UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of June 2024
Commission File Number 001-41631
Xiao-I Corporation
(Translation of registrant’s name into English)
5/F, Building 2, No. 2570
Hechuan Road, Minhang District
Shanghai, China 201101
(Address of principal executive offices)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On June 17, 2024, Xiao-I Corporation, a Cayman
Islands exempted company with limited liability (the “Company”), has entered into a securities purchase agreement with an
institutional investor (the “Investor”) to issue and sell an aggregate principal amount of $3,260,869.57 senior convertible
notes (the “Notes”) with an 8% Original Issue Discount to the Investor, convertible into the Company’s ordinary shares
(“Conversion Shares”) in the form of American Depositary Shares (“Conversion ADSs”) (the “SPA”). Each
ADS represents one-third of an ordinary share.
The Company is also concurrently offering an additional
1,000,002 ADS (the “Pre-Delivery ADSs”), at par, representing 333,334 of its ordinary shares (the “Pre-Delivery Shares”),
to the Investor. Each holder of Pre-Delivery Shares is not permitted to sell, assign or transfer such Pre-Delivery ADSs except in connection
with a conversion of the Note of such holder to facilitate T+1 delivery of Conversion ADSs upon any conversion of a Note. At such time
when no Notes remain outstanding, the remaining Pre-Delivery ADSs will be deemed surrendered and cancelled by the holder on the date the
holder ceases to hold any Notes.
The Notes
Conversion at Option of Holder
The Notes will mature 360-days after the
Issuance Date (as defined in the Notes) and will be convertible into the Company’s ADSs at a conversion price equal to $1.00
per ADS. Each holder of Notes may convert all, or any part, of the outstanding principal of the Notes, together with accrued and
unpaid interest, any make-whole amount and any late charges thereon, at any time, at such holder’s option, into Conversion
Shares represented by Conversion ADSs at the “Conversion Price” of $1.00 per ADS, subject to pro rata adjustment for any
stock split, stock dividend, stock combination and/or similar transactions.
Alternate Conversion at Option of Holder
Each holder of Notes may also convert all, or
any part, of the outstanding principal of the Notes, together with accrued and unpaid interest, any make-whole amount and any late charges
thereon (subject to an additional 25% premium if an event of default then exists), at any time, at such holder’s option, into Conversion
Shares represented by Conversion ADSs at the “Alternate Conversion Price” calculated the lower of:
| (i) | the Conversion Price then in effect; and |
| x. | if no event of default then exists, 92% of the lowest volume weighted average price of the Company’s
ADSs during the ten (10) consecutive Trading Days ending and including the Trading Day immediately preceding the delivery or deemed delivery
of the applicable Conversion Notice; or |
| y. | if an event of default then exists, the lowest of: |
| (a) | 80% of the volume weighted average price of the Company’s ADSs as of the trading day immediately
preceding the delivery or deemed delivery of the applicable notice of conversion or event of default (as applicable); |
| (b) | 80% of the volume weighted average price of the Company’s ADSs as of the trading day the delivery
or deemed delivery of the applicable notice of conversion (if any); and |
| (c) | 80% of the price computed as the quotient of (I) the sum of the volume weighted average price of the Company’s
ADSs for each of the three (3) Trading Days with the lowest volume weighted average price of the Company’s ADSs during the 20 consecutive
trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable Conversion
Notice, divided by (II) three (3)). |
Interest Rate
The Notes will bear interest at a rate of 6.0%
per annum, which rate will increase to 15% in the event of occurrence and during the continuance of an event of default.
Ranking
All payments due under the Notes will be senior
to all subordinated indebtedness of the Company and/or its subsidiaries.
Redemption Rights
In connection with a change of control of the
Company, each holder may require us to redeem in cash all, or any portion, of the Notes at a 25% redemption premium to the greater of
(i) the face value of the Notes to be redeemed, (ii) the equity value of the Conversion Shares represented by Conversion ADSs underlying
such Notes, and (iii) the equity value of the change of control consideration payable to the holder of the Conversion Shares represented
by Conversion ADSs underlying such Notes.
The holders of the Notes may require the Company
to redeem the Notes, in whole or in part, upon the occurrence of certain offerings of equity or equity-linked securities and/or assets
sales, at a 5% premium. In such an event, the Company would be required to redeem Notes using 25% of the gross proceeds of such an offering
and/or asset sale, as applicable.
