Notice to Noteholders - Proposal to Amend Terms

THIS NOTICE CONTAINS IMPORTANT INFORMATION THAT IS OF INTEREST TO THE REGISTERED AND BENEFICIAL OWNERS OF THE SUBJECT SECURITIES. IF APPLICABLE, ALL DEPOSITORIES, CUSTODIANS AND OTHER INTERMEDIARIES RECEIVING THIS NOTICE ARE REQUESTED TO EXPEDITE THE RE-TRANSMITTAL TO BENEFICIAL OWNERS OF THE SECURITIES IN A TIMELY MANNER. IF NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, IF ANY, THEY SHOULD IMMEDIATELY CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 (IF THEY ARE IN THE UNITED KINGDOM) OR ANOTHER APPROPRIATELY AUTHORISED INDEPENDENT FINANCIAL ADVISER AND TAKE SUCH OTHER ADVICE FROM THEIR OWN PROFESSIONAL, TAX AND LEGAL ADVISERS AS THEY DEEM NECESSARY.

8 MARCH 2024

NOTICE TO NOTEHOLDERS

BODYSMART FINANCE LIMITED

(Incorporated in Bailiwick of Jersey with registered number 131386)

to the holders of those of the Series 2020-B1 notes issued by the Issuer on 3 June 2020 withISIN: GB00BMQ56V55(the "Noteholders" and the "Notes", respectively)

Unless otherwise defined in this Notice, capitalised terms used in this Notice shall have the meanings ascribed to them in the Trust Deed dated 3 June 2020 (as supplemented, restated or amended from time to time) between the Issuer and Note Trustee (the "Trust Deed").

Continuing Event of Default under the Loan Agreement

The Issuer hereby confirms to Noteholders that BodySmart Investment Group LLC (the "Borrower") continues to have failed to pay interest due up to and including 3 December 2023 (payable on 4 December 2023 with 3 December 2023 not being a Business Day) to the Issuer (as lender) in an amount of US$278,200.15 pursuant to the terms of the Loan Agreement and that this constitutes an Event of Default under Condition 13(h) of the Notes, which is continuing.

Continuing Event of Default under the Notes

The Issuer hereby notifies Noteholders that, without the above payment of interest from the Borrower to the Issuer pursuant to the terms of the Loan Agreement, the Issuer was unable to pay its coupon due on the Interest Payment Date falling on 4 December 2023 (3 December 2023 not being a Business Day) in an amount of US$ US$278,200.15 and that this is an Event of Default under Condition 13(a) of the Notes, which is continuing.

Borrower proposal to amend terms

The Issuer hereby notifies the Noteholders that the Issuer and Note Trustee have received from the Borrower the following proposal dated 7 March 2024 (set out in full below) (the "Proposal"):

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Coupon Payment deferment request for BodySmart Finance LimitedSeries 2020-B1 12.00% Fixed Rate Bond Due 2025(ISIN: GB00BMQ56V55)

(the "Bond")

07 March 2024

Further to recent RNS announcements in December 2023, BodySmart Investment Group LLC (the "Borrower"), under BodySmart Finance Limited's (the "Issuer") MTN programme, hereby confirm that it is requesting to amend the terms of the Bond.

The Borrower recognises the effect that the revisions set out in this proposal may have but the amendment to the coupon payments (as set out herein) will best allow for payment obligations to be met. The Borrower has taken time in presenting this proposal to explore fully other refinancing options.

In 2020, BodySmart Finance Ltd created a $100m MTN Secured Medium Term Note Programme and issued its first series. The strategy at the time, was to issue multiple series over a number of years to allow the Borrower's business to grow and expand in the medical, aesthetic and wellness industry - and also crucially refinance on improving terms. However, due to the interest rate environment, the slow rate of raising funds and the costs involved (as mentioned in the below sections), the Borrower does not see any benefit in continuing on this strategic path.

The Borrower is intending, under this proposal (the "Proposal"), to consolidate its current and future cashflows from its operational businesses to help ensure full repayment of principal and due interest.

The amendments being proposed are the deferment of the coupon due 3rd December 2023 and all subsequent interest for the Bond until the maturity date of 3rd June 2025 (the "Maturity Date"), when interest shall be paid along with the due principal. The payment will include an additional 2% of default interest for the period from 4th December 2023 to the Maturity Date, taking the coupon to 14% p.a.

