT

1.1 AMR Preparer

	 	 	 

	To be completed by
UFH authorized
representative

	 	Name: [   ]

Title: Vice President of Finance, Chief Financial Officer

Telephone Number: (8610) 64333960

Facsimile Number: (8610) 64333960

Email: [    ]
	 
	 	 
	UFH Information

	 	UFH office physical address:
	 

	 	Address: Beijing United Family Hospital and Clinics, 2
Jiang Tai Lu, Chaoyang District, Beijing, PRC 100016
	 
	 	 
	 

	 	UFH web page address:

I certify that the data contained in this AMR completely
and accurately represents UFH’s operations during this reporting period. I
further certify that analytical data summariesii incorporated in
Section 6 are based upon data collected and analyzed in a 

 

			
	ii	 	Raw analytical data upon which summaries are based
should not be submitted with this AMR but must be preserved by UFH and
presented to IFC upon demand.

 

- 47 -

manner
consistent with the World Bank Group’s Pollution Prevention and
Abatement Handbook, Monitoring.iii

	 	 	 

	                                                            
	 	                                                            
	UFH Employee Name
	 	Signature

1.2 Environmental Responsibility Chart

Please name the individuals in the company who hold responsibility for environmental and
social performance (e.g. Environment Manager, Occupational Health and Safety Manager, Community
Relations Manager) and give their contact information (Name, Address, Telephone Number, Fax Number,
E-mail Address).

1.3 Summary of Current Operations

Describe company operations and level of business activity. Describe any significant changes
since the last report in the company or in day-to-day operations that may affect environmental and
social performance. In particular, please identify any changes in fuel/power supply that would
necessitate independent air quality monitoring.

Describe any management initiatives (e.g. Joint Commission International Accreditation (JCIA), ISO
14001, ISO 9001, OHSAS 18001, or equivalent Quality, Environmental and Occupational Health and
Safety certifications).

2 OCCUPATIONAL HEALTH AND SAFETY PERFORMANCE (OHS)

UFH personnel are required to monitor, record, and report occupational health and safety incidents
and workplace conditions (air quality and physical parameters, which are potentially impacted by
the construction, maintenance and operation of the development) throughout the reporting period.

2.1 Compliance with Local Requirements

 

			
	iii	 	Pollution Prevention and Abatement
Handbook

 

- 48 -

Please list any reports submitted to local authorities, e.g. on OHS, fire and safety
inspections, compliance monitoring, emergency exercises, as well as comments received and
corrective actions taken. Local authority monitoring and inspections with subsequent actions taken
shall also be summarized and reported.

If any of the information requested in the AMR (Section 2.2 — Section 2.4) is contained in reports
sent to local authorities, please submit the applicable section of the report.

2.2 Incident Statistics Monitoring

Please report on incidents during the reporting year for UFH, covering UFH employees,
contractors, tenants and passers-by/visitors for each facility. Contractor employees are required
to adhere to comparable occupational health and safety standards as UFH employees. If UFH uses
contractor employees, please also report any contractor employee incidents. Please indicate the
cause of all incidents, including failure to follow procedures, human error, inadequate training,
equipment failure, building design failure, etc. Expand or shrink the tables as needed.

1. Total Amounts

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Reporting period- 1 year	 	Reporting period- 2
	Report TOTAL 	 	This reporting period	 	ago	 	years ago
	numbers for each 	 	UFH	 	Contractor	 	UFH	 	Contractor	 	UFH	 	Contractor
	parameter	 	employees	 	employees	 	employees	 	employees	 	employees	 	employees
	Employees
	 	 	 	 	 	 	 	 	 	 	 	 
	Average working hours per week per employee
	 	 	 	 	 	 	 	 	 	 	 	 
	Average number of weeks
worked per year per employee
	 	 	 	 	 	 	 	 	 	 	 	 
	Fatalities
	 	 	 	 	 	 	 	 	 	 	 	 
	Non-fatal injuriesiv
	 	 	 	 	 	 	 	 	 	 	 	 
	Lost workdaysv
	 	 	 	 	 	 	 	 	 	 	 	 
	Vehicle collisionsvi
	 	 	 	 	 	 	 	 	 	 	 	 
	Incidencevii
	 	 	 	 	 	 	 	 	 	 	 	 

 

			
	iv	 	Incapacity to work for at least one full
workday beyond the day on which the accident or illness occurred.
	 
	v	 	Lost workdays are the number of workdays
(consecutive or not) beyond the date of injury or onset of illness that the
employee was away from work or limited to restricted work activity because of
an occupational injury or illness.

 

- 49 -

2. Fatality details for this reporting period

	 	 	 	 	 	 	 
	Report known	 	 	 	 	 	Passers-by in common
	numbers for each	 	UFH employees or	 	UFH tenants?	 	areas? (indoor and outdoor)
	parameter	 	contractor employees?	 	[report known statistics]	 	[report known statistics]
	Time of death after
accident (e.g.
immediate, within a
month, within a year)
	 	 	 	 	 	 
	Cause of fatality
	 	 	 	 	 	 
	Corrective measures
to prevent
reoccurrence
	 	 	 	 	 	 

3. Non-fatal injuries details for this reporting period

	 	 	 	 	 	 	 
	Report known	 	 	 	 	 	Passers-by in common
	numbers for	 	UFH employees or	 	 	 	areas? (indoor and
	each parameter	 	contractor employees?	 	UFH tenants?	 	outdoor)
	Total workdays lost

	 	 	 	 	 	N/A
	Description of injury
	 	 	 	 	 	 
	Cause of accident
	 	 	 	 	 	 
	Corrective measures
to prevent
reoccurrence
	 	 	 	 	 	 

 

			
	vi	 	Vehicle Collision: When a vehicle (device used
to transport people or things) collides (comes together with violent force)
with another vehicle or inanimate or animate object(s) and results in injury
(other than the need for First Aid) or death.
	 
	vii	 	Calculate incidence using the following
equation: incidence= total lost workdays/ 100,000 man-hours
worked.

Use the total lost workdays to calculate the incidence for this reporting
period, reporting periods 1 year ago and 2 years ago, as required above.

 

- 50 -

4. Vehicle collision details for this reporting period

	 	 	 	 	 	 	 
	Report known	 	 	 	 	 	 
	numbers for	 	UFH employees or	 	 	 	 
	each parameter	 	contractor employees?	 	UFH tenants?	 	Visitors?
	Cause of collision
	 	 	 	 	 	 
	Corrective measures
to prevent
reoccurrence
	 	 	 	 	 	 

5. Trainingviii for this reporting period

	 	 	 	 	 
	UFH employees or	 	 	 	 
	contractor	 	 	 	Number of employees that
	employees?	 	Description of training	 	attended
	 
	 	 	 	 

2.3 Life and Fire Safety

1. Please complete the following table for UFH’s operations.

 

			
	viii	 	Eastwood II personnel should be trained in
environmental, health and safety matters including accident prevention, safe
lifting practices, the use of Material Safety Data Sheets (MSDS), safe chemical
handling practices, proper control and maintenance of equipment and facilities,
emergency response, personal protective equipment (PEP), emergency response,
etc.

 

- 51 -

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Corrective Actions and
	UFH Fire Safety	 	Mandatory	 	Date(s)	 	Observed	 	Schedule For
	Verification Activities	 	Frequency	 	Performed	 	Deficienciesix	 	Implementationx
	Fire Drills

	 	Minimum: three (3)/year	 	 	 	 	 	 
	Inspect and certify
fire detection and
suppression electrical
and mechanical
systems.

	 	Minimum: one (1)/year	 	 	 	 	 	 
	Inspect,
refill/recharge
portable fire
extinguisher

	 	Minimum: two (2)
inspections/ year	 	 	 	 	 	 

2. Please list all fire permits retained by UFH and provide copies to IFC.

2.4 Significant OHS Events

Please explain any significant Occupational Health and Safety events not covered in the above
OHS tables. The report could include proposed revision of the OHS Management System (if
applicable), revised quantitative objectives, action plans for technical improvements, and planned
training activities.

3 Significant Environmental and Social Events

UFH personnel are required to report all environmental and social eventsxi that
may have caused damage; caused health problems; attracted the attention of outside parties;

 

			
	ix	 	Attach additional sheets as needed to fully
describe observed deficiencies.
	 
	x	 	Attach additional sheets as needed to fully
describe corrective actions and implementation.
	 
	xi	 	Examples of significant incidents follow.
Chemical and/or hydrocarbon materials spills; fire, explosion or unplanned
releases; industrial injuries; fatalities including transportation; ecological
damage/destruction; local population disruption; disruption of emissions or
effluent treatment; legal/administrative notice of violation; penalties, fines,
or increase in pollution charges; negative media attention; chance cultural
finds; labor unrest or disputes.

 

- 52 -

affected project labor or adjacent populations;
affected cultural property; or created UFH and/or
UFH liabilities.

Attach photographs, plot plans, newspaper articles and all relevant supporting information
that IFC will need to be completely familiar with the incident and associated environmental
and social issues.

Please report on the following topics, expanding or collapsing the table where needed.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Corrective actions
	 	 	 	 	 	 	Reports sent to IFC	 	(including cost and
	 	 	 	 	Affected	 	and/or local	 	time schedule for
	Date of event	 	Event description	 	people/environment	 	regulatory agencies	 	implementation)
	 
	 	 	 	 	 	 	 	 

4 GENERAL INFORMATION AND FEEDBACK

Provide any additional information including the following:

	1.	 	In detail, describe print or broadcast media attention given to UFH during this reporting
period.
	 
	2.	 	In detail, describe interactions with non-governmental organizations (NGOs) or public
scrutiny of UFH.
	 
	3.	 	Describe UFH public relations efforts (e.g. establishment of a web page, hiring of community
liaison officer)
	 
	4.	 	Suggest ways and means to improve information exchange and interactions with IFC
professionals.

 

- 53 -

5 SUSTAINABILITY OF PROJECT AND ASSOCIATED OPERATIONS

IFC has developed a framework to help assess the development impacts of our investments. Many
of our projects take on initiatives, develop processes, or install equipment that exceeds IFC’s
environmental and social requirements. This framework permits us to rate project performance in
various areas. Over the past year, has UFH made changes to operations or participated in any
efforts that have impacted UFH’s organization in the following areas?

	 	q	 	Certified / enhanced its environmental management system as part of its JCIA
compliant system
	 
	 	q	 	Published an environment/sustainability or a corporate social responsibility
report (please send copy or provide web link)
	 
	 	q	 	Established formal and regular consultation with local community and other
stakeholders
	 
	 	q	 	Reduced environmental footprint of your operations, for example:

	 	o	 	decreased use of resources (energy, water, materials, etc.)
	 
	 	o	 	substitution refrigerants with lower less ozone-depleting potential
	 
	 	o	 	reduced heat gain of the building
	 
	 	o	 	increased emission controls or wastewater treatment
	 
	 	o	 	adopted renewable energy technology
	 
	 	o	 	sourced materials from sustainably managed sources or made from
processed with reduced environmental impacts
	 
	 	o	 	avoidance of PVC electrics or plumbing
	 
	 	o	 	increased by-product recycling

	 	q	 	Marketing of services that are specifically environmentally friendly
	 
	 	q	 	Worked to improve local supplier relationships or provided technical
assistance to suppliers
	 
	 	q	 	Programs to benefit the local community
	 
	 	q	 	Employee programs — training, health, safety

If so, please offer details so we can assess your performance beyond our compliance criteria.

 

- 54 -

6 REPORTS TO ILLUSTRATE COMPLIANCE WITH IFC/WBG ENVIRONMENTAL POLICIES

AND GUIDELINES AND HOST COUNTRY REGULATIONS

6.1. Liquid Effluent

Liquid Effluent refers to all types of liquid waste which is discharged from the site. Types of
liquid effluent include process, sanitary, stormwater, and thermal discharges.

UFH is required to collect and analyze representative samples of liquid effluent from all
points of discharge where wastewater is discharged from UFH’s operations either stormwater or
sanitary sewer systems and report the results to IFC. Individual samples and individual reports
will be required for each liquid effluent monitoring point. Monitoring should take place both
during construction and while the facility is operating.

Please provide local maximum levels in local units in the tables below.

Treated Liquid Effluent Monitoring Point Location (State the source
and provide a scaled facility map showing the precise location of all discharge
points.):

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Sample	 	 	 	UFH	 	 	 	UFH
	 	 	Collection	 	WBG/IFC	 	Performance	 	 	 	Performance
	 	 	and	 	Maximum	 	(WBG/IFC Units)	 	 	 	(Local Units)
	 	 	Analysis	 	Levels	 	Annual average of	 	Local Limit	 	Annual average of
	Parameters	 	Frequency	 	(WBG/IFC Units)	 	monthly samples	 	(local Units)	 	quarterly samples
	pH

	 	Daily
	 	6-9
	 	 	 	6-9	 	 
	Biochemical oxygen demand (BOD5)

	 	Weekly
	 	50 mg/l
	 	mg/l
	 	 	 	mg/l
	Chemical oxygen demand (COD)

	 	Weekly
	 	250 mg/l
	 	mg/l
	 	 	 	mg/l
	Oil and grease

	 	Weekly
	 	10 mg/l
	 	mg/l
	 	 	 	mg/l
	Total suspended solids (TSS)

	 	Weekly
	 	50 mg/l
	 	mg/l
	 	 	 	mg/l
	Total coliform bacteria, Most
Probable Number (MPN) or plate count (PC)

	 	Monthly
	 	£400 Per 100ml
	 	Per 100ml	 	 	 	 
	Temperature increase

	 	Monthly
	 	£3oC	 	 	 	 	 	 

 

- 55 -

6.2. Point Source Air Emissions

Point Source Air Emissions refers to the air flow out from a specific location on the project
site. These emissions can come from points such as process stacks, power generation stacks and
vents.

UFH is required to collect representative samples of point source air emissions from on-site
sources, submit these samples for laboratory analysis and report the results to IFC. Individual
samples and individual reports are required for each point source air emissions monitoring point.
Monitoring should take place while facility is operating.

Please provide PRC maximum levels in local units in the table below.

Point Source Air Emissions Monitoring Point Locationxii:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	UFH	 	 	 	 
	 	 	 	 	WBG/IFC	 	Performance	 	 	 	UFH
	 	 	 	 	Maximum	 	(WBG/IFC	 	Local	 	Performance
	 	 	 	 	Levels	 	Units)	 	Maximum	 	(PRC Units)
	Point Source Air Emission	 	Collection	 	(WBG/IFC	 	Annual average of	 	Levels	 	Annual average of
	Parameters	 	Frequency	 	Units)	 	quarterly samples	 	(PRC Units)	 	quarterly samples
	Nitrogen Oxides (NOx)

Coal Fired

	 	Quarterly
	 	750 mg/Nm3
	 	mg/Nm3	 	 	 	 
	Nitrogen Oxides (NOx)

Gas Fired

	 	Quarterly
	 	320 mg/Nm3
	 	mg/Nm3	 	 	 	 
	Particulate Matter (PM10)

3 200 million BTU/hour equivalent heat input

	 	Quarterly
	 	50 mg/Nm3
	 	mg/Nm3	 	 	 	 
	Particulate Matter (PM10)

< 200 million BTU/hour equivalent heat input

	 	Quarterly
	 	100 mg/Nm3
	 	mg/Nm3	 	 	 	 
	Sulfur Dioxide

	 	Quarterly
	 	2000 mg/Nm3
	 	mg/Nm3	 	 	 	 

 

			
	xii	 	Provide latitude, longitude of the point
source air discharge point. Alternatively provide a scaled facility map showing
the precise location of all discharge points.

