CONVERTIBLE NOTE PURCHASE AGREEMENT between Peak Asia Investment Holdings V Limited and Aesthetic Medical International Holdings Group Limited and Beacon Technology Investment Holdings Limited

Exhibit 99.4

EXECUTION VERSION

CONVERTIBLE NOTE PURCHASE AGREEMENT

between

Peak Asia Investment Holdings V Limited

and

Aesthetic Medical International Holdings Group Limited

and

Beacon Technology Investment Holdings Limited

Dated                          , 2020

TABLE OF CONTENTS

This CONVERTIBLE NOTE PURCHASE AGREEMENT (this “Agreement”) dated                            , 2020 is entered into

BETWEEN:

(1)                                 Peak Asia Investment Holdings V Limited, a company incorporated and existing under the laws of the British Virgin Islands and its registered office situated at ▇▇▇▇▇▇▇▇ House, P.O. Box 662, Wickhams Cay, Road Town, Tortola, British Virgin Islands (or its successor and permitted assigns, the “Investor”);

(2)                                 Aesthetic Medical International Holdings Group Limited, an exempted company incorporated and existing under the laws of the Cayman Islands and its registered office situated at the offices of Vistra (Cayman) Limited, P. O. Box 31119 Grand Pavilion, Hibiscus Way, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ - ▇▇▇▇ Cayman Islands (the “Company”); and

(3)                                 Beacon Technology Investment Holdings Limited, a company incorporated and existing under the laws of Hong Kong and its registered office situated at Unit 1001, 10/F, Infinitus Plaza, 199 Des Voeux Road Central, Hong Kong, as security trustee for the Investor (the “Security Trustee”).

RECITALS:

(A)                               Upon the terms and conditions set forth in this Agreement, the Company intends to issue and sell to the Investor, and the Investor intends to acquire, certain convertible notes in the form of Exhibit A (the “Convertible Notes”) with an aggregate principal amount of up to US$10,000,000.

(B)                               The Security Trustee has agreed to act as security trustee for the Investor in respect of the Initial Onshore Share Pledge (as defined below).

AGREEMENT:

SECTION 1
INTERPRETATION

1.1                               Definitions.  In this Agreement, 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 Investor, the term “Affiliate” includes (v) any direct or indirect shareholder of the Investor, (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).

“Board” means the board of directors of the Company as from time to time constituted.

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“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the PRC or HKSAR are required or authorized by law or executive order to be closed or on which a tropical cyclone warning no. 8 or above or a “black” rainstorm warning signal is hoisted in HKSAR at any time between 9:00 a.m. and 5:00 p.m. Hong Kong time.

“Charter Documents” means the charter and/or the constitutive documents of a body corporate.

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

“Closing” means the First Closing or the Subsequent Closing, as applicable.

“Closing Date” means the First Closing Date or the Subsequent Closing Date, as applicable.

“CN Basic Documents” means the Note Documents, the Company Charter Documents and any other document designated by the Company and the Investor in writing as a “CN Basic Document”.

“Company Account” means a bank account designated by the Company at least three (3) Business Days prior to the Closing.

“Company Charter Documents” means the Memorandum of Association and Articles of Association of the Company as amended and/or restated from time to time.

“Company Warranties” means the representations, warranties and undertakings made by the Company with respect to the Group Companies set forth in Schedule 2.

“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.

“Consideration” means the Note I Consideration or the Note II Consideration, as applicable.

“Conversion Shares” means the Equity Securities of the Company to be issued by the Company upon the conversion of the Convertible Notes in accordance with their respective terms.

“Domestic Company” means Shenzhen Pengai Hospital Investment Management Co., Ltd. (深圳鹏爱医院投资管理有限公司).

“Encumbrance” means (a) any mortgage, charge (whether fixed or floating), pledge, lien (other than lien created by operation of law), hypothecation, assignment, deed of trust, title retention, security interest or other encumbrance of any kind securing, or conferring any priority of payment in respect of, any obligation of any Person, including

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any right granted by a transaction which, in legal terms, is not the granting of security but which has an economic or financial effect similar to the granting of security under applicable law, and (b) any proxy, power of attorney, voting trust agreement, interest, option, right of first offer, negotiation or refusal or transfer restriction in favor of any Person.

“Equity Securities” means, with respect to any Person, such Person’s capital stock, membership interests, partnership interests, registered capital, joint venture or other ownership interests or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such capital stock, membership interests, partnership interests, registered capital or joint venture or other ownership interest.

“ESOP” means the employee share incentive plan of the Company adopted pursuant to the Company Charter Documents covering the grant of Ordinary Shares (or awards therefor) to senior officers or key employees/service providers of a Group Company.

“Event of Default” has the meaning given to it in the Convertible Notes.

“Exit Payments Agreement” means the exit payments agreement between the Company and the Investor with respect to certain payment obligations of the Company dated on or around the date hereof.

“First Closing Date” means the date on which the closing of the purchase of the Convertible Note I occurs as contemplated under Section 4.1.

“Founders” means, collectively, Zhou Pengwu (周鹏武), a Chinese citizen with ID number ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, and Ding Wenting (丁文婷), a Chinese citizen with ID number ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.

“Founder Holdcos” means, collectively, Seefar Global Holdings Limited, Jubilee Set Investments Limited and Pengai Aesthetic Medical Group (BVI incorporated).

“Fundamental Warranties” means the Company Warranties contained in Section 1 (Corporate Matters), Section 2 (Authorization and Validity of Transactions), Sections 7(c) to 7(f) (Tax, Records and Returns) and Section 8 (Holding Company Status) of Schedule 2, and individually, as a “Fundamental Warranty”.

“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.

“Group” means, collectively, the Offshore Group Companies, the Onshore Group Companies, and any other Person in which the Company directly or indirectly owns a majority interest and “Group Company” means any of them.

