Document:

Exhibit 4.7

 

FORM OF EXCHANGEABLE NOTE

 

THE NOTE REPRESENTED BY THIS INSTRUMENT AND THE SECURITIES ISSUABLE UPON EXCHANGE OF THE NOTE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS.

 

PENGAI AESTHETIC MEDICAL GROUP

 

EXCHANGEABLE NOTE

 

No. [·]

 

	
US$[·]
    	
December 8, 2016
    

 

FOR VALUE RECEIVED, the undersigned, [Issuer], a business company incorporated and existing under the laws of [·] (the “Issuer”), hereby promises to pay, subject to the terms and conditions of this Exchangeable Note (this “Note”, and together with any other outstanding Exchangeable Notes issued pursuant to the Exchangeable Note Purchase Agreement (as defined below), the “Notes”), to the order of Peak Asia Investment Holdings V Limited (together with any permitted transferees, the “Holder”, and together with all other holders of Notes, the “Holders”), the principal amount of [·] United States Dollars (US$[·]) (the “Principal Amount”) and all other sums payable hereunder.

 

This Note is issued pursuant to, and in accordance with, the Exchangeable Note Purchase Agreement, dated November 9, 2016, by and among Company, the Issuer, the Holder and the other parties named therein (the “Exchangeable Note Purchase Agreement”). The Holder is entitled to the benefits of this Note and the Exchangeable Note Purchase Agreement and, subject to the terms and conditions set forth herein and therein, may enforce the agreements contained herein and therein and exercise the remedies provided for hereby and thereby or otherwise available in respect hereto and thereto. All capitalized terms not otherwise defined in this Note shall have the meanings attributed to such terms in the Exchangeable Note Purchase Agreement.

 

SECTION 1
 REDEMPTION

 

1.1                               Redemption on Maturity Date. The Issuer shall redeem this Note on the Maturity Date by payment of the Redemption Price to the Holder.

 

1.2                               Redemption at Option of the Holder. The Holder may, by delivering to the Issuer a notice in the form attached as Exhibit A (a “Default Redemption Notice”) at any time after the occurrence and during the continuance of an Event of Default, require the Issuer to redeem this Note at a price equal to the aggregate of the Principal Amount and the Catch-up Amount (the “Default Amount”). On the twentieth (20th) Business Day after delivery of the Default Redemption Notice, the Issuer shall pay to the Holder the Default Amount.

 

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1.3          Payments.

 

(a)                                 The Issuer shall pay the applicable Redemption Price to the Holder by wire transfer in United States Dollars in immediately available funds to a bank account specified by the Holder and provided to the Issuer in writing in accordance with Section 8.1 at least five (5) Business Days before payment is due. Following payment in full of the Redemption Price, the Holder shall return this Note for cancellation.

 

(b)                                 All payments whatsoever under this Note will be made by the Issuer free and clear of, and without liability for withholding or deduction for or on account of, any present or future taxes, duties or charges of whatever nature (“Taxes”) imposed or levied by or on behalf of any applicable jurisdiction, unless the withholding or deduction of such Tax is required by law. If any deduction or withholding for any Tax shall at any time be required in respect of any amounts to be paid by the Issuer under this Note, the Issuer will pay to the relevant taxing jurisdiction the full amount required to be withheld, deducted or otherwise paid before penalties attach thereto or interest accrues thereon, and to the extent that such withholding or deduction does not constitute income tax assessed against the Holder (no matter in the form of direct taxation, withholding or whatsoever), the Issuer shall pay to the Holder such additional amounts as may be necessary in order that the net amounts paid to the Holder pursuant to the terms of this Note, after such deduction, withholding or payment (including, without limitation, any required deduction or withholding of Tax on or with respect to such additional amount), shall be not less than the amounts then due and payable to the Holder under the terms of this Note before the assessment of such Tax.

 

(c)                                  All payments by the Issuer shall be made, not later than 5 p.m. (Hong Kong time) on the due date, by remittance to such bank account as the Holder may notify the Issuer not less than 10 days in advance from time to time.

 

(d)                                 If any payment pursuant to this Note shall be due on a day that is not a Business Day, such payment shall be made without default on the next succeeding day which is a Business Day, and any interest-bearing portions of the payment shall not accrue interest during such extension.

 

SECTION 2
 EXCHANGE

 

2.1                               Optional Exchange. The Holder of this Note shall have the right, but not the obligation, at any time on or before the Maturity Date, to exchange this Note in whole, but not in part, into such number of fully paid and non-assessable Exchange Shares as is equal to the quotient of (a) the Principal Amount, divided by (b) the then applicable Exchange Price.

 