 

- 56 -

6.3. Solid Waste Management

Solid Waste refers to non-liquid, non-soluble materials that contain complex substances. Examples
of solid waste include sewage sludge, demolition wastes, wastes arising from building construction
and maintenance, and office waste, some which are applicable only to specific sectors.xiii

UFH is required to monitor methods of collection, storage, handling, recycling, reuse and/or
disposal of solid waste, and report these methods and measured quantities to IFC. Please complete
the information below.

Solid Waste Management Summary

	 	 	 	 	 
	Solid Waste Type	 	Annual	 	UFH Method of Storage, Handling and/or Treatment (including
	Include description	 	Quantity	 	Recycling, Reuse or Disposalxiv)
	Hazardous Healthcare waste
	 	 	 	 
	Non Hazardous Healthcare waste
	 	 	 	 
	Surplus equipment containing
a radioactive or similar
source
	 	 	 	 
	Other (please list in detail)
	 	 	 	 

Please describe initiatives undertaken to encourage waste reduction, reuse or recycling among
tenants.

 

			
	xiii	 	Pollution Prevention and Abatement
Handbook, Glossary of Environmental Terms
	 
	xiv	 	Describe disposal method (e.g. landfill,
incineration, land farming, reuse, etc.) Provide name and location of disposal
facility used; state if waste is sold as byproduct, scrap or a material to be
used by others; state name and business of purchaser. Provide additional sheets
as needed to fully describe disposal, organizations involved in waste
management, facility permits, and agency authorizations.

 

- 57 -

6.4. Hazardous Materials Management

Hazardous materials are those materials that represent an excessive risk to property, the
environment or human health because of their physical and/or chemical characteristics. Examples
include explosives, toxic or flammable gases, flammable liquids and solids, oxidizing substances,
radioactive materials and corrosive substances.

UFH is required to monitor methods of collection, storage and disposal of hazardous
materialsxv, and report these methods and measured quantities to IFC. Please refer to
the Hazardous Materials Management guideline for additional information.

	 	1.	 	Please update us on your Hazardous Materials Management Program. You should include
your Emergency Preparedness and Response Plans, and if available, your Hazardous Materials
Risk Management Plan, Hazardous Materials Transportation Plan and/or Hazardous Waste
Management Plan.

Please complete the information below unless included in an updated version of the Hazardous
Materials Management Program. If included, please specify.

Hazardous Materials Management Plan Summary

 

			
	xv	 	Hazardous materials include ignitable,
reactive, flammable, radioactive, corrosive and toxic substances.

 

- 58 -

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Maximum	 	 	 	 
	Hazardous Material	 	 	 	 	 	 	 	Quantity	 	UFH Method of	 	 
	(Name and Number	 	Class or	 	Annual	 	Stored on	 	Storage, Handling	 	UFH Method of
	UN/CAS)	 	divisionxvi	 	Quantity	 	Site	 	and/or Treatmentxvii	 	Disposalxviii
	Hazardous Materials Used
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Oxygen

	 	 	2	 	 	 	 	 	 	 	 	 
	Diesel oil

	 	 	3	 	 	 	 	 	 	 	 	 
	Varnish

	 	 	3	 	 	 	 	 	 	 	 	 
	alcohol solution

	 	 	3	 	 	 	 	 	 	 	 	 
	Purell hand sanitizer

	 	 	3	 	 	 	 	 	 	 	 	 
	Alcohol swabs

	 	 	4	 	 	 	 	 	 	 	 	 
	Chlorine sterling tablet

	 	 	4	 	 	 	 	 	 	 	 	 
	Skin iodine

	 	 	3	 	 	 	 	 	 	 	 	 
	Iodine foe mucous membrane

	 	 	3	 	 	 	 	 	 	 	 	 

 

			
	xvi	 	UN classification (1. Explosives; 2.
Gases ; 3. Flammable liquids ; 4. Flammable solids ; 5. Oxidizing substances ;
6. Toxic and infectious substances ; 7. Radioactive material; 8. Corrosive
substances; 9. Miscellaneous hazardous materials.)
	 
	xvii	 	State how hazardous materials / waste is
stored on site (e.g. drums, bins, and other containers) and handled (including
transported). Provide additional sheets as needed to fully describe disposal,
organizations involved in management, facility permits and agency
authorizations.
	 
	xviii	 	Report on method of disposal for
hazardous waste used only.

 

- 59 -

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Maximum	 	 	 	 
	Hazardous Material	 	 	 	 	 	 	 	Quantity	 	UFH Method of	 	 
	(Name and Number	 	Class or	 	Annual	 	Stored on	 	Storage, Handling	 	UFH Method of
	UN/CAS)	 	divisionxvi	 	Quantity	 	Site	 	and/or Treatmentxvii	 	Disposalxviii
	Iodine swab

	 	 	4	 	 	 	 	 	 	 	 	 
	Glutaraldehyde
	 	 	 	 	 	 	 	 	 	 	 	 
	Lodine tincture

	 	 	6	 	 	 	 	 	 	 	 	 
	Benzocaine

	 	 	3	 	 	 	 	 	 	 	 	 
	Methanol

	 	 	6	 	 	 	 	 	 	 	 	 
	Ethyl acetates

	 	 	6	 	 	 	 	 	 	 	 	 
	S-sulfo salieylic acid

	 	 	6	 	 	 	 	 	 	 	 	 
	Ammonium oxalate

	 	 	6	 	 	 	 	 	 	 	 	 
	Thymol

	 	 	6	 	 	 	 	 	 	 	 	 
	Potassium hydroxide

	 	 	6	 	 	 	 	 	 	 	 	 
	Formaldehyde solution

	 	 	6	 	 	 	 	 	 	 	 	 
	Ethyenediamine tetracetic

	 	 	6	 	 	 	 	 	 	 	 	 
	Acid disedium salt

	 	 	6	 	 	 	 	 	 	 	 	 
	Phenol

	 	 	6	 	 	 	 	 	 	 	 	 
	Methylene blue

	 	 	6	 	 	 	 	 	 	 	 	 
	Sodium bicarbonate

	 	 	6	 	 	 	 	 	 	 	 	 
	Acetic acid

	 	 	6	 	 	 	 	 	 	 	 	 
	Ethy alcohol absolute

	 	 	3	 	 	 	 	 	 	 	 	 
	Methanol

	 	 	6	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Hazardous Materials Produced
	 	 	 	 	 	 	 	 	 	 	 	 
	Developer/fixer waste fluid

	 	 	6	 	 	 	 	 	 	 	 	 

 

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6.5. Utility Management

Utility Management refers to measures taken to improve or decrease the use of utilities (e.g.
electricity, hot water, natural gas and water)

	 	1.	 	What was the annual operational budget (excluding annual cost of utilities) used for
utility management, allocated by the following, and how was this figure determined?

	 	•	 	Active management of utility consumption;
	 
	 	•	 	Capital expenditure budget for implementation of utility saving projects.

Utility Consumption Report

Please complete the table to identify all utility service consumed by your development. The
table should include all electricity, heat and fuels purchased, refrigerant and all water used
whether from a municipal supply, river or borehole. Include the cost in your own currency.

	 	 	 	 	 	 	 
	Utility Type	 	Annual Consumption	 	Units	 	Annual Cost
	Electricity

	 	 	 	kWh	 	 
	Purchased Steam
	 	 	 	 	 	 
	Purchased Hot Water
	 	 	 	 	 	 
	Natural Gas
	 	 	 	 	 	 
	LPG
	 	 	 	 	 	 
	Oil — Diesel
	 	 	 	 	 	 
	Oil — Heavy Fuel Oil
	 	 	 	 	 	 
	Other Energy Source
	 	 	 	 	 	 
	Other Energy Source
	 	 	 	 	 	 
	Refrigerant
	 	 	 	 	 	 
	City Water
	 	 	 	 	 	 
	Treated Water
	 	 	 	 	 	 
	Discharged Effluent
	 	 	 	 	 	 

Utilities Monitoring and Control

	 	1.	 	What is the size of the interior building area managed by UFH?
	 
	 	2.	 	Please describe systems used to monitor utility flows within your processes.
	 
	 	3.	 	Please provide data on your consumption of refrigerants and the cooling degree days.

 

- 61 -

	 	4.	 	Please describe your evaporative cooling systems and measures to control legionella
disease if applicable.
	 
	 	5.	 	For water, heat and electricity separately, please state the number of main and
sub-meters installed, meter reading frequency, meter reading method (manual or automatic),
and the use made of the meter readings.
	 
	 	6.	 	Please provide samples of utility consumption reports produced from these metering
systems. Include following information: whom these reports are sent to and at what
frequency, how they are used, and the benefits derived.
	 
	 	7.	 	Do these reports contain utility consumption targets? If so, how are these set?
	 
	 	8.	 	If regular operational targets are not met, please describe the reasons, and
corrective action taken to ensure that future targets are met.
	 
	 	9.	 	How are utility consumption budgets set for your operations? What means are used to
ensure that utility budgets are met? How are managers encouraged to meet these budgets?
	 
	 	10.	 	Do you consider that your utility management practices could be more effective? If
so, then please identify what would be required to improve the effectiveness of your
utilities management (e.g. more time, greater project budget, better knowledge of
opportunities).

7 DATA INTERPRETATION AND CORRECTIVE MEASURES

Provide the following information for monitoring data which exceed WGB/IFC maximum
levels. This refers to data presented in Section 6, Quantitative Data Reports to Illustrate
Compliance with IFC/ World Bank Group Environmental Guidelines and Local Regulations.
Provide the information in the table for each parameter exceeded.

	 	 	 	 	 	 	 	 	 	 	 
	Monitoring	 	 	 	 	 	 	 	 	 	 
	parameter that	 	Cause for	 	 	 	 	 	 	 	 
	exceeds WBG/IFC	 	monitoring	 	 	 	 	 	 	 	%
	guidelines and	 	parameter	 	Corrective action	 	Completion	 	 	 	Complete/
	local regulations	 	exceedance	 	plan	 	date	 	Cost	 	Status
	 
	 	 	 	 	 	 	 	 	 	 

 

- 62 -

EXHIBIT 1

FORM OF GUARANTEE AGREEMENT

 

INVESTMENT NUMBER 26133

GUARANTEE AGREEMENT

between

CHINDEX INTERNATIONAL, INC.

and

INTERNATIONAL FINANCE CORPORATION

Dated [       ]

 

 

- 63 -

GUARANTEE AGREEMENT

This AGREEMENT is made on [           ],

Between

	 	(1)	 	CHINDEX INTERNATIONAL, INC. (the “Guarantor” ), 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; and
	 
	 	(2)	 	INTERNATIONAL FINANCE CORPORATION (“IFC”), an international organization established
by Articles of Agreement among its member countries, including the PRC, with its legal
office at 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433, United States of
America.

Whereas:

     (A) By a loan agreement (the “IFC Loan Agreement”) dated [      ] between [Onshore Borrower]
(the “Borrower”) and IFC, IFC has agreed to extend to the Borrower a loan up to [      ]
Dollars ($[ ]) (the “IFC Loan”) on the terms and subject to the conditions set forth in the IFC
Loan Agreement.

     (B) The Guarantor has been provided with, and hereby acknowledges receipt of, a copy of the
IFC Loan Agreement.

     (C) It is a condition of the Disbursement under the IFC Loan Agreement that the Guarantor has
guaranteed the obligations of the Borrower in respect of the Loan on terms and conditions
satisfactory to IFC.

     (D) The Guarantor will obtain benefits as a result of the Loan made to the Borrower under the
IFC Loan Agreement and, accordingly, desires to execute and deliver this Guarantee Agreement in
order to satisfy the condition described in the preceding paragraph.

     (E) The Guarantor, to induce IFC to make the Loan and, in particular, the first disbursement
of the Loan, has agreed to guarantee such obligations of the Borrower.

     NOW, THEREFORE, the Guarantor and IFC agree as follows:

 

- 64 -

ARTICLE I

Definitions and Interpretation

     Section 1.01. Defined Terms. Unless the context otherwise requires, terms defined in
the IFC Loan Agreement have the same meanings when used in this Agreement and each of the following
terms have the meaning opposite it:

	 	 	 

	“Auditors”

	 	BDO Seidman, LLP or its affiliates, or
such other internationally reputable accounting firm that
the Guarantor appoints from time to time as its auditors;
	 
	 	 
	“Financial Year”

	 	     the accounting year of the Guarantor commencing
each year on April 1 and ending on the following March
31, or such other period as the Guarantor, with IFC’s
consent, from time to time designates as its accounting
year.

     Section 1.02. Guaranteed Obligations. In this Agreement, the term “Guaranteed
Obligations” means all debts and monetary liabilities of the Borrower to IFC under or in relation
to the IFC Loan Agreement, and in any capacity irrespective of whether the debts or liabilities:

     (a) are present or future;

     (b) are actual or contingent;

     (c) are at any time ascertained or unascertained;

     (d) are owed or incurred by or on account of the Borrower alone, or severally or jointly with
any other Person;

     (e) are owed or incurred to or for the account of IFC alone, or severally or jointly with any
other Person;

     (f) are owed or incurred as principal, interest, fees, charges, taxes, duties or other
imposts, damages (whether for breach of contract or tort or incurred on any other ground), losses,
costs or expenses, or on any other account; or

     (g) comprise any combination of the above.

 

- 65 -

     Section 1.03. Interpretation. In this Agreement, unless the context otherwise
requires:

     (a) headings are for convenience only and do not affect the interpretation of this Agreement;

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

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

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

     (e) a reference to a party to any document includes that party’s successors and permitted
assigns.

ARTICLE II

Guarantee

     Section 2.01. Guarantee. (a) The Guarantor irrevocably, absolutely and
unconditionally:

     (i) as principal obligor and not merely as surety, guarantees to
IFC the due and punctual payment of the Guaranteed Obligations; and

	 	(ii)	 	undertakes with IFC that whenever the Borrower does not
pay any amount of the Guaranteed Obligations when due the Guarantor will,
upon demand by IFC, pay that amount to IFC, in the currency prescribed in
the IFC Loan Agreement, and otherwise in the same manner in all respects as
the Guaranteed Obligations are required to be paid by the Borrower.

 

- 66 -

     (b) The Guarantor waives notice of acceptance of this Agreement and notice of any liability to
which it may apply, and waives presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liability, suit or taking of other action by IFC against, and any other
notice to, any party liable thereon (including such Guarantor or any other guarantor).

     Section 2.02. Continuing Guarantee. (a) The guarantee contained in this Agreement
is a continuing obligation of the Guarantor (and all liabilities to which it applies or may apply
under the terms of this Agreement shall be conclusively presumed to have been created in reliance
on this Agreement), notwithstanding any settlement of account or the occurrence of any other thing,
and shall remain in full force and effect until the Guaranteed Obligations have been fully paid
strictly in accordance with the provisions of the IFC Loan Agreement, regardless of any
intermediate payment or discharge.

     (b) The guarantee contained in this Agreement shall be an additional, separate and independent
obligation of the Guarantor.

     (c) The Guarantor’s obligations under this Agreement can be discharged only by performance and
then only to the extent of such performance. These obligations are not subject to any prior notice
to, demand upon or action against the Borrower or to any prior notice to the Guarantor with regard
to any default by the Borrower.

     Section 2.03. No Set-off. All payments which the Guarantor is required to make under
this Agreement shall be without any set-off, counterclaim or condition.