“Hanfei SPA” means the acquisition and investment management agreement dated July 14, 2020 between Shenzhen Pengai Investment 深圳鹏爱医院投资管理有限公司, a wholly-owned subsidiary of the Company, and 怀化问美企业管理咨询合伙企业（有限合伙), in respect of the acquisition of Guangdong Hanfei Investment

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Management Co. Ltd. (广东韩妃投资管理有限公司) by Shenzhen Pengai Investment 深圳鹏爱医院投资管理有限公司.

“HKSAR” or “Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

“Initial Onshore Share Pledge” has the meaning given to it in paragraph (a) of the definition of Onshore Share Pledge.

“Investor Warranties” means the representations, warranties and undertakings of the Investor set forth in Schedule 3.

“Long Stop Date” means the date falling 30 days after the date of this Agreement.

“Material Adverse Change” means any material adverse change in, and any change in circumstances that has or is reasonably likely to have a material adverse impact on, (i) the business, operations, properties, financial condition or prospects of the Group as a whole; (ii) the ability of any Group Company to perform its obligations, or consummate the transactions contemplated, under and in accordance with any Note Document; or (iii) the validity or enforceability of any Note Document, the effectiveness or ranking of any security granted or purported to be granted pursuant to any Note Document, or the rights or remedies of the Investor under any Note Document, provided, however, that in no event shall any of the following exceptions, alone or in combination with the other enumerated exceptions below, be deemed to constitute, nor shall be taken into account in determining whether there has been or will be, a Material Adverse Change: (A) any change resulting from compliance with the terms and conditions of, or from the announcement of the transactions contemplated by this Agreement and/or any other CN Basic Document, or (B) any change that results from changes affecting the industry in which the Group operates generally or the economy generally, provided that any such change is not specifically relating to or does not disproportionately affect the Company or any Group Company in any material respect relative to other similarly situated participants in the industry in which they operate.

“Medical Institute License” means 医疗机构执业许可证 issued by the MOH or its local branch.

“MOH” means the Ministry of Health of the PRC or, with respect to any matter to be submitted for examination and approval by the Ministry of Health, any Governmental Authority which is similarly competent to examine and approve such matter under the laws of the PRC.

“New Onshore Share Pledge” has the meaning given to it in paragraph (b) of the definition of Onshore Share Pledge.

“Note Documents” means this Agreement, the Convertible Notes, the Security Documents, the Exit Payments Agreement, all ancillary documents in connection therewith and any other document designated by the Company and the Investor in writing as a “Note Document”.

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“Offshore Group Companies” means, collectively, the Company, Dragon Jade Holdings Limited (龍翠控股有限公司), Peng Oi Investment (Hong Kong) Holdings Limited (鹏爱投资（香港）集团有限公司), and Newa Medical Aesthetics Limited.

“Onshore Group Companies” means, collectively, the companies, particulars of which are set out in Part II of Schedule I, other than the Offshore Group Companies, but including the WFOE and the Domestic Company.

“Onshore Share Pledge” means:

(a)                                 prior to the Replacement Date, the Equity Interest Pledge Agreement to be executed by Peng Oi Investment (Hong Kong) Holdings Limited (鹏爱投资（香港）集团有限公司) in favor of the Security Trustee with respect to 51% of the registered capital of the WFOE (the “Initial Onshore Share Pledge”); and

(b)                                 on and after the Replacement Date, the Equity Interest Pledge Agreement to be executed by Peng Oi Investment (Hong Kong) Holdings Limited (鹏爱投资（香港）集团有限公司) in favor of the Investor with respect to 51% of the registered capital of the WFOE (the “New Onshore Share Pledge”).

“Ordinary Shares” means the ordinary shares having a par value of US$0.001 per share in the share capital of the Company.

“Party” or “Parties” means any signatory or the signatories to this Agreement and any Person who subsequently becomes a party to this Agreement pursuant to the terms and conditions hereof.

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

“Permits” means all permits, consents, approvals, authorizations, franchises, certifications and licenses from, and all registrations with, any Governmental Authority.

“Potential Event of Default” has the meaning given to it in the Convertible Notes.

“Related Party” means (a) each of the Founders and their respective Affiliates; (b) each individual who is or has at any time in the past twelve (12) months served as, a director or high level management officer of any of the Group Companies; (c) each Relative of each of the individuals referred to in sub-clauses (a) and (b) above; and (d) any trust or other person or entity in which any one of such persons holds (or in which more than one of such persons collectively hold), beneficially or otherwise, an interest;

“Relative” of a natural person means the spouse of such person, and any parent, grandparent, child, grandchild, sibling, uncle, aunt, nephew, niece or great-grandparent of such person or such person’s spouse.

“Replacement Date” means the date on which the Initial Onshore Share Pledge has been de-registered by the SAMR and the New Onshore Share Pledge has been registered by the relevant local counterpart of SAMR.

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“RMB” means renminbi yuan, the lawful currency of the PRC.

“SAMR” means the State Administration for Market Regulation of the PRC.

“Sanctions” means the economic sanctions laws, regulations, embargoes or restrictive measures enacted or enforced by the United States government and any of its agencies, including, without limitation, the Office of Foreign Assets Control and the U.S. State Department, or any other Governmental Authority having jurisdiction over the Company, any other Group Company or the Investor.

“Security Documents” means, with respect to the security for the Company’s obligations under the Note Documents, the following documents, each in the form and substance satisfactory to the Parties hereto:

(a)                                 the Deed of Share Charge to be executed by the Company in favor of the Investor with respect to 51% of the Equity Securities in DRAGON JADE HOLDINGS LIMITED (龍翠控股有限公司);

(b)                                 the Deed of Share Charge to be executed by DRAGON JADE HOLDINGS LIMITED (龍翠控股有限公司) in favor of the Investor with respect to 51% of the Equity Securities in Peng Oi Investment (Hong Kong) Holdings Limited (鹏爱投资（香港）集团有限公司); and

(c)                                  the Onshore Share Pledge.

