Exhibit 2.1

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

 

by and among

 

CHINDEX INTERNATIONAL, INC.,

 

HEALTHY HARMONY HOLDINGS, L.P.

 

and

 

HEALTHY HARMONY ACQUISITION, INC.

 

Dated as of April 18, 2014

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TABLE OF CONTENTS

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TABLE OF CONTENTS

(Continued)

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TABLE OF CONTENTS

(Continued)

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Exhibit A-1

-  Rollover Investors

Exhibit A-2

-  Form of Side Letter to Support Agreement

Exhibit A-3

-  Form of Guarantee

Exhibit B

-  Certificate of Incorporation of the Surviving Corporation

Exhibit C

-  By-Laws of the Surviving Corporation

Exhibit D

-  Form of Amendment to Rights Plan

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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER

AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of April 18, 2014, by and among Chindex International, Inc., a Delaware corporation (the "Company"), Healthy Harmony Holdings, L.P., a Cayman Islands limited partnership ("Parent"), and Healthy Harmony Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger Sub").

WHEREAS, on February 17, 2014, the Company, Parent and Merger Sub entered into an Agreement and Plan of Merger (the "Original Merger Agreement"), pursuant to which Parent agreed to acquire the Company by means of the merger of Merger Sub with and into the Company, with the Company continuing as a wholly-owned subsidiary of Parent (the "Original Merger"), on the terms and subject to the conditions set forth in the Original Merger Agreement and the General Corporation Law of the State of Delaware, as amended ("DGCL");

WHEREAS, a transaction committee (the "Transaction Committee") of the Company Board (as defined in Section 1.1), the Company Board (acting upon the affirmative recommendation of the Transaction Committee) and the respective Boards of Directors of Parent and Merger Sub have determined the merger of the Merger Sub with and into the Company, with the Company continuing as a wholly-owned subsidiary of Parent, on the terms and subject to the conditions set forth in this Agreement and the DGCL (the "Merger") to be advisable and fair to, and in the best interests of, their respective stockholders;

WHEREAS, the Transaction Committee, the Company Board (acting upon the affirmative recommendation of the Transaction Committee) and the respective Boards of Directors of Parent and Merger Sub have approved and declared advisable this Agreement, including all the terms and conditions set forth herein, all the Transactions (as defined in Section 1.1.), including the Merger, and have approved the agreements and arrangements referred to in Section 5.8 of the Parent Disclosure Schedule (as defined below) (in the case of the Transaction Committee and the Company Board for purposes of Section 203 of the DGCL);

WHEREAS, the Transaction Committee and the Company Board (acting upon the affirmative recommendation of the Transaction Committee), prior to the execution of the Original Merger Agreement, approved Parent, Merger Sub and the other Affiliates of Parent each becoming an "interested stockholder" (as defined in Section 203 of DGCL) of the Company in connection with the Support Agreement (as defined below);

WHEREAS, the Transaction Committee and the Company Board (acting upon the affirmative recommendation of the Transaction Committee) have resolved to recommend that the Company's stockholders adopt this Agreement;

WHEREAS, each of the Company, Parent and Merger Sub desires to make certain representations, warranties, covenants and agreements in connection with the Transactions and also to prescribe various conditions to the consummation thereof;

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WHEREAS, concurrently with the execution of the Original Merger Agreement, each stockholder of the Company whose name is set forth on Exhibit A-1 hereto (the "Rollover Investors") entered into a support agreement in respect of such percentage of the Shares (as defined in Section 4.2(a)) beneficially owned by such stockholder as indicated on Exhibit A-1 hereto, which is supplemented in connection with the execution of this Agreement by a letter agreement in the form attached as Exhibit A-2 hereto (as so supplemented, and as may be amended and restated from time to time in accordance with Section 17(c) thereof, the "Support Agreement"); and

WHEREAS, concurrently with the execution of the Original Merger Agreement, (a) TPG Asia VI, L.P., a Cayman Islands limited partnership ("Sponsor"), executed a limited guarantee in favor of the Company with respect to certain of the obligations of Parent and Merger Sub under this Agreement, which is amended and restated in connection with the execution of this Agreement in the form attached as Exhibit A-3 hereto (as so amended and restated, the "Guarantee"), and (b) Sponsor executed an equity financing commitment letter in favor of Parent, which is amended and restated in connection with the execution of this Agreement (as so amended and restated, the "Equity Commitment Letter"), pursuant to which, subject to the terms and conditions therein, Sponsor has committed to invest in Parent the amount set forth therein.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree to amend and restate the Original Merger Agreement in its entirety and agree as follows:

ARTICLE I

Section 1.1.  Certain Definitions.  As used in this Agreement, the following terms have the following meanings:

"Acceptable Confidentiality Agreement" means a confidentiality agreement that contains provisions that are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement (it being understood and agreed that such confidentiality agreement need not prohibit the making or amendment of any Alternative Proposal).

"Affiliate" has the meaning assigned to that term in Rule 12b-2 under the Exchange Act.  A Person shall be deemed to control another Person if such first Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, as trustee or executor, by Contract or credit arrangement or otherwise; provided, however, that (i) Fosun Industrial Co., Limited, a corporation organized under the laws of Hong Kong ("Significant Stockholder"), and its Affiliates shall not be deemed to be Affiliates of the Company and (ii) Sponsor and Significant Stockholder and their respective Affiliates shall be deemed Affiliates of Parent and Merger Sub.

"Alternative Proposal" means any offer, proposal or indication of interest, as the case may be, by any Person (or group of Persons) (other than Parent and Merger Sub) that relates to (i) a transaction or series of transactions (including any merger, consolidation, recapitalization, reorganization, liquidation or other direct or indirect business combination) involving the issuance or acquisition of Shares or other equity securities of the Company representing twenty percent (20%) or more of the outstanding capital stock of the Company (other than the Transactions), (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any Person, together with all Affiliates thereof, becoming the beneficial owner of Shares or other equity securities of the Company representing twenty percent (20%) or more of the outstanding capital stock of the Company, (iii) the acquisition, license or purchase by any Person or group of Persons (other than the Company and the Company Subsidiaries), or any other disposition by the Company or any Company Subsidiary, of twenty percent (20%) or more (based on the fair market value thereof) of the consolidated assets of the Company (including the equity securities of any Company Subsidiary) and the Company Subsidiaries, taken as a whole (other than the Transactions) or (iv) any combination of the foregoing.

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"AML" means the Anti-Monopoly Law of China of August 1, 2008, as amended.

"Associate" has the meaning assigned to that term in Rule 12b-2 under the Exchange Act.

"Business Day" means a day other than Saturday or Sunday or any other day on which banks in New York City or Beijing, China are required to or may be closed.

"Certificate of Merger" means the certificate of merger with respect to the Merger to be filed with the Secretary of State.

"China" means the People's Republic of China, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company Board" means the Board of Directors of the Company.

"Company Credit Agreements" means (i) that certain Amendment and Restatement Agreement to RMB Loan Agreement, dated as of November 30, 2011, which amended and restated the RMB Loan Agreement dated as of October 10, 2005 by and among Beijing United Family Health Center and Shanghai United Family Hospital, Inc., as borrowers, and International Finance Corporation, as lender (including each transaction document referenced therein), (ii) that certain Loan Agreement, dated as of March 7, 2013, by and between Beijing United Family Hospital Co., Ltd., as borrower, and International Finance Corporation, as lender (including each transaction document referenced therein), and (iii) that certain Loan Agreement dated as of March 7, 2013, by and between Beijing United Family Hospital Co., Ltd., as borrower, and DEG – Deutsche Investitions und Entwicklungsgesellschaft mbH, as lender (including each transaction document referenced therein).

"Company Equity Plans" means, collectively, the Chindex International, Inc. 1994 Stock Option Plan, the Chindex International, Inc. 2004 Stock Incentive Plan and the Chindex International, Inc. 2007 Stock Incentive Plan, each as amended to date.