     Section 2.04. Taxes. (a) The Guarantor shall pay or cause to be paid all present
and future taxes, duties, fees and other charges of whatsoever nature, if any, now or in the future
levied or imposed by the Government of the PRC or by any Authority or any jurisdiction through or
out of which a payment is made on or in connection with the payment of any and all amounts due
under this Agreement.

     (b) All payments due under this Agreement shall be made without deduction for or on account of
any such taxes, duties, fees or other charges.

     (c) If the Guarantor is prevented by operation of law or otherwise from making or causing to
be made such payments without deduction, the amounts due under this Agreement shall be increased to
such amount as may be necessary so that IFC receives the full amount it would have received (taking
into account any such taxes, duties, fees or other charges payable on amounts payable

 

- 67 -

by the Guarantor under this subsection) had such payments been made without such deduction.

     (d) If subsection (c) above applies and IFC so requires, the Guarantor shall deliver to IFC
official tax receipts evidencing payment (or certified copies of them) within thirty (30) days of
the date of payment.

     Section 2.05. Certificate Conclusive. A certificate of IFC stating:

     (a) the amount of the Guaranteed Obligations due and payable; or

     (b) any amount due and payable by the Guarantor under this Agreement; or

     (c) the amount of the Guaranteed Obligations, whether currently due and payable or not,

shall be conclusive in the absence of manifest error.

     Section 2.06. Application of Payments. IFC may apply any amounts received by it or
recovered under:

     (a) any Security; and

     (b) any other document or agreement which is a security for any of the Guaranteed Obligations
and any other moneys,

in such manner as it determines in its absolute discretion.

     Section 2.07. Allocation. If the Guarantor at any time pays to IFC an amount less
than the full amount then due and payable to IFC under this Agreement, IFC may allocate and apply
such payment to the Guaranteed Obligations in any way or manner and for such purpose or purposes as
IFC in its sole discretion determines, notwithstanding any instruction that the Guarantor might
give to the contrary.

 

- 68 -

ARTICLE III

Saving Provisions

     Section 3.01. Waiver of Defenses. The Guarantor’s obligations under this Guarantee
shall not be affected or impaired by any act, omission, circumstance (other than complete payment
of the Guaranteed Obligations), matter or thing which, but for this provision, would reduce,
release or prejudice any of its obligations under this Agreement or which might otherwise
constitute a legal or equitable discharge or defense of a surety or a guarantor, including (whether
or not known to the Guarantor or to IFC):

     (a) any time, waiver, composition, forbearance or concession given to the Borrower or any
other person;

     (b) any assertion of, or failure to assert, or delay in asserting, any right, power or remedy
against the Borrower or any other person, or in respect of any security for the Loan;

     (c) any amplification, amendment (however fundamental), variation or replacement of the
provisions of any Transaction Document or of any other agreement or security between IFC and the
Borrower;

     (d) any failure of the Borrower or the Guarantor to comply with any requirement of any law,
regulation or order;

     (e) the dissolution, liquidation, reorganization or other alteration of the legal status or
structure of the Borrower or the Guarantor;

     (f) any purported or actual assignment of the Loan by IFC to any other party; or

     (g) the IFC Loan Agreement or any other Transaction Document being in whole or in part
illegal, void, voidable, avoided, invalid, unenforceable or otherwise of limited force and effect.

     Section 3.02. Immediate Recourse. The Guarantor waives any right it may have of
first requiring IFC (or any trustee, agent or other person acting on its behalf) to proceed against
or enforce any other rights or security or claim payment from any person before claiming from the
Guarantor under this Agreement.

 

- 69 -

     Section 3.03. Non-Competition. (a) If any amounts have become payable or have been
paid by the Guarantor under this Agreement, the Guarantor shall not, in respect of such monies,
seek to enforce repayment, obtain the benefit of any
security or exercise any other rights or legal remedies of any kind which may accrue to the
Guarantor against the Borrower, whether by way of subrogation, offset, counterclaim or otherwise,
in respect of the amount so payable or so paid (or in respect of any other monies for the time
being due to the Guarantor from the Borrower) if and for so long as any Guaranteed Obligations
remain payable.

The Guarantor shall hold in trust for, and forthwith pay or transfer to, IFC any payment or
distribution or benefit of security received by it contrary to this Section 3.03.

     (b) Upon the payment and satisfaction in full of all the Guaranteed Obligations and of all
sums now or in future becoming due to IFC from the Guarantor pursuant to this Agreement, and
provided that IFC is not under any further obligation (actual or contingent) to advance monies to
the Borrower under the IFC Loan Agreement, the Guarantor, if it has made a payment under this
Agreement, shall be entitled to exercise its rights of subrogation to its proportion of all
relevant rights of IFC against the Borrower pursuant to the IFC Loan Agreement. IFC shall promptly
execute, at the expense of the Guarantor, an assignment and such other documents in such form as
the Guarantor may reasonably request to transfer such proportion of such rights of IFC against the
Borrower to the Guarantor as are required for the Guarantor to obtain the full benefit of such
subrogation. The Guarantor shall enforce such rights directly against the Borrower in its own name
and not in the name of IFC.

     Section 3.04. Bankruptcy or Liquidation of Borrower. If the Borrower is adjudged
bankrupt or insolvent, or a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Borrower, or any substantial part of its property or other assets, is appointed,
or the Borrower makes any arrangement with its creditors, or is liquidated or wound up, the
Guarantor shall not claim, rank, prove or vote as a creditor of the Borrower or its estate in
competition with IFC in respect of any amounts owing to the Guarantor by the Borrower on any
account whatsoever, but instead shall give IFC the benefit of any such proof and of all amounts to
be received in respect of that proof until all Guaranteed Obligations have been fully paid.

     Section 3.05. Appropriation of Monies. Until all of the Guaranteed Obligations have
been irrevocably paid in full, IFC (or any trustee, agent or other person acting on its behalf)
may:

 

- 70 -

     (a) refrain from applying or enforcing any other monies, security or rights held or received
by IFC (or such trustee, agent or other person) in respect of the Guaranteed Obligations, or apply
and enforce the same in such manner and order as it sees fit (whether against the Guaranteed
Obligations or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and

     (b) hold and keep for such time as it thinks prudent any monies received, recovered or
realized under this Agreement, to the credit either of the Guarantor or such other person or
persons as it thinks fit or in a suspense account.

     Section 3.06. Reinstatement. (a) Where any discharge (whether in respect of the
obligations of the Borrower, the Guarantor or any security for those obligations or otherwise) is
made in whole or in part or any arrangement is made on the faith of any payment, security or other
disposition which is avoided or must be restored on insolvency, liquidation or otherwise without
limitation, the liability of the Guarantor under this Agreement shall continue or shall be
reinstated (as the case may be) as if such discharge or arrangement had not occurred.

     (b) IFC (or any trustee, agent or other person acting on its behalf) may concede or compromise
any claim that any payment, security or other disposition is liable to avoidance or restoration.

     Section 3.07. Additional Security. This Agreement is in addition to and is not in
any way prejudiced by any collateral or other security now or in future held by IFC, nor shall such
collateral or other security held by IFC or the liability of any person for all or any part of the
Guaranteed Obligations be in any manner prejudiced or affected by this Agreement.

 

- 71 -

ARTICLE IV

Representations and Warranties

     Section 4.01. Representations and Warranties. The Guarantor represents and warrants
that as of the date of this Agreement:

     (a) it is a company duly organized and validly existing under the laws of its place of
establishment, and has the corporate power to enter into and deliver and to perform its obligations
under this Agreement;

     (b) the execution and delivery by it of this Agreement and the performance by it of its
obligations hereunder have been duly authorized;

     (c) this Agreement has been duly executed by it and constitutes its valid and legally binding
obligations enforceable in accordance with its terms and would be so treated in the courts of its
place of incorporation and any other jurisdiction to which the Guarantor has agreed to submit in
this Agreement;

     (d) neither the execution and delivery by it of this Agreement nor the performance by it of
its obligations under this Agreement conflicts or will conflict with or result in any breach of any
of the terms, conditions or provisions of, or violate or constitute a default or require any
consent under:

     (i) any indenture, mortgage, contract, agreement or other
instrument or arrangement to which it is a party or which purports to be
binding upon it or any of its property or assets, and will not result in
the imposition or creation of any material lien, charge, or encumbrance
on, or security interest in, any part thereof pursuant to the provisions
of any such agreement, instrument or arrangement; or

     (ii) any of the terms or provisions of its memorandum or articles
of association or by-laws; or

     (iii) any statute, rule or regulation or any judgment, decree or
order of any court, governmental authority, bureau or agency known to
the Guarantor and binding on or applicable to it; and

 

- 72 -

     (e) all Authorizations required for the execution and delivery of this Agreement by it and the
performance by it of its obligations hereunder, have been duly obtained or granted and are in full
force and effect.

     Section 4.02. IFC Reliance. (a) The Guarantor acknowledges that it makes the
representations in Section 4.01 with the intention of inducing IFC to enter into this Agreement and
the IFC Loan Agreement and that IFC enters into this Agreement and the IFC Loan Agreement on the
basis of, and in full reliance on, each of such representations.

     (b) The Guarantor warrants to IFC that each of such representations is true and correct in all
material respects as of the date of this Agreement and that none of them omits any matter the
omission of which makes any of such representations misleading.

     Section 4.03. Rights and Remedies not Limited. IFC’s rights and remedies in relation
to any misrepresentation or breach of warranty on the part of the Guarantor are not prejudiced:

     (a) by any investigation by or on behalf of IFC into the affairs of the Guarantor;

     (b) by the execution or the performance of this Agreement; or

     (c) by any other act or thing which may be done by or on behalf of IFC in connection with this
Agreement and which might, apart from this Section, prejudice such rights or remedies.

ARTICLE V

Covenants

          Section 5.01. Guarantor’s Covenants. Unless IFC otherwise agrees, Guarantor shall:

 

- 73 -

     (a) Clinic Dividends. Ensure that: (i) all dividends and distributable profits from
the Clinics are, to the extent not payable to relevant domestic joint venture partners or domestic
co-investors, distributed directly or indirectly through an Affiliate to the Borrower or Guarantor
and not through any other Person; and (ii) all income from any management contracts between any
Clinic and Guarantor or any other company affiliated with Guarantor is paid directly or indirectly
to Guarantor or the Borrower;

     (b) Quarterly Reports. As soon as available or within sixty (60) days after the end of
each quarter of each Financial Year, whichever is later, furnish to
IFC two (2) copies of its financial statements for such period prepared on a Consolidated Basis in
accordance with the Accounting Principles, which requirement is deemed satisfied if such filings
have been made publicly available and a notice has been sent to IFC regarding the availability of
those filings;

     (c) Annual Reports. As soon as available or within one hundred and twenty (120) days
after the end of each Financial Year, whichever is later, furnish to IFC two (2) copies of its
financial statements for such Financial Year (which are in agreement with its books of account and
prepared on a Consolidated Basis in accordance with the Accounting Principles), together with an
audit report on them, all in form reasonably satisfactory to IFC, which requirement is deemed
satisfied if such filings have been made publicly available and a notice has been sent to IFC
regarding the availability of those filings;

     (d) Auditor Certification. As soon as available or within one hundred and twenty (120)
days after the end of each Financial Year, whichever is later, provide a report by the Auditor
certifying that, on the basis of its financial statements, Guarantor was in compliance with
financial covenants under this Agreement (including a clear methodology of the calculation of such
covenants); and

 

- 74 -

     (e) Filings.
Provide IFC a copy of all filings that have been made by Guarantor with
the Securities and Exchange Commission of the United States and/or other Stock Exchange on which
Guarantor stock is listed within five (5) Business Days after relevant filling is made which
requirement is deemed satisfied if such filings have been made available through EDGAR and a notice
has been sent to IFC regarding the availability of those filings in EDGAR.

     Section 5.02. Negative Covenants. Unless IFC otherwise agrees, Guarantor shall not:

     (a) Financial Debt. Incur any additional Financial Debt, unless after giving effect of
such debt transaction:

	 	(i)	 	the Liabilities to Tangible Net Worth Ratio is not
greater than 1.2; and
	 
	 	(ii)	 	The Peak Debt Service Coverage Ratio is not less than
1.2.

     (b) Dividends. declare or pay any cash dividend, make any other cash distribution on
its equity, or make any payment under any shareholder loans unless:

	 	(i)	 	the Project Physical Completion Date of both Projects has
occurred;
	 
	 	(ii)	 	first principal repayment of the Loan has been made;
	 
	 	(iii)	 	in the case of dividends, such payment would be made out
of retained earnings;
	 
	 	(iv)	 	the Peak Debt Service Coverage Ratio is not less than 1.2
and

 

- 75 -

	 	(v)	 	after giving effect to such payment:

	 	(A)	 	no Event of Default or Potential Event
of Default exists or is continuing;
	 
	 	(B)	 	the Current Ratio is not less than 1.5; and
	 
	 	(C)	 	the Liabilities to Tangible Net Worth
Ratio is not greater than 1.0.

     (c) Guarantees. Guarantee or assume the Liabilities of others except for its
Subsidiaries;

     (d) Leases. Enter into leases other than Financial Leases, if the aggregate payments
are in excess of $2,000,000 in any financial year;

     (e) Loans. Make loans or advances to, deposits (except commercial bank deposits) with
or investments in other persons except for its subsidiaries other than short-term investment grade
marketable securities;

     (g) Merger of Subsidiaries. Merge, consolidate, reorganize, or dispose of any of the
Borrower or Beijing UFH or Beijing United Family Health Center or Shanghai United Family Hospital
Inc., or merge, consolidate, reorganize, or dispose of any other Subsidiaries if such action has or
could reasonably be expected to have a Material Adverse Effect;

     (h) Use of Proceeds. Use proceeds of the IFC investment in countries which are not
members of the World Bank; and

     (i) Practices. Engage in any corrupt, fraudulent, coercive, collusive or obstructive
practice related to the Projects.

 

- 76 -

     (j) Make any principal payment of the Tranche B Note or Trance C Note, each as defined in the
Security Purchase Agreement by and between Chindex and Magenta Magic Limited, dated November 7,
2007, in each case, before the maturity of such Tranche B Note and Tranche C Note, as the case may
be.

     (k) Liens on Equity in the Borrower. Encumber, mortgage, pledge or otherwise secure
any interest in the registered capital of the Borrower for the benefit of any third party, other
than to IFC and in accordance with the Share Pledge Agreement.

ARTICLE VI

Miscellaneous

          Section 6.01. Notices. Any notice, request or other communication to be given or
made under this Agreement to IFC or to the Guarantor shall be in writing and shall be deemed to
have been duly given or made when it is delivered by hand, airmail, established courier service or
facsimile to the party to which it is required or permitted to be given or made at such party’s
address specified below or at such other address as such party has designated by notice to the
other party hereto.

     For the Guarantor:

Chindex International, Inc.

4340 East West Highway, Suite 1100

Bethesda, Maryland 20814

Attn: Roberta Lipson, CEO

         Lawrence Pemble, CFO

Facsimile: 301-215-7719

                502-427-0409

With a copy sent by e-mail to the attention of Roberta Lipson, CEO, and Lawrence
Pemble, CFO, at:

E-mail addresses: rlipson@Chindex.com and
            
                 lpemble@chindex.com

 

- 77 -

     For IFC:

International Finance Corporation

2121 Pennsylvania Ave., N.W.

Washington, D.C. 20433

United States of America

Attention: Director, Health and Education Department

Facsimile: +1 (202) 974-4792

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

Facsimile: +1 (202) 522-7419

     Section 6.02. English Language. All documents to be furnished or communications to
be given or made under this Agreement shall be in the English language or, if in another language,
shall be accompanied by a translation into English satisfactory to IFC certified by a
representative of the Guarantor, which translation shall be the governing version between the
Guarantor and IFC.