“Tax” or “Taxes” means all applicable forms of taxation, duties and levies imposts, whether direct or indirect including without limitation corporate income tax, wage withholding tax, value added tax, business tax, customs and excise duties, capital tax and other legal transaction taxes, dividend withholding tax, dividend distribution tax, land taxes, environmental taxes and duties and any other type of taxes or duties payable by virtue of any applicable national, regional or local law and which may be due directly or by virtue of joint and several liability in any relevant jurisdiction; together with any interest, penalties, surcharges or fines relating to them, due, payable, levied, imposed upon or claimed to be owed in any relevant jurisdiction.

“US$” means United States Dollars, the lawful currency of the United States of America.

“Warranties” means the Company Warranties and the Investor Warranties.

“WFOE” means Shenzhen Pengyida Business Consulting (Shenzhen) Co., Ltd. (鹏意达商务咨询（深圳）有限公司).

1.2                               Terms Defined Elsewhere in this Agreement.  The following terms are defined in this Agreement as follows:

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1.3                               Interpretation

(a)                                 Directly or Indirectly.  The phrase “directly or indirectly” means directly, or indirectly through one or more intermediate Persons or through contractual or other arrangements, and “direct or indirect” has the correlative meaning.

(b)                                 Gender and Number.  Unless the context otherwise requires, all words (whether gender-specific or gender neutral) shall be deemed to include each of the masculine, feminine and neuter genders, and words importing the singular include the plural and vice versa.

(c)                                  Headings.  Headings are included for convenience only and shall not affect the construction of any provision of this Agreement.

(d)                                 Include not Limiting.  “Include,” “including,” “are inclusive of” and similar expressions are not expressions of limitation and shall be construed as if followed by the words “without limitation.”

(e)                                  Law.  References to “law” shall include all applicable laws, regulations, rules and orders of any Governmental Authority, securities exchange or other self-regulating body, any common or customary law, constitution, code, ordinance, statute or other legislative measure and any regulation, rule, treaty, order, decree or judgment; and “lawful” shall be construed accordingly.

(f)                                   References to Documents.  References to this Agreement include the Schedules and Exhibits, which form an integral part hereof.  A reference to any Section, Schedule or Exhibit is, unless otherwise specified, to such Section of, or Schedule or Exhibit to this Agreement.  The words “hereof,” “hereunder” and “hereto,” and words of like import, unless the context requires otherwise, refer to this Agreement as a whole and not to any particular Section hereof or Schedule or Exhibit hereto.  A reference to any document (including this Agreement) is to that document as amended, consolidated, supplemented, novated or replaced from time to time.

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(g)                                  Time.  If a period of time is specified and dates from a given day or the day of a given act or event, such period shall be calculated exclusive of that day.

(h)                                 Writing.  References to writing and written include any mode of reproducing words in a legible and non-transitory form including emails and faxes.

(i)                                     Language.  This Agreement is drawn up in the English language.  If this Agreement is translated into any language other than English, the English language text shall prevail.

SECTION 2
SALE AND PURCHASE OF THE CONVERTIBLE NOTES

2.1                               Sale and Purchase of Note I.  Subject to the applicable terms and conditions of this Agreement, the Company shall issue and sell to the Investor, and the Investor shall subscribe for and purchase from the Company, a convertible note in principal amount of US$5,000,000 (“Convertible Note I”) on the First Closing Date (the “First Closing”). The consideration payable by the Investor for Convertible Note I shall be US$5,000,000  (the “Note I Consideration”) and shall be paid at the First Closing, subject to Section 8.2, by means of wire transfer of immediately funds in US$ to the Company Account.

2.2                               Sale and Purchase of Note II.  Upon the Company’s request in writing, the Investor may in its absolute discretion agree in writing that, within twelve (12) months after the date of the First Closing and subject to the applicable terms and conditions of this Agreement, the Company shall issue and sell to the Investor, and the Investor shall subscribe for and purchase from the Company, a convertible note (“Convertible Note II”) in principal amount (the “Note II Consideration”) that is no more than US$5,000,000 (the “Subsequent Closing”). Any agreement between the Company and the Investor shall include (i) the closing date (the “Subsequent Closing Date”) on which Convertible Note II will be issued and sold, and (ii) the amount of the Note II Consideration.

2.3                               Use of Proceeds.  The Company shall cause the proceeds from the sale of the Convertible Note I to the Investor to be used in the following proportions:

(a)                                 60% shall be used in respect of payment of amounts due under the Hanfei SPA, with each payment requiring the Investor’s approval in writing; and

(b)                                 40% shall be used for general working capital of the Group, or such other uses approved in writing by the Investor,

provided that the Investor shall have no obligation to monitor or verify that the proceeds are used in such a manner.

If the Company issues and sells Convertible Note II to the Investor, the proceeds from such issuance and sale shall be utilized in the same proportions.

2.4                               Compliance with Laws. The Company shall not use, or permit the use of, any proceeds from the sale of the Convertible Notes, directly or indirectly, for the purpose of financing the activities of any person subject to any Sanctions or for any other purpose that will, or is likely to, cause the Company, any other Group Company or the Investor

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to breach or be non-compliant with any applicable law, including anti-money laundering and anti-bribery laws.