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"Company Material Adverse Effect" means any effect, event, development, fact, circumstance, occurrence or change (any such item, an "Effect") that, individually or in the aggregate, (i) has had or would reasonably be expected to have a material adverse effect on the assets and liabilities (taken as a whole), business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) would or would reasonably be expected to prevent or delay in any material respect the Company and the Company Subsidiaries from consummating the Merger or any of the other Transactions; provided, however, solely with respect to clause (i) above, that none of the following, either alone or in combination, shall be deemed to constitute or be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect:  (1) any Effect after the date of this Agreement to the extent arising out of or relating to (x) (A) economic, credit, financial or securities market conditions in the United States of America, China or any other country in which the Company or any of the Company Subsidiaries has business operations, including changes in prevailing interest rates or currency rates or (B) legal, tax, regulatory, political or business conditions in the United States of America, China or any other country in which the Company or any of the Company Subsidiaries has business operations, or (y) acts of terrorism or sabotage, the outbreak, escalation or worsening of hostilities (whether or not pursuant to the declaration of a national emergency or war by a U.S., Chinese or other Governmental Entity), man-made disasters, natural disasters (including hurricanes, typhoons, cyclones, tornados, volcano eruptions, tsunamis, pandemics, earthquakes, floods and mudslides) or Acts of God, (2) any adverse Effect after the date of this Agreement to the extent arising out of or relating to factors, conditions, trends or other circumstances generally affecting the operation of hospitals and clinics in China, (3) any adverse Effect to the extent arising out of or resulting from the execution and delivery of the Original Merger Agreement, this Agreement or the announcement, pendency or consummation of any of the Transactions (including the identity of, or any facts or circumstances relating to, Parent or any of its Affiliates or any communication by Parent or any of its Affiliates regarding its or their plans or intentions with respect to the conduct of the business or assets of the Company or any of the Company Subsidiaries), including (A) any loss of existing employees, consultants or independent contractors, (B) any loss of, or reduction in business by or revenue from, existing customers, (C) any disruption in or loss of suppliers, distributors, partners or similar third parties with whom the Company or any of the Company Subsidiaries has any relationship, (D) any litigation brought or threatened to be brought by any stockholder(s) of the Company (or any of their respective Affiliates) in connection with this Agreement, any of the Transactions or any agreement or arrangement referred to in Section 5.8 of the Parent Disclosure Schedule or (E) the absence of any consents, waivers or approvals relating to any of the Transactions from any Governmental Entity or other Person, or any other adverse Effect to the extent resulting from or relating to change of control or similar provisions contained in Contracts to which the Company or any Company Subsidiary is a party (provided that the provisions of clauses (B) and (E) shall not apply to the representations and warranties set forth in Section 4.4 or the satisfaction of the condition in Section 7.2(b) insofar as it relates to Section 4.4), (4) in and of itself, any change in the market price or trading volume of the Company's securities (it being understood that any underlying facts or occurrences giving rise to or contributing to such change may be taken into account in determining whether there has been a Company Material Adverse Effect (taking into account the other exceptions set forth in this definition)), (5) any adverse Effect to the extent arising out of or relating to any change in Law (including Laws relating to the provision of healthcare services or the operation of hospitals or clinics), GAAP, regulatory accounting requirements or interpretations thereof that apply to the Company or any of the Company Subsidiaries (including the proposal or adoption of any new law, statute, code, ordinance, rule or regulation, or any change in the

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interpretation or enforcement of any existing law, statute, code, ordinance, rule or regulation), (6) in and of itself, any failure by the Company to meet analysts' expectations or to meet any internal or published estimates, expectations, projections, forecasts, guidance or revenue or earnings predictions for any period ending prior to, on or after the date of this Agreement, or any change or publicly announced prospective change in any financial strength rating or any other recommendation or rating as to the Company or any of the Company Subsidiaries by analysts (it being understood that any underlying facts or occurrences giving rise to or contributing to such change may be taken into account in determining whether there has been a Company Material Adverse Effect (taking into account the other exceptions set forth in this definition)), (7) any reasonable costs or expenses incurred or accrued by the Company or any of the Company Subsidiaries in connection with the Original Merger Agreement, this Agreement or any of the Transactions, (8) any adverse Effect arising out of or relating to any Proceeding brought against the Company or any of the Company Subsidiaries or any of their respective properties or assets or any of their respective officers or directors (in their capacity as officers or directors or the Company or any Company Subsidiary) by any stockholder(s) of the Company (or any of their respective Affiliates or Associates) before any Governmental Entity, or any judgment, disposition, development or other state of facts with respect to any such Proceeding pending as of the date of this Agreement, (9) any adverse Effect to the extent arising out of or resulting from any action(s) taken, or failure(s) to take action, by Parent or Merger Sub in breach of this Agreement, (10) any adverse Effect to the extent arising out of or resulting from any action(s) taken by the Company or any Company Subsidiary that is expressly required to be taken by the Company or such Company Subsidiary pursuant to this Agreement, or failure(s) to take any action by the Company or any Company Subsidiary that is expressly prohibited by this Agreement (provided that any Effect to the extent arising out of or resulting from the performance of, or compliance with, the Company's or any Company Subsidiary's obligations under Section 6.1 shall not be considered for purposes of this clause (10), except to the extent such Effect arises out of or results from (x) any action taken by the Company or any Company Subsidiary that (a) is described in Section 6.1 and (b) was taken at Parent's written request or (y) the failure by the Company or any Company Subsidiary to take any action that is prohibited by Section 6.1 if Parent fails to give its consent to such action after a written request therefor pursuant to Section 6.1 was given by the Company a reasonable time in advance), (11) any adverse Effect to the extent arising out of or resulting from any action(s) taken at the written request of Parent by the Company or any Company Subsidiary and (12) any adverse Effect to the extent arising out of or resulting from the Restructuring (as defined in the Company Disclosure Schedule); provided that any Effect referred to in the foregoing clauses (1), (2), (3) and (5) shall be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect to the extent such Effect has a disproportionate effect on the Company and the Company Subsidiaries, taken as a whole, as compared to other companies in the healthcare industry (or more specifically, the operation of hospitals and clinics in China).

"Company Subsidiary" means any Subsidiary of the Company.

"Company's Knowledge" or "Company Knowledge" means the actual knowledge, without investigation, of Roberta Lipson, Lawrence Pemble, Robert Low, Ming Xie, Brent Johnson, David Rutstein, Sylvia Pan, Emery Brautigan and Walter Xue.

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"Confidentiality Agreement" means the Confidentiality Agreement, dated March 18, 2013, between the Company and TPG Global, LLC.

"Contract" means any oral or written contract, agreement, lease, instrument or other legally binding contractual commitment.

"Disclosure Schedule" means the Company Disclosure Schedule or the Parent Disclosure Schedule, as the case may be.

"Environmental Law" means any and all applicable China or non-China Law relating to (i) environmental matters, (ii) the generation, use, storage, transportation or disposal of Hazardous Materials or (iii) occupational safety and health, industrial hygiene, handling and disposal of medical waste or the protection of human health or safety, in any manner applicable to any Company Subsidiary as related to exposure to Hazardous Materials.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"ERISA Affiliate" shall mean with respect to any entity, any other entity that, together with such first entity, would be treated as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of the Code.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, including all rules and regulations promulgated thereunder.

"Excluded Holder" shall mean (i) holders of shares of Class B Common Stock, (ii) Parent or Merger Sub, (iii) any officers or directors of the Company (other than the members of the Transaction Committee), (iv) the Rollover Investors, any Additional Rollover Stockholders and any other Persons who have an equity interest in, or any right to acquire an equity interest in, Parent or Merger Sub, and (v) any Affiliates or Associates of any of the foregoing.  The Transaction Committee shall make any and all determinations regarding the identity of Excluded Holders, which determinations shall be binding, absent manifest error.