     Section 6.03. Expenses. The Guarantor shall pay to IFC or as IFC may direct:

     (a) the fees and expenses of IFC’s counsel in the PRC, Delaware and New York incurred in
connection with:

(i) the preparation and/or review, execution and, where
appropriate, stamping or registration of this Agreement;

(ii) the giving of any legal opinions required by IFC under this
Agreement; and

(iii) any amendment, supplement or modification to, or waiver
under, this Agreement; and

     (b) the costs and expenses incurred by IFC in relation to the enforcement or protection or
attempted enforcement or protection of its rights under this Agreement, including legal and other
professional consultants’ fees.

 

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     Section 6.04. Remedies and Waivers. No failure or delay by IFC in exercising any
power, remedy, discretion, authority or other rights under this Agreement shall waive or impair
that or any other right of IFC. No single or partial exercise of such a right shall preclude its
additional or future exercise. No such waiver shall waive any other right under this Agreement.
All waivers or consents given under this Agreement shall be in writing.

     Section 6.05. Jurisdiction and Enforcement. (a) This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York, United States of America.

     (b) For the exclusive benefit of IFC, the Guarantor irrevocably agrees that any legal action,
suit or proceeding arising out of or relating to this Agreement may be brought by IFC in the courts
of the State of New York or of the United States of America located in the Southern District of New
York. Final judgment against the Guarantor in any such action, suit or proceeding shall be
conclusive and may be enforced in any other jurisdiction, including the PRC, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence of the judgment, or
in any other manner provided by law.

     (c) By the execution of this Agreement, the Guarantor irrevocably submits to the non-exclusive
jurisdiction of such Court in any such action, suit or proceeding and designates, appoints and
empowers CT Corporation System, with offices currently located at 111 Eighth Avenue,
13th Floor, New York, New York 10011, as its authorized agent to receive for and on
its behalf service of the writ of summons or other legal process in any such action, suit or
proceeding in the State of New York.

     (d) Nothing in this Agreement shall affect the right of IFC to commence legal proceedings or
otherwise sue the Guarantor in the PRC or any other appropriate jurisdiction, or concurrently in
more than one jurisdiction, or to serve process, pleadings and other papers upon the Guarantor in
any manner authorized by the laws of any such jurisdiction.

     (e) As long as this Agreement remains in force, the Guarantor shall maintain a duly appointed
agent for the service of summons, complaint and other legal process in New York, New York, United
States of America, for purposes of any legal action, suit or proceeding brought by IFC in respect of this Agreement. The Guarantor
shall keep IFC advised of the identity and location of such agent.

 

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     (f) The Guarantor also irrevocably consents, if for any reason the Guarantor’s authorized
agent for service of process of summons, complaint and other legal process in any such action, suit
or proceeding is not present in New York, New York, to service of such papers being made out of
those courts by mailing copies of the papers by registered United States air mail, postage prepaid,
to the Guarantor at its address specified in Section 6.01. In such a case, IFC shall also send by
telex or facsimile, or have sent by telex or facsimile, a copy of the papers to the Borrower.

     (g) Service in the manner provided in subsection (f) above in any such action, suit or
proceeding will be deemed personal service, will be accepted by the Guarantor as such and will be
valid and binding upon the Guarantor for all purposes of any such action, suit or proceeding.

     (h) The Guarantor irrevocably waives to the fullest extent permitted by applicable law:

(i) any objection which it may have now or in the future to the
laying of the venue of any such action, suit or proceeding in any court
referred to in this Section;

(ii) any claim that any such action, suit or proceeding has been
brought in an inconvenient forum;

(iii) its right of removal of any matter commenced by 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 the Guarantor by IFC.

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

 

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     (j) The Guarantor hereby acknowledges 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 Guarantor hereby waives any and all rights to demand a trial by jury in any action, suit or
proceeding arising out of or relating to this Agreement or the transactions contemplated by this
Agreement brought against IFC in any forum in which IFC is not entitled to immunity from a trial by
jury.

     (k) To the extent that the Guarantor may, in any suit, action or proceeding brought in any of
the courts referred to in paragraph (b) above or a court of the PRC or elsewhere arising out of or
in connection with this Agreement, be entitled to the benefit of any provision of law requiring IFC
in such suit, action or proceeding to post security for the costs of the Guarantor (cautio
judicatum solvi), or to post a bond or to take similar action, the Guarantor hereby
irrevocably waives such benefit, in each case to the fullest extent now or in the future permitted
under the laws of the PRC or, as the case may be, the jurisdiction in which such court is located.

     Section 6.06. Successors and Assigns. This Agreement binds and inures to the benefit
of the respective successors and assigns of the parties, except that the Guarantor may not assign
or otherwise transfer all or any part of its rights or obligations under this Agreement without the
prior written consent of IFC. The benefit of this Agreement may be freely and unconditionally
assigned, transferred or otherwise disposed of, in whole or in part, by IFC to any other person,
corporate or otherwise.

     Section 6.07. Amendment. Any amendment of any provision of this Agreement shall be
in writing and signed by the parties.

     Section 6.08. Counterparts. This Agreement may be executed in several counterparts,
each of which is an original, but all of which together constitute one and the same agreement.

 

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

	 	 	 	 	 	 	 

	 	 	CHINDEX INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 
	 	 	Name (print):	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	INTERNATIONAL FINANCE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Authorized Representative
	 	 
	 	 	Name (print):	 	 
	 

	 	Title:	 	 	 	 

 

 

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EXHIBIT 2

FORM OF MORTGAGE AGREEMENT

 

IFC INVESTMENT NUMBER 26133

Mortgage Agreement

between

[ONSHORE BORROWER]

and

INTERNATIONAL FINANCE CORPORATION

Dated _________, 200[  ]

 

 

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MORTGAGE AGREEMENT

This MORTGAGE AGREEMENT (the “Agreement”) is made and entered into as of _________, 200[ ],
by and between:

	(1)	 	[Onshore Borrower] (the “Borrower”), a [Chinese-foreign equity joint venture enterprise] with
limited liability organized and existing under the laws of the People’s Republic of China
(“PRC”) with its legal address at: [                    ], PRC; and
	 
	(2)	 	International Finance Corporation (“IFC”), an international organization established by
Articles of Agreement among its member countries, including the PRC, with its legal office at
2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433, United States of America.

in accordance with the PRC Property Rights Law (the “Property Rights Law”), the PRC Security Law
(the “Security Law”), the Law of the PRC on the Administration of Urban Real Property (the “Real
Property Law”), the Provisional Regulations of the PRC on the Grant and Transfer of State-Owned
Land-Use Rights in Cities and Townships, the Measures on Movable Assets Mortgage Registration, the
Administrative Measures on Registration of Rights and Ownership of Buildings in Cities, as amended,
the Notice on Issues Concerning Registration of Land-Use Rights Mortgage and other relevant laws
and regulations of the PRC.

WHEREAS:

(A) Subject to the terms and conditions of a Loan Agreement dated [          ], 200[  ] between the
Borrower and IFC (the “IFC Loan Agreement”), IFC has agreed to lend the Borrower up to [          ]
Dollars ($      ) (the “IFC Loan”);

(B) In consideration of, and as security for, the amounts provided by IFC under the IFC Loan
Agreement the Borrower has agreed to provide certain collateral (the “Collateral”, as defined in
Article 1 below) to IFC, as security for the repayment of such amounts and other Secured
Obligations (as defined in Article 1 below).

NOW, THEREFORE, in consideration of the promises and the mutual covenants described hereafter, the
Borrower and IFC agree as follows:

 

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ARTICLE I

Definitions and Interpretation

     Section 1.01. Definitions. Unless otherwise defined, or the context otherwise
requires, terms defined in the IFC Loan Agreement have the same meanings when used in this
Agreement and the following terms shall have the meanings opposite them:

	 	 	 

	“Approvals”

	 	any consent, registration, filing,
agreement, notarization, certificate,
license, approval, permit,
authorization, authority or exemption
from, by or with any Authority,
whether given by express action or
deemed given by failure to act within
any specified time period, and all
corporate, creditors’ and
shareholders’ approvals or consents or
authorizations;
	 
	 	 
	“Authority”

	 	any government or governmental,
administrative, fiscal, judicial, or
government-owned body, department,
commission, authority, tribunal,
agency or entity;
	 
	 	 
	“Board”

	 	the Board of Directors of the
Borrower, as constituted from time to
time;
	 
	 	 
	“Building Ownership Certificate(s)”

	 	the Building Ownership Certificate(s)
in the name of the Borrower issued by
[                    ] Real Estate
Administration Commission evidencing
the Borrower’s ownership of the
Buildings, copies of which are
attached hereto as part of Schedule 2;
	 
	 	 
	“Buildings”

	 	the buildings, plant, improvements,
premises, structures, fixtures and
facilities located on the Project
Site, including those under
construction, each as more
particularly described in Schedule 2
to this Agreement and all other
buildings, improvements, premises,
structures, fixtures, attachments and
facilities now or in the future to be
located on the Project Site;

 

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	“Business Day”

	 	a day when banks are open for business
in New York, New York and Beijing,
PRC;
	 
	 	 
	“Certificate of Other Rights”

	 	the security registration certificate
issued by appropriate land and real
estate administration bureaus in
respect of the Collateral;
	 
	 	 
	“Collateral”

	 	all or any part of the following: (i)
the Land-Use Rights, (ii) the
Buildings; (iii) the Equipment; and
(iv) any cash or other proceeds from
the rental, sale or other disposition
of any of (i), (ii) or (iii) above;
	 
	 	 
	“Construction Contracts”

	 	the agreements entered into or to be
entered into by or on behalf of the
Borrower for the provision of building
and civil works of the Project,
including engineering, procurement,
construction, erection, installation
and commissioning;
	 
	 	 
	“Disbursement”

	 	any disbursement of the IFC Loan;
	 
	 	 
	“Dollars” and “$”

	 	the lawful currency of the United States of America;
	 
	 	 
	“Equipment”

	 	certain equipment and machinery and other
movables owned by the Borrower and
located on the Project Site, including
those being installed and/or
commissioned, each as more particularly
described in Schedule 3 to this
Agreement, and all other equipment,
machinery and movables now or in the
future to be located on the Project Site
that are or will be owned by the
Borrower;
	 
	 	 
	“Event of Default”

	 	has the meaning ascribed thereto in the
IFC Loan Agreement.
	 
	 	 
	“IFC Loan Agreement”

	 	has the meaning ascribed thereto in the
introduction to this Agreement;
	 
	 	 
	“IFC Loan”

	 	has the meaning ascribed thereto in the
introduction to this Agreement;

 

- 86 -

	 	 	 

	“Investment Documents”

	 	the IFC Loan Agreement and any and all
documents executed by the Borrower and
IFC in connection with the IFC Loan
Agreement;
	 
	 	 
	“Land Grant Contract”

	 	[                    ]
	 
	 	 
	“Land-Use Rights”

	 	the existing granted land-use rights for
the Mortgaged Lands as described in the
Land-Use Rights Certificate(s) and any
future granted land use rights acquired
by the Borrower for the Project;
	 
	 	 
	“Land-Use Rights Certificate(s)”

	 	the State-Owned Land-Use Certificate(s)
(No. [                    ]) issued by the [                    ] Municipal Land Administration
on [                    ], covering an area of [                    ] square meters
and located on the [                    ], China, granting to
the Borrower a land use right to the
Project Site for industrial use during [                    ]
and [                    ], a copy of
which is attached as part of Schedule 1
to this Agreement;
	 
	 	 
	“Lien”

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

	 	the land with a total area of [                    ] square meters, as more particularly
described in the Land-Use Rights
Certificate(s), attached hereto as part
of Schedule 1 and any land acquired by
the Borrower in the future;
	 
	 	 
	“Mortgage Registration Certificate”

	 	the security registration certificate
issued by appropriate administration of industry and commerce in respect of the Collateral;

 

- 87 -

	 	 	 

	“People’s Court”

	 	the courts in the PRC;
	 
	 	 
	“Person”

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

	 	has the meaning ascribed thereto in the IFC
Loan Agreement;
	 
	 	 
	“PRC”

	 	the People’s Republic of China;
	 
	 	 
	“Project”

	 	has the meaning ascribed thereto in the IFC
Loan Agreement;
	 
	 	 
	“Project Site”

	 	the existing parcel of land designated and
identified in the Land Use Rights
Certificate(s) and any parcel of land
acquired by the Borrower in the future for
the Project;
	 
	 	 
	“Property Rights Law”

	 	has the meaning ascribed thereto in the
introduction to this Agreement;
	 
	 	 
	“Real Property Law”

	 	has the meaning ascribed thereto in the
introduction to this Agreement;
	 
	 	 
	“Receiver”

	 	any receiver, agent, administrator or other
similar officer appointed by IFC for the
purpose of taking any action or exercising any
rights in connection with the enforcement of
the security created by this Agreement, which
Receiver shall exercise his powers hereunder as
agent of, and at the cost of, the Borrower and
provided that IFC shall not be under any
obligation to appoint a Receiver unless
required to do so by applicable law;
	 
	 	 
	“Relevant Certificates and
Documents”

	 	the certificates and documents relating to the
rights, title and/or interests in or to the
Collateral, including the Land-Use Rights

 

- 88 -

	 	 	 

	 

	 	Certificate(s) the Building Ownership
Certificate(s), the Certificates of Other
Rights, the Mortgage Registration Certificate
and any of the above documents to be obtained
in the future by the Borrower;
	 
	 	 
	“Secured Obligations”

	 	at any time and from time to time, all amounts
payable by the Borrower to IFC in respect of
principal, interest, fees and other amounts or
charges and otherwise (including any amounts in
respect of liquidated damages, compensatory
damages and enforcement costs) in respect of
the IFC Loan under or in connection with the
IFC Loan Agreement and any and all other
agreements, documents or instruments executed
by the Borrower and/or IFC in connection with
the IFC Loan, all in Dollars;
	 
	 	 
	“Security Law”

	 	has the meaning ascribed thereto in the
introduction to this Agreement;
	 
	 	 
	[“[          ] Customs”

	 	the [                    ] Administration of Customs;]
	 
	 	 
	“[          ] AFE”

	 	the [                    ] Municipal Administration of
Foreign Exchange;
	 
	 	 
	“[          ] AIC”

	 	the [                    ] Municipal Administration of
Industry and Commerce;
	 
	 	 
	“[          ] BLR”

	 	[                    ] Municipal Bureau of Land and
Resources; and
	 
	 	 
	“[          ] REAC”

	 	the [                    ] Municipal Real Estate
Administration Commission.

     Section 1.02. Interpretation. In this Agreement, unless the context otherwise
requires:

     (a) headings are for convenience only and do not affect the interpretation of this Agreement;

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

 

- 89 -

     (c) a reference to a natural person includes any company, partnership, trust, joint venture,
association, corporation or other body corporate and any governmental authority or agency;

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

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

     (f) a reference to a party to any document includes that party’s successors and permitted
assigns;

     (g) the word “including” shall mean “including without limitation” or “including but not
limited to;” and

     (h) all Authorities referred to in this Agreement shall be construed as including any
successor or substitute Authority thereof having the same or substantially the same functions and
powers.

ARTICLE II

Mortgage

     Section 2.01. Mortgage. As continuing security for the payment and discharge in full
of all the Secured Obligations, the Borrower hereby grants to IFC a first priority mortgage over
the Collateral in accordance with the Property Rights Law, the Security Law and other relevant laws
and regulations of the PRC.