Upon any event of default, the Company shall immediately
redeem in cash all amounts due under the Notes at a 25% premium to the greater of (i) the face value of the Notes to be redeemed, and
(ii) the equity value of the Conversion Shares represented by Conversion ADS underlying such Notes (unless the holder waives such right
to receive such payment).
Voluntary Adjustment Right
Subject to the NASDAQ Stock Market rules and regulations,
the Company has the right, at any time, with the written consent of the Required Holders (as defined in the SPA), to lower the Conversion
Price to any amount and for any period of time deemed appropriate by the Company’s board of directors.
Beneficial Ownership Limitation
Conversions and issuance of Conversion Shares
represented by Conversion ADSs pursuant to the Notes are prohibited if such conversion or issuance would cause the applicable holder (together
with its affiliates) to beneficially own in excess of 4.99% of the outstanding Conversion Shares represented by Conversion ADSs (which
percentage is subject to increase to 9.99% or decrease, at the option of such holder, except that any increase will only be effective
upon 61-days’ prior notice to the Company).
The Notes, Conversion ADSs and Predelivery
ADSs (the “Securities”) are being offered through a prospectus supplement pursuant to the Company’s effective
shelf registration statement on Form F-3, as amended (SEC File No. 333-279306) (which was initially filed with the U.S. Securities
and Exchange Commission (the “SEC”) on May 10, 2024, and declared effective on May 20, 2024), and the base prospectus
contained therein. Prior to the closing, the Company will file a prospectus supplement pursuant to Rule 424(b)(5) of the Securities
Act of 1933, as amended (the “Securities Act”), registering the Securities.
Copies of the form of Note and SPA are attached hereto as Exhibit 4.1 and 10.1, respectively, and are incorporated herein by reference.
The foregoing description of the SPA and Note is a summary of the material terms of such agreements, does not purport to be complete and
is qualified in its entirety by reference to the SPA and Note.
Placement Agent
On June 17, 2024, the Company also entered
into a placement agency agreement (the “PAA”) with FT Global Capital Inc. (“FT Global” or “Placement
Agent”), to engage FT Global as its exclusive Placement Agent on
a “best efforts” basis for the offering. The Company agreed to pay the Placement Agent an aggregate cash fee equal to
7.5% of the gross proceeds raised in the offering, and to reimburse the Placement Agent for expenses up to $90,000.
A copy of the PAA is attached hereto as Exhibit 10.2 and is incorporated herein by reference. The foregoing description of the PAA is
a summary of the material terms of such agreement, and does not purport to be complete and is qualified in its entirety by reference to
the PAA.
Issuance of Press Release
One June 17, 2024, the Company issued a press release announcing the pricing of the transaction contemplated in the SPA. Such press
release is attached to this current report on Form 6-K as exhibit 99.1.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: June 17, 2024 |
Xiao-I Corporation |
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|
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By: |
/s/ Hui Yuan |
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Name: |
Hui Yuan |
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Title: |
Chief Executive Officer |
Exhibit
4.1
FOR
NEGOTIATION AND
DISCUSSION PURPOSES ONLY
NOT AN OFFER OR SALE OF SECURITIES
FORM
FINAL
[FORM
OF SENIOR CONVERTIBLE NOTE]
THE
PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS
SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.
THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), XU CHAO,
A REPRESENTATIVE OF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE
HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). XU CHAO MAY BE REACHED AT TELEPHONE NUMBER
+86 021-64435203.
Xiao-I
Corporation
Senior
Convertible Note
Issuance
Date: [●] 20__ |
Original
Principal Amount: U.S. $[●] |
FOR
VALUE RECEIVED, Xiao-I Corporation, an exempted company incorporated under the laws of the Cayman Islands (the “Company”),
hereby promises to pay to the order of [BUYER] or its registered assigns (“Holder”) the amount set forth above as
the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”)
when due, whether upon the Maturity Date, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof)
and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from
the date set forth above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether
upon the Maturity Date or upon acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof).
This Senior Convertible Note (including all Senior Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”)
is one of an issue of Senior Convertible Notes issued pursuant to (i) the Securities Purchase Agreement, dated as of June 17, 2024 (the
“Subscription Date”), by and among the Company and the investors (the “Buyers”) referred to therein,
as amended from time to time (collectively, the “Notes”, and such other Senior Convertible Notes, the “Other
Notes”), (ii) the Company’s Registration Statement on Form F-3 (File Number 333-279306) (the “Registration Statement”)
and (iii) a registration statement on Form F-6 which has 100,000,000 ADSs (as defined below) issuable upon deposit of Ordinary Shares
(as defined below) (Registration No. 333-269502) (the “ADS Registration Statement”). Certain capitalized terms used
herein are defined in Section 32.
