Shanghai Fosun Pharmaceutical : ENTERING INTO TARGET FUND LPA AND POSSIBLE CONTINUING CONNECTED TRANSACTION REGARDING THE ENTERING INTO THE TARGET FUND MANAGEMENT AGREEMENT

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上 海 復 星 醫 藥（ 集 團 ）股 份 有 限 公 司

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.*

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 02196)

CONNECTED TRANSACTION

ENTERING INTO TARGET FUND LPA

AND

POSSIBLE CONTINUING CONNECTED TRANSACTION REGARDING

THE ENTERING INTO THE TARGET FUND MANAGEMENT AGREEMENT

TARGET FUND LPA

The Board is pleased to announce that on 7 January 2022, Dalian Fujian and Ningbo Fuying (both being subsidiaries of the Company), Fosun High Tech (controlling shareholder of the Company), Dalian Rongda and Lvshun Guotou entered into the Target Fund LPA in relation to, among others, the establishment of the Target Fund, of which the targeted subscription capital shall be RMB500 million. The Target Fund will mainly invest in start-up and early to mid-stage innovative enterprises in the medical devices, medical technology and related industries.

ENTERING INTO THE TARGET FUND MANAGEMENT AGREEMENT

The Target Fund, Dalian Fujian and Fujian Fund will enter into the Target Fund Management Agreement to engage Fujian Fund as the fund manager to provide fund management services to the Target Fund for a term of 3 years.

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HONG KONG LISTING RULES IMPLICATIONS

Regarding the Target Fund LPA, as at the date of this announcement, Fosun High Tech is the controlling shareholder of the Company and therefore constitutes a connected person of the Company under Rule 14A.07 of the Hong Kong Listing Rules. Therefore, the transactions contemplated under the Target Fund LPA constitute connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules. Given the relevant parties to the Target Fund LPA and those to the Previous Connected Transactions are the same connected persons, pursuant to Rule 14A.81 of the Hong Kong Listing Rules, the transactions contemplated under the Target Fund LPA shall be aggregated with the Previous Connected Transactions. As the aggregated relevant percentage ratios applicable to the transactions contemplated under the Target Fund LPA and the Previous Connected Transactions are more than 0.1% but less than 5%, the transactions contemplated under the Target Fund LPA are subject to reporting and announcement requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

With respect to the entering into the Target Fund Management Agreement, as Fujian Fund is a company owned by the Company and Fosun High Tech (the controlling shareholder of the Company) as to 60% and 40%, respectively, Fujian Fund is a connected subsidiary of the Company under Rule 14A.16 of the Hong Kong Listing Rules and a connected person under the Hong Kong Listing Rules. Therefore, the transactions contemplated under the Target Fund Management Agreement, if they materialise, will constitute continuing connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules. Given the relevant parties to the Target Fund Management Agreement and those to the Existing Fund Management Agreements are the same connected person, under Rule 14A.81 of the Hong Kong Listing Rules, the transactions contemplated under the Target Fund Management Agreement shall be aggregated with Existing Fund Management Agreements. As the relevant applicable percentage ratios after aggregation on an annual basis applicable to the transactions contemplated under the Target Fund Management Agreement and the Existing Fund Management Agreements are more than 0.1% but less than 5%, the transactions contemplated under the Target Fund Management Agreement are subject to reporting, annual review and announcement requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

1. TARGET FUND LPA
   The Board is pleased to announce that on 7 January 2022, Dalian Fujian and Ningbo Fuying (both being subsidiaries of the Company), Fosun High Tech (controlling shareholder of the Company), Dalian Rongda and Lvshun Guotou entered into the Target Fund LPA in relation to, among others, the establishment of the Target Fund, of which the targeted subscription capital shall be RMB500 million. The Target Fund will mainly invest in start-up and early to mid-stage innovative enterprises in the medical devices, medical technology and related industries. The principal terms of the Target Fund LPA are summarised below.

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Date

7 January 2022

Parties

1. Dalian Fujian, as the general partner;
2. Ningbo Fuying, as a limited partner;
3. Fosun High Tech, as a limited partner
4. Dalian Rongda, as a limited partner; and
5. Lvshun Guotou, as a limited partner

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, other than Fosun High Tech, each of Dalian Rongda and Lvshun Guotou and their respective ultimate owners are third parties independent of the Company and its connected persons.