     Section 2.02. Enforcement. The security created by this Agreement shall become
enforceable immediately upon the occurrence and during the continuance of an Event of Default under
the IFC Loan Agreement.

     Section 2.03. Actions in Connection with Enforcement. At any time after the
occurrence of an Event of Default that is continuing under the IFC Loan Agreement, IFC shall have
the right (which right the Borrower irrevocably consents and agrees to and acknowledges) to the
extent permitted by applicable law, either in person or through any Receiver, to take any one or
more of the following actions at IFC’s option:

 

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     (a) to take possession of, get in, collect and receive all or any part of the Collateral for
the purpose (in the opinion of the IFC) of converting all or any part of the Collateral into value
and/or obtaining proceeds from the auction or sale of all or any part of the Collateral;

     (b) to convert all or any part of the Collateral into value and/or obtain proceeds from the
auction or sale of all or any part of the Collateral;

     (c) to commission the relevant organization or Authority to auction all or any part of the
Collateral;

     (d) to apply to the relevant Authority or Authorities for the lawful sale or disposal of all
or any part of the Collateral at a price considered by IFC to be reasonable;

     (e) with a view to selling all or any part of the Collateral (or offering it for sale) to
repair, replace, improve and/or develop such Collateral and to apply for any appropriate
permission, license, consent or approval in connection therewith;

     (f) to sever any attachments or fixtures and to sell them apart from the land or buildings on
or to which they are attached, and to uninstall, disassemble or sever any equipment, machinery or
other movables and to sell them apart from any other equipment, machinery, other movables, plants
or facilities to which they are attached or associated;

     (g) for the purpose of converting all or any part of the Collateral into value and/or
obtaining proceeds from the auction or sale of all or any part of the Collateral, to sell,
exchange, license or otherwise dispose of or in any way whatsoever deal with the Collateral for
such consideration (if any), including shares, debentures or any other securities whatsoever, and
upon such terms as IFC may reasonably think fit;

     (h) for the purpose of converting all or any part of the Collateral into value and/or
obtaining proceeds from the auction or sale of all or any part of the Collateral, to make any
leases whatsoever of the Collateral and, with or without consideration, to accept or agree to
accept surrenders of leases of the Collateral in such circumstances, for such purposes and upon
such terms whatsoever as IFC may reasonably think fit, and to vary the terms of any lease affecting
the Collateral and to act in relation to any review of the rent under such lease in such manner as
IFC may reasonably think fit;

     (i) to insure, repair, improve, replace, exploit and/or develop the Collateral in any manner;

 

- 91 -

     (j) to bring, defend, submit to arbitration, negotiate, compromise, abandon and/or settle any
claims and/or proceedings concerning the Collateral;

     (k) for the purpose of converting all or any part of the Collateral into value and/or
obtaining proceeds from the auction or sale of all or any part of the Collateral, generally to
carry out, or cause or authorize to be carried out, any transaction or arrangement whatsoever,
whether similar or not to any of the foregoing, in relation to the Collateral which IFC may
reasonably consider expedient as effectively as if IFC were solely and absolutely entitled to the
Collateral;

     (l) in connection with the exercise of any of its powers, to execute or do, or cause or
authorize to be executed or done, on behalf of or in the name of the Borrower or otherwise, as IFC
may reasonably think fit, all documents, acts or things which IFC may reasonably consider
appropriate;

     (m) to take such other actions as are appropriate to satisfy the Secured Obligations, in
accordance with the Property Rights Law, the Security Law and other relevant laws and regulations;

     (n) to exercise all rights and privileges of the Borrower provided in any or all of the
Construction Contracts and other contracts or agreements relating to the Collateral on behalf or in
the name of the Borrower, as IFC may reasonably think fit;

     (o) to take possession of, collect, manage and use the Collateral and exercise any or all the
Borrower’s rights and privileges in respect of the Collateral to the exclusion of the Borrower as
if IFC were the beneficial owner of the Collateral ; and

     (p) in each case, to be compensated in full and in first priority from the funds and proceeds
obtained through any such actions to the extent of the Secured Obligations and any expenses related
thereto.

     Section 2.04. Deficiency or Surplus. If the funds obtained as the result of the
actions set out in Section 2.03 above are insufficient to satisfy in full the Secured Obligations
and all expenses related hereto, IFC shall have the right to claim the deficiency from the
Borrower. If any balance remains after the payment in full of the Secured Obligations and all
expenses related hereto, such balance shall be returned to the Borrower or applied as otherwise
required by applicable law, and IFC shall, at the cost and expense of the Borrower (including any
costs of notarization, registration and obtaining of any approvals from any relevant Authority),
execute and deliver to the Borrower proper instruments evidencing the termination and release of
this Agreement.

 

- 92 -

     Section 2.05. Appointment of Attorney. (a) As further security for the performance of
its obligations under this Agreement and for conferring on IFC the benefit of the rights expressed
to be conferred hereunder, the Borrower hereby
irrevocably appoints and constitutes, until the Secured Obligations have been paid and discharged
in full, IFC, as the Borrower’s true and lawful attorney with full power (in the name of the
Borrower or otherwise) to, after the occurrence and during the continuance of an Event of Default,
exercise any or all of the Borrower’s rights and carry out any or all of the Borrower’s obligations
hereunder, to demand and receive any and all moneys and claims for moneys due or to become due
arising out of the Collateral, to enforce any provision thereof, to give valid receipts and
discharges, and generally to file any and all claims or take any and all lawful actions or
institute any and all proceedings that may be necessary for the purpose of putting into effect the
intent of this Agreement.

     (b) The Borrower hereby consents, acknowledges and agrees that IFC and its agents shall not be
liable for any loss, damage, cost, expense, impairment, diminution or devaluation of the Collateral
caused by or resulting or arising from or in connection with any act or failure to act by IFC or
its respective agents under this Agreement or in relation to the Collateral, unless directly caused
by the gross negligence or willful misconduct of IFC or such agents.

     Section 2.06. Power to Delegate. After notifying the Borrower, IFC may at any time
and from time to time delegate by power of attorney or in any other manner to any Person(s) all or
any of the rights, powers and discretions exercisable by any or all of them under Section 2.03
above. Any such delegation may be made upon such terms (including the power to sub-delegate) and
subject to such conditions as IFC may deem appropriate in its discretion.

     Section 2.07. No Discharge. The obligations of the Borrower under this Agreement
shall not be discharged or impaired by:

     (a) any invalidity, unenforceability or other defect relating to any of the Investment
Documents or any security relating to any such documents; or

     (b) any amendment to or variation of any of the Investment Documents or any security relating
to any such documents, other than amendments made in accordance with the terms thereof; or

     (c) any release of or granting of time or any other indulgence to the Borrower or any third
party, other than a release of, granting of time or any other indulgence granted by the IFC to the
Borrower in accordance with the terms of the Investment Documents; or

 

- 93 -

     (d) any winding up, dissolution, reconstruction or reorganization, legal limitation,
incapacity or lack of corporate power or authority or other circumstances of, or any change in the
constitution or corporate identity or loss of corporate identity by, the Borrower or any other
Person; or

     (e) any other act, event, neglect or omission which would or might but for this Section
operate to impair or discharge the Borrower’s liability hereunder.

ARTICLE III

Representations and Warranties

     Section 3.01. Representations and Warranties The Borrower represents and warrants to
IFC that:

     (a) The Borrower is a Sino-foreign joint venture enterprise duly incorporated and validly
existing under the laws of the People’s Republic of China and has the corporate power to enter
into, and comply with its obligations under this Agreement.

     (b) The Land Grant Contract, Land-Use Rights Certificate(s), the Building Ownership
Certificate and the Construction Contracts are each in full force and effect. The Borrower has the
full right to use and enjoy the Project Site and to own/use the Collateral, and to assign and
mortgage the land use rights for the Project Site until the expiration of the term as provided the
Land Grant Contract and the Land-Use Rights Certificate(s). The Borrower has paid, or made
satisfactory arrangements for the payment when due all fees for the rights under the Land-Use
Rights Certificate(s), and has performed in a timely manner all other material obligations that are
set out in the Land Grant Contract, Land-Use Rights Certificate(s), the Building Ownership
Certificate(s) and the Construction Contracts.

     (c) The Borrower (i) is in compliance with the material requirements of the Land Grant
Contract Land-Use Rights Certificate(s) and the Building Ownership Certificate(s); (ii) has paid or
made satisfactory arrangements for the payment when due, all costs, fees and expenses of and for
the development of the Project Site and for the procurement, importation, transportation, erection,
installation, testing and commissioning of the Equipment; (iii) has obtained, or will obtain when
necessary, all Approvals required for the development and use of the Project Site; and (iv) has
performed all material obligations with regard to the use or development of the Project Site in
accordance with the requirements of the Land Grant Contract Land-Use Rights Certificate(s),
Building Ownership Certificate(s), and any other related applicable Approvals.

 

- 94 -

     (d) The execution and enforcement of this Agreement by the Borrower does not and will not
violate the provisions of (i) any applicable law, (ii) any relevant Approval, or (iii) the terms or
conditions of the Land Grant Contract, the Land-Use Rights Certificate(s) or the Building Ownership
Certificate(s). This
Agreement has been duly executed by the, and is the legal, valid and binding obligation of the
Borrower and enforceable against the Borrower in accordance with the terms hereof.

     (e) All the information and documents provided to IFC in connection with this Agreement and
the Collateral are true, complete and correct in all material respects.

     (f) The Borrower has duly obtained , or will obtain when necessary, all required Relevant
Certificates and Documents, including all required certificates, permits and approvals from
applicable Authorities for all Buildings and all Equipment.

     (g) None of the representations and warranties in this Section 3.01 omits any information or
matter the omission of which makes any of such representations and warranties inaccurate or
misleading in any material respects.

     Section 3.02. Reliance. The Borrower acknowledges and agrees that it makes the
representations and warranties in Section 3.01 above with the intention of inducing IFC to enter
into this Agreement and the IFC Loan Agreement, and that IFC has entered into this Agreement and
the IFC Loan Agreement on the basis of, and in full reliance on, each of such representations and
warranties being true, accurate and complete.

     Section 3.03. Rights and Remedies not Limited. The rights and remedies of IFC in
relation to any misrepresentations or breach of warranty by the Borrower shall not be prejudiced
by:

     (a) any investigation by or on behalf of any of IFC into the affairs of the Borrower;

     (b) the execution or performance of this Agreement; or

     (c) any other act or thing which may be done by or on behalf of IFC in connection with this
Agreement and which might, apart from this Section, prejudice such rights or remedies.

 

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ARTICLE IV

Covenants

     Section 4.01. Affirmative Covenants. Throughout the term of this Agreement, the
Borrower covenants and agrees as follows:

     (a) The Borrower shall (i) maintain the Collateral in good repair and condition, and (ii)
protect the Collateral from any material damage or impairment, normal wear and tear excepted.

     (b) The Borrower shall perform in a timely fashion all its material obligations
under the Land Grant Contract, Land-Use Rights Certificate(s) and the Building Ownership
Certificate(s), including the payment of all relevant fees, considerations, taxes and other amounts
payable by the Borrower in respect of the Project Site, and shall comply with all applicable laws
and regulations of the PRC relating to the Project Site.

     (c) To protect and perfect rights of IFC hereunder, including IFC’s first priority security
interest in the Collateral, the Borrower shall file and register with (i) the [          ] REAC and the
[          ] BLR; (ii) the [           ] AIC; (iii) the [          ] AFE; (iv) the [          Customs]; and (v)
any other relevant Authorities: (A) all required documents, executed by the necessary Persons, to
effect the release of all existing Liens with respect to the Collateral covered under this
Agreement in favour of Persons other than IFC, and such Liens shall have been released in
accordance with PRC law within five (5) Business Days after the execution of this Agreement and as
an integrated transaction herewith, (B) this Agreement and all other required documents within five
(5) Business Days after the execution of this Agreement, and (C) each amendment or supplement to
any such document within five (5) Business Days after the signing of such amendment or supplement,
and after completing such registrations shall provide evidence thereof satisfactory to IFC. The
Borrower shall ensure that all relevant registration and approval documents specifically name IFC
as the secured lender. The Borrower shall obtain all Approvals necessary for all such registrations
and for this Agreement and any such amendment and supplement to be legally effective, valid,
binding and enforceable against the Borrower in accordance with the terms hereof and thereof.

     (d) Promptly upon obtaining of a land use right certificate for any new parcel of land
acquired by the Borrower after the date of this Agreement, the Borrower shall execute and deliver
to IFC a Supplemental Mortgage Agreement in the form of Schedule 4 to this Agreement, and take such
other actions as are necessary, to record and perfect IFC’s first priority mortgage over such land
use

 

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rights. Each such Supplemental Mortgage Agreement shall constitute a supplement to this
Agreement.

     (e) Promptly upon the completion of any Building which was not completed prior to the date of
this Agreement, the Borrower shall obtain the Building Ownership Certificate pertaining to said
Building from the [          ] REAC and/or other relevant Authority and promptly file and register
each such document with the [          ] REAC, [          ] AIC and/or such other relevant Authority
and shall execute and deliver to IFC a Supplemental Mortgage Agreement in the form of Schedule 4 to
this Agreement, and take such other actions as are necessary, to record and perfect IFC’s first
priority mortgage over each such Building. Each such Supplemental Mortgage Agreement shall
constitute a supplement to this Agreement.

     (f) [Immediately after any imported Equipment for the Project is no longer subject to customs
supervision (the details of each item of the Equipment currently subject to customs supervision and
the remaining supervision periods are described in detail in Schedule 3) ] and promptly upon the
acquisition of any new Equipment after the date of this Agreement which is not subject to the
customs supervision, the Borrower shall obtain title documents or certificates to said Equipment
from the relevant Persons and/or relevant Authorities and promptly file and register, as necessary,
each such document or certificate and shall execute and deliver to IFC a Supplemental Mortgage
Agreement in the form of Schedule 4 to this Agreement, with the [          ] AIC and/or such other
relevant Authority and take such other actions as are necessary, to record and perfect IFC’s first
priority mortgage over each such item of Equipment. Each such Supplemental Mortgage Agreement shall
constitute a supplement to this Agreement.

     (g) The Borrower shall promptly obtain all other Approvals, execute all other documents and
instruments and do all other acts and things as IFC may reasonably request from time to time to
carry out the matters and transactions contemplated in this Agreement or in any document required
to be delivered in connection herewith, including such Approvals, executions, acts and things as
are necessary to perfect, protect or enforce the interests of IFC created hereunder or intended to
be created hereunder or for facilitating the realization of the Collateral or the exercise of any
right, power or discretion exercisable by IFC in respect of the Collateral.

     (h) In respect of any Building that is under construction or any Equipment that has not yet
been acquired and installed at the Project Site, the Borrower shall prior to the Supplemental
Mortgage Agreement contemplated above in Section 4.01(__) or Section 4.01(__) obtain a duly signed

 

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Contractor’s Consent & Agreement from the relevant contractors in the form attached as Schedule 5
to this Agreement.

     (k) The Borrower shall ensure that there shall be no claim made against it or the Collateral
by any contractor pursuant to Article 286 of the Contract Law of the PRC.