"Excluded Person" shall mean any Person or group of Persons that was an "Excluded Person" under the Original Merger Agreement as of 11:59 p.m., New York City time, on April 3, 2014.

"GAAP" means United States generally accepted accounting principles.

"Governmental Approvals" means Company Required Governmental Approvals and Parent Required Governmental Approvals.

"Governmental Entity" means any foreign, federal, state, provincial, county or local court, administrative or regulatory agency or commission or any other governmental authority or instrumentality.

"Government Official" means any (i) employee or official of a national or local government, instrumentality of government (e.g., state-owned or state-controlled enterprise, government agency or government advisor) or public international organization (e.g., the World Bank); (ii) political party or party official; or (iii) candidate for political office.

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"Hazardous Materials" means (i) any petroleum, hazardous or toxic petroleum-derived substance or petroleum product, flammable or explosive material, radioactive materials, asbestos in any form that is or is reasonably likely to become friable, urea formaldehyde foam insulation, or polychlorinated biphenyls (PCBs); or (ii) any element, compound, or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous substance or chemical, hazardous waste, medical waste, biohazardous or infectious waste, special waste, or solid waste under any Laws.

"Intellectual Property" means all trade secrets, know-how and inventions and all patents and patent applications with respect thereto, all trademarks and service marks and all registrations and applications for registration thereof, all copyrights and registrations and applications for registration thereof, and all Internet domain name registrations.

"Law" means (i) any federal, state, local, provincial, foreign, multinational or international law, statute, constitution, treaty, code, ordinance, rule, regulation, principle of common law or civil law; (ii) any interpretation, notice or measure published by regulatory authorities which are generally applicable; or (iii) any judgment, order, writ, decree or injunction.

"Lien" means any lien, pledge, mortgage, deed of trust, encumbrance, claim, security interest, transfer restriction and, with respect to securities, in addition to the foregoing, rights of first offer or refusal, limitation on voting rights or similar restrictions.

"Material Company Subsidiary" means any Company Subsidiary that is a "significant subsidiary" (as such term is defined in Section 1-02 of Regulation S-X under the Exchange Act) of the Company.

"MOFCOM" means the Ministry of Commerce of China.

"Parent's Knowledge" means the actual knowledge, without investigation, of John Viola and Ronald Cami.

"Permits" means all authorizations, licenses, approvals, certificates, franchises, registrations and permits granted by or obtained from any Governmental Entity or pursuant to any Law.

"Permitted Liens" means (i) Liens for Taxes or other charges by Governmental Entities not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings and for which appropriate reserves have been made in accordance with GAAP to the extent required, (ii) mechanics', carriers', workers', repairers', and similar Liens arising or incurred in the ordinary course of business, (iii) pledges or deposits to secure obligations under workers' compensation Laws or similar legislation or to secure public or statutory obligations, (iv) purchase money Liens arising in the ordinary course of business, (v) zoning, planning, entitlement and other land use and environmental regulations by Governmental Entities, (vi) with respect to real property owned by the Company or any Company Subsidiary, any matters disclosed in title reports (or other reports with respect to title insurance) delivered or made available to Parent prior to the date of this Agreement in the electronic data room prepared by the Company or otherwise delivered or made available by the Company to Parent, and all Liens of record, (vii) with respect to leasehold interests, Liens incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the leased property, with or without the consent of the lessee, (viii) Liens in favor of the Company or any Company Subsidiary securing intercompany borrowing by any Company Subsidiary, (ix) non-exclusive licenses of Intellectual Property, (x) Liens set forth on Section 4.8 of the Company Disclosure Schedule, (xi) Liens disclosed in the SEC Documents, (xii) Liens (other than Liens securing indebtedness for borrowed money) that are not, individually or in the aggregate, material in amount or would not, individually or in the aggregate, reasonably be expected to materially impair the value, marketability or utility of or continued use and operation of the assets to which they relate, (xiii) Liens arising under the Company Credit Agreements, (xiv) Liens discharged prior to the Effective Time and (xv) such other Liens for amounts not in excess of $200,000 individually or in the aggregate.

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"Person" shall be construed as broadly as possible and shall include an individual or natural person, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a Governmental Entity.

"Proceeding" means any action, claim, arbitration, audit, assessment, hearing, investigation, prosecution, litigation, mediation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Entity. 

"Real Property Lease" means any agreement under which the Company or any Company Subsidiary is the landlord, sublandlord, tenant, subtenant or occupant.

"Release" means any spilling, leaking, pumping, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping, or disposing of Hazardous Materials into the environment.

"Representatives", when used with respect to any Person, means such Person's officers, directors, employees, agents, advisors and other representatives (including any investment banker, financial advisor, attorney or accountant retained by or on behalf of such Person or any of the foregoing).

"Rights Plan" means the Rights Agreement, dated as of June 7, 2007, by and between the Company and American Stock Transfer & Trust Company, as Rights Agent, as amended by Amendment No. 1 to Rights Agreement, dated as of November 4, 2007, Amendment No. 2 to Rights Agreement, dated as of June 8, 2010, and Amendment No. 3 to Rights Agreement, dated as of February 17, 2014, and as the same may be further amended in accordance with its terms.

"RMB" means Renminbi, the lawful currency of China.

"SEC" means the United States Securities and Exchange Commission.

"Secretary of State" means the Secretary of State of the State of Delaware.

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"Securities Act" means the Securities Act of 1933, as amended, including all rules and regulations promulgated thereunder.

"Subsidiary", when used with respect to any Person, means any corporation, limited liability company, partnership, joint venture or other organization, whether incorporated or unincorporated, (i) of which at least a majority of the securities or other ownership interests having by their terms voting power to elect a majority of the board of directors, or others performing similar functions with respect to such corporation or other organization, is beneficially owned or controlled, directly or indirectly, by such Person or by any one or more of its Subsidiaries (as defined in the preceding clause), or by such Person and one or more of its Subsidiaries or (ii) of which such Person controls through Contracts.  For the avoidance of doubt, all of the Persons listed in Section 4.2(b) of the Company Disclosure Schedule shall be deemed to constitute Subsidiaries of the Company.

"Superior Proposal" means any bona fide written Alternative Proposal (provided, that for purposes of this definition, the applicable percentages in clauses (i), (ii) and (iii) of the definition of Alternative Proposal shall be fifty percent (50%) rather than twenty percent (20%)), which (on its most recently amended or modified terms, if amended or modified) the Transaction Committee and the Company Board (acting upon the recommendation of the Transaction Committee) determine in good faith (after consultation with the Company's financial advisor and outside counsel), would constitute a transaction that is more favorable to the Company's stockholders (other than Parent and its Affiliates, Merger Sub and its Affiliates, the Rollover Investors and the Additional Rollover Stockholders), from a financial point of view, than the Merger, taking into account, among other things, (i) the terms of such Alternative Proposal, (ii) any revisions to the terms of this Agreement proposed by Parent in response to such Alternative Proposal or otherwise, and (iii) any legal, financial, regulatory, timing, financing, conditionality (i.e., closing conditions), likelihood of enforcement issues, likelihood of consummation and other aspects of such Alternative Proposal and the Merger (including the Person(s) making such Alternative Proposal, any termination fee and expense reimbursement provisions and any stockholder litigation in connection with the Merger) which the Transaction Committee and the Company Board (acting upon the recommendation of the Transaction Committee) deem relevant.

"Tax" means any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, social security, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, imposed by any Governmental Entity, together with any interest, penalty or addition to tax imposed with respect thereto.

"Tranche C Convertible Notes" means the Company's Tranche C Convertible Notes due 2017 that were issued pursuant to the Securities Purchase Agreement, dated November 7, 2007, between the Company and Magenta Magic Limited.