Contribution

Under the Target Fund LPA, the targeted subscription contribution amount shall be RMB500 million, of which Dalian Fujian and Ningbo Fuying agreed to contribute RMB5 million and RMB200 million, respectively. The subscription contribution amount of each partner is set out below:

				Percentage of
		Subscription	interest in the
Partner	Type	contribution	Target Fund
		(RMB million)
Dalian Fujian	General partner	5	1%
Ningbo Fuying	Limited partner	200	40%
Fosun High Tech	Limited partner	50	10%
Dalian Rongda	Limited partner	145	29%
Lvshun Guotou	Limited partner	100		20%
TOTAL		500		100%

Note: the percentage of interest in the Target Fund to be held by each partner shall be subject to completion of the

fundraising process.

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The subscription contribution amount to be contributed by each partner of the Target Fund was determined between the parties through arm's-length negotiation based on the capital requirements of the Target Fund. Dalian Fujian and Ningbo Fuying will settle the subscription contribution amount by their respective self-raised funds.

Contribution Arrangement

Under the Target Fund LPA, each partner shall pay their respective subscription contribution amount by three instalments:

1. initial instalment: upon the establishment of Target Fund and its receiving bank account is opened, all partners shall make the initial instalment of paid-up contribution in the aggregate amount of RMB150 million according to the same funding progress;
2. second instalment: upon at least 70% of the initial paid-up contribution of RMB150 million (including provisions for proposed investments, partnership fees) having been utilised, all partners shall make the second instalment of paid-in contribution in the aggregate amount of RMB200 million; and
3. third instalment: upon at least 70% of the of the second paid-up contribution of RMB200 million (including provisions for proposed investments, partnership fees) having been utilised, all partners shall make the third instalment in the aggregate amount of RMB150 million.

Notwithstanding the abovementioned contribution arrangement, the condition for each payment of Dalian Rongda's contribution is that all partners other than Dalian Rongda having paid their respective contributions, and the documents evidencing such payment having been provided by the general partner.

Management and decision-making

1. Dalian Fujian, the general partner of the Target Fund, shall be the executive partner and is responsible for the day-to-day operation of the Target Fund and represents the Target Fund externally.
2. Investment Committee
   The general partner of the Target Fund shall establish an investment committee (the ''Investment Committee''), which is the sole investment decision-making body of the Target Fund and is responsible for considering and deciding on matters including, among others, the investment and divestment of the Target Fund.

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The Investment Committee shall consist of 5 members, which shall be determined by the general partner of the Target Fund upon establishment. The members of the Investment Committee may be adjusted as determined by the general partner of the Target Fund. Each member of the Investment Committee shall have one vote each, and any resolution of the Investment Committee shall be valid only if approved by two-thirds of all members of the Investment Committee.

Pursuant to the Target Fund LPA, each of Dalian Rongda and Lvshun Guotou may nominate one government coordinating observer.

1. The Target Fund shall have a general meeting of partners, which shall consist of all partners of the Target Fund. A physical general meeting shall be held at least once a year, which shall be convened and chaired by the general partner. Other than the following matters that require unanimous consent of all partners, the resolutions of partners shall be passed by holders of more than two-third partnership interest in the Target Fund: amendment to the Target Fund LPA, reduction of the total amount of the subscription contribution and the change of the payment time of paid-up contribution, termination or dissolution of the Target Fund, change of the Target Fund's name, approval of the liquidation report of the Target Fund and change of two key personnel on a cumulative basis.

Duration

Subject to the terms of the Target Fund LPA, the term of the Target Fund shall be 7 years commencing from the Initial Closing Date. The term may be extended twice (extending one year each time) by unanimous consent of all partners. The investment period is from the first to the fifth year during the term of the Target Fund.

Manager and management fee

Fujian Fund is the fund manager of the Target Fund, who is responsible for the day-to-day investment (and/or exit) and day-to-day management of the Target Fund. The Target Fund shall pay the management fee to the manager at the rate and in the manner agreed in the Target Fund Management Agreement.

Investment

1. Investment target
   The Target Fund will mainly invest in start-up, early and mid-stage innovative enterprises in the medical equipment, medical technology and related industries in the northern region of the PRC.

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