     Section 4.02. Negative Covenants. Unless IFC otherwise consents to such action or
matter in writing in advance, throughout the term of this Agreement, the Borrower shall not:

     (a) unless otherwise permitted by the IFC Loan Agreement, sell, lease, assign, convey,
transfer or otherwise dispose of any of the Collateral, or agree to do any of the foregoing, except
for the replacement of items of the Collateral (with comparable items having a value equal to or
greater than the value of the items replaced) which are required by normal wear and tear in the
ordinary course of business or in connection with a casualty event for which insurance proceeds are
obtained; any purported sale, lease, assignment, conveyance, transfer or other disposal of any of
the Collateral, except as expressly permitted in this Section 4.02(a), shall be invalid;

     (b) unless otherwise permitted by the IFC Loan Agreement, waive any rights with respect to any
of the Collateral;

ARTICLE V

Custody of Relevant Certificates and Documents

     Section 5.01. Custody of Relevant Certificates and Documents. Except as otherwise
required by any applicable laws or regulations, all Relevant Certificates and Documents shall be
held by IFC (or a nominee on behalf of IFC) during the term of the IFC Loan Agreement and shall be
returned to the Borrower after the security created by this Agreement has lapsed and been
discharged. In order to maintain the validity of the Relevant Certificates and Documents and to the
extent required by any applicable laws and regulations, IFC agrees to allow the Borrower access to
such Relevant Certificates and Documents upon request, and with reasonable notice, and to present
them to the relevant Authorities for such purpose. IFC shall take all necessary measures to
prevent the Relevant Certificates and Documents from being lost or damaged when they are in IFC’s
custody.

 

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ARTICLE VI

Effectiveness

     Section 6.01. Effectiveness. Unless otherwise provided by PRC law, the security
created by this Agreement shall become effective against the various items of Collateral when the
relevant registrations referred to in Section 4.01(b) for such Collateral have been completed.

ARTICLE VII

Miscellaneous

     Section 7.01. Notices. Any notice, request or other communication to be given or
made under this Agreement shall be in writing. The notice, request or other communication may be
delivered by hand, airmail, facsimile or established courier service to the party’s address
specified below or at such other address as such party notifies to the other parties from time to
time. Any notice, request or other communication from the Borrower shall only be effective upon
receipt by IFC or, in the case of delivery by hand or by established courier service, upon refusal
to accept delivery when delivered to IFC during normal business hours. Any notice, request or other
communication from IFC shall be effective upon receipt by the Borrower, or when deemed to be
received by the Borrower (a) in the case of delivery by hand or by established courier service,
upon refusal to accept delivery when delivered to the Borrower during normal business hours, or (b)
in the case of delivery by facsimile, on the day it is transmitted, provided that transmission is
proved, in the case of a facsimile, by the appearance of the Borrower’s facsimile number on the
facsimile transmission report of IFC’s facsimile machine.

For the Borrower:

[                                        ]

Attention: [                    ]

Facsimile: 0086-[                    ]

For IFC:

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

United States of America

 

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Facsimile: +1 (202) 974-4792

Attention: Director, Health and Education Department

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

Facsimile: +1 (202) 522-7419

With a copy to:

International Finance Corporation

15th Floor, China World Tower 2

China World Trade Center

No. 1 Jian Guo Men Wai Avenue

Beijing 100004

People’s Republic of China

Facsimile: +86 (10) 5860-3100

Attention: Country Manager

     Section 7.02. Language. Any notice, request or other communication to be given or
made under this Agreement shall be in English, or if in another language, shall, if IFC so
requests, be accompanied by a translation into English satisfactory to the IFC and certified by an
Authorized Representative of the Borrower, which translation shall be the governing version among
the relevant parties.

     Section 7.03. Termination of Agreement. This Agreement shall continue in force until
all the Secured Obligations have been paid and discharged in full in accordance with the terms of
the IFC Loan Agreement.

     Section 7.04. Applicable Law and Jurisdiction. (a) This Agreement is governed by and
shall be construed in accordance with the laws of the PRC.

     (b) In the event of any dispute in the interpretation or enforcement of this Agreement, IFC
shall be entitled to commence a legal action in the People’s Court of relevant jurisdiction to
interpret or enforce the provisions hereof.

     Section 7.05. Severability. Any provision of this Agreement which is prohibited or
unenforceable by reason of any present or future law in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such

 

- 100 -

prohibition or unenforceability without
invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     Section 7.06. Successors and Assigns. This Agreement binds and benefits the
respective successors and assigns of the parties. However, the Borrower may not assign or delegate
any of its rights or obligations under this Agreement without IFC’s prior written consent.

     Section 7.07. Amendment. Any amendment of any provision of this Agreement shall be
in writing and signed by the parties.

     Section 7.08. Borrower’s Waiver. The Borrower hereby waives all objections, denials
and challenges to the validity and binding force of this Agreement.

     Section 7.09. Execution Copies. This Agreement has been written in Chinese and
English in [ ] ( ) originals each, all of which constitute one and the same agreement. Each
party shall hold one (1) set of Chinese and English originals. Both language versions shall be
equally authentic.

     Section 7.10. Remedies and Waivers. No forbearance, extension of time limit or delay
on the part of IFC in exercising its rights, powers and discretions hereunder against any default
or delay on the part of the Borrower shall prejudice, affect or limit any of the rights, powers and
discretions to which IFC is entitled under this Agreement and as a creditor under the general law,
nor shall it be deemed as consent on its part to a breach of this Agreement, nor will it constitute
a waiver by IFC or be deemed to constitute a waiver of its rights to take action against any breach
of this Agreement in the future. No single or partial exercise of such a right shall preclude its
additional or future exercise. No such waiver shall waive any other right under this Agreement. All
waivers or consents given under this Agreement shall be in writing.

     Section 7.11. Article 35 of the Security Law. To the extent the total value of
Collateral is at any time less than the value of the Secured Obligations, IFC may, in its sole
discretion, for the purpose of Article 35 of the Security Law, divide its loan into separate
tranches and deem separate items or groups of items constituting parts of the Collateral and having
a value greater than that of a tranche or tranches of that loan as severally constituting security
for such tranche or tranches.

     Section 7.12. Costs and Expenses. The Borrower shall pay or, as the case may be,
reimburse IFC any amount paid by on account of, all taxes (including stamp taxes), duties, fees or
other charges payable on or in connection with the preparation and/or review execution, issue,
delivery, registration or notarization

 

- 101 -

of this Agreement and any other documents related to this
Agreement and the reasonable fees and expenses incurred by IFC (including legal counsel fees) in
connection with (i) any legal opinions required in connection with this Agreement; (ii)
administration by IFC of its investments or otherwise in connection with any amendment, supplement
or modification to, or waiver under, this Agreement; (iii) the registration (where appropriate) and
the delivery of the evidences of indebtedness relating to the Loan Agreements and their
disbursements and (iv) the costs and expenses incurred by IFC in relation to efforts to enforce or
protect its rights under any Investment Documents, or the exercise of its rights or powers
consequent upon or arising out of the occurrence of any Event of Default or Potential Event of
Default, including legal and other professional consultants’ fees on a full indemnity basis.

 

- 102 -

IN WITNESS WHEREOF, this Agreement is entered into by the parties, acting through their duly
authorized representatives, as of the date first above written.

	 	 	 	 	 	 	 

	 	 	[ONSHORE BORROWER]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	INTERNATIONAL FINANCE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

 

- 103 -

SCHEDULE 1

LAND USE RIGHTS

 

- 104 -

SCHEDULE 2

BUILDINGS

The Buildings are located on the Mortgaged Land and are solely owned by the Borrower, which are
described in detail in the following Building Ownership Certificates:

BUILDINGS OWNERSHIP CERTIFICATE NUMBER

 

- 105 -

SCHEDULE 3

EQUIPMENT

Part I: Equipment not Subject to Customs Supervision

Part II: Equipment Currently Subject to Customs Supervision

 

 

- 106 -

SCHEDULE 4

FORM OF SUPPLEMENTAL MORTGAGE CONTRACT

THIS SUPPLEMENTAL MORTGAGE CONTRACT is entered into on _______________ between

[ONSHORE BORROWER] (the “Borrower”), a [Chinese-foreign equity joint venture
enterprise] with limited liability organized and existing under the laws of the People’s
Republic of China (“PRC”) with its legal office at the [                    ], PRC; and

INTERNATIONAL FINANCE CORPORATION (“IFC”), an international organization established by
Articles of Agreement among its member countries, including the PRC, with its legal office
at 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433, United States of America;

The Borrower and IFC are collectively referred to herein as the “Parties.” Capitalised terms used
in this Supplemental Mortgage Contract (“Supplement”) and not otherwise defined shall have the
meanings given to them in the Mortgage Agreement between the Parties dated _________________ (the
“Mortgage Agreement”).

WHEREAS:

(A) Subject to the terms and conditions of a Loan Agreement dated [               ], between the
Borrower and IFC (the “IFC Loan Agreement”), IFC has agreed to lend the Borrower up to
[               ] ($[ ]) (the “IFC Loan”).

(B) In consideration of, and as security for, the amounts provided by IFC under the IFC Loan
Agreement, the Borrower had agreed to provide certain collateral (the “Collateral”, as defined in
Article 1 of the Mortgage Agreement) to IFC as security for the repayment of such amounts and other
Secured Obligations (as defined in Article 1 of the Mortgage Agreement).

(C ) Sections 4.01 of the Mortgage Agreement provide that the Borrower shall execute Supplemental
Mortgage Contracts in respect of any Collateral acquired or constructed by the Borrower after the
date of the Mortgage Agreement.

NOW THEREFORE the Parties agree as follows:

1. As continuing security for the payment and discharge in full of all the Secured Obligations and
in consideration of IFC continuing to make the Disbursements and maintaining the availability of
the IFC Loan to the Borrower, to the extent not already validly and effectively mortgaged under
the Mortgage Agreement, the Borrower hereby grants to IFC a first priority mortgage over the
Collateral listed in Appendix A hereto.

 

 - 107 - 

2. Within thirty (30) days (or such shorter period as may be required under applicable law) after
execution, the Borrower shall cause this Supplement to be registered with all such Authorities as
may be necessary to perfect or protect IFC’s first priority mortgage over such Collateral,
including the following:

	 	(i)	 	the [               ] REAC and [          ]BLR;
	 
	 	(ii)	 	the [               ] AIC;
	 
	 	(iii)	 	the [               ]AFE;
	 
	 	(iv)	 	[the [               ] Customs]; and
	 
	 	(v)	 	any other relevant Authorities.

and shall deliver to the IFC all certificates of third party rights, registration certificates or
other documentary evidence of the completion of such registrations.

3. This Supplement shall be deemed to be supplemental to and to incorporate all relevant terms and
conditions of the Mortgage Agreement.

 

 - 108 - 

IN WITNESS WHEREOF, the Parties have caused this Supplement to be signed by their duly authorized
representatives on the date first above written.

	 	 	 	 	 

	[ONSHORE BORROWER]	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	INTERNATIONAL FINANCE CORPORATION	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

 

 - 109 - 

Appendix A

List of Collateral

 

 - 110 - 

SCHEDULE 5

CONTRACTOR’S CONSENTS & AGREEMENT

[Date]

[Onshore Borrower]

[International Finance Corporation]

Dear Sirs:

     Reference is made to the Mortgage Agreement dated ___________, 200[ ] (the “Mortgage
Agreement”), by and among Onshore Borrower (the “Borrower”) and International Finance Corporation
(“IFC”), to which this Contractor’s Consent & Agreement (“Consent”) shall be deemed a supplement.

     Reference
is also made to that ______________ dated ____, __________, by and between
_____________ (the “Contractor”) and the Borrower (the “Contract”), a copy of which is attached to
this letter as Appendix A.

     As contemplated by Section 4.01 of the Mortgage Agreement, the Contractor and the parties to
the Mortgage Agreement hereby acknowledge, consent and agree to the following:

1. The mortgage by the Borrower of the property which is the subject matter of the Contract (the
“Property,” as described in more detail in Appendix B to this letter) to IFC by filing and
registering an executed Supplemental Mortgage Agreement pursuant to Section 4.01 of the Mortgage
Agreement to secure the obligations secured pursuant to the Mortgage Agreement (the “Supplemental
Mortgage”);

2. The collateral assignment of all rights, interests and benefits of the Borrower under the
Contract to IFC and its nominees or assignees pursuant to the Mortgage Agreement;

3. The assignment of all rights, interests and benefits of the Borrower under the Contract to IFC
or its nominees or assignees in the event IFC or its nominees or assignees exercise their rights
to foreclose under the Mortgage Agreement; and

4. The rights of IFC or its nominees or assignees in the event of foreclosure as described in
paragraph 3 above to require the continued

 

 - 111 - 

performance by the Contractor and its successors and assignees under the Contract in accordance
with the terms thereof.

     The undersigned represents and undertakes that he/or she is the legal representative of the
Contractor, and has the legal authority to sign this letter and to bind the Contractor and its
successors and assignees hereto.

	 	 	 	 	 

	Very truly yours,	 	 
	 
	 	 	 	 
	[Contractor’s Name]	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Legal Representative [Signature]
	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:

	 	 	 	Chop:
	 

	 	 

	 	 
	 
	 	 	 	 
	[ONSHORE BORROWER]	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	INTERNATIONAL FINANCE CORPORATION	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

 

 - 112 - 

Appendix A

Copy of the Contract

 

 - 113 - 

Appendix B

Description of the Property

 

 - 114 - 

EXHIBIT 3

FORM OF SHARE PLEDGE AGREEMENT

      

INVESTMENT NUMBER 26133

Share Pledge Agreement

between

CHINDEX INTERNATIONAL, INC.

and

INTERNATIONAL FINANCE CORPORATION

Dated                 , 200[ ]

      

 

 - 115 - 

SHARE PLEDGE AGREEMENT

AGREEMENT is made on                                          200[ ] 

between

	 	(1)	 	CHINDEX INTERNATIONAL, INC. (“Chindex”), a NASDAQ listed company incorporated
in Delaware with its registered address [ ]; and

	 	(2)	 	INTERNATIONAL FINANCE CORPORATION (“IFC”), an international organization
established by Articles of Agreement among its member countries;

In accordance with the Property Rights Law of the People’s Republic of China, the Security Law of
the People’s Republic of China, the Variation Regulations (as defined in Article 1) and other
relevant laws and regulations of the People’s Republic of China.

Whereas

     (A) Chindex is one of the shareholders of [Onshore Borrower] (the “Borrower”), a company
organized and existing under the laws of the People’s Republic of China.

     (B) As of the date hereof, Chindex has paid US$[      ] million to the registered capital of
the Borrower and thus holds [       ] % equity interest in the Borrower (the “Equity Interest”).

     (C) In accordance with the terms of the Borrower’s Articles of Association, Chindex is
obligated to pay an additional US$[      ] million in registered capital (“Additional Equity
Interest”)

     (D) By an agreement dated December [            ], 200[ ] (the “IFC Loan Agreement”) between
the Borrower and IFC, IFC has agreed to lend the Borrower up to [            ] ($[      ]) (the “IFC
Loan”).

     (E) It is a condition of the first Disbursement under the IFC Loan Agreement that the parties
enter into this Agreement.