"Transactions" means, collectively, all of the transactions contemplated hereby, including the Merger.  For the avoidance of doubt, references herein to the Transactions or to any of the Transactions shall not be deemed to include or mean any agreement or arrangement (if any) referred to in Section 5.8 of the Parent Disclosure Schedule.

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Section 1.2.  Certain Other Definitions.  The following terms are defined in the respective Sections of the Agreement indicated:

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ARTICLE II

Section 2.1.  The Merger.  Subject to the terms and conditions of this Agreement, at the Effective Time, (i) Merger Sub shall be merged with and into the Company in accordance with the provisions of Section 251 of the DGCL, and the separate existence of Merger Sub shall cease and (ii) the Company shall be the surviving corporation in the Merger (the "Surviving Corporation") and shall continue its corporate existence under the DGCL.  The Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL.  Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all property, rights, powers, privileges and franchises of Merger Sub shall vest in the Company as the Surviving Corporation, and all debts, liabilities and duties of the Company shall become the debts, liabilities and duties of the Surviving Corporation.  The Surviving Corporation may, at any time after the Effective Time, take any action (including executing and delivering any document) in the name and on behalf of either the Company or Merger Sub in order to carry out and effectuate the Transactions.  The Surviving Corporation shall thereafter be responsible and liable for all the liabilities and obligations of the Company and Merger Sub.

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Section 2.2.  Closing.  The closing of the Merger (the "Closing") shall take place at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004, at 10:00 a.m., local time, on a date designated by the Company which is reasonably satisfactory to Parent, which shall be as soon as practicable, but not later than ten (10) Business Days, after the satisfaction or waiver of all of the conditions set forth in Article VII (other than those conditions that by their nature must be satisfied on the Closing Date but subject to the satisfaction or waiver of those conditions on the Closing Date), or at such other place, time and date as the parties hereto shall agree.  The date on which the Closing occurs is hereinafter referred to as the "Closing Date").

Section 2.3.  Effective Time.  Subject to the terms and conditions of this Agreement, as soon as practicable during the Closing, Merger Sub and the Company shall cause the Merger to be consummated by filing all necessary documentation, including the filing by the Company of the Certificate of Merger with the Secretary of State as provided in Sections 103 and 251 of the DGCL.  The Merger shall become effective at the time that the Certificate of Merger is duly filed with the Secretary of State, or such later time as is agreed upon by the parties hereto and specified in the Certificate of Merger in accordance with the DGCL.  The time when the Merger becomes effective is hereinafter referred to as the "Effective Time".

Section 2.4.  Certificate of Incorporation and By-Laws of the Surviving Corporation.  At the Effective Time, the Certificate of Incorporation and By-Laws of the Company shall be amended in their entirety to read as set forth in Exhibit B and Exhibit C hereto, respectively, and as so amended, shall be the Certificate of Incorporation and By-Laws of the Surviving Corporation, until thereafter duly amended as provided therein or by applicable Law (subject to Section 6.7(b) of this Agreement).

Section 2.5.  Directors and Officers of the Surviving Corporation.  The directors of Merger Sub and the officers of the Company immediately prior to the Effective Time shall, from and after the Effective Time, be the directors and officers, respectively, of the Surviving Corporation until their respective successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the DGCL and the Certificate of Incorporation and By-Laws of the Surviving Corporation.

Section 2.6.  Stockholders' Meeting.

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Section 2.7.  FIRPTA Certificate.  Immediately prior to the Closing, the Company shall deliver a certificate signed by an authorized officer of the Company to the effect that that the Company is not, and has not been at any time during the five years preceding the Closing Date, a United States real property holding corporation, as defined in Section 897(c)(2) of the Code, conforming to the requirements of Treasury Regulations Section 1.1445-2(c)(3) and 1.897-2(h).

ARTICLE III

Section 3.1.  Conversion of Capital Stock.  At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Parent, Merger Sub or any holder of any share of capital stock of the Company, Parent or Merger Sub:

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Section 3.2.  Exchange of Certificates.

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Section 3.3.  Dissenting Shares.  Notwithstanding any provision of this Agreement to the contrary, Shares which are issued and outstanding immediately prior to the Effective Time (other than Shares to be cancelled pursuant to Section 3.1(b)) and which are held by holders who shall have complied with the provisions of Section 262 of the DGCL (the "Dissenting Shares") shall not be converted into the right to receive the Merger Consideration, and holders of such Dissenting Shares shall only be entitled to receive payment of the fair value of such Dissenting Shares in accordance with the provisions of Section 262 of the DGCL, unless and until the applicable holder fails to comply with the provisions of Section 262 of the DGCL or effectively withdraws or otherwise loses such holder's rights to receive payment of the fair value of such holder's Shares under Section 262 of the DGCL or if a court of competent jurisdiction determines that such holder is not entitled to the appraisal provided by Section 262 of the DGCL.  If, after the Effective Time, any such holder fails to comply with the provisions of Section 262 of the DGCL or effectively withdraws or loses such right or if a court of competent jurisdiction determines that such holder is not entitled to the appraisal provided by Section 262 of the DGCL, such Dissenting Shares shall thereupon be deemed to have been converted at the Effective Time into the right to receive the Merger Consideration, without interest thereon.  The Company shall give Parent prompt written notice of any written demands for appraisal of Shares received by the Company under Section 262 of the DGCL, any withdrawal of any such demand and any other written demand, notice or instrument delivered to the Company prior to the Effective Time pursuant to DGCL that relates to such demand, and shall give Parent the opportunity to participate in negotiations and Proceedings with respect to such demands.  The Company shall not, except with the prior written consent of Parent, make any payment with respect to any such demands for appraisal or offer to settle or settle any such demands.

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Section 3.4.  Treatment and Satisfaction of Company Options and Unvested Restricted Stock.

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Section 3.5.  Tax Effect.  The parties agree that (a) the reverse subsidiary merger of Merger Sub with and into the Company pursuant to this Article III shall be treated for Tax purposes as the acquisition of Shares by Parent for cash, and (b) the conversion or exchange of Shares held by the Rollover Investors for or into shares in Parent shall be treated as a contribution of such Shares pursuant to Section 721 of the Code.

ARTICLE IV

Except (i) as set forth in the corresponding section or subsection of the disclosure schedule delivered by the Company to Parent and Merger Sub simultaneously with the execution and delivery of this Agreement (the "Company Disclosure Schedule"), and (ii) as disclosed in the SEC Documents filed or furnished prior to the date of this Agreement (excluding "risk factors" and "forward-looking statements" sections); provided, that in no event shall any disclosure in such SEC Documents qualify or limit the representations and warranties in Sections 4.2(a), 4.3, 4.4(a) or 4.19 of this Agreement, the Company represents and warrants to Parent and Merger Sub as follows:

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Section 4.1.  Corporate Organization.

Section 4.2.  Capitalization.

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Section 4.3.  Authority.

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Section 4.4.  Consents and Approvals; No Violations.

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Section 4.5.  SEC Documents; Financial Statements; Undisclosed Liabilities.

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Section 4.6.  Absence of Certain Changes or Events.  Except as expressly contemplated by this Agreement, since January 1, 2013, no events have occurred which have constituted or would constitute, individually or in the aggregate, a Company Material Adverse Effect.  From January 1, 2013 to the date of this Agreement, the Company and the Company Subsidiaries have carried on and operated their respective businesses in all material respects in the ordinary course of business consistent with past practice.

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Section 4.7.  Litigation.  There is no Proceeding (with respect to investigations, to the Company's Knowledge) pending or, to the Company's Knowledge, threatened in a writing delivered to the Company or any Company Subsidiary or their respective directors or officers, against the Company, any Company Subsidiary or any of their respective properties or assets or any of their respective officers or directors (in their capacity as officers or directors of the Company or any Company Subsidiary) before any Governmental Entity that would constitute, individually or in the aggregate, a Company Material Adverse Effect (excluding any Proceeding (or threatened Proceeding) concerning this Agreement, any of the Transactions or any agreement or arrangement referred to in Section 5.8 of the Parent Disclosure Schedule).  Except as would not constitute, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any Company Subsidiary is subject to any outstanding judgment, order, writ, injunction or decree of any Governmental Entity.