SECTION 3
CONDITIONS PRECEDENT TO CLOSINGS

3.1                               Conditions Precedent to Obligations of Investor at Closings. The obligation of the Investor to complete the purchase of the relevant Convertible Note at each Closing is subject to the fulfillment, prior to or simultaneously with each such Closing, of the following conditions except for those conditions expressly indicated therein as applicable to the First Closing only, in which case such conditions shall not apply to the Subsequent Closing, any one or more of which may only be waived by the Investor in writing:

(a)                                 (A) the Company Warranties (i) being true and correct as of the date hereof and (ii) being true and correct in all material respects on the First Closing Date, as if given on the First Closing Date with reference to the facts and circumstances then existing, and (B) each of the Fundamental Warranties (other than Sections 7(c) to 7(f) (Tax, Records and Returns) of Schedule 2) being true and correct in all material respects on the Subsequent Closing Date, as if given on the Subsequent Closing Date with reference to the facts and circumstances then existing;

(b)                                 each of the Founders, Founder Holdcos and Group Companies having performed and complied in all material respects with all of its agreements and obligations contained in the CN Basic Documents to which it is a party that are required to be performed or complied with by it on or before the relevant Closing;

(c)                                  each of the Group Companies having duly attended to and carried out all corporate procedures that are required under the laws of its place of incorporation or establishment or (if applicable) listing to effect its execution, delivery and performance of the Note Documents to which it is a party, and the transactions contemplated hereby and thereby, and having provided copies of all resolutions (and all attachments thereto) described below to the Investor (certified by a director of the Company to be true, complete and correct copies as of the relevant Closing Date) which corporate procedures shall include:

(i)                                     approval by the Board and the shareholders of the Company, of the following:

(1)                                 the authorization and issuance of the relevant Convertible Note in an aggregate principal amount equal to the relevant Consideration to the Investor; and

(2)                                 the execution, delivery and performance by the Company of each Note Document to which it is a party, and all the transactions contemplated by such Note Documents; and

(ii)                                  approval by the boards of directors and the shareholders of each other Group Company, of the execution, delivery and performance by such

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entity, of each Note Document to which it is a party, and all the transactions contemplated by such Note Documents to which it is a party.

(d)                                 there being no Governmental Authority or other Person that has:

(i)                                     instituted or threatened in writing any legal, arbitral or administrative proceedings against any Group Company to restrain, prohibit or otherwise challenge the purchase of the relevant Convertible Note by the Investor or any of the other transactions contemplated herein or under any Note Document; or

(ii)                                  proposed or enacted any statute or regulation which would prohibit, materially restrict or materially delay implementation of the transactions contemplated under this Agreement, any other Note Document or the operation of the Group as a whole after the relevant Closing as contemplated in the Note Documents;

(e)                                  each of the Note Documents having been executed by each party thereto other than the Investor;

(f)                                   at the First Closing, all share certificates, share transfer forms and other documents and notices required to be provided under the Security Documents having been delivered to the Investor;

(g)                                  there having been since the date of this Agreement no Material Adverse Change;

(h)                                 no Event of Default having occurred; and

(i)                                     the Company having delivered to the Investor a certificate, dated the relevant Closing Date and signed by an authorized signatory of the Company, certifying that the conditions set forth in paragraphs (a) to (i) of this Section 3.1 relevant to such Closing, have been satisfied.

SECTION 4
CLOSING ACTIONS

4.1                               Time and Place of Closings.  As soon as practical, but in no event later than fourteen (14) days after the conditions precedent set forth in Section 3.1 (other than those conditions precedent that by their terms cannot be fulfilled until the Closing) being satisfied or waived, the Closing shall take place at 10:00 a.m. Hong Kong time at the Hong Kong offices of Dechert LLP or, at such other time and place as the Parties may mutually agree.

4.2                               Actions at Closings.

(a)                                 At each Closing, each of the following shall take place simultaneously:

(i)                                     the Company shall deliver to the Investor the duly authorized and executed Convertible Note with respect to such Closing in a principal amount equal to the relevant Consideration, payable to the order of the

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Investor or its nominee and registered in the name of the Investor or its nominee; and

(ii)                                  the Investor shall procure that the relevant Consideration (subject to Section 8, including the withholding of an amount equal to the Reimbursed Expenses at the First Closing), shall be paid by wire transfer of immediately available funds in US$ to the Company Account, and the delivery of one or more irrevocable MT103 SWIFT payment messages, Federal Reference numbers or other similar irrevocable confirmations of such payment shall be conclusive evidence of the satisfaction of the Investor’s obligation under this Section 4.2(a)(ii).

(b)                                 Without prejudice to Section 4.2(a), at the First Closing, each of the following shall take place simultaneously:

(i)                                     the Company shall deliver to the Investor each document executed pursuant to Section 3.1(e) dated as of the First Closing Date; and

(ii)                                  the Company shall, and shall ensure other relevant Group Companies to, deliver to the Investor, all such other deliverables required to be provided under the Security Documents.

4.3                               Efforts to Fulfill Closing Conditions.  The Company shall use all reasonable efforts to ensure that the conditions set forth in Section 3.1 shall be fulfilled by the Long Stop Date.

4.4                               Actions if Conditions not Fulfilled.  If any condition applicable to the First Closing set forth in Section 3.1 shall not have been fulfilled or waived by the Long Stop Date, the Investor may, at its option, without prejudice to its rights hereunder and under applicable law:

(a)                                 proceed to the First Closing in accordance with Section 4.1 so far as practicable; or

(b)                                 terminate this Agreement in accordance with Section 10.2.

In the case of termination, no Party shall have any rights or claims against any other Party, without prejudice to the rights or claims of any Party in respect of a breach of this Agreement prior to such termination and save for those that expressly survive termination of this Agreement in accordance with the provisions of Section 10.3.

SECTION 5
OBLIGATIONS ON ACTIONS OF THE GROUP COMPANIES AND THE
INVESTOR BETWEEN EXECUTION AND CLOSING

5.1                               Business Operation.  From the date hereof until the First Closing Date, the Company shall cause each of the Group Companies to, conduct its business in a manner so as to ensure that the Company Warranties continue to be true and correct in all material respects on and as of the First Closing Date as if made on and as of the First Closing Date.