 

 - 116 - 

     NOW, THEREFORE, in consideration of the promises and the mutual covenants described hereafter,
Chindex and IFC agree as follows:

ARTICLE I

Definitions and Interpretation

     Section 1.01. General Definitions. Unless otherwise defined, or the context
otherwise requires, terms defined in the IFC Loan Agreement have the same meanings when used in
this Agreement and the following terms have the following meanings:

	 	 	 

	“Additional Equity Interest”

	 	the meaning given to it in Recital (C);
	 
	 	 
	“Approval Authority”

	 	the examination and approval authority for
the Borrower, which as at the date hereof
is the [                ];
	 
	 	 
	“Capital Contribution
Certificate”

	 	any certificate(s) issued by the Borrower
to Chindex from time to time in respect of
Chindex’s contributions to the registered
capital of the Borrower;
	 
	 	 
	“Collateral”

	 	the Equity Interest and all the right,
title and interest in and to the Equity
Interest;
	 
	 	 
	“Default Notice”

	 	the meaning given to it in Section 4.02;
	 
	 	 
	“Equity Interest”

	 	the meaning given to it in Recital (B);
	 
	 	 
	“Secured Amounts”

	 	at any time and from time to time all
principal, interest, fees and other
amounts expressed to be payable by the
Borrower under the IFC Loan Agreement and
all amounts expressed to be payable by
Chindex under Section 7.02; and
	 
	 	 
	“Variation Regulations”

	 	the Certain Regulations on Variations to
Equity Interests of Investors in Foreign
Investment Enterprises issued by the
former Ministry of Foreign Trade and
Economic Cooperation and the State
Administration of Industry and Commerce on
May

 

 - 117 - 

	 	 	 

	 

	 	28, 1997 and the Implementing Rules on
Certain Issues of Law Application in
relation to the Administration of Approval
and Registration of Foreign-invested
Enterprises jointly issued by the Ministry
of Commerce, the State Administration of
Industry and Commerce, the General
Administration of Customs and the State
Administration of Foreign Exchange on
April 24, 2006.

     Section 1.02. Interpretation. In this Agreement, unless the context otherwise
requires:

     (a) headings are for convenience only and do not affect the interpretation of this Agreement;

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

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

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

     (e) a reference to a party to any document includes that party’s successors and permitted
assigns.

ARTICLE II

Pledge

     Section 2.01. Pledge.

     (a) As continuing security for the payment and discharge in full of all the Secured
Amounts, Chindex hereby pledges to IFC the Collateral.

     (b) For the avoidance of doubt, the security hereby created does not create or impose upon IFC
any liability or obligation to perform or fulfill any of the obligations of Chindex under or in
respect of the Collateral.

     Section 2.02. Negative Pledge. Chindex hereby undertakes to IFC that, unless IFC
otherwise agrees in writing, it shall not:

 

 - 118 - 

     (a) assign or purport to assign, transfer or otherwise deal with any interest of Chindex in
the Collateral, the Additional Equity Interest or any other equity interest of Chindex in the
Borrower; or

     (b) create, agree to create or permit to exist any Lien (howsoever ranking in priority) of any
nature whatsoever (other than under this Agreement or arising by operation of law) on or over the
Collateral, the Additional Equity Interest or any other equity interest of Chindex in the Borrower.

     Section 2.03. Discharge. The security hereby created shall lapse and be discharged
upon the satisfaction of the following conditions: (i) the Borrower’s Project Physical Completion
Date has been achieved; (ii) the aggregate cash generation from the Borrower for the preceding four
quarters was at least $2,5000,000; and (iii) the Peak Debt Service Ratio based on the most recent
Chindex Consolidated Financial Statements is not less than 1.2

     Section 2.04 Surplus. If any amount remains after the indefeasible payment and
discharge in full of all the Secured Amounts, the balance standing to the credit of Chindex shall
be returned to Chindex and IFC shall at the cost of Chindex (including any cost of notarization,
registration and obtaining of any Authorization from any Authority) execute and deliver to Chindex
the necessary instruments to evidence the discharge of the security hereby created.

ARTICLE III

Perfection of Security

     Section 3.01. Approval. In accordance with the Variation Regulations, Chindex shall,
promptly after the execution of this Agreement (and in any event within fifteen (15) days or such
other statutory period required by the applicable laws of the People’s Republic of China), submit
this Agreement for approval to the Approval Authority, together with all such documents as the
Approval Authority may require in connection therewith, including without limitation:

     (a) a resolution of the board of directors of the Borrower substantially in the form of
Schedule 1;

     (b) the Capital Contribution Certificate; and

 

 - 119 - 

     (c) a capital contribution verification report in respect of the Borrower issued by a
registered firm of accountants in the People’s Republic of China acceptable to IFC.

     Section 3.02. Registrations. Chindex shall promptly:

     (a) after the execution of this Agreement, procure the recording of the pledge of Chindex’s
equity interest in the shareholder register of the Borrower and deliver two (2) certified copies of
the relevant page of such register to IFC; and

     (b) after receiving approval of the Approval Authority (and in any event within thirty (30)
days or such other statutory period required by the applicable laws of the People’s Republic of
China), procure the registration of this Agreement with the [ ] Municipal Administration for
Industry and Commerce and provide evidence of the completion of such registration to IFC.

     Section 3.03. Additional Capital Contributions. If, after the date of this
Agreement, Chindex pays in any additional contribution to, or otherwise acquires any additional
portion of, the registered capital of the Borrower, including but not limited to the Additional
Equity Interest, Chindex shall promptly enter into and submit for approval and registration as
required by applicable laws of the PRC such amendments or supplements to this Agreement as IFC may
require with respect to such additional capital contribution or acquisition.

     Section 3.04. Further Assurances. Chindex undertakes to take whatever action
(including obtaining any Authorizations, executing any documents, effecting any registrations and
giving any notices, orders, instructions or directions) IFC may reasonably require for:

     (a) perfecting or protecting the security created or intended to be created by this Agreement
over the Collateral; or

     (b) facilitating the realization of the Collateral or the exercise of any right, power or
discretion exercisable by IFC in respect of the Collateral;

including without limitation causing the Borrower to take the following steps as contemplated in
the Variation Regulations, namely:

	 	(i)	 	making an application to the Approval Authority for modifications to the
ownership rights of investors in the Borrower;

 

 - 120 - 

	 	(ii)	 	submitting to the Approval Authority the Charter, together with any
amendment agreements to reflect the interest of IFC in the Borrower;

	 	(iii)	 	submitting to the Approval Authority copies of the original approval
certificate and business license of the Borrower; and

	 	(iv)	 	submitting to the Approval Authority a list of the members of the board of
directors as it will be after the proposed changes to the shareholding rights of the
investors in the Borrower are made.

ARTICLE IV

Enforcement

     Section 4.01. Chindex’s Rights Prior to Enforcement of the Pledge. Until service of
a Default Notice, Chindex shall be entitled, subject to and in a manner consistent with the
provisions of this Agreement and the other Transaction Documents:

     (a) to receive all dividends, profits or other distributions, interest and other income
derived from or paid in respect of the Collateral, in each case, unencumbered by the security
interest granted hereunder; and

     (b) to exercise any voting or other rights and powers attached to the Collateral, to the
exclusion of IFC.

     Section 4.02. Enforcement. The security created by this Agreement shall become
enforceable by IFC immediately, during the continuance of an Event of Default, upon the service of
a notice to Chindex by IFC (a “Default Notice”), and IFC shall be entitled to exercise all rights,
powers and discretions in respect of the Collateral, to the exclusion of Chindex, and to take all
action and pursue all remedies available to IFC at law to enforce such security, subject to
obtaining all necessary Authorizations from the Approval Authority.

     Section 4.03. No Discharge. The obligations of Chindex under this Agreement shall
not be discharged or impaired by:

     (a) any invalidity, unenforceability or other defect relating to the IFC Loan Agreement or any
of the other Transaction Documents or any security relating to any such documents;

 

 - 121 - 

     (b) any amendment to or variation of the IFC Loan Agreement or any of the other Transaction
Documents or any security relating to any such documents;

     (c) any release of or granting of time or any other indulgence to the Borrower or the other
Sponsors or any third party;

     (d) any winding up, dissolution, reconstruction or reorganization, legal limitation,
incapacity or lack of corporate power or authority or other circumstances of, or any change in the
constitution or corporate identity or loss of corporate identity by, the Borrower or Chindex or any
other Person; or

     (e) any other act, event, neglect or omission which would or might but for this Section
operate to impair or discharge Chindex’s liability hereunder.

ARTICLE V

Representations and Warranties

     Section 5.01. Representations and Warranties. Chindex represents and warrants to IFC
that:

     (a) it is a company duly organized under the laws of the Delaware, United States of America
and is in good standing and has the corporate power to execute and deliver this Agreement and to
perform fully and completely all its obligations and liabilities hereunder;

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

     (c) the execution, delivery and performance by it of this Agreement will not violate any
provision of any existing published law or regulation applicable to it or order or decree of any
Authority having jurisdiction over it or of its charter documents, or of any contract, undertaking
or agreement to which it is a party or which is binding upon it or any of its property or assets
and will not result in the imposition or creation of any Lien (other than the Lien created hereby)
on any part thereof pursuant to the provisions of any such contract, undertaking or agreement;

 

 - 122 - 

     (d) its contribution to the registered capital of the Borrower is fully paid in to the extent
reflected in the Capital Contribution Certificate provided to IFC hereunder;

     (e) it is the sole legal and beneficial owner of the Collateral;

     (f) no Lien exists over the Collateral at the date of execution of this Agreement; and

     (g) the copy of the Charter provided to IFC prior to the date hereof is a true, complete and
correct copy.

     Section 5.02 Undertaking. Chindex acknowledges and agrees that it will not exercise
any rights of subrogation that may accrue to Chindex arising out of the exercise by IFC of any of
its rights, powers and discretions under this Agreement, and that Chindex shall have no rights of
action arising out of this Agreement against the Borrower, IFC or any third party to whom the
Collateral may be transferred, in each case, until the Secured Amounts have been paid and
discharged in full in accordance with the terms of the IFC Loan Agreement and this Agreement.
Chindex undertakes to IFC that it will not seek to enforce repayment or exercise any other rights
or remedies of any kind against the Borrower, IFC or any third party to whom the Collateral may be
transferred which may accrue to Chindex, whether by way of subrogation or otherwise in respect of
any amount due to Chindex from the Borrower until all the Secured Amounts have been paid or
discharged in full in accordance with the terms of the IFC Loan Agreement and this Agreement, and
in the event of the liquidation or winding up of the Borrower, Chindex will not prove in
competition with IFC on any account whatsoever in respect of any moneys owing to Chindex.

     Section 5.03. Reliance.

     (a) Chindex acknowledges to IFC that it has made the representations and warranties in
Section 5.01 with the intention of inducing IFC to enter into the IFC Loan Agreement; and that IFC
has entered into the IFC Loan Agreement on the basis of, and in full reliance on, each of such
representations and warranties.

     (b) Chindex warrants to IFC that each of such representations is true and correct in all
material respects as of the date of this Agreement and that none of them omits any matter the
omission of which makes any of such representations misleading.

     Section 5.04. Rights and Remedies not Limited. The rights and remedies of IFC in
relation to any misrepresentations or breach of warranty on the part of Chindex shall not be
prejudiced:

 

 - 123 - 

     (a) by any investigation by or on behalf of IFC into the affairs of Chindex;

     (b) by the execution or the performance of this Agreement; or

     (c) by any other act or thing which may be done by or on behalf of IFC in connection with this
Agreement and which might, apart from this Section, prejudice such rights or remedies.

     Section 5.05. Receipt of Moneys. Subject to the provisions of the other Transaction
Documents and Section 4.01, Chindex shall procure that all moneys received by Chindex or any other
Person constituting, or arising from or in connection with, the Collateral shall be paid forthwith
to IFC.

ARTICLE VI

Effectiveness

     Section 6.01. Effectiveness. The security created by this Agreement over the
Collateral shall become effective upon approval by the Approval Authority as provided in Section
3.01 and when all the registrations referred to in Section 3.02 have been duly completed.

ARTICLE VII

Miscellaneous

     Section 7.01. Appointment of Attorney. Subject to the provisions of Section 4.01,
Chindex hereby irrevocably appoints IFC as Chindex’s attorney with full power (in the name of
Chindex or otherwise) to, upon the occurrence and during the continuance of an Event of Default,
carry out any of Chindex’s obligations hereunder, and to exercise all the rights of Chindex in
connection with the Collateral and to file any claims or take any lawful action or institute any
proceedings which may be necessary for the purpose of putting into effect the intent of this
Agreement. The Borrower shall ratify and confirm all things done
and all documents executed by any attorney in the exercise or purported exercise of all or any of
his powers pursuant to this Section 7.01.

     Section 7.02. Expenses. Chindex shall on demand pay:

 

 - 124 - 

	 	(a)	 	all reasonable and documented costs, and all fees and expenses and taxes in
connection with:

	 	(i)	 	all approvals and registrations referred to in Sections 3.02 and 3.03 or
otherwise incurred in connection with the perfection or protection of the security
created by this Agreement; and

	 	(ii)	 	the obtaining of all necessary Authorizations relating to the execution and
performance by the Borrower of this Agreement; and

     (b) all expenses (including legal and out-of-pocket expenses) incurred by IFC in connection
with the preservation or enforcement of any of their rights under this Agreement;

and shall keep IFC indemnified against any failure or delay in paying the same.

     Section 7.03. Notices. Any notice, request or other communication to be given or
made under this Agreement shall be in writing. Any such communication may be delivered by hand,
airmail, facsimile or established courier service to the party’s address specified below or at such
other address as such party notifies to the other party from time to time, and will be effective
upon receipt.

For
Chindex:

Chindex International, Inc.

4340 East West Highway, Suite 1100

Bethesda, Maryland 20814

 

Attn:  Roberta Lipson, CEO

            Lawrence Pemble, CFO

 

Facsimile:    301-215-7719

                     502-427-0409

With a copy sent by e-mail to the attention of Roberta Lipson, CEO, and Lawrence Pemble,
CFO, at:

E-mail addresses: rlipson@Chindex.com and lpemble@chindex.com

For IFC:

 

 - 125 - 

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

United States of America

 

Attention:      Director, Health and Education Department

 

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

 

Facsimile: 202-522-7419

     Section 7.04. English Language. Any notice, request or other communication to
be given or made under this Agreement shall be in the English language or, if in another language,
shall, if IFC so requests, be accompanied by a translation into English satisfactory to IFC, which
translation shall be the governing version between the relevant parties.

     Section 7.05. Applicable Law and Jurisdiction. (a) This Agreement is governed by and
shall be construed in accordance with the laws of the People’s Republic of China.

     (b) In the event of any dispute in the interpretation or enforcement of this Agreement, IFC
shall be entitled to commence a legal action in the competent Chinese court to interpret or enforce
the provisions hereof.

     Section 7.06. Severability. Any provision of this Agreement which is prohibited or
unenforceable by reason of any present or future law in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 7.07. Successors and Assigns. This Agreement binds and benefits the
respective successors and assigns of the parties. However, Chindex may not assign or delegate any
of its rights or obligations under this Agreement without the consent of IFC.

     Section 7.08. Amendment. Any amendment of any provision of this Agreement shall be
in writing, signed by the parties and approved by the Approval Authority.

 

 - 126 - 

     Section 7.09. Execution Copies. This Agreement has been written in Chinese and
English in five (5) originals each, all of which constitute one and the same agreement. Chindex
shall hold two (2) sets of Chinese and English originals, IFC shall hold two (2) sets of Chinese
and English originals and the remaining set of Chinese and English originals shall be submitted to
the Approval Authority. Both the Chinese and English versions shall have equal effect.

     Section 7.10. Remedies and Waivers. No failure or delay by IFC in exercising any
power, remedy, discretion, authority or other rights under this Agreement shall waive or impair
that or any other right of IFC. No single or partial exercise of such right shall preclude its
additional or future exercise. No such waiver shall waive any other right under this Agreement.
All waivers or consents given under this Agreement shall be in writing.