Section 4.8.  Real Property; Personal Property.

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Section 4.9.  Taxes.  Except as would not constitute, individually or in the aggregate, a Company Material Adverse Effect:

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Section 4.10.  Compliance with Laws; Permits.

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Section 4.11.  Employee Benefits.

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Section 4.12.  Contracts.

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As used in this Agreement, the term "Material Contracts" means, collectively, (x) the Contracts referred to in clauses (i) through (xvii) above and (y) each other Contract (including all amendments thereto) that (A) has been filed as a "material contract" by the Company with the SEC as an exhibit to the SEC Documents as of the date of this Agreement pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act and (B) remains in effect as of the date of this Agreement.

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Section 4.13.  Intellectual Property.  Each of the Company and the Company Subsidiaries owns all right, title and interest in and to, or otherwise possesses adequate licenses or other rights to use, all Intellectual Property necessary to conduct its business as conducted on the date of this Agreement, except where the failure to own or possess such rights would not constitute, individually or in the aggregate, a Company Material Adverse Effect.  Except as would not constitute, individually or in the aggregate, a Company Material Adverse Effect, (i) no Proceeding (with respect to investigations, to the Company's Knowledge) is pending or, to the Company's Knowledge, threatened in a writing delivered to the Company, any Company Subsidiary or their respective officers or directors, claiming that (x) the Company or any Company Subsidiary has infringed, misappropriated or otherwise violated any Intellectual Property rights of any Person or (y) any Person has infringed, misappropriated or otherwise violated any Intellectual Property rights of the Company or any Company Subsidiary and (ii) to the Company's Knowledge, there is no valid basis for any such Proceeding or position referred to in the foregoing clause (i)(x).

Section 4.14.  Environmental Matters.

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Section 4.15.  Insurance.  Section 4.15 of the Company Disclosure Schedule contains a complete and correct list as of the date of this Agreement of all insurance policies (by policy number and insurer) covering the Company or any Company Subsidiary, including self-insurance, held by the Company and each Company Subsidiary, and any other Person (the "Insurance Policies").  Each of the Company and the Company Subsidiaries maintains insurance coverage against such risks and in such amounts as the Company believes to be customary for companies of similar size, in its geographic regions and in the respective businesses in which it operates.  Except as would not constitute, individually or in the aggregate, a Company Material Adverse Effect, (i) the Company and the Company Subsidiaries, and to the Company's Knowledge any other party to the Insurance Policies acquired by or on behalf of the Company or any Company Subsidiary, are in compliance with the terms and provisions of the Insurance Policies and all premiums due and payable with respect thereto have been paid, (ii) neither the Company nor any Company Subsidiary, nor to the Company's Knowledge any other Person, has received a notice of cancellation or termination of any Insurance Policy, other than such notices which are received in the ordinary course of business and (iii) there is no existing default or event which, with the giving of notice or lapse of time or both, would constitute a default, by the Company or any Company Subsidiary thereunder.

Section 4.16.  Affiliate Transactions.  As of the date of this Agreement, there are no agreements, arrangements or understandings between the Company or any of the Company Subsidiaries, on the one hand, and any officer, director, stockholder who, to the Company's Knowledge, owns ten percent (10%) or more of any class or series of the Company's capital stock, or Affiliate of the Company (other than the Company Subsidiaries), on the other hand, that has not been disclosed in the SEC Documents and are of the type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act.

Section 4.17.  Restrictions on Business Combinations; Rights Plan.

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Section 4.18.  Opinion of Financial Advisor.  The Transaction Committee has received the opinion of Morgan Stanley & Co. LLC. ("Morgan Stanley"), the Transaction Committee's financial advisor, to the effect that, as of the date of such opinion, the Merger Consideration is fair from a financial point of view to the holders of Shares (other than Parent, Merger Sub, the Rollover Investors, the Additional Rollover Stockholders, the respective Affiliates of all of the foregoing, holders of shares of Class B Common Stock and holders of Shares as to which dissenter's rights have been perfected or with respect to Shares held in treasury).  A signed copy of such opinion will promptly after the date of this Agreement be made available to Parent for information purposes only.

Section 4.19.  Broker's Fees.  Except for Morgan Stanley (which was engaged by the Transaction Committee) and the fees and expenses payable to it (including amounts payable to it at the Closing), neither the Company nor any of the Company Subsidiaries nor any of their respective officers or directors on behalf of the Company or any of the Company Subsidiaries has employed any financial advisor, broker or finder in a manner that would result in any liability for any broker's fees, commissions or finder's fees in connection with any of the Transactions. The Company has delivered or made available to Parent prior to or simultaneously with the execution of this Agreement a copy of the Company's engagement letter with Morgan Stanley.

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Section 4.21.  No Other Representations or Warranties.  Except for the representations and warranties expressly contained in this article iv (giving effect to the company disclosure schedule and the sec documents), neither the company nor any other person makes any express or implied representation or warranty with respect to the company, the company subsidiaries, their respective assets, liabilities, properties, business, operations, condition (financial or otherwise) or prospects of any of them.  The company hereby disclaims any such other representation or warranty, whether by the company, any company subsidiary, any of their respective representatives or affiliates, or any other person, notwithstanding the delivery or disclosure to parent, merger sub or any other person of any documentation or other written or oral information by the company, any company subsidiary or any of their respective representatives or any other person, and, except in the case of fraud, neither the company nor any other person will have or be subject to any liability or indemnification obligation to parent, merger sub or any other person resulting from such delivery or disclosure, or parent's or merger sub's use, of any such documentation or other information (including any information, documents, projections, forecasts, budgets, business plans or other material made available to parent or merger sub in certain "data rooms", confidential information memoranda (including supplements thereto), management presentations or other written materials provided or made available to parent, merger sub, any of their respective representatives or affiliates, or any other person in connection with the transactions, whether provided or made available prior to, on or after the date of this agreement).

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Except as set forth in the corresponding section or subsection of the amended and restated disclosure schedule delivered by Parent to the Company simultaneously with the execution and delivery of this Agreement (the "Parent Disclosure Schedule"), Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:

Section 5.1.  Organization.  Each of Parent and Merger Sub is (i) in the case of Parent, an exempted limited partnership duly formed, validly existing and in good standing under the laws of Cayman Islands or (ii) in the case of Merger Sub, a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and each has the requisite power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted.  Each of Parent and Merger Sub is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not constitute, individually or in the aggregate, a material adverse effect on Parent's or Merger Sub's ability to perform its obligations under this Agreement or prevent or delay in any material respect the consummation of the Transactions (a "Parent Material Adverse Effect").

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Section 5.2.  Authority.  Each of Parent and Merger Sub has all necessary power and authority to execute and deliver this Agreement and to consummate the Transactions to be consummated by it. The execution, delivery and performance by Parent and Merger Sub of this Agreement, and the consummation by each of Parent and Merger Sub of the Transactions to be consummated by it, have been duly authorized and approved by Parent and Merger Sub, and no other action on the part of Parent, Merger Sub or their respective partners or stockholders is necessary to authorize the execution and delivery by Parent and Merger Sub of this Agreement and the consummation by each of Parent and Merger Sub of the Transactions to be consummated by it.  This Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming due and valid authorization, execution and delivery of this Agreement by the Company, constitutes a valid and binding obligation of each of Parent and Merger Sub, enforceable against each of them in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other similar Laws affecting or relating to the enforcement of creditors' rights generally and (ii) is subject to general principles of equity.

Section 5.3.  Consents and Approvals; No Violations.

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Section 5.4.  Merger Sub.