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5.2                               Restrictions on Actions Between Execution and Closing.  From the date hereof until the First Closing Date, other than as set forth in this Agreement or other CN Basic Documents, the Company shall not, without the prior written consent of the Investor, cause or permit any Group Company to take any actions set forth in Schedule 4.

SECTION 6
REPRESENTATIONS, WARRANTIES, UNDERTAKINGS AND
COVENANTS

6.1                               Company Warranties.  The Company represents, warrants and undertakes to the Investor in the terms of the Company Warranties and acknowledges that the Investor in entering into this Agreement is relying on such Company Warranties.

6.2                               Investor Warranties.  The Investor represents, warrants and undertakes to the Company in the terms of the Investor Warranties and acknowledges that the Company in entering into this Agreement is relying on the Investor Warranties.

6.3                               Separate and Independent.  The Company Warranties shall be separate and independent and save as expressly provided shall not be limited by reference to any other paragraph or anything in this Agreement or the Schedules.

6.4                               Registration of Security Documents.

The Company shall, and shall cause the relevant Group Companies to, (i) as soon as practicable after the First Closing, but in any event no later than 45 days after the First Closing, register the Initial Onshore Share Pledge with the relevant local counterpart of the State Administration of Foreign Exchange, the Ministry of Commerce and the SAMR, where applicable; and (ii) file or register the other Security Documents as provided for therein.

6.5                               Hanfei SPA

The Company shall not amend, waive any right or remedy under, or terminate the Hanfei SPA without the prior written consent of the Investor.

6.6                               Information Rights

For as long as any of the Convertible Notes remain outstanding, the Company shall supply the Investor with:

(a)                                 concurrently therewith, copies of all documents or other material information distributed to any to the creditors of any Group Company, or any class of them;

(b)                                 promptly upon any Group Company becoming aware of them, details of any litigation, arbitration, administrative or similar proceedings, or any notice from any Governmental Authority relating to any audit or investigation, in each case, current, pending or threatened in respect of any Group Company;

(c)                                  promptly upon any Group Company becoming aware of its occurrence, notice of any Potential Event of Default or Event of Default, and the steps (if any) being taken to remedy it;

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(d)                                 promptly upon receipt thereof, a copy of any notice from any counterparty to any agreement or arrangement to which any Group Company is party of any actual or potential default; and

(e)                                  promptly upon request, such information as the Investor may from time to time reasonably request relating to the business, assets or financial condition of the Group or compliance by the Company or any Group Company with the terms of any Note Document.

6.7                               Inspection Rights

For as long as any of the Convertible Notes remain outstanding, the Company shall, and shall procure that each other Group Company shall, allow the Investor and its Affiliates and their respective agents and professional advisors full access at all reasonable times and on reasonable prior written notice to inspect the offices and facilities of any Group Company and examine the books, accounts and records of any Group Company, including, without limitation, to:

(a)                                 visit any of the sites and premises where the business of any Group Company is conducted;

(b)                                 inspect any of the sites, offices, facilities, plant and equipment and other assets of any Group Company; and

(c)                                  have access to those management, employees, agents, contractors and subcontractors of any Group Company who have or may have knowledge of matters with respect to which the Investor seeks information,

provided that no such reasonable prior notice shall be necessary if the Investor is in receipt of, and have provided to the Company, reasonable evidence indicating that any Group Company or its personnel has violated any applicable law or if the Investor reasonably suspects that any Potential Event of Default or Event of Default has occurred.

SECTION 7
CONFIDENTIALITY; RESTRICTION ON ANNOUNCEMENTS

7.1                               General Obligation.  Each Party undertakes to the other Parties that it shall not reveal, and that it shall procure that its directors, equity interest holders, partners, representatives, members, advisors (including auditors, accountants, consultants, financial advisors and attorneys), financing sources, officers, employees and agents (collectively, “Representatives”) do not reveal, the Confidential Information of any other party hereto to any third party without the prior written consent of such other Parties or use any Confidential Information in such manner that is detrimental to the Company or the concerned Party, as the case may be.  Each Party shall be responsible for any breach of obligations set forth herein by any of its Affiliates, its Representatives or its Affiliates’ Representatives.  The term “Confidential Information” as used in this Section 7 means, with respect to the Company: any information concerning the organization, business, technology, safety records, investment, finance, marketing, business plans, transactions or affairs of any Group Company or any of their respective directors, officers or employees (whether conveyed in written, oral or in any other form and whether such information is furnished before, on or after the date of this

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Agreement) and with respect to each of the Company and the Investor: the terms and existence of any CN Basic Document (other than the CN Basic Documents that are required by law or any applicable Governmental Authority to be publicly filed or disclosed); provided, that Confidential Information does not include information that (i) is or becomes publicly known or available through no breach of this Agreement, (ii) is rightfully acquired from a third party free of restrictions on its disclosure or (iii) is independently developed without any use of or reference to any Confidential Information. The Company shall procure that each of the other Group Companies shall comply with the obligations set forth in this Section 7 as if it were a Party to this Agreement.

7.2                               Exceptions.  The provisions of Section 7.1 shall not apply to:

(a)                                 disclosure by a Party to its Representative, provided that such Representative (i) is under a similar obligation of confidentiality or (ii) is otherwise under a binding professional obligation of confidentiality;

(b)                                 disclosure by a Party to its Affiliates or their respective Representatives, provided that such Affiliate or Representative (i) is under a similar obligation of confidentiality or (ii) is otherwise under a binding professional obligation of confidentiality;

(c)                                  disclosure, after giving prior notice to the other Parties to the extent practicable under the circumstances and subject to any practicable arrangements to protect confidentiality, to the extent required under the rules of any stock exchange on which the shares of a Party or its parent company are listed or by law or any applicable Governmental Authority and only to the extent required thereby, provided that the Company shall prior to making any disclosures hereunder, provide, at its own cost, the Investor with, to the extent permitted under applicable laws, the full text of such disclosure and the list of Confidential Information to be disclosed and, if requested by the Investor and to the extent permitted under applicable laws, to amend such disclosure and the amount of Confidential Information to be disclosed to the reasonable satisfaction of the Investor;

(d)                                 disclosure by any Party or its Representatives with the prior written consent of the other Party; or

(e)                                  disclosure by the Investor (or any direct or indirect assignee or transferee of the Investor) to a party to whom assignment or transfer is permitted under this Agreement, and any potential or actual transferee of any Convertible Note.