1.
PAYMENTS OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 25(c)) on such Principal and Interest.
Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, Make-Whole Amount,
accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any.
2.
INTEREST; INTEREST RATE.
(a)
Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day
months and shall be payable in arrears for on the first calendar day of each calendar month (each, an “Interest Date”)
with the first Interest Date being July 1, 2024. Interest shall be payable on each Interest Date, to the record holder of this Note on
the applicable Interest Date, in ADSs (“Interest ADSs”) so long as there has been no Equity Conditions Failure; provided
however, that the Company may, at its option following notice to the Holder, pay Interest on any Interest Date in cash (“Cash
Interest”) or in a combination of Cash Interest and Interest ADSs. For avoidance of doubt, the Interest ADSs shall be settled
from pre-delivery ADSs to the extent available as contemplated in Section 15(q)(ii). The Company shall deliver a written notice (each,
an “Interest Election Notice”) to each holder of the Notes on or prior to the tenth (10th) Trading Day
immediately prior to the applicable Interest Date (each, an “Interest Notice Due Date” and the date such notice is
delivered to all of the holders of Notes, the “Interest Notice Date”) which notice (i) either (A) confirms that Interest
to be paid on such Interest Date shall be paid entirely in Interest ADSs or (B) elects to pay Interest as Cash Interest or a combination
of Cash Interest and Interest ADSs and specifies the amount of Interest that shall be paid as Cash Interest and the amount of Interest,
if any, that shall be paid in Interest ADSs and (ii) certifies that there has been no Equity Conditions Failure. If an Equity Conditions
Failure has occurred as of the Interest Notice Date, then unless the Company has elected to pay such Interest as Cash Interest, the Interest
Election Notice shall indicate that unless the Holder waives the Equity Conditions Failure, the Interest shall be paid as Cash Interest.
Notwithstanding anything herein to the contrary, if no Equity Conditions Failure has occurred as of the Interest Notice Date but an Equity
Conditions Failure occurs at any time prior to the Interest Date, (A) the Company shall provide the Holder a subsequent notice to that
effect and (B) unless the Holder waives the Equity Conditions Failure, the Interest shall be paid in cash. Interest to be paid on an
Interest Date in Interest ADSs shall be paid in a number of fully paid and nonassessable shares (rounded to the nearest whole share in
accordance with Section 3(a)) of ADSs equal to the quotient of (1) the amount of Interest payable on such Interest Date less any Cash
Interest paid and (2) the Interest Conversion Price in effect on the applicable Interest Date.
(b)
When any Interest ADSs are to be paid on an Interest Date, the Company shall (i) (A) provided that the ADS depository (and transfer agent)
(the “Transfer Agent”) is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program (“FAST”), credit such aggregate number of Interest ADSs to which the Holder shall be entitled
to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (B) if
the Transfer Agent is not participating in FAST, issue and deliver on the applicable Interest Date, to the address set forth in the register
maintained by the Company for such purpose pursuant to the Securities Purchase Agreement or to such address as specified by the Holder
in writing to the Company at least two (2) Business Days prior to the applicable Interest Date, the number of uncertificated Interest
ADSs registered in the name of the Holder or its designee to which the Holder shall be entitled and (ii) with respect to each Interest
Date, pay to the Holder, in cash by wire transfer of immediately available funds, the amount of any Cash Interest.
(c)
Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of
inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b) or upon any redemption in
accordance with Section 13 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during the
continuance of any Event of Default, the Interest Rate shall automatically be increased to fifteen percent (15.0%) per annum (the “Default
Rate”). In the event that such Event of Default is subsequently cured (and no other Event of Default then exists, including,
without limitation, for the Company’s failure to pay such Interest at the Default Rate on the applicable Interest Date), the adjustment
referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure;
provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue
to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure
of such Event of Default.
3.
CONVERSION OF NOTES. At any time after the Issuance Date, this Note shall be convertible into validly issued, fully paid and non-assessable
Ordinary Shares evidenced by ADSs, on the terms and conditions set forth in this Section 3.