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2.2                               Exchange Procedures. The exchange rights set forth in Section 2.1 shall be exercised by the Holder by delivering to the Issuer pursuant to Section 8.1 a written notice in the form of Exhibit B attached hereto (a “Exchange Notice”) specifying (i) that the Holder elects to exchange the entire Note and (ii) the name or names (with address) in which the Exchange Shares, and the certificate or certificates for Exchange Shares, are to be issued. As soon as practicable after the delivery of the Exchange Notice, and in any event no later than three (3) Business Days thereafter, the Issuer shall deliver a duly executed instrument of transfer (as seller) and sold note (if applicable) in respect of the relevant Exchange Shares to be delivered pursuant to the Exchange Notice to the Holder pursuant to Section 8.1, and as soon as practicable after the receipt by the Issuer of the said instrument of transfer and the related bought note (if applicable) duly executed by the Holder as purchaser in respect of the Exchange Shares but in no event later than ten (10) Business Days thereafter (or such longer period as the Issuer and the Holder may mutually agree), the Issuer shall take all actions and execute all documents necessary to effect the transfer and registration (if not previously registered) of such Exchange Shares (including giving all necessary instruction to the relevant share registry to effect such transfer and registration (if not previously registered)) and deliver to the Holder certificate(s) representing the number of fully paid and non-assessable Exchange Shares calculated in accordance with Section 2.1. Against the Issuer’s delivery of the abovementioned Exchange Shares, the Holder shall (i) cause this Note to be delivered to the Issuer for cancellation and (ii) release the Share Charge and deliver to the Issuer a deed of release in respect of an amount of Shares equal to the Exchange Shares (the “Release Shares”) together with the corresponding share certificates representing the Release Shares and the related instruments of transfer, bought and sold notes and other related documents previously delivered to the Holder under the Share Charge, if any. Unless contrary to the laws of Hong Kong or the Cayman Islands, at the time of surrender of this Note, the Person in whose name any certificate(s) for the Exchange Shares shall be issuable upon such exchange shall be deemed by the Issuer and the Holder to be the beneficial owner of such Exchange Shares on such date, notwithstanding that the share register of the Company shall then be closed or that the certificates representing such Exchange Shares shall not then be actually delivered to such Person.

 

2.3                               Fractional Shares. No fractional Exchange Shares shall be transferred upon exchange of this Note. All Exchange Shares (including fractions thereof) into which more than one Note held by a Holder thereof may be exchangeable shall be aggregated for purposes of determining whether the exchange would result in the issuance of any fractional share. If, after the aforementioned aggregation, the exchange would result in the issuance of any fractional share, the Issuer shall, in lieu of transferring any fractional share, pay cash equal to the product of such fraction multiplied by the higher of (i) fair market value of one Exchange Share on the date of exchange of this Note and (ii) the Exchange Price.

 

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2.4                               Availability of Shares. The Issuer covenants that it will cause the Company to reserve for issuance and/or transfer, each solely for the purpose of transfer or delivery upon any exchange herein provided, such number of Series B Preferred Shares equal to the number of Exchange Shares receivable hereunder. The Issuer covenants that all Exchange Shares, when issued, transferred or delivered pursuant to Section 2.2, shall be duly and validly issued and fully paid, free and clear of all Encumbrances.

 

2.5                               Adjustment of Exchange Price upon Dividend, Subdivision, Combination or Reclassification of Exchange Shares. In the event that the Company shall at any time or from time to time, prior to exchange of this Note (i) make a distribution of Series B Preferred Shares (other than a scrip dividend out of current year’s profits, in connection with which the holders of Shares have the right to elect to receive cash or Shares) by way of capitalization of profits or reserves (including any share premium account or capital redemption reserve fund), (ii) subdivide the outstanding Series B Preferred Shares into a larger number of shares, (iii) combine the outstanding Series B Preferred Shares into a smaller number of shares or (iv) issue any Ordinary Share Equivalents in a reclassification of the Series B Preferred, then, and in each such case, the Exchange Price in effect immediately prior to such event shall be adjusted (and any other appropriate actions shall be taken by the Issuer) so that the Holder shall be entitled to receive the number of Shares or other securities of the Company that the Holder would have held or been entitled to receive upon or by reason of the relevant event described above had this Note been exchanged immediately prior to the occurrence of such event or (if earlier) the record date for shareholders of the Company entitled to participate in such distribution. An adjustment made pursuant to this Section 2.5 shall become effective retroactively (x) in the case of any such distribution, to a date immediately following the close of business on the record date for the determination of holders of Series B Preferred Shares entitled to receive such distribution or (y) in the case of any such subdivision, combination or reclassification, to the close of business on the day upon which such corporate action becomes effective.

 

2.6                               Abandonment. If the Company shall set a record date for the determination of holders of Series B Preferred Shares entitled to receive a dividend or other distribution, and shall thereafter and before the distribution to shareholders thereof legally abandon its plan to pay or deliver such dividend or distribution, then no adjustment in the Exchange Price shall be required by reason of setting such record date.

 

2.7                               Certificate as to Adjustments. Upon any adjustment in the Exchange Price (including an adjustment pursuant to Section 6.5 of the Exchangeable Note Purchase Agreement, if any), the Issuer shall, within a reasonable period (not to exceed 20 Business Days) following any of the foregoing transactions deliver to the Holders a certificate, signed by a director of the Issuer, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the Exchange Price then in effect following such adjustment.

 

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2.8                               Reorganization, Reclassification. In case of any merger, amalgamation, arrangement or consolidation of the Company or any capital reorganization, reclassification or other change of outstanding Shares (each, a “Transaction”), the Issuer shall execute and deliver to the Holder at least thirty (30) days prior to effecting such Transaction a certificate, signed by a director of the Issuer, stating that the rights of the Holder shall continue to be recognized and not prejudiced by the Transaction and appropriate provision shall be made therefor in the agreement, if any, relating to such Transaction. Where there is an adjustment to the Exchange Price, any certificate delivered pursuant to this Section 2.8 shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in Section 2.5. The provisions of this Section 2.8 and any equivalent thereof in any such certificate similarly shall apply to successive transactions.

 

2.9                               Legends. The Holder agrees to the imprinting, so long as required by law, of a legend on certificates representing all of the Holder’s Exchange Shares issuable upon exchange of this Note in substantially the following form:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE OR JURISDICTION. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS.