SECTION 8
TAXES, DUTIES, FEES, COSTS, EXPENSES AND INDEMNIFICATION

8.1                               Taxes; Fees, Costs and Expenses.  Each Party shall pay all of its own Taxes, and subject to Section 8.2, its own fees, costs and expenses, incurred in connection with the negotiation, execution, delivery and performance of this Agreement and other CN Basic Documents and the transactions contemplated hereby and thereby.

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8.2                               Fees and Expenses.

(a)                                 Notwithstanding anything to the contrary herein, the Company shall pay or reimburse the Investor all the fees, costs and expenses incurred by the Investor for the purpose of conducting due diligence and preparing, negotiating, executing, delivering and performing the CN Basic Documents (including any amendments thereof) and related professional work (including but not limited to fees and expenses of the Investor’s counsels, accountants, agents and representatives and other out-of-pocket costs and administration expenses) so long as the sum of such amounts payable or reimbursable by the Company does not exceed US$100,000 (the “Reimbursed Expenses”), provided that Reimbursed Expenses shall not be paid to the Investor if the First Closing does not occur due to the Investor’s failure to close after all the conditions precedent set forth in Section 3.1 (other than those conditions precedent that by their terms cannot be fulfilled until the First Closing) have been satisfied or waived.

(b)                                 A notification by the Investor as to the amount of the Reimbursed Expenses shall (absent any manifest error) be final, conclusive and binding on the Company.  Notwithstanding anything to the contrary herein, the Investor shall be entitled to (i) withhold an amount equal to the Reimbursed Expenses from the Note I Consideration at the First Closing and (ii) withhold and set-off any amount of Losses (as defined in Section 8.3) incurred by any Indemnified Party (as defined in Section 8.3) from and against any payment of the Note I Consideration and/or the Note II Consideration payable by the Investor at the First Closing and/or the Subsequent Closing, respectively.  If the First Closing does not occur due to the failure to satisfy any conditions set forth under Section 3.1 or the Company otherwise refuses to close, upon written notice of the Investor setting forth the amount of the Reimbursed Expenses, the Company shall promptly on demand but no later than twenty (20) days after such demand pay such amount of the Reimbursed Expenses to the Investor.

8.3                               Indemnification.  The Company shall indemnify (to the fullest extent permitted by applicable laws), defend and hold harmless the Investor and the Investor’s Affiliates, and their respective officers, directors, agents and employees (each an “Indemnified Party”) from and against all losses, damages, liabilities, claims, proceedings, obligation, penalty or settlement, costs and expenses (including reasonable legal, accounting and other professional fees and expenses in any action, including any threatened legal proceeding, or in connection with any investigation or evaluation of a claim or otherwise), other than incidental or indirect damages, special or punitive damages, or consequential damages resulting from a breach, actually incurred by the Indemnified Party resulting from or arising out of any breach by the Company of any Company Warranties, covenant or agreement in the CN Basic Documents (collectively, “Losses”), provided that:

(a)                                 the Company shall not be liable in respect of any Losses unless the amount, when aggregated with any other amount or amounts recoverable in respect of other Losses, exceeds US$200,000, and in the event that the aggregate amount exceeds US$200,000, the Company shall be liable for the full amount of all Losses;

(b)                                 absent of any fraud, willful misconduct, or gross negligence of the Company, the aggregate amount of Losses the Company shall be liable for under this Section 8.3, whether or not the Convertible Notes are converted, shall in no

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event be greater than the amount that equals the sum of the principal amounts of the Convertible Notes upon the issuance thereof and any other amounts that may be payable or repayable thereon (including at maturity);

(c)                                  the amount of any Losses for which indemnity is provided under this Agreement shall be determined without duplication of recovery by reason of the events, circumstances or facts giving rise to such liability constituting a breach of more than one representations, warranties, covenants or agreements under this Agreement.

If the Company suffers, incurs or otherwise becomes subject to any Losses, then (without limiting any of the rights of the Investor under the Note Documents), the Investor shall also be deemed, by virtue of its interest in the Conversion Shares (through the Convertible Notes, assuming the Convertible Notes are converted on the basis of the Conversion Price on the date on which the Company suffers, incurs or otherwise becomes subject to such Losses) and as a shareholder of the Company (together, “Effective Ownership”), to have incurred an amount of such Losses proportionate to its Effective Ownership, and in the event any amount is paid by the Company pursuant to this Section 8.3 (an “Indemnity Payment”), the Company shall increase the amount of the Indemnity Payment to ensure that the Investor would not suffer any Losses as a result of such Indemnity Payment by virtue of its Effective Ownership.

8.4                               The Company Warranties other than the Fundamental Warranties shall survive the Closing and the Subsequent Closing solely for purposes of Section 8.3 and, except for the Fundamental Warranties, shall terminate upon the close of business on the second (2nd) year anniversary of (a) the First Closing Date; or (b) if the Subsequent Closing occurs, the Subsequent Closing Date. The Fundamental Warranties shall survive the Closing and the Subsequent Closing, subject to the statute of limitation in accordance with applicable laws. The covenants and agreements of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the First Closing Date indefinitely or for the shorter period explicitly specified therein, except that for such covenants and agreements that survive for such shorter period, breaches thereof shall survive indefinitely or until the latest date permitted by law.  Notwithstanding the preceding sentences, any breach of representation, warranty, covenant or agreement in respect of which indemnity may be sought hereunder shall survive the time at which it would otherwise terminate pursuant to the preceding sentences, if notice of the inaccuracy or breach thereof giving rise to such right of indemnity shall have been given to the party against whom such indemnity may be sought prior to such time.