Section 5.5.  Sufficient Funds.  Parent and Merger Sub collectively have, and Parent will make available to Merger Sub, sufficient funds to consummate the Transactions (including sufficient funds (a) to pay the aggregate Merger Consideration pursuant to Article III, (b) to make all required payments in respect of the Company Options and Restricted Stock pursuant to Section 3.4, (c) to perform Parent's and Merger Sub's other payment obligations required to be performed prior to and including the Effective Time under this Agreement and (d) to pay all fees, expenses and other amounts related to the Transactions payable by either of them).  Prior to the execution and delivery of this Agreement, Parent has delivered to the Company a complete, correct and executed copy of the Equity Commitment Letter to provide equity financing for the Transactions in an aggregate amount set forth therein (the "Equity Financing"), including all exhibits, schedules or amendments thereto, which have not been amended or modified (and no such amendment or modification is contemplated) as of the date of this Agreement.  As of the date of this Agreement, the commitment contained in the Equity Commitment Letter has not been withdrawn or rescinded in any respect.  As of the date of this Agreement, the Equity Commitment Letter is in full force and effect, constitutes legal, valid and binding obligations of Parent and, to Parent's Knowledge, the other parties thereto, and is enforceable in accordance with its terms against Parent and Merger Sub, as applicable, and, to Parent's Knowledge, the other parties thereto (in each case, as may be limited by bankruptcy, insolvency, moratorium or other similar Laws affecting or relating to the enforcement of creditors' rights generally and general principles of equity).  As of the date of this Agreement, neither Parent or Merger Sub nor, to Parent's Knowledge, any other party to the Equity Commitment Letter is in breach of any of the terms or conditions set forth in the Equity Commitment Letter, and no event has occurred which, with or without notice, lapse of time or both, would reasonably be expected to constitute a breach, default or failure to satisfy any condition precedent set forth therein.  There is no fact or occurrence existing on the date of this Agreement that, with or without notice, lapse of time or both, could reasonably be expected to (a) make any of the assumptions or any of the statements set forth in the Equity Commitment Letter inaccurate, (b) result in any of the conditions in the Equity Commitment Letter not being satisfied, (c) cause the Equity Commitment Letter to be ineffective or (d) otherwise result in the Equity Commitment Letter not being available on a timely basis in order to consummate the Transactions.  As of the date of this Agreement, Sponsor has not notified Parent of its intention to terminate the Equity Commitment Letter.  Parent has paid in full any and all commitment or other fees required by the Equity Commitment Letter that are due as of the date of this Agreement, and will pay, after the date of this Agreement, all such commitments and fees as they become due.  There are no side letters, understandings or other agreements or arrangements relating to the Equity Commitment Letter to which Parent or any of its Affiliates is a party other than as set forth in the Equity Commitment Letter.  The Equity Commitment Letter contains all of the conditions precedent or other contingencies to the obligations of the parties thereunder to make Equity Financing available to Parent and Merger Sub on the terms therein.  Subject to the satisfaction of the conditions contained in Sections 7.1 and 7.2, as of the date of this Agreement Parent and Merger Sub have no reason to believe that any of the conditions precedent to the Equity Financing as set forth in the Equity Commitment Letter will not be satisfied in connection with the consummation of the Transactions or that the Equity Financing will not be available to Parent on the Closing Date; provided, however, that it is agreed that it is not a condition to Closing under this Agreement, for Parent to obtain the financing pursuant to the Equity Commitment Letter or any alternative financing.  Parent and Merger Sub have obtained the consent of the other parties under the Equity Commitment Letter to publicly file the Equity Commitment Letter with the SEC if requested by the SEC or required by Law.

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Section 5.6.  Solvency. Neither Parent nor Merger Sub is entering into the Transactions with the intent to hinder, delay or defraud either present or future creditors.  As of the Effective Time and immediately after the consummation of the Transactions, assuming (a) the accuracy in all material respects of the representations and warranties of the Company contained in Article IV as if made as of the Effective Time and (b) the performance in all material respects by the Company of its obligations hereunder, and giving effect to all of the Transactions, the payment of the aggregate Merger Consideration pursuant to Article III, the payments in respect of the Company Options and Restricted Stock pursuant to Section 3.4, and payment of all fees, expenses and other amounts related to the Transactions, each of Parent and the Surviving Corporation (i) will be able to pay its debts as they become due and shall own property having a fair saleable value greater than the amounts required to pay its debts and other liabilities (including a reasonable estimate of the amount of all contingent liabilities) as they become due; and (ii) shall not have an unreasonably small amount of capital to carry on the businesses in which is it engaged or proposed to be engaged. For all purposes of this Agreement, clauses (i) and (ii) shall mean that each of Parent and the Surviving Corporation will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.

Section 5.7.  Ownership of Shares.  Other than as a result of (a) the Stock Purchase Agreement, dated June 14, 2010, among the Company, Significant Stockholder and Significant Stockholder Parent, which was approved by the Company Board, and (b) this Agreement, the Support Agreement and the Additional Rollover Agreements (if any) or any agreement, arrangement or understanding between Parent or Merger Sub, on the one hand, and any of the Rollover Investors, on the other hand, in the form approved by the Transaction Committee, none of Parent, Merger Sub or any of their Affiliates is, or at any time during the period beginning three (3) years prior to the date of the Original Merger Agreement and ending on the date hereof, has been, an "interested stockholder" (as defined in Section 203 of the DGCL) of the Company.

Section 5.8.  Other Agreements.  Except as set forth in Section 5.8 of the Parent Disclosure Schedule, neither Parent, Merger Sub nor any other Affiliate of Parent has entered  (or committed to enter) into any agreement or arrangement with (i) any officer or director of the Company in connection with any of the Transactions or otherwise or (ii) pursuant to which any stockholder of the Company would be entitled to receive consideration of a different amount or nature than the Merger Consideration or pursuant to which any stockholder of the Company agrees to vote to adopt this Agreement or agrees to vote against (or refrain from voting in favor of) any Superior Proposal.  Parent has, prior to the date of this Agreement, delivered or made available to the Company a complete and correct copy (or, in the case of any oral agreement or arrangement, a written summary) of any agreement or arrangement required to be disclosed on the Parent Disclosure Schedule pursuant to the preceding sentence.

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Section 5.9.  Litigation.  Except (i) as would not constitute, individually or in the aggregate, a Parent Material Adverse Effect and (ii) for any Proceeding (or threatened Proceeding) concerning this Agreement, any of the Transactions, or any agreement or arrangement referred to in Section 5.8 of the Parent Disclosure Schedule, there is no Proceeding (with respect to investigations, to the Parent's Knowledge) pending or, to Parent's Knowledge, threatened in a writing delivered to Parent, Merger Sub or any of their respective Subsidiaries, against Parent or Merger Sub or any of their respective Subsidiaries or any of their respective properties or assets or any of their respective officers or directors (in their capacity as officers or directors of Parent or Merger Sub or any of their respective Subsidiaries) before any Governmental Entity.  Except as would not constitute, individually or in the aggregate, a Parent Material Adverse Effect, neither Parent nor Merger Sub is subject to any outstanding judgment, order, writ, injunction or decree of any Governmental Entity.