(a)
Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall
be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully paid
and non-assessable Ordinary Shares evidenced by ADSs in accordance with Section 3(c), at the Conversion Rate (as defined below). The
Company shall not issue any fraction of an ADS upon any conversion. If the issuance would result in the issuance of a fraction of an
ADS, the Company shall round such fraction of an ADS up to the nearest whole ADS. The Company shall pay any and all transfer, stamp,
issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Registrar Service Provider (as
defined below) and the Depositary (as defined below)) that may be payable with respect to the issuance and delivery of ADSs upon conversion
of any Conversion Amount.
(b)
Conversion Rate. The number of ADSs issuable upon conversion of any Conversion Amount (the “ADS Number”) pursuant
to Section 3(a) shall be determined according to the following formula (the “Conversion Rate”):
ADS
Number = A * (B ÷ C)
For
the purposes of the foregoing formula:
A=
three (3) ADS for one (1) Ordinary Share (as adjusted from time to time) (the “ADS Ratio”).
B
= the Conversion Amount.
C
= the Conversion Price.
(i)
“Conversion Amount” means the sum of (A) the portion of the Principal of this Note to be converted, redeemed or otherwise
with respect to which this determination is being made, (B) accrued and unpaid Interest with respect to such Principal of this Note,
(C) the Make-Whole Amount, if any, (D) accrued and unpaid Late Charges with respect to such Principal of this Note, Make-Whole Amount
and Interest, and (E) any other unpaid amounts pursuant to the Transaction Documents, if any.
(ii)
“Conversion Price” means, as of any Conversion Date or other date of determination, $1.00 per ADS ($3.00 per Ordinary
Share), subject to adjustment as provided herein.
(c)
Mechanics of Conversion.
(i)
Optional Conversion. To convert any Conversion Amount into ADSs on any date (a “Conversion Date”), the Holder
shall deliver (whether via electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy
of an executed notice of conversion in the form attached hereto as Exhibit I (each, a “Conversion Notice”)
to the Company. If required by Section 3(c)(iii), within one (1) Trading Day following a conversion of this Note as aforesaid, the Holder
shall surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking
with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 19(b)). On the date of receipt of
a Conversion Notice, the Company shall transmit by electronic mail an acknowledgment of confirmation and representation as to whether
such ADSs may then be issued pursuant to Rule 144 or an effective and available registration statement (which may be the Registration
Statement) and the ADS Registration Statement, in the forms attached hereto as Exhibit II and Exhibit III, respectively,
of receipt of such Conversion Notice to the Holder, the Company’s transfer agent (the “Registrar Service Provider”)
and the Depositary (including a copy of the certified register of the Company reflecting the issuance of the Ordinary Shares) which confirmation
shall constitute an instruction to the Depositary to process such Conversion Notice in accordance with the terms herein and to instruct
the Registrar Service Provider to issue the requisite underlying Ordinary Shares to the Depositary with respect thereto. On or before
the first (1st) Trading Day following the date on which the Company has received a Conversion Notice (or such earlier date as required
pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion
Date of such ADSs issuable pursuant to such Conversion Notice) (the “Share Delivery Deadline”), the Company shall,
except to the extent not required by the Company hereunder in reliance on in Section 15(q) below, (1) cause the Registrar Service Provider
to deposit with the custodian for the Depositary (the “Custodian”) such aggregate number of Ordinary Shares as necessary
to effect the issuance in full of the ADSs to be issued pursuant to such Conversion Notice, and (2) either (A) provided that the Depositary
is participating in the DTC Fast Automated Securities Transfer Program (“FAST”), credit such aggregate number of ADSs
to which the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s balance account with
DTC through its Deposit/Withdrawal at Custodian system, Direct Registration System and/or Profile Modification System, as applicable,
or (B) if the Depositary is not participating in FAST, upon the request of the Holder, issue and deliver to the address as specified
in the Conversion Notice, a DRS statement reflecting the ADSs, registered in the name of the Holder or its designee, for the number of
ADSs to which the Holder shall be entitled pursuant to such conversion. If this Note is physically surrendered for conversion pursuant
to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being
converted, then the Company shall as soon as practicable and in no event later than one (1) Business Day after receipt of this Note and
at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section 19(d)) representing the
outstanding Principal not converted. The Person or Persons entitled to receive the ADSs issuable upon a conversion of this Note shall
be treated for all purposes as the record holder of such ADSs on the Conversion Date; provided, that the Holder shall be deemed to have
waived any voting rights of any such ADSs and/or Ordinary Shares, as applicable, that may arise with respect to any record date during
the period commencing on such Conversion Date, through, and including, such applicable Share Delivery Deadline (each, an “Conversion
Period”), as necessary, such that the aggregate voting rights of any ADSs beneficially owned by the Holder and/or any Attribution
Parties, collectively, on any such record date shall not exceed the Maximum Percentage (as defined below) as a result of any such conversion
of this Note.