SECTION 9
SECURITY TRUSTEE

9.1                               Trust.

(a)                                 The Security Trustee declares that it shall hold all property over which security is expressed to be granted under the Initial Onshore Share Pledge, all proceeds thereof and all representations, warranties and obligations of the pledgor thereunder on trust for the Investor on the terms contained in this Agreement.

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(b)                                 Each of the Parties agrees that the Security Trustee shall have only those duties, obligations and responsibilities expressly specified in this Agreement or in the Initial Onshore Share Pledge (and no others shall be implied).

9.2                               Parallel Debt.

(a)                                 Notwithstanding any other provision of this Agreement, the Company hereby irrevocably and unconditionally undertakes to pay to the Security Trustee, as creditor in its own right and not as representative of the Investor, sums equal to and in the currency of each amount payable by the Company or any other Group Company to the Investor under each of the Note Documents as and when that amount falls due for payment under the applicable Note Documents.

(b)                                 The Security Trustee shall have its own independent right to demand payment of any or all of the amounts payable by the Company under this Section 9.2.

(c)                                  Any amount due and payable by the Company to the Security Trustee under this Section 9.2 shall be decreased to the extent that the Investor has received (and is able to retain) payment in full of the corresponding amount under the other provisions of the Note Documents and any amount due and payable by the Company or any other Group Company to the Investor under those provisions shall be decreased to the extent that the Security Trustee has received (and is able to retain) payment in full of the corresponding amount under this Section 9.2.

(d)                                 The rights of the Investor to receive payment of amounts payable by the Company under the Note Documents are several and are separate and independent from, and without prejudice to, the rights of the Security Trustee to receive payment under this Section 9.2.

9.3                               Instructions to Security Trustee.

(a)                                 Subject to paragraph (b) below, the Security Trustee shall act in accordance with any instructions given to it by the Investor or, if so instructed by the Investor, refrain from exercising any right, power, authority or discretion vested in it as Security Trustee.

(b)                                 Paragraph (a) shall not apply in respect of any provision which protects the Security Trustee’s own position in its personal capacity as opposed to its role of Security Trustee for the Investor.

9.4                               Security Trustee’s Actions.

Without prejudice to the provisions of Section 9.3, the Security Trustee may (but shall not be obliged to), in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Initial Onshore Share Pledge as it considers in its discretion to be appropriate.

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9.5                               Powers Supplemental.

The rights, powers and discretions conferred upon the Security Trustee by this Agreement shall be in addition to any which may be vested in the Security Trustee by general law or otherwise.

9.6                               Resignation of the Security Trustee.

(a)                                 The Security Trustee may resign and appoint one of its Affiliates as successor by giving notice to the Company and the Investor.

(b)                                 The Security Agent’s resignation notice shall only take effect upon (i) the appointment of a successor and (ii) the assignment or transfer of all of the trust property referred to in Clause 9.1(a) to that successor.

9.7                               Winding up of Trust.

The trusts set out in this Agreement shall be wound up on the Replacement Date.

9.8                               New Onshore Share Pledge.

The Company shall, promptly upon request of the Investor, procure that each of Peng Oi Investment (Hong Kong) Holdings Limited (鹏爱投资（香港）集团有限公司) and the WFOE shall:

(a)                                 execute and deliver the New Onshore Share Pledge (in substantially the same form as the Initial Onshore Share Pledge);

(b)                                 de-register the Initial Onshore Share Pledge and simultaneously register the New Onshore Share Pledge with the relevant local counterpart of the State Administration of Foreign Exchange, the Ministry of Commerce and the SAMR, where applicable; and

(c)                                  do all other acts and things necessary to ensure that the New Onshore Share Pledge is legal, valid, binding and enforceable.

SECTION 10
TERMINATION

10.1                        Effective Date; Termination.  This Agreement shall become effective upon execution by all of the Parties and shall continue in force until terminated in accordance with Section 10.2.

10.2                        Events of Termination.  This Agreement may be terminated at any time prior to the First Closing as follows:

(a)                                 at the election of the Investor, if any one or more of the conditions set forth in Section 3.1 to the obligation of the Investor to complete has not been fulfilled on or prior to the Long Stop Date;

(b)                                 by either Party in writing and without liability of any Party on account of such termination (provided that the terminating party is not otherwise in material

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default or material breach of this Agreement), if the First Closing shall not have occurred on or before the Long Stop Date; or

(c)                                  by written consent of the Parties.

10.3                        Survival.  If this Agreement is terminated in accordance with Section 10.2, it shall become void and of no further force and effect, except for the provisions of Section 7 (Confidentiality; Restriction on Announcements), Section 8 (Taxes, Duties, Fees and Expenses), this Section 10.3 (Survival), Section 11 (Notices), Section 12 (Miscellaneous) and Section 13 (Governing Law and Dispute Resolution); provided, however, that such termination shall, unless otherwise agreed by the Parties, be without prejudice to the rights of any Party in respect of a breach of this Agreement prior to such termination.

SECTION 11
NOTICES

11.1                        Notices.  Each notice, demand or other communication given or made under this Agreement shall be in writing in English and delivered or sent to the relevant Party at its address, fax number or email address set out below (or such other address, fax number or email address as the addressee has by five days’ prior written notice specified to the other Parties).  Any notice, demand or other communication given or made by letter between countries shall be delivered by air mail.  Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered, (a) if delivered in person or by messenger, when proof of delivery is obtained by the delivering party; (b) if sent by post within the same country, on the third day following posting, and if sent by post to another country, on the seventh day following posting; (c) if given or made by fax, upon dispatch and the receipt of a transmission report confirming dispatch; and (d) if given or made by email, at the time of transmission.