 

PENGAI AESTHETIC MEDICAL GROUP (THE “COMPANY”) IS A COMPANY INCORPORATED UNDER THE LAWS OF THE CAYMAN ISLANDS, AND THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL NOT BE SOLD, ASSIGNED, TRANSFERRED, EXCHANGED, MORTGAGED, PLEDGED OR OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE ARTICLES OF ASSOCIATION OF THE COMPANY AND THE SHAREHOLDER AND NOTEHOLDER AGREEMENT. COPIES OF THE ARTICLES OF ASSOCIATION OF THE COMPANY AND THE SHAREHOLDER AND NOTEHOLDER AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SHARES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE ARTICLES OF ASSOCIATION OF THE COMPANY AND THE SHAREHOLDER AND NOTEHOLDER AGREEMENT.

 

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SECTION 3
 COVENANTS

 

3.1                               Positive Covenants. The Issuer covenants to the Holder that, from the date hereof until all amounts owing under this Note have been paid in full or this Note has been redeemed or exchanged in full, the Issuer shall:

 

(a)                                 punctually repay the principal when due, and pay any other amount due and payable under this Note in the manner specified in this Note;

 

(b)                                 give written notice promptly to the Holder of any condition or event that constitutes an Event of Default (as defined below) or Potential Event of Default by delivering a certificate specifying the nature and period of existence of such condition, event or change and the nature of such claimed Event of Default, Potential Event of Default, default, event or condition;

 

(c)                                  comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority, noncompliance with which could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Change; and

 

(d)                                 execute and deliver, or cause to be executed and delivered, upon the reasonable request of the Holder and at the Issuer’s expense, such additional documents, instruments and agreements as the Holder may reasonably determine to be necessary to carry out the provisions of this Note and the Exchangeable Note Purchase Agreement and the transactions and actions contemplated hereunder and thereunder.

 

SECTION 4 EVENTS OF DEFAULT

 

4.1                               Events of Default. The occurrence and continuance of any one or more of the following events shall constitute an “Event of Default”:

 

(a)                                 the Issuer shall fail to pay any amount which is payable under this Note when due in accordance with the terms hereof and such non-payment is not remedied within ten (10) days after the relevant due date;

 

(b)                                 any representation, warranty, certification or statement made by or on behalf of the Issuer or any other Warrantor in this Note, the Exchangeable Note Purchase Agreement, or any other EN Basic Documents, or in any certificate or other document delivered pursuant hereto or thereto, shall have been false in any material respect when made (a “Breach”) and, if capable of being remedied, has not been remedied within thirty (30) days after being notified in writing of such Breach by the Holder; provided that such Breach has caused or is likely to cause a Material Adverse Change;

 

(c)                                  the Issuer, any other Warrantor or any Group Company shall commit any material default in the observance or performance of any other covenant, condition or agreement contained any EN Basic Document (except for those set forth on Section 6.4(j) of the Exchangeable Note Purchase Agreement), and such default: (i) cannot be cured or (ii) can be cured but has continued for thirty (30) days after being notified in writing of such default by the Holder;

 

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(d)                                 the Issuer, any other Warrantor or any Group Company shall (i) default (but after expiration of any period of grace, if any, provided in the instrument or agreement under which such indebtedness was created) in making any payment of any principal of any indebtedness (including any other Note) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such indebtedness was created; or (iii) default in the observance or performance of any other material agreement, term, covenant or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, in each case, the effect of which default is to cause, or to permit the holder or beneficiary of such indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such indebtedness to become due and payable prior to its stated maturity;

 

(e)                                  (i) the Issuer, any other Warrantor or any Group Company shall commence any case, proceeding or other action (1) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (2) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets; or (ii) there shall be commenced against the Issuer, any other Warrantor or any Group Company any case, proceeding or other action of a nature referred to in clause (i) above which (1) results in the entry of an order for relief or any such adjudication or appointment or (2) remains undismissed, undischarged or unbonded for a period of ten (10) Business Days; or (iii) there shall be commenced against the Issuer any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distrait or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged or stayed, or bonded pending appeal, within ten (10) Business Days after the entry thereof; or (iv) the Issuer, any other Warrantor or any Group Company shall (1) make a general assignment for the benefit of its creditors, or (2) shall admit its inability to pay its debts when they become due; or (v) there shall be any order, judgment or decree entered against the Issuer, any other Warrantor or any Group Company decreeing the dissolution or split up of such entity and such order shall remain undischarged or unstayed for a period in excess of 30 days, or any Group Company shall cease to carry on all or any substantial part of its business in the ordinary course.

 

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4.2                               Notice by the Issuer. Upon the occurrence of an Event of Default, the Issuer shall give the Holder prompt notice of the occurrence of such Event of Default.

 

4.3                               Consequence of Event of Default. Upon the occurrence and during the continuance of an Event of Default, the Holder may, by notice in writing to the Issuer declare this Note in whole, but not in part, and all accrued interest thereon, to be immediately due and payable and require the Issuer to redeem this Note in accordance with Section 1.2. At the time for payment of the Default Amount by the Issuer in accordance with such Section, the Holder shall surrender the Note to the Issuer in the manner and at the place designated by the Issuer and thereupon the Default Amount shall be payable to the Holder, and the Note shall be canceled and retired. For the avoidance of doubt, following the payment in full by the Issuer of the Default Amount, then notwithstanding that this Note shall not have been surrendered, interest with respect to this Note shall cease to accrue after such payment, and all rights with respect to this Note shall forthwith terminate following such payment.