Following the review of this Proposal and subject to approval, the Borrower would enter into amendments to the Loan Agreements, the Trust Deed and/or ancillary documents necessary to allow for the formalisation of the new proposed terms below. There will be no changes to the level of security obligations under the Bond.

This Proposal has the following objectives;

The Proposal is to allow for the Borrower to consolidate its current and future cashflows, from its operational businesses (the "Obligors"), over the next circa 1.5 years. The Borrower believes this approach will help to ensure full repayment of the principal and interest as detailed above.

Below is further background to help evaluate the Proposal:

As investors globally are aware, the financial markets have experienced the "steepest series of interest-rate increases in decades during their two-year drive to tame inflation" (IMF). In response, the bond market has seen high credit securities pay very attractive interest rates - reducing the spread to fixed high yield bonds such as BodySmart's. This reducing gap has seen a significant drop off in subscriptions into the Bond.

Though there are signs that some central banks may cut rates in 2024/2025 and possible refinancing options may become available to the Borrower ahead of the Maturity Date, the Borrower cannot rely on this and therefore has decided on the Proposal herein.

The Bond has generally been sold via a long-standing broker and platform-based network. In recent years, this network has seen a significant retraction.

The first series Bond was intended to have $15m subscription within the first six months - however, it has raised a little over $4.6m in three years. Even considering the headwinds experienced due to the covid pandemic, the level and speed of the raise has made the series suboptimal for the Bond's underlying growth/acquisition-based strategy. In addition, the Borrower has had to bear increasing and continuing Bond costs.

The underlying Obligor businesses are operational and the management team of the Borrower believes focus on cash accruement and the targeted expansion into India will, over the remaining term of the Bond, allow it to meet its obligations to the Issuer and Noteholders under the proposed transactions documents of the Bond.

The new Bangalore based aesthetics clinic (which is currently being operationalised). was selected due to its large population, abundance of aesthetic professionals (with low-cost production) as well as an affluent demographic.

If this Proposal is accepted, the unknown costs of enforcements can be avoided and the Borrower can work to settlement by the current Maturity Date.

Please note, this Bond has no liquidity reserve. All cost will be borne by the Borrower if the Proposal is accepted.

However, if this proposal is rejected or security was enforced, alternative arrangements would need to be put in place; and their costs will not be borne by the Borrower. Furthermore, any enforcement may take a great deal of time and the activation of transaction parties, who each sit higher in the Post-Enforcement Priority of Payments; taking their fees ahead of Noteholders, will significantly weaken the final settlement for the Noteholders.

Following the approval of this Proposal, the Issuer's legal counsel will draft the required updates to the transaction documents, before all key Transaction Parties formally enter into the new amendments, namely those of the Loan Agreements, the Trust Deed and/or any ancillary documents necessary to effectuate the following.

The Borrower may be reimbursed for third party fees and professional service fees reasonably incurred (including legal and accounting fees) under this proposal.

We look forward to your consideration of the above proposal.

Yours faithfully,

Authorised Signatory of:

BodySmart Investment Group LLC

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The Borrower gave consent to the Issuer to publish the Proposal for the Noteholders' information on 7 March 2024. 

Neither the Issuer nor the Note Trustee make any recommendations and give no legal or investment advice in respect of the Proposal or as to the Notes generally. 

Noteholders should take and rely on their own independent legal and financial advice and may not rely on advice or information provided to the Note Trustee, statements as to the legal position included in notices issued by the Issuer or the Note Trustee relating to the Notes or otherwise or the views of the Issuer or the Note Trustee expressed herein or otherwise.

Noteholders should note that the Proposal relates to the Notes only.

No Further Action by the Issuer or Note Trustee in respect of the Proposal

For the avoidance of doubt (but without prejudice to the exercise of any discretion, power or authority which the Note Trustee is required, expressly or impliedly, to exercise in or by reference to the interests of the Noteholders under the Trust Deed), neither the Issuer nor the Note Trustee currently intend to take any further action in respect of the Proposal without the request or direction (including indemnification) of the Noteholders, subject always to the terms and conditions of the Trust Deed. Noteholders are reminded that the Note Trustee is under no obligation to take (or to instruct the Security Trustee to take) any enforcement action unless instructed to do so and indemnified and/or secured and/or prefunded to its satisfaction by the Noteholders.