11.2                        Addresses and Fax Numbers.  The initial address and facsimile for each Party for the purposes of this Agreement are:

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SECTION 12
MISCELLANEOUS

12.1                        Enforcement Action.  For the avoidance of doubt, any obligation on the part of the Investor to make the investment hereunder is made solely to the Company, and no other Person shall have any right to enforce such obligation against the Investor.

12.2                        No Partnership.  The Parties expressly do not intend hereby to form a partnership, either general or limited, under any jurisdiction’s partnership law.  The Parties do not intend to be partners one to another, or partners as to any third party, or create any fiduciary relationship among themselves, solely by virtue of the Investor’s status as the holder of the Convertible Notes.

12.3                        Amendment.  This Agreement may not be amended, modified or supplemented except by a written instrument executed by each of the Parties.

12.4                        Waiver.  No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party waiving such provision.  No failure or delay by a Party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy.  Without limiting the foregoing, no waiver by a Party of any breach by any other Party of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof.

12.5                        Entire Agreement.  This Agreement (together with the other CN Basic Documents and any other documents referred to herein or therein) constitutes the whole agreement between the Parties relating to the subject matter hereof and supersedes any prior agreements or understandings relating to such subject matter.

12.6                        Severability.  Each and every obligation under this Agreement shall be treated as a separate obligation and shall be severally enforceable as such, including in the event of any other obligation or obligations being or becoming invalid, illegal or unenforceable in whole or in part.  To the extent that any provision or provisions of this Agreement are invalid, illegal or unenforceable the Company and the Investor shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

12.7                        Counterparts.  This Agreement may be executed in one or more counterparts including counterparts transmitted by telecopier, facsimile or PDF attachment to an email, each of which shall be deemed an original, but all of which signed and taken together, shall constitute one document.

12.8                        Consent to Specific Performance.  The Parties declare that it is impossible to measure in money the damages that would be suffered by a Party by reason of the failure by any other Party to perform any of the material obligations hereunder and that, in addition to all other remedies, each Party will be entitled to seek specific performance and to seek

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injunctive or other equitable relief as a remedy for any such breach or failure to perform its material obligations hereunder.

12.9                        Transfer; Assignment.  None of the Parties shall be entitled to assign or transfer this Agreement or any of its rights or duties hereunder to any Person without the other Party’ prior written consent except that the Investor may assign or transfer all or part of its interest, rights and duties under this Agreement (including the right to purchase the Convertible Notes) to any of its Affiliate(s), or any transferee of any Convertible Note, in each case, without the consent of the Company.  This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the Parties.

12.10                 Knowledge.  In this Agreement, any reference to the Company’s “knowledge” means the actual knowledge of the Founders and that knowledge which would have been acquired by the Founders had the Founder made such due inquiry and exercised such due diligence as a prudent business person would have made or exercised in the management of his or her business affairs, including due inquiry of those officers, directors, key employees and professional advisers (including attorneys, accountants and consultants) of the Group Companies who could reasonably be expected to have knowledge of the matters in question, and any reference to the Investor’s “knowledge” means information (i) disclosed by the Company in its prospectus used in its initial public offering and/or in its other public filings; (ii) disclosed by the Company to the Investor in writing.

SECTION 13
GOVERNING LAW AND DISPUTE RESOLUTION

13.1                        GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE HKSAR.

13.2                        Dispute Resolution.

(a)                                 Any dispute, controversy or claim (each, a “Dispute”) arising out of or relating to this Agreement, or the interpretation, breach, termination, validity or invalidity thereof, shall be referred to arbitration upon the demand of either party to the dispute with notice (the “Arbitration Notice”) to the other.

(b)                                 The Dispute shall be settled by arbitration in Hong Kong by the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules (the “HKIAC Rules”) in force when the Arbitration Notice is submitted in accordance with the HKIAC Rules.  There shall be three (3) arbitrators. The claimants in the Dispute shall nominate one (1) arbitrator and the respondents in the Dispute shall nominate one (1) arbitrator.  The HKIAC Council shall appoint the third arbitrator, who shall serve as the presiding arbitrator.

(c)                                  The arbitral proceedings shall be conducted in English.  To the extent that the HKIAC Rules are in conflict with the provisions of this Section 13.2, including the provisions concerning the appointment of the arbitrators, the provisions of this Section 13.2 shall prevail.

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(d)                                 Each party to the arbitration shall cooperate with each other party to the arbitration in making full disclosure of and providing complete access to all information and documents requested by such other party in connection with such arbitral proceedings, subject only to any confidentiality obligations binding on such party.

(e)                                  The award of the arbitral tribunal shall be final and binding upon the parties thereto, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.

(f)                                   The arbitral tribunal shall decide any Dispute submitted by the parties to the arbitration strictly in accordance with the substantive laws of Hong Kong.

(g)                                  Any party to the Dispute shall be entitled to seek preliminary injunctive relief, if possible, from any court of competent jurisdiction pending the constitution of the arbitral tribunal.

(h)                                 During the course of the arbitral tribunal’s adjudication of the Dispute, this Agreement shall continue to be performed except with respect to the part in dispute and under adjudication.

[The remainder of this page is intentionally left blank]

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IN WITNESS WHEREOF this Agreement has been executed on the day and year first above written.

[Signature Page to the Convertible Note Purchase Agreement]

IN WITNESS WHEREOF this Agreement has been executed on the day and year first above written.

[Signature Page to the Convertible Note Purchase Agreement]

IN WITNESS WHEREOF this Agreement has been executed on the day and year first above written.

[Signature Page to the Convertible Note Purchase Agreement]

SCHEDULE 1

GROUP STRUCTURE CHART AND PARTICULARS OF EACH GROUP COMPANY

Part I Group Structure Chart

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Part II Particulars of Each Group Company

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