 

4.4                               Expenses. The Issuer will pay all costs and expenses (including without limitation fees and expenses of legal counsel) reasonably incurred by the Holder in connection with: (i) enforcing or defending (or determining whether or how to enforce or defend) any rights under this Note or any other EN Basic Documents or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Note or any other EN Basic Documents, or by reason of being the holder of the Note; and (ii) the insolvency or bankruptcy of the Issuer or any work-out or restructuring of the transactions contemplated by this Note or any other EN Basic Documents.

 

SECTION 5
 REGISTRATION AND TRANSFER OF NOTE

 

5.1                               Register. The Issuer shall keep at its principal office a register in which the Issuer shall provide for the registration and transfer of this Note, in which the Issuer shall record the name and address of the Holder and the name and address of each permitted transferee and prior owner of this Note. The Holder shall notify the Issuer of any change of name or address and promptly after receiving such notification the Issuer shall record such information in such register.

 

5.2                               Transfer. Except for the transfer by the Holder of the Note and its rights, interest and duties hereunder to any Affiliate(s) of the Holder or any third party that is not a Competitor, this Note and all rights hereunder shall not be transferred by the Holder without the prior written consent of the Issuer.

 

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5.3                               Replacement of Note. Upon receipt by the Issuer of evidence of the loss, theft, destruction or mutilation of this Note and

 

(a)                                 in the case of loss, theft or destruction, of indemnity from the Holder reasonably satisfactory to it, or

 

(b)                                 in the case of mutilation, upon surrender and cancellation thereof,

 

the Issuer at its own expense shall within ten (10) Business Days execute and deliver to the Holder, in lieu thereof, a new Note, dated and bearing interest from the Original Issuance Date.

 

SECTION 6
 DEFINITIONS

 

6.1                               Definitions. Capitalized terms used but not otherwise defined herein shall have the respective meanings as ascribed to them in the Exchangeable Note Purchase Agreement. In this Note, unless the context otherwise requires the following words and expressions have the following meanings:

 

“Affiliate” of a Person (the “Subject Person”) means (a) in the case of a Person other than a natural person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with the Subject Person and (b) in the case of a natural person, any other Person that directly or indirectly is Controlled by such natural person or is a Relative of such natural person. In the case of the Holder, the term “Affiliate” includes (v) any shareholder of the Holder, (w) any of such shareholder’s general partners or limited partners, (x) the fund manager managing such shareholder (and general partners, limited partners and officers thereof) and (y) trusts controlled by or for the benefit of any such individuals referred to in (v), (w) or (x).

 

“Business” has the meaning set forth in the Exchangeable Note Purchase Agreement.

 

“Business Day” has the meaning set forth in the Exchangeable Note Purchase Agreement.

 

“Catch-up Amount” means such amount as would, when taken together with the Principal Amount, would represent an IRR in respect of the Note equal to 10%.

 

“Company” means Pengai Aesthetic Medical Group, a company incorporated and existing under the laws of the Cayman Islands.

 

“Control” of a Person means (a) ownership of more than 50% of the shares in issue or other equity interests or registered capital of such Person or (b) the power to direct the management or policies of such Person, whether through the ownership of more than 50% of the voting power of such Person, through the power to appoint a majority of the members of the board of directors or similar governing body of such Person, through contractual arrangements or otherwise.

 

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“Competitor” means any Person that is listed on Schedule I or otherwise engaged in the Business via managing or operating at least two (2) aesthetic hospitals or clinics in the PRC, or in the case of any of the foregoing, any of their Affiliates. For the avoidance of doubt, any bona fide financial investor investing in the Business shall not be deemed as a Competitor.

 

“Convertible Note Purchase Agreement” means the convertible note purchase agreement between the Holder and the Company with respect to the issuance of certain convertible note(s) by the Company to the Holder, dated November 9, 2016.

 

“Encumbrance” has the meaning set forth in the Exchangeable Note Purchase Agreement.

 

“EN Basic Documents” has the meaning set forth in the Exchangeable Note Purchase Agreement.

 

“Exchange Price” means US$2.3292 per Share, subject to adjustment as provided in Section 6.5 of the Exchangeable Note Purchase Agreement, as well as Section 2.5 and Section 2.8 hereof.

 

“Exchange Shares” means the Series B Preferred Shares.

 

“Exchangeable Note Purchase Agreement” has the meaning set forth in the Preamble.

 

“Group” and “Group Companies” has the meaning set forth in the Exchangeable Note Purchase Agreement.

 

“Governmental Authority” means any government or political subdivision thereof; any department, agency or instrumentality of any government or political subdivision thereof; any court or arbitral tribunal; and the governing body of any securities exchange.

 

“Holder” and “Holders” have the meaning ascribed to them in the Preamble.

 

“Hong Kong” means Hong Kong Special Administrative Region of the People’s Republic of China.

 

“IRR” means the internal rate of return achieved by the Holder with respect to the Holder’s purchase and holding of the Note, the calculation of which internal rate of return shall take into account (i) the amount and timing of the purchase of the Note and (ii) the amount and timing of any distributions and payments by the Company attributable to the Note.

 

“Issuer” has the meaning set forth in the Preamble.

 

“Material Adverse Change” has the meaning set forth in the Exchangeable Note Purchase Agreement.