(ii)
Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable
Share Delivery Deadline, to register such underlying Ordinary Shares on the Company’s register of members and deposit such Ordinary
Shares with the Custodian, or if the Depositary is not participating in FAST, to issue and deliver to the Holder (or its designee) an
ADR certificate for the number of ADSs to which the Holder is entitled and register such ADSs on the Company’s share register or,
if the Depositary is participating in FAST, to credit the balance account of the Holder or the Holder’s designee with DTC for such
number of ADSs to which the Holder is entitled upon the Holder’s conversion of this Note (as the case may be) (a “Conversion
Failure”), then, in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the Holder
on each day after such Share Delivery Deadline that the issuance of such ADSs is not timely effected an amount equal to 2% of the product
of (A) the sum of the number of ADSs not issued to the Holder on or prior to the Share Delivery Deadline and to which the Holder is entitled,
multiplied by (B) any trading price of the ADSs selected by the Holder in writing as in effect at any time during the period beginning
on the applicable Conversion Date and ending on the applicable Share Delivery Deadline and (2) the Holder, upon written notice to the
Company, may void its Conversion Notice with respect to, and retain or have returned (as the case may be) any portion of this Note that
has not been converted pursuant to such Conversion Notice, provided that the voiding of a Conversion Notice shall not affect the Company’s
obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise.
In addition to the foregoing, the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery Deadline,
to register such underlying Ordinary Shares on the Company’s register of members and deposit such Ordinary Shares with the Custodian,
or a Conversion Failure occurs, and if on or after such Share Delivery Deadline the Holder acquires (in an open market transaction, stock
loan or otherwise) ADSs corresponding to all or any portion of the number of ADSs issuable upon such conversion that the Holder is entitled
to receive from the Company and has not received from the Company in connection with such Conversion Failure (a “Buy-In”),
then, in addition to all other remedies available to the Holder, the Company shall, within one (1) Business Day after receipt of the
Holder’s request and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the ADSs so acquired
(including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate (and to issue such ADSs) or credit the balance
account of such Holder or such Holder’s designee, as applicable, with DTC for the number of ADSs to which the Holder is entitled
upon the Holder’s conversion hereunder (as the case may be) (and to issue such ADSs) shall terminate, or (II) promptly honor its
obligation to so issue and deliver to the Holder a ADR certificate or certificates representing such ADSs or credit the balance account
of such Holder or such Holder’s designee, as applicable, with DTC for the number of ADSs to which the Holder is entitled upon the
Holder’s conversion hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (x) such number of ADSs multiplied by (y) the lowest Closing Sale Price of the ADSs on any Trading Day
during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under
this clause (II) (the “Buy-In Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver ADR certificates representing ADSs (or to electronically deliver such ADSs)
upon the conversion of this Note as required pursuant to the terms hereof. Notwithstanding the foregoing, no Conversion Failure shall
be deemed to occur hereunder with respect to any Delivery ADSs (as defined in Section 15(q) below) satisfied with Pre-Delivery ADSs in
accordance with Section 15(q) below to the extent the Company delivers such applicable Delivery ADS Replacement Amount (as defined in
Section 15(q) below) of ADSs to the Holder (or its designee) in replacement of such applied Pre-Delivery ADSs on or prior to the fifth
(5th) Trading Day after such applicable Conversion Date (the “Replacement Share Delivery Deadline”) (which
issuances shall remain subject to the terms and conditions of this Section 3(c)(ii), but with a Share Delivery Deadline for such issuance
deemed to be the Replacement Share Delivery Deadline).