Section 5.10.  Acknowledgments of Parent and Merger Sub.  Each of Parent and Merger Sub acknowledges, understands and agrees to Section 4.21 and acknowledges and agrees that (i) Parent has conducted its own independent investigation and analysis of the business, assets, condition and operations of the Company and its Subsidiaries and (ii) in entering into this Agreement, it has relied solely upon Parent's own investigation and analysis and the representations and warranties, covenants and agreements of the Company contained in this Agreement.  Without limitation of the foregoing, in connection with the due diligence investigation of the Company by Parent and Merger Sub and their respective Representatives, Parent and Merger Sub and their respective Representatives have received and may continue to receive after the date of this Agreement from the Company and its Representatives certain estimates, projections, forecasts and other forward-looking information, as well as certain business plan information, regarding the Company and its business and operations.  Accordingly, each of Parent and Merger Sub acknowledges and agrees that (i) there are uncertainties inherent in attempting to make such estimates, projections, forecasts and other forward-looking statements, as well as in such business plans, with which Parent and Merger Sub are familiar, (ii) Parent and Merger Sub are taking full responsibility for making their own evaluation of the adequacy and accuracy of all estimates, projections, forecasts and other forward-looking information, as well as such business plans, so furnished to them (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, forward-looking information or business plans), (iii) Parent and Merger Sub will have no claim against the Company or any of the Company Subsidiaries, or any of their respective Representatives with respect thereto and (iv) none of the Company or any of the Company Subsidiaries, nor any of their respective Representatives, has made or is making any express or implied representation or warranty with respect to such estimates, projections, forecasts, forward-looking statements or business plans (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, forward-looking statements or business plans).

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Section 5.11.  Broker's Fees.  Except for Goldman, Sachs & Co. (whose fees shall be paid by Parent), neither Parent nor Merger Sub nor any of their Affiliates, nor any of their respective officers or directors on behalf of Parent or Merger Sub or any of their Affiliates, has employed any financial advisor, broker or finder in a manner that would result in any liability for any broker's fees, commissions or finder's fees in connection with any of the Transactions.

Section 5.12.  No Other Representations or Warranties.  Except for the representations and warranties expressly contained in this article v (giving effect to the parent disclosure schedule), neither parent nor merger sub nor any other person makes any express or implied representation or warranty on behalf of parent or merger sub with respect to parent, merger sub, their respective assets, liabilities, properties, business, operations, condition (financial or otherwise) or prospects of any of them.  Parent and merger sub hereby disclaim any such other representation or warranty, whether by parent, merger sub, or any of their respective representatives or affiliates, or any other person.

ARTICLE VI

Section 6.1.  Conduct of Businesses Prior to the Effective Time.  Except as (x) set forth in Section 6.1 of the Company Disclosure Schedule, (y) expressly contemplated, required or permitted by this Agreement, or (z) required by Law, during the period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement in accordance with Section 8.1, without the prior written consent of Parent (such consent not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of the Company Subsidiaries to, (i) conduct its business in all material respects in the ordinary course of business consistent with past practice and (ii) use commercially reasonable efforts to maintain and preserve substantially intact its business organization and the goodwill of those having business relationships with it and retain the services of its officers and key employees in service as of the date of this Agreement.  Without limiting the generality of the foregoing, and except as (x) set forth in Section 6.1 of the Company Disclosure Schedule, (y) expressly contemplated, required or permitted by this Agreement, or (z) required by Law, during the period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement in accordance with Section 8.1, the Company shall not, and shall not permit any of the Company Subsidiaries to, without the prior written consent of Parent (such consent not to be unreasonably withheld, delayed or conditioned) (it being understood and agreed that if any action is permitted by any of the following subsections, such action shall be permitted under the first sentence of this Section 6.1):

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Without in any way limiting the rights or obligations of any party hereto under this Agreement, the parties hereto acknowledge and agree that (i) nothing in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company or any of the Company Subsidiaries prior to the Effective Time and (ii) prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and the Company Subsidiaries' operations.

Section 6.2.  No Solicitation.

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provided, however, that (A) prior to taking such action, the Company shall give Parent at least three (3) Business Days' notice thereof (except as provided in the final sentence of this Section 6.2(c)), describing in reasonable detail the reasons for such Change in Recommendation or termination and attaching the proposed Superior Proposal Agreement (or, if applicable, the latest draft thereof), including the identity of the Person or group of Persons making such Superior Proposal, if applicable, which notice need only be given once with respect to any Superior Proposal, unless such Superior Proposal is modified in any material respect, and (B) if, within such three (3) Business Days period, Parent makes a bona fide offer that the Transaction Committee and the Company Board (acting upon the recommendation of the Transaction Committee) determine in good faith (after consultation with the Company's financial advisor and outside counsel) is more favorable to the stockholders of the Company (other than Parent and its Affiliates, Merger Sub and its Affiliates, the Rollover Investors and the Additional Rollover Stockholders), from a financial point of view, than such Superior Proposal (taking into account, among other things, (I) the terms of such offer and (II) such legal, financial, regulatory, timing, financing, conditionality (i.e., closing conditions), likelihood of consummation and other aspects of such offer (including the Person(s) making such offer and any termination fee and expense reimbursement provisions) and the Merger which the Transaction Committee and the Company Board (acting upon the recommendation of the Transaction Committee) deem relevant (including any stockholder litigation in connection with the Merger), and Parent agrees in writing to all adjustments in the terms and conditions of this Agreement as are necessary to reflect such offer, then the Company's notice of Change in Recommendation or termination, as applicable, with respect to such Superior Proposal shall be deemed to be rescinded and of no further force and effect.  Notwithstanding the foregoing, in the event of any modification in any material respect to any Superior Proposal, the Company shall deliver a new written notice to Parent and comply with the requirements of this Section 6.2(c) with respect to such written notice; provided, however, that any new notice of Change in Recommendation or termination given by the Company under this Section 6.2(c) shall require only at least two (2) Business Days' notice before taking effect and, accordingly, all references above in this Section 6.2(c) to three (3) Business Days shall instead be deemed to be two (2) Business Days.

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Section 6.3.  Publicity.  The initial press release with respect to the execution of this Agreement shall be a joint press release reasonably acceptable to Parent and the Company. Thereafter, so long as this Agreement is in effect, none of the Company, Parent or any of their respective Affiliates shall issue or cause the publication of any press release or other announcement with respect to the Merger, this Agreement or any of the other Transactions without the prior written approval of the Company and Parent, except as may be required by Law or by the rules of any applicable securities exchange as determined in the good faith judgment of the party wanting to make such release or announcement, in which event such party shall, to the extent practicable under the circumstances, use its reasonable best efforts to provide a meaningful opportunity to the other party to review and comment upon such press release or announcement prior to making it.  For the avoidance of doubt, the Company shall not be required to obtain the prior written approval of Parent in connection with any press release or public announcement that the Transaction Committee or the Company Board has taken any action in accordance with (a) clause (y) of the proviso in Section 2.6(a)(ii), (b) the proviso in Section 2.6(a)(iii) or (c) Section 6.2(c).

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Section 6.4.  Access to Information.

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Section 6.5.  Further Assurances; Regulatory Matters.

Section 6.6.  Employee Benefit Plans.

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Section 6.7.  Indemnification and Insurance.

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Section 6.8.  Obligations of Parent and Merger Sub.  Prior to the earlier of the Effective Time or the termination of this Agreement in accordance with Section 8.1:

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Section 6.11.  Bank Consent.  The Company shall use commercially reasonable efforts to, prior to the Closing, obtain the consents set forth in Section 6.11 of the Company Disclosure Schedule.

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Section 6.16.  Takeover Statutes.  If any Takeover Statute is or may become applicable to the Merger or any of the Transactions after the date of this Agreement, each of Parent, the board of directors of Parent, the Company and the Company Board shall use its respective commercially reasonable efforts to grant such approvals and take such actions as are reasonably necessary so that such Transaction may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise act to eliminate or minimize, to the extent possible, the effects of such statute or regulation on such Transaction.