 

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“Maturity Date” means the fourth (4th) anniversary of the Original Issuance Date.

 

“Note” and “Notes” have the meaning ascribed to them in the Preamble.

 

“Original Issuance Date” means the date of this Note.

 

“Ordinary Shares” means the Ordinary Shares of the Company, par value US$0.001 per share.

 

“Ordinary Share Equivalent” means any security or obligation which is by its terms convertible into or exchangeable or exercisable for Ordinary Shares or other share capital of the Company, including this Note and any option, warrant or other subscription or purchase right with respect to Ordinary Shares or such other share capital.

 

“Person” means any natural person, firm, company, Governmental Authority, joint venture, partnership, association or other entity (whether or not having separate legal personality).

 

“Principal Amount” has the meaning set forth in the Preamble.

 

“Potential Event of Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

 

“PRC” means the People’s Republic of China and for the purpose of this Agreement shall exclude Hong Kong Special Administrative Region, Taiwan and the Macau Special Administrative Region.

 

“Redemption Price” means the Principal Amount or the Default Amount, as applicable.

 

“Share Charge” means the share charges under the Security Documents (as defined in the Exchangeable Note Purchase Agreement).

 

“Shares” means any shares of the Company.

 

“Series B Preferred Shares” means the redeemable Series B Preferred Shares of the Company, par value US$0.001 per share.

 

“Warrantors” shall have the meaning set forth in the Exchangeable Note Purchase Agreement.

 

6.2                               Headings. Section headings in this Note are included herein for convenience of reference only and shall not constitute a part of this Note for any other purpose.

 

6.3                               Reference to Documents. A reference to any Section or Exhibit is, unless otherwise specified, to such Section of or Exhibit to this Note. The words “hereof,” “hereunder” and “hereto,” and words of like import, unless the context requires otherwise, refer to this Note as a whole and not to any particular Section hereof. A reference to any document (including this Note) is to that document as amended, consolidated, supplemented, novated or replaced from time to time.

 

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SECTION 7
 GOVERNING LAW; JURISDICTION

 

7.1                               GOVERNING LAW AND JURISDICTION. Any dispute or claim arising out of or in connection with or relating to this Note shall be settled in accordance with sections 12.1 and 12.2 (Governing Law and Dispute Resolution) of the Exchangeable Note Purchase Agreement.

 

SECTION 8
 MISCELLANEOUS

 

8.1                               Notices. Each notice, demand or other communication given or made under this Note shall be in writing in English and delivered or sent to the Issuer or the Holder at its respective addresses or fax numbers specified in the Exchangeable Note Purchase Agreement (or such other address or fax number as the addressee has by five days’ prior written notice specified). Any notice, demand or other communication shall be delivered in person, sent by fax, mailed, first class, postage prepaid, or sent by commercial overnight courier service; provided that any notice, demand or other communication made by letter between countries shall be delivered by internationally recognized commercial courier service. Any notice, demand or other communication so addressed to the Issuer or the Holder, as the case may be, shall be deemed to have been delivered, (a) if delivered in person or by courier, when proof of delivery is obtained by the delivering party; (b) if sent by post within the same country, on the third Business Day following posting, and if sent by post to another country, on the seventh Business Day following posting; and (c) if given or made by fax, upon dispatch and the receipt of a transmission report confirming dispatch.

 

8.2                               Wavier. The Issuer waives presentment, notice of dishonor, protest and any other notice or formality with respect to this Note. Unless otherwise provided herein, the Issuer agrees that no omission or delay by the Holder in exercising any right under this Note shall operate as a waiver, and the single or partial exercise of any such right or rights shall not preclude any other further exercise of such right or rights.

 

8.3                               Amendment. This Note may not be amended or modified except by a written agreement executed by the Issuer and the Holder.

 

8.4                               Language. This Note is drawn up in the English language. If this Note is translated into any language other than English, the English language text shall prevail.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the undersigned has caused this Note to be executed on the date first above written by its officer or director thereunto duly authorized.

 

	
Executed as a deed by 
    	
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[Issuer]
    	
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)  
    	
 
    
	
By
    	
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)  
    	
Name: 
    
	
 
    	
)  
    	
Title: 
    
	
In the presence of:
    	
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Witness
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    

 

[Signature Page to Exchangeable Note]

 

 

AGREED AND ACCEPTED:

 

Peak Asia Investment Holdings V Limited

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

[Signature Page to Exchangeable Note]

 

 

SCHEDULE I

 

LIST OF COMPETITORS

 

 

EXHIBIT A

 

FORM OF DEFAULT REDEMPTION NOTICE

 

[date]

 

To:          Pengai Hospital Management Corporation (the “Issuer”)

 

Re:          Default Redemption Notice in relation to the Exchangeable Note No. [  ] with an aggregate outstanding Principal Amount of [  ] (the “Note”). Capitalized terms used herein and not otherwise defined shall have their respective meanings as set forth in the Note.

 

Dear Sirs:

 

We, the holder of the Note, hereby deliver this Redemption Notice pursuant to Section 1.2 of the Note and hereby notify the Issuer of the exercise of the redemption right set forth in Section 1.2 of the Note to redeem [all of the outstanding principal amount of the Note] at an amount calculated pursuant to the Note as specified below.

 

Aggregate outstanding Principal Amount to be redeemed: US$ [                      ]

 

Catch-up Amount: US$ [              ]

 

Total Redemption Price: US$ [                      ]

 

Please kindly transfer to us the Default Amount in accordance with the provisions of Section 1.2 of the Note.