     Section 7.11. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter of this Agreement.

As witness this Agreement is entered into by the parties, acting through their duly
authorized representatives, as of the date first above written.

	 	 	 	 	 

	CHINDEX INTERNATIONAL, INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

   Authorized Representative
	 	 
	 
	 	 	 	 
	INTERNATIONAL FINANCE CORPORATION	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

   Authorized Representative
	 	 

 

 - 127 - 

SCHEDULE 1

RESOLUTION OF THE BOARD OF DIRECTORS OF

ONSHORE BORROWER. (the “Borrower”)

Reference is made to the Pledge Agreement (the “Pledge Agreement”) between Chindex International,
Inc. (“Chindex”) and International Finance Corporation whereby Chindex shall pledge to IFC, among
other things, [ ] % equity interest it currently holds in the Borrower (the “Equity
Interest”).

AS WITNESS, the undersigned, being all of the directors of the Borrower, hereby consent to Chindex
using its Equity Interest in the Borrower for the purposes set out in the Pledge Agreement and
resolve that the Borrower will, upon an enforcement of the security created by the Pledge Agreement
by IFC in accordance with its terms, give all assistance to IFC in realizing the modification of
ownership rights in the Borrower contemplated thereby.

Date:                                         200[ ]

	 	 	 	 	 	 	 	 

	By:

	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 
	Name:

	 	 	 	 	Name:	 	 
	Title:

	 	Director
	 	 	Title:
	 	Director
	 
	 	 	 	 	 	 	 
	By:

	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 
	Name:

	 	 	 	 	Name:	 	 
	Title:

	 	Director
	 	 	Title:
	 	Director
	 
	 	 	 	 	 	 	 
	By:

	 	 	]	 	 	 	 
	 

	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 
	Title:

	 	Director	 	 	 	 	 

 

 - 128 - 

ANNEX AA

METHODOLOGY FOR DETERMINATION OF THE BASE FIXED RATE FOR EACH
 LOAN DISBURSEMENT 

(See Section 2.03 of the Loan Agreement) 

Section (A) Methodology for Determination of the Base Fixed Rate

The Base Fixed Rate for each Disbursement is the weighted average of the swap rates for all
maturities in that Disbursement, determined as follows (see also attached example of calculation):

	1.	 	The amount of each Disbursement is first allocated for repayment in amounts on each of the
maturity dates specified in the repayment schedule appearing in Section 2.06 (b)
(Repayment) (each such amount, an “Installment”). The amount of each Disbursement is first
allocated for repayment pro rata to the amounts appearing opposite each of
those maturity dates
	 
	2.	 	Each Installment therefore has a tenor (a “Tenor”) equal to the period commencing from the
date of the relevant Disbursement to the date on which such Installment has been allocated for
repayment.
	 
	3.	 	On the Interest Rate Setting Date for the relevant Disbursement, IFC determines the fixed
rate swap equivalent for each Installment (a “Fixed Rate Swap Equivalent”), i.e., the
fixed interest rate payable in the swap market against receipt of interest at LIBOR, in
respect of a specified maturity matching the Tenor of that Installment. For the purposes of
this Annex AA:
	 
	 	 	(a) “LIBOR” means the British Bankers’ Association London interbank offered rate for
deposits in the Loan Currency;
	 
	 	 	(b) the swap market information used to determine the Fixed Rate Swap Equivalent for each
Installment is obtained from the Telerate rate fixing page for the Loan Currency
(currently page 42276), on the Interest Rate Setting Date; and if that information cannot
be obtained from the Telerate Service, IFC shall obtain that information from the relevant
rate-fixing page available on the Reuters Service or, if not available, on the Bloomberg
Financial Markets Service;
	 
	 	 	(c) if all the services referred to in the preceding paragraph cease to be available, or
if none of them contains the necessary swap market information, whether on the relevant
Interest Rate Setting Date or generally, then IFC will determine the Fixed Rate Swap
Equivalent for each Installment:

 

 - 129 - 

ANNEX AA

	 	(i)	 	to the extent available, from a live screen of a
financial markets information provider that IFC, in its reasonable opinion,
considers appropriate, the information to be obtained on the Interest Rate
Setting Date as of 11:00 a.m., New York time; or
	 
	 	(ii)	 	using whatever equivalent reasonable means of calculation
that IFC, in its reasonable opinion, considers appropriate; and

(d) swap market rates shall be interpolated on a straight-line basis so as to match the
actual Tenor of each Installment.

	4.	 	The Fixed Rate Swap Equivalent for each Installment is then allocated a weight based on the
Tenor and amount of that Installment (a “Weight”). Each such Weight is expressed as a
percentage, i.e., the percentage which the product of the amount of an Installment
times its Tenor represents of the sum of all those products calculated for all the
Installments in the relevant Disbursement.
	 
	5.	 	Each Weight so determined is then multiplied by its corresponding Fixed Rate Swap Equivalent
and the products so obtained for all Installments are added together to obtain the weighted
average swap rate (the “Weighted Average Swap Rate”).
	 
	6.	 	The Weighted Average Swap Rate for the relevant Disbursement is then converted to the rate
basis used for the Loan (i.e., actual number of days/360) and rounded up to the
nearest two decimal places to produce the Base Fixed Rate for that Disbursement.

 

 - 130 - 

ANNEX AA

Example

Applicable Swap Rates (from Telerate page 42276)

Rate-Setting Date: 13 Feb 1996 Effective Date: 15 Feb. 1996

Quote Basis: Semi-Annual, 30/360 (by market convention)

	 	 	 	 	 	 	 	 	 
	 	 	Maturity	 	Offered Rates
	 
	 	2 Years	 	 	5.010	%
	 
	 	3 Years	 	 	5.190	%
	 
	 	4 Years	 	 	5.370	%
	 
	 	5 Years	 	 	5.540	%
	Interpolated
	 	6 Years	 	 	5.655	%
	 
	 	7 Years	 	 	5.770	%
	Interpolated
	 	8 Years	 	 	5.867	%
	Interpolated
	 	9 Years	 	 	5.963	%
	 
	 	10 Years	 	 	6.060	%

Base Fixed Rate Calculation for a Disbursement of $15,000,000

with 3 Years Grace and 10 Years Final Maturity

Disbursement Date: 9 February 1996

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Column #:	 	1	 	2	 	3	 	4	 	5 = 1 x 3	 	6 = 5 as %
 of (total 5)	 	7 = 4 x 6
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Calculation
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Interpolated	 	 	 	 	 	 	 	 	 	of Weighted
	 	 	Tenor	 	Outstanding	 	 	 	 	 	Offer	 	 	 	 	 	 	 	 	 	Average
	Date	 	(Years)	 	Principal	 	Installment	 	Swap Rates	 	 	 	 	 	Weights	 	Swap Rate
	15 Feb 1996
	 	 	0	 	 	 	15,000,000	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15 Aug 1996
	 	 	0.5	 	 	 	15,000,000	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15 Feb 1997
	 	 	1	 	 	 	15,000,000	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15 Aug 1997
	 	 	1.5	 	 	 	15,000,000	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15 Feb 1998
	 	 	2	 	 	 	15,000,000	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15 Aug 1998
	 	 	2.5	 	 	 	15,000,000	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15 Feb 1999
	 	 	3	 	 	 	14,000,000	 	 	 	1,000,000	 	 	 	5.190	%	 	 	3,000,000	 	 	 	3.0769	%	 	 	0.1597	%
	15 Aug 1999
	 	 	3.5	 	 	 	13,000,000	 	 	 	1,000,000	 	 	 	5.280	%	 	 	3,500,000	 	 	 	3.5897	%	 	 	0.1895	%
	15 Feb 2000
	 	 	4	 	 	 	12,000,000	 	 	 	1,000,000	 	 	 	5.370	%	 	 	4,000,000	 	 	 	4.1026	%	 	 	0.2203	%
	15 Aug 2000
	 	 	4.5	 	 	 	11,000,000	 	 	 	1,000,000	 	 	 	5.455	%	 	 	4,500,000	 	 	 	4.6154	%	 	 	0.2518	%

 

 - 131 - 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Column #:	 	1	 	2	 	3	 	4	 	5 = 1 x 3	 	6 = 5 as %
 of (total 5)	 	7 = 4 x 6
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Calculation
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Interpolated	 	 	 	 	 	 	 	 	 	of Weighted
	 	 	Tenor	 	Outstanding	 	 	 	 	 	Offer	 	 	 	 	 	 	 	 	 	Average
	Date	 	(Years)	 	Principal	 	Installment	 	Swap Rates	 	 	 	 	 	Weights	 	Swap Rate
	15 Feb 2001
	 	 	5	 	 	 	10,000,000	 	 	 	1,000,000	 	 	 	5.540	%	 	 	5,000,000	 	 	 	5.1282	%	 	 	0.2841	%
	15 Aug 2001
	 	 	5.5	 	 	 	9,000,000	 	 	 	1,000,000	 	 	 	5.598	%	 	 	5,500,000	 	 	 	5.6410	%	 	 	0.3158	%
	15 Feb 2002
	 	 	6	 	 	 	8,000,000	 	 	 	1,000,000	 	 	 	5.655	%	 	 	6,000,000	 	 	 	6.1538	%	 	 	0.3480	%
	15 Aug 2002
	 	 	6.5	 	 	 	7,000,000	 	 	 	1,000,000	 	 	 	5.713	%	 	 	6,500,000	 	 	 	6.6667	%	 	 	0.3808	%
	15 Feb 2003
	 	 	7	 	 	 	6,000,000	 	 	 	1,000,000	 	 	 	5.770	%	 	 	7,000,000	 	 	 	7.1795	%	 	 	0.4143	%
	15 Aug 2003
	 	 	7.5	 	 	 	5,000,000	 	 	 	1,000,000	 	 	 	5.818	%	 	 	7,500,000	 	 	 	7.6923	%	 	 	0.4476	%
	15 Feb 2004
	 	 	8	 	 	 	4,000,000	 	 	 	1,000,000	 	 	 	5.867	%	 	 	8,000,000	 	 	 	8.2051	%	 	 	0.4814	%
	15 Aug 2004
	 	 	8.5	 	 	 	3,000,000	 	 	 	1,000,000	 	 	 	5.915	%	 	 	8,500,000	 	 	 	8.7179	%	 	 	0.5157	%
	15 Feb 2005
	 	 	9	 	 	 	2,000,000	 	 	 	1,000,000	 	 	 	5.963	%	 	 	9,000,000	 	 	 	9.2308	%	 	 	0.5505	%
	15 Aug 2005
	 	 	9.5	 	 	 	1,000,000	 	 	 	1,000,000	 	 	 	6.012	%	 	 	9,500,000	 	 	 	9.7436	%	 	 	0.5858	%
	15 Feb 2006
	 	 	10	 	 	 	0	 	 	 	1,000,000	 	 	 	6.060	%	 	 	10,000,000	 	 	 	10.2564	%	 	 	0.6215	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Totals
	 	 	 	 	 	 	 	 	 	 	$15,000,000	 	 	 	 	 	 	 	97,500,000	 	 	 	100.0000	%	 	 	5.7666	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	The Weighted Average Swap Rate is	 	 	5.7666	%	 	on a 30/360 semi-annual basis
	 	 	The Base Fixed Rate for the tranche is	 	 	5.6900	% 	 	on an A/360 semi-annual basis
	 
	 	 	 	 	 	 	 	 	 	(converted from	 	 	5.7666	% 	 	on a 30/360 semi-annual basis)

 

 - 132 - 

ANNEX BB

METHODOLOGY FOR CALCULATION OF THE REDEPLOYMENT COSTS

Section (A) Methodology for Calculation of the Redeployment Cost

	1.	 	The redeployment cost equals the amount in excess of zero, if any, obtained by deducting (x)
the Present Value of the Available Base Rate Cash Flows of the amount to be prepaid from (y)
the Present Value of the Original Base Rate Cash Flows of the amount to be prepaid.
	 
	2.	 	For the purpose of this Section:

	 	(a)	 	the “Original Base Rate Cash Flows of the amount to be prepaid” means the
aggregate amount of interest originally scheduled to be paid on the principal amount
to be prepaid from the date of prepayment until the final maturity date of the Loan,
calculated at the Loan Base Fixed Rate. If the relevant prepayment occurs before
the Loan Consolidation Date, the applicable interest rate shall be the weighted
average of all Disbursement Base Fixed Rates then in effect, calculated using the
methodology set forth in Section 3.03(f) (Interest);
	 
	 	(b)	 	the “Available Base Rate Cash Flows of the amount to be prepaid” means
the aggregate amount of interest that would have accrued, from the date of
prepayment until the final maturity date of the Loan, on the respective principal
amount to be prepaid had such amount been disbursed on the prepayment date,
calculated at an interest rate equal to the Prepayment Base Fixed Rate applicable to
such hypothetical disbursement, determined two (2) Business Days prior to the date
of prepayment in accordance with Annex C, Section (A); and
	 
	 	(c)	 	the “Present Value” of the relevant Base Rate Cash Flows is the value of
the Original Base Rate Cash Flows or, as the case may be, the Available Base Rate
Cash Flows discounted back to the date of prepayment from each of the relevant
Interest Payment Dates at a discount rate equal to the Prepayment Base Fixed Rate
determined pursuant to paragraph (b) above.

 

 - 133 - 

3. The determination by IFC of the redeployment cost shall be final and conclusive and bind the
Borrower (unless the Borrower shows to IFC’s satisfaction that the determination involves manifest
error).

 

 - 134 - 

ANNEX AA

EXAMPLE

Applicable Swap Rates (from Reuters page 42276)

Rate-Setting Date: 13 Feb 1998 Effective Date: 15 Feb. 1998

Quote Basis: Semi-Annual, 30/360 (by market convention)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Offered
	 	 	Maturity	 	 	 	 	 	Rates
	 
	 	3 mos	 	 	0	 	 	 	3.100	%
	 
	 	1 Year	 	 	1	 	 	 	3.200	%
	 
	 	2 Years	 	 	2	 	 	 	3.300	%
	 
	 	3 Years	 	 	3	 	 	 	3.400	%
	 
	 	4 Years	 	 	4	 	 	 	3.500	%
	 
	 	5 Years	 	 	5	 	 	 	3.600	%
	Interpolated
	 	6 Years	 	 	6	 	 	 	3.650	%
	 
	 	7 Years	 	 	7	 	 	 	3.700	%
	Interpolated
	 	8 Years	 	 	8	 	 	 	3.800	%
	Interpolated
	 	9 Years	 	 	9	 	 	 	3.900	%
	 
	 	10 Years	 	 	10	 	 	 	4.000	%
	Interpolated
	 	11 Years	 	 	11	 	 	 	4.100	%
	 
	 	12 Years	 	 	12	 	 	 	4.200	%

Calculation of the Redeployment Cost on Prepayment of $15,000,000

Prepayment Date: 15 February, 1998

Same repayment schedule as in example in Section (A) of Annex C

Step 1. Determine Base Fixed Rate for a hypothetical Disbursement of principal amount to be prepaid
(i.e., $15,000,000) as of prepayment date (15 February, 1998).

Step 2. Calculate Available Base Rate Cash Flows at an interest rate equal to the Prepayment Base
Fixed Rate.

Step 3. Calculate the Original Base Rate Cash Flows using the Loan Base Fixed Rate.

Step 4. Calculate Present Value of each income stream.

Step 5. Subtract the Present Value of the Available Base Rate Cash Flows from the Present Value of
the Original Base Rate Cash Flows. The result, if in excess of zero, is the redeployment cost.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}]]