ARTICLE VII

Section 7.1.  Conditions to Each Party's Obligation to Effect the Merger.  The respective obligation of each party to effect the Merger shall be subject to the satisfaction at or prior to the Closing of each of the following conditions (which may be waived in whole or in part by such party):

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Section 7.2.  Additional Conditions to Obligation of Parent and Merger Sub to Effect the Merger in Certain Cases.  The obligation of each of Parent and Merger Sub to effect the Merger shall be further subject to the satisfaction at or prior to the Closing of each of the following conditions (which may be waived in whole or in part by Parent and Merger Sub):

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Section 7.3.  Additional Conditions to Obligation of the Company to Effect the Merger in Certain Cases.  The obligation of the Company to effect the Merger shall be further subject to the satisfaction at or prior to the Closing of each of the following conditions (which may be waived in whole or in part by the Company):

ARTICLE VIII

Section 8.1.  Termination.  Anything herein or elsewhere to the contrary notwithstanding, this Agreement may be terminated and the Transactions may be abandoned at any time prior to the Effective Time, by action taken or authorized by the general partner of Parent (in the case of a termination by Parent) or the Company Board acting upon the affirmative recommendation of the Transaction Committee (in the case of a termination by the Company), whether before or after the Company Stockholder Approvals have been obtained:

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Section 8.2.  Effect of Termination.  The party desiring to terminate this Agreement pursuant to Section 8.1 shall deliver written notice (pursuant to Section 9.4) of such termination to the other party or parties specifying the provision of this Agreement pursuant to which such termination is made, and this Agreement (other than this Section 8.2, Section 8.3 (if applicable) and the applicable Sections of Articles I and IX (and any other definitions of terms contained in any such Sections or Articles under this Agreement), which shall survive any termination of this Agreement) shall immediately become null and void, and there shall be no liability or obligation on the part of Parent, Merger Sub or the Company under this Agreement; provided, however, that, in the case of any termination pursuant to Section 8.1, none of the parties shall be relieved from liability for any willful material breach of any of its covenants contained in this Agreement.  For the avoidance of doubt, the Confidentiality Agreement shall survive any termination of this Agreement in accordance with the terms set forth therein.

Section 8.3.  Termination Fees.

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ARTICLE IX

Section 9.1.  Amendment and Modification.  Subject to applicable Law, this Agreement may be amended, modified or supplemented in any and all respects, whether before or after any vote of the stockholders of the Company contemplated hereby, by written agreement of the parties hereto by action taken or authorized by their respective Boards of Directors (in the case of the Company, acting upon the affirmative recommendation of the Transaction Committee)  at any time prior to the Effective Time; provided, however, that after the adoption of this Agreement by the stockholders of the Company, no amendment, modification or supplement shall be made that changes the consideration payable in the Merger, adversely affects the rights of the Company's stockholders under this Agreement or otherwise requires the approval of such stockholders under applicable Law, in any such case without the prior approval of such stockholders; and provided, further, that after the Effective Time no covenant or agreement of the parties hereto that contemplates performance after the Effective Time may be amended, modified, waived or supplemented.

Section 9.2.  Extension; Waiver.  At any time prior to the Effective Time, the parties may (i) extend the time for the performance of any of the obligations or other acts of any party, (ii) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement and (iii) waive compliance with any of the agreements or conditions contained in this Agreement.  Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights nor shall any single or partial exercise of any such rights preclude any other or further exercise thereof.

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Section 9.3.  Nonsurvival of Representations and Warranties.  None of the representations and warranties contained in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Effective Time.  This Section 9.3 shall not limit any covenant or agreement of the parties hereto that contemplates performance after the Effective Time.

Section 9.4.  Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail and receipt is confirmed, at the facsimile telephone number or email address specified in this Section 9.4, prior to 5:00 p.m., New York City time, on a Business Day, (ii) the first Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section 9.4 (x) at or after 5:00 p.m., local time of the receiving party, on a Business Day or (y) on a day that is not a Business Day, (iii) when received, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required or permitted to be given.  The address for such notices and communications (unless changed by the applicable party by like notice) shall be as follows:

(a)

if to the Company, to:

Chindex International, Inc.

4340 East West Highway

Bethesda, MD 20814

Attention: Chief Executive Officer and Corporate Secretary

Facsimile No.: 310-215-7777

with a copy to:

Hughes Hubbard & Reed LLP

One Battery Park Plaza

New York, NY  10004-1482

Attention: Gary J. Simon

Telephone No.: (212) 837-6000

Facsimile No.: (212) 422-4726

Email address: simon@hugheshubbard.com

(b)

if to Parent or Merger Sub, to it at:

Healthy Harmony Holdings, L.P.

c/o TPG Capital, L.P.

345 California Street, Suite 3300

San Francisco, CA 94104

Attention: Ronald Cami, Esq.

Telephone No.: (415) 743-1532

Facsimile No.: (415) 743-1501

Email address: rcami@tpg.com

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with a copy to:

Cleary Gottlieb Steen & Hamilton LLP

Twin Towers - West (23Fl), Jianguomenwai Da Jie

Chaoyang District

Beijing 100022, China

Attention: Ling Huang

Telephone No.: (86) 10 5920-1000

Facsimile No: (852) 2160-1087

Email address: lhuang@cgsh.com

and

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Victor Lewkow

Telephone No.: (212) 225-2000

Facsimile No: (212) 225-3999

Email address: vlewkow@cgsh.com

Section 9.5.  Counterparts.  This Agreement may be executed in two (2) or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when each party has received counterparts signed by each of the other parties, it being understood and agreed that delivery of a signed counterpart of this Agreement by facsimile transmission or by email shall constitute valid and sufficient delivery thereof.

Section 9.6.  Entire Agreement; Third Party Beneficiaries.  This Agreement (including the documents and the instruments referred to herein), the Guarantee, the Equity Commitment Letter, the Support Agreement and the Confidentiality Agreement: (i) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement, and (ii) are not intended to confer upon any Person other than the parties hereto any rights or remedies whatsoever, except if the Effective Time occurs, with respect to Article III and Section 6.7 (which shall inure to, and may be enforced by, the Persons benefiting therefrom as intended third party beneficiaries thereof).  In any successful Proceeding to enforce any provision of this Agreement referred to in clause (x) of the preceding sentence, and without limiting any other remedies, each third party beneficiary commencing or participating in such Proceeding shall be entitled to recover from Parent all costs and reasonable attorneys' fees incurred by it in connection therewith.  In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, Persons other than the parties hereto may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

Section 9.7.  Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall nevertheless remain in full force and effect and shall in no way be affected, impaired or invalidated.  Upon such determination that any term, provision, covenant or restriction is invalid, illegal, void, unenforceable or against regulatory policy, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the Transactions are consummated as originally contemplated to the greatest extent possible.

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Section 9.8.  Governing Law.  This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware that apply to agreements made and performed entirely within the State of Delaware, without regard to the conflicts of laws provisions thereof or of any other jurisdiction.

Section 9.9.  Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the parties hereto, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other parties hereto.  Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.  Any purported assignment in violation of the provisions of this Agreement shall be null and void ab initio.

Section 9.10.  Schedules.

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Section 9.11.  Expenses.  Except as expressly set forth in this Agreement, whether or not the Merger is consummated, all fees, costs and expenses incurred by any party to this Agreement or on its behalf in connection with this Agreement and the Transactions expressly contemplated by this Agreement shall be paid by the party incurring such expenses; provided, that (i) Parent shall pay all filing fees for the filings required under the AML and (ii) the costs and expenses incurred in connection with the filing, printing and mailing of the Proxy Statement (including any SEC filing fees) shall be borne equally by the Company and Parent.

Section 9.12.  Submission to Jurisdiction; Waivers.

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Section 9.13.  Specific Performance.

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Section 9.14.  Construction of Agreement.

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IN WITNESS WHEREOF, the Company, Parent and Merger Sub have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.

 

	CHINDEX INTERNATIONAL, INC.
	By:	/s/ Kenneth A. Nilsson
		Name:	Kenneth A. Nilsson
		Title:	Chairman of the Board of Directors

	HEALTHY HARMONY HOLDINGS, L.P.
	By:	Healthy Harmony GP, Inc., its general partner
		By:	/s/ Ronald Cami
			Name:	Ronald Cami
			Title:	Vice President
	HEALTHY HARMONY ACQUISITION, INC.
		By:	/s/ Ronald Cami
			Name:	Ronald Cami
			Title:	Vice President

 

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