 

Very truly yours,

[Names of the Holder]

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

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EXHIBIT B

 

FORM OF EXCHANGE NOTICE

 

[date]

 

To:          Pengai Hospital Management Corporation (the “Issuer”)

 

Re:          Exchange Notice in relation to the Exchangeable Note No. [    ] with an aggregate outstanding Principal Amount of [    ] (the “Note”). Capitalized terms used herein and not otherwise defined shall have their respective meanings as set forth in the Note.

 

Dear Sirs:

 

We, holder of the Note, hereby deliver this Exchange Notice pursuant to Section 2.2 of the Note and hereby notify the Issuer of the exercise of the exchange right set forth in Section 2.1 of the Note to exchange all of the outstanding Principal Amount of the Note at the applicable Exchange Price.

 

Aggregate outstanding Principal Amount: US$ [                   ]

 

Exchange Price: US$ [                   ] per [Series B Preferred Shares].

 

Please kindly procure to transfer to us such number of [Series B Preferred Shares] to be transferred upon exchange of the Note in accordance with this Exchange Notice and with the provisions of Section 2.2 of the Note to the following entity(ies):

 

(1)                                 Name: [                   ]

Address: [                   ]

Number of [Series B Preferred Shares] to be transferred: [                   ]

 

(2)                                 [Repeat as necessary]

 

Very truly yours,

[Name of the Holder]

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:Exhibit 10.1

 

FORM OF INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (the “Agreement”) is entered into as of                  ,  2019 by and between Aesthetic Medical International Holdings Group Limited, a company incorporated and existing under the laws of the Cayman Islands (the “Company”), and the undersigned, a director and/or officer of the Company (“Indemnitee”).

 

RECITALS

 

1.                                      The Company recognizes that highly competent persons are becoming more reluctant to serve corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their services to the corporation.

 

2.                                      The Board of Directors of the Company (the “Board”) has determined that the inability to attract and retain highly competent persons to serve the Company is detrimental to the best interests of the Company and its shareholders and that it is reasonable and necessary for the Company to provide adequate protection to such persons against risks of claims and actions against them arising out of their services to the Company.

 

3.                                      The Company is willing to indemnify Indemnitee to the fullest extent permitted by applicable law, and Indemnitee is willing to serve and continue to serve the Company on the condition that he or she be so indemnified.

 

AGREEMENT

 

In consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

A.                                    DEFINITIONS

 

The following terms shall have the meanings defined below:

 

Expenses shall include damages, judgments, fines, penalties, settlements and costs, attorneys’ fees and disbursements and costs of attachment or similar bond, investigations, and any expenses paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding (as hereinafter defined).

 

Indemnifiable Event means any event or occurrence that takes place either before or after the execution of this Agreement, related to the fact that Indemnitee is or was a director of the Company or an officer of the Company or any of its subsidiaries, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture or other entity, or related to anything done or not done by Indemnitee in any such capacity.

 

Participant means a person who is a party to, or witness or participant (including on appeal) in, a Proceeding.

 

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Proceeding means any threatened, pending or completed action, suit or proceeding, or any inquiry, hearing or investigation, whether civil, criminal, administrative, investigative or other, including appeal, in which Indemnitee may be or may have been involved as a party or otherwise by reason of an Indemnifiable Event, including, without limitation, any threatened, pending or completed action, suit or proceeding by or in the right of the Company.

 

B.                                    AGREEMENT TO INDEMNIFY

 

1.                                      General Agreement.  In the event Indemnitee was, is or becomes a Participant in, or is threatened to be made a Participant in, a Proceeding, the Company shall indemnify the Indemnitee from and against any and all Expenses which Indemnitee incurs or becomes obligated to incur in connection with such Proceeding, to the fullest extent permitted by applicable law.

 

2.                                      Indemnification of Expenses of Successful Party.  Notwithstanding any other provision of this Agreement to the contrary, to the extent that Indemnitee has been successful on the merits in defense of any Proceeding or in defense of any claim, issue or matter in such Proceeding, Indemnitee shall be indemnified against all Expenses incurred in connection with such Proceeding or such claim, issue or matter, as the case may be, offset by the amount of cash, if any, received by Indemnitee resulting from his/her success therein.

 

3.                                      Partial Indemnification.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of Expenses, but not for the total amount of Expenses, the Company shall indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

 

4.                                      Exclusions.  Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification under this Agreement:

 

(a)                                 to the extent that payment is actually made to Indemnitee under a valid, enforceable and collectible insurance policy;

 

(b)                                 to the extent that Indemnitee is indemnified and actually paid other than pursuant to this Agreement;

 

(c)                                  in connection with a judicial action by or in the right of the Company, in respect of any claim, issue or matter as to which Indemnitee shall have been adjudicated by final judgment in a court of law to be liable for intentional misconduct in the performance of his/her duty to the Company unless and only to the extent that any court in which such action was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such Expenses as such court shall deem proper;

 

(d)                                 in connection with any Proceeding initiated by Indemnitee against the Company, any director or officer of the Company or any other party, and not by way of defense, unless (i) the Company has joined in or the Reviewing Party (as hereinafter defined) has consented to the initiation of such Proceeding; or (ii) the Proceeding is one to enforce indemnification rights under this Agreement or any applicable law;

 

(e)                                  for a disgorgement of profits made from the purchase and sale by the Indemnitee of securities pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any applicable U.S. state statutory law or common law;

 

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(f)                                   brought about by the dishonesty or fraud of Indemnitee seeking payment hereunder; provided, however, that Indemnitee shall be protected under this Agreement as to any claims upon which suit may be brought against him/her by reason of any alleged dishonesty on his/her part, unless a judgment or other final adjudication thereof adverse to Indemnitee establishes that he/she committed (i) acts of active and deliberate dishonesty, (ii) with actual dishonest purpose and intent, and (iii) which acts were material to the cause of action so adjudicated;

 

(g)                                  for any judgment, fine or penalty which the Company is prohibited by applicable law from paying as indemnity;

 

(h)                                 arising out of Indemnitee’s personal tax matter; or

 

(i)                                     arising out of Indemnitee’s breach of an employment agreement with the Company (if any) or any other agreement with the Company or any of its subsidiaries.