Notwithstanding the above, the Issuer and the Note Trustee intend to facilitate Noteholders in their decision whether or not to accept the Proposal through the passing or rejecting of Extraordinary Resolutions (pursuant to the terms and conditions of the Notes). The Issuer will, at the appropriate time, convene a meeting of Noteholders and/or arrange for written Extraordinary Resolutions to be circulated to Noteholders for the purposes of approving or rejecting the Proposal.

Information regarding the Proposal

Queries regarding the Proposal should be made promptly in writing to the Calculation Agent, for onward communication to the Borrower, as follows:

ZigZag Management Experts LLCUnit No:423 DMCC Business CentreLevel No 5 Jewellery & Gemplex 2DubaiUnited Arab Emirates info@zigzag-me.com

Ref: 2020-B1

The Calculation Agent shall not make any recommendations and shall give no legal or investment advice in respect of the Proposal or as to the Notes generally. The Calculation Agent shall use its reasonable endeavours to ensure that the Borrower answers any queries raised by Noteholders but shall assume no liability or duty of care to any party in so doing.

Noteholders should take and rely on their own independent legal and financial advice and may not rely on advice or information provided by the Calculation Agent.

Right to direct the Note Trustee

Pursuant to Condition 13 (Events of Default), if an Event of Default has occurred and is continuing, the Note Trustee at its discretion may, and if so requested in writing by the holders of at least one-quarter of the aggregate principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution of the Noteholders shall (subject to the Note Trustee having been indemnified and/or secured and/or prefunded to its satisfaction), give written notice to the Issuer (an "Acceleration Notice") declaring the Notes to be immediately due and payable, whereupon they shall become immediately due and payable at their Early Redemption Amount together with accrued interest without further action or formality.

The Security shall become enforceable upon the service of an Acceleration Notice by the Note Trustee on the Issuer.

Pursuant to Condition 18 (Enforcement), the Note Trustee may at any time at its discretion and without notice, take such action under or in connection with any of the Transaction Documents or the Notes or the Coupons as it may think fit (including, without limitation, directing the Security Trustee to take any action under or in connection with any of the Transaction Documents or, at any time after the security has become enforceable, to take steps to enforce the Security). The Note Trustee shall not be bound to take any such action unless (i) it shall have been directed by an Extraordinary Resolution of Noteholders or so requested in writing by the holders of at least one-quarter in principal amount of the Notes then outstanding and (ii) it shall have been indemnified and/or secured and/or prefunded to its satisfaction. The Security Trustee shall not, and shall not be bound to, take any such action unless (i) instructed by the Note Trustee and (ii) it shall have been indemnified and/or secured and/or prefunded to its satisfaction.

No Further Action by Note Trustee

For the avoidance of doubt (but without prejudice to the exercise of any discretion, power or authority which the Note Trustee is required, expressly or impliedly, to exercise in or by reference to the interests of the Noteholders under the Trust Deed), the Note Trustee will not take any further action without the request or direction (including indemnification) of the holders as described above.

Noteholder Contact

In order to facilitate communications with Noteholders, Noteholders should make themselves known to the Note Trustee by contacting it by e-mail using the contact details below. Any such communication should make reference to the Issuer and disclose the identity of the Noteholder, the aggregate nominal amount of Notes held by the Noteholder and the details of the person(s) who shall represent the Noteholder.

All Noteholders must verify their holdings when contacting the Note Trustee by providing proof of holding (with a supporting custodian letter (if applicable)), in each case disclosing the information set out above.

Persons who hold the Notes beneficially through CREST may also disclose their identity to the Note Trustee in accordance with the above paragraph. The Note Trustee will require the Notes of any Noteholder that gives any direction to the Note Trustee to be blocked in CREST. Further instructions will be provided in connection with this process on request.

Correspondence to the Note Trustee should be addressed to security@woodsidesecretaries.co.uk with the ISIN of the Notes and "Linklease Finance Plc" in the subject line of the email.

Queries regarding the circumstances surrounding this default may be addressed to the Calculation Agent:

ZigZag Management Experts LLCUnit No:423 DMCC Business CentreLevel No 5 Jewellery & Gemplex 2DubaiUnited Arab Emirates info@zigzag-me.com

Ref: 2020-B1

This notice is given by the Issuer.