 

5.                                      No Employment Rights.  Nothing in this Agreement is intended to create in Indemnitee any right to continued employment with the Company.

 

6.                                      Contribution.  If the indemnification provided in this Agreement is unavailable and may not be paid to Indemnitee for any reason other than those set forth in Section B.4 above, then the Company shall contribute to the amount of Expenses paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and by Indemnitee on the other hand from the transaction from which such Proceeding arose, and (ii) the relative fault of the Company on the one hand and of Indemnitee on the other hand in connection with the events which resulted in such Expenses, as well as any other relevant equitable considerations.  The relative fault of the Company on the one hand and of Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Expenses.  The Company agrees that it would not be just and equitable if contribution pursuant to this Section B.6 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

 

C.                                    INDEMNIFICATION PROCESS

 

1.                                      Notice and Cooperation by Indemnitee.  Indemnitee shall, as a condition precedent to his/her right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement.  Notice to the Company shall be given in accordance with Section F.7 below.  In addition, Indemnitee shall give the Company such information and cooperation as the Company may reasonably request.

 

2.                                      Indemnification Payment.

 

(a)                                 Advancement of Expenses.  Indemnitee may submit a written request with reasonable particulars to the Company requesting that the Company advance to Indemnitee all Expenses that may be reasonably incurred by Indemnitee in connection with a Proceeding.  The Company shall, within ten (10) business days of receiving such a written request by Indemnitee, advance all requested Expenses to Indemnitee.  Any excess of the advanced Expenses over the actual Expenses will be repaid to the Company.

 

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(b)                                 Reimbursement of Expenses.  To the extent Indemnitee has not requested any advanced payment of Expenses from the Company, Indemnitee shall be entitled to receive reimbursement for the Expenses incurred in connection with a Proceeding from the Company as soon as practicable after Indemnitee makes a written request to the Company for reimbursement.

 

(c)                                  Determination by the Reviewing Party.  Notwithstanding anything foregoing to the contrary, in the event the Reviewing Party (as hereinafter defined) informs the Company that Indemnitee is not entitled to indemnification in connection with a Proceeding under this Agreement or applicable law, the Company shall be entitled to be reimbursed by Indemnitee for all the Expenses previously advanced or otherwise paid to Indemnitee in connection with such Proceeding; provided, however, that Indemnitee may bring a suit to enforce his indemnification right in accordance with Section C.3 below.

 

3.                                      Suit to Enforce Rights.  Regardless of any action by the Reviewing Party, if Indemnitee has not received full indemnification within 30 days after making a written demand in accordance with Section C.2 above, Indemnitee shall have the right to enforce his/her indemnification rights under this Agreement by commencing litigation in any court of competent jurisdiction seeking a determination by the court or challenging any determination by the Reviewing Party or any breach in any aspect of this Agreement.  Any determination by the Reviewing Party not challenged by Indemnitee and any final judgment entered by the court shall be binding on the Company and Indemnitee.

 

4.                                      Assumption of Defense.  In the event the Company is obligated under this Agreement to advance or bear any Expenses for any Proceeding against Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee, upon delivery to Indemnitee of written notice of its election to do so.  After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, unless (i) the employment of counsel by Indemnitee has been previously authorized by the Company, (ii) Indemnitee shall have reasonably concluded, based on written advice of counsel, that there may be a conflict of interest of such counsel retained by the Company between the Company and Indemnitee in the conduct of any such defense, or (iii) the Company ceases or terminates the employment of such counsel with respect to the defense of such Proceeding, in any of which events the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.  At all times, Indemnitee shall have the right to employ counsel in any Proceeding at Indemnitee’s expense.

 

5.                                      Defense to Indemnification, Burden of Proof and Presumptions.  It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement that it is not permissible under this Agreement or applicable law for the Company to indemnify the Indemnitee for the amount claimed.  In connection with any such action or any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified under this Agreement, the burden of proving such a defense or determination shall be on the Company.  Neither the failure of the Reviewing Party or the Company to have made a determination prior to the commencement of such action by Indemnitee that indemnification is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or the Company that Indemnitee had not met such applicable standard of conduct shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

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6.                                      No Settlement Without Consent.  Neither party to this Agreement shall settle any Proceeding in any manner that would impose any damage, loss, penalty or limitation on Indemnitee without the other party’s written consent.  Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement.

 

7.                                      Company Participation.  Subject to Section B.6, the Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial action if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense, conduct and/or settlement of such action.

 

8.                                      Reviewing Party.

 

(a)  For purposes of this Agreement, the “Reviewing Party” with respect to each indemnification request of Indemnitee shall be (A) the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, said Disinterested Directors so direct, Independent Counsel (as hereinafter defined) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; and, if it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any Independent Counsel or member of the Board of Directors shall act reasonably and in good faith in making a determination under this Agreement of the Indemnitee’s entitlement to indemnification.  Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom to the extent as aforesaid.  “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(b)  If the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected as provided in this Section C.8(b).  The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors shall select), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected.  In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section C.8(d) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit.  If the determination of entitlement to indemnification is to be made by Independent Counsel, but within 20 days after submission by Indemnitee of a written request for indemnification, no Independent Counsel shall have been selected and not objected to, then the Board of Directors by a majority vote shall select the Independent Counsel.  The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting under this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section C.8(b), regardless of the manner in which such Independent Counsel was selected or appointed.

 

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(c)  In making a determination with respect to entitlement to indemnification hereunder, the Reviewing Party shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement (with or without court approval), conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Company and any other corporation, partnership, joint venture or other entity of which Indemnitee is or was serving at the written request of the Company as a director, officer, employee, agent or fiduciary, including financial statements, or on information supplied to Indemnitee by the officers and directors of the Company or such other corporation, partnership, joint venture or other entity in the course of their duties, or on the advice of legal counsel for the Company or such other corporation, partnership, joint venture or other entity or on information or records given or reports made to the Company or such other corporation, partnership, joint venture or other entity by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or such other corporation, partnership, joint venture or other entity.  In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or such other corporation, partnership, joint venture or other entity shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.  The provisions of this Section C.8(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(d)  “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees of the Independent Counsel referred to above.

 

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D.                                    DIRECTOR AND OFFICER LIABILITY INSURANCE

 

1.                                      Good Faith Determination.  The Company shall from time to time make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Company with coverage for losses incurred in connection with their services to the Company or to ensure the Company’s performance of its indemnification obligations under this Agreement.

 

2.                                      Coverage of Indemnitee.  To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any of the Company’s directors or officers.

 

3.                                      No Obligation.  Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain any director and officer insurance policy if the Company determines in good faith that such insurance is not reasonably available in the case that (i) premium costs for such insurance are disproportionate to the amount of coverage provided, (ii) the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or (iii) Indemnitee is covered by similar insurance maintained by a parent, subsidiary of the Company.

 

E.                                     NON-EXCLUSIVITY; FEDERAL PREEMPTION; TERM

 

1.                                      Non-Exclusivity.  The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Articles of Association, applicable law or any written agreement between Indemnitee and the Company (including its subsidiaries).  The indemnification provided under this Agreement shall continue to be available to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he/she may have ceased to serve in any such capacity at the time of any Proceeding.

 

2.                                      Federal Preemption.  Notwithstanding the foregoing, both the Company and Indemnitee acknowledge that in certain instances, U.S. federal law or public policy may override applicable law and prohibit the Company from indemnifying its directors and officers  under this Agreement or otherwise.  Indemnitee acknowledges that the U.S. Securities and Exchange Commission (the “SEC”) believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

 

3.                                      Duration of Agreement.  All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer and/or a director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding by reason of his former or current capacity at the Company or any other enterprise at the Company’s request, whether or not he/she is acting or serving in any such capacity at the time any Expense is incurred for which indemnification can be provided under this Agreement.  This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer and/or a director of the Company or any other enterprise at the Company’s request.

 

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F.                                      MISCELLANEOUS

 

1.                                      Amendment of this Agreement.  No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by the parties hereto.  No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions (whether or not similar), nor shall such waiver constitute a continuing waiver.  Except as specifically provided in this Agreement, no failure to exercise or any delay in exercising any right or remedy shall constitute a waiver.

 

2.                                      Subrogation.  In the event of payment to Indemnitee by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents as necessary to enable the Company to bring suit to enforce such rights.

 

3.                                      Assignment; Binding Effect.  Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either party hereto without the prior written consent of the other party; except that the Company may, without such consent, assign all such rights and obligations to a successor in interest to the Company which assumes all obligations of the Company under this Agreement.  Notwithstanding the foregoing, this Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the parties hereto and the Company’s successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company) and assigns, as well as Indemnitee’s spouses, heirs, and personal and legal representatives.

 

4.                                      Severability and Construction.  Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law.  The Company’s inability, pursuant to a court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement.  In addition, if any portion of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by applicable law.  The parties hereto acknowledge that they each have opportunities to have their respective counsel review this Agreement.  Accordingly, this Agreement shall be deemed to be the product of both of the parties hereto, and no ambiguity shall be construed in favor of or against either of the parties hereto.

 

5.                                      Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

 

6.                                      Governing Law.  This agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto hereunder shall be governed, construed and interpreted in accordance with the laws of the State of New York, U.S.A., without giving effect to conflicts of law provisions thereof.

 

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7.                                      Notices.  All notices, demands, and other communications required or permitted under this Agreement shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at:

 

Aesthetic Medical International Holdings Group Limited

Nanshan Road 1122

Nanshan District

Shenzhen, China

Attn:  Pengwu Zhou

Phone: #####

Email: zhoupengwu@pengai.com.cn

 

and to Indemnitee at:

 

[•]
  [address]

Attn:  [•]

Phone: [•]

Fax: [•]

Email: [•]

 

8.                                      Entire Agreement.  This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the date first written above.

 

COMPANY

 

	
Aesthetic   Medical International Holdings Group Limited
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
INDEMNITEE
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
			

 

[Signature Page to Indemnification Agreement]

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