(iii)
Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the
names and addresses of the holders of each Note and the principal amount of the Notes held by such holders (the “Registered
Notes”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and
the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including,
without limitation, the right to receive payments of Principal, Make-Whole Amount and Interest hereunder) notwithstanding notice to the
contrary. A Registered Note may be assigned, transferred or sold in whole or in part only by registration of such assignment or sale
on the Register. Upon its receipt of a written request to assign, transfer or sell all or part of any Registered Note by the holder thereof,
the Company shall record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate
principal amount as the principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 19,
provided that if the Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered
Note within two (2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment,
transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion
of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to
the Company unless (A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered
to the Company following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior
written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this
Note. The Holder and the Company shall maintain records showing the Principal, Make-Whole Amount, Interest and Late Charges converted
and/or paid (as the case may be) and the dates of such conversions, and/or payments (as the case may be) or shall use such other method,
reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion. If the Company
does not update the Register to record such Principal, Make-Whole Amount, Interest and Late Charges converted and/or paid (as the case
may be) and the dates of such conversions, and/or payments (as the case may be) within two (2) Business Days of such occurrence, then
the Register shall be automatically deemed updated to reflect such occurrence.
(iv)
Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for
the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company,
subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount of such
holder’s portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion on such
date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such date. In the event of a
dispute as to the number of ADSs issuable to the Holder in connection with a conversion of this Note, the Company shall issue to the
Holder the number of ADSs not in dispute and resolve such dispute in accordance with Section 24.
(d)
Limitations on Conversions. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not
have the right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be
null and void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the Ordinary
Shares and/or ADSs, as applicable, outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence,
the aggregate number of Ordinary Shares and/or ADSs, as applicable, beneficially owned by the Holder and the other Attribution Parties
shall include the number of Ordinary Shares and/or ADSs, as applicable, held by the Holder and all other Attribution Parties plus the
number of Ordinary Shares and/or ADSs, as applicable, issuable upon conversion of this Note with respect to which the determination of
such sentence is being made, but shall exclude Ordinary Shares and/or ADSs, as applicable, which would be issuable upon (A) conversion
of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of the other Attribution Parties and (B)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any convertible notes or convertible preferred shares or warrants) beneficially owned by the Holder or any other Attribution Party subject
to a limitation on conversion or exercise analogous to the limitation contained in this Section 3(d). For purposes of this Section 3(d),
beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of
outstanding Ordinary Shares and/or ADSs, as applicable, the Holder may acquire upon the conversion of this Note without exceeding the
Maximum Percentage, the Holder may rely on the number of outstanding Ordinary Shares and/or ADSs, as applicable, as reflected in (x)
the Company’s most recent Annual Report on Form 20-F, Report of Foreign Issuer on Form 6-K or other public filing with the SEC,
as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Depositary,
if any, setting forth the number of Ordinary Shares and/or ADSs, as applicable, outstanding (the “Reported Outstanding Share
Number”). If the Company receives a Conversion Notice from the Holder at a time when the actual number of outstanding Ordinary
Shares and/or ADSs, as applicable, is less than the Reported Outstanding Share Number, the Company shall notify the Holder in writing
of the number of Ordinary Shares and/or ADSs, as applicable, then outstanding and, to the extent that such Conversion Notice would otherwise
cause the Holder’s beneficial ownership, as determined pursuant to this Section 3(d), to exceed the Maximum Percentage, the Holder
must notify the Company of a reduced number of Ordinary Shares and/or ADSs, as applicable, to be purchased pursuant to such Conversion
Notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm
orally and in writing or by electronic mail to the Holder the number of Ordinary Shares and/or ADSs, as applicable, then outstanding.
In any case, the number of outstanding Ordinary Shares and/or ADSs, as applicable, shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Note, by the Holder and any other Attribution Party since the date as of which
the Reported Outstanding Share Number was reported. In the event that the issuance of ADSs to the Holder upon conversion of this Note
results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage
of the number of outstanding Ordinary Shares and/or ADSs, as applicable, (as determined under Section 13(d) of the 1934 Act), the number
of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum
Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall
not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time
to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease
the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase
in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company
and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of
Notes that is not an Attribution Party of the Holder. For purposes of clarity, the Ordinary Shares and/or ADSs, as applicable, issuable
pursuant to the terms of this Note in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for
any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert this Note pursuant
to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination
of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 3(d) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be
defective or inconsistent with the intended beneficial ownership limitation contained in this Section 3(d) or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived or amended
and shall apply to a successor holder of this Note.
(e)
Right of Alternate Conversion.
(i)
General.
(1)
Alternate Optional Conversion. Subject to Section 3(d), at any time, at the option of the Holder, the Holder may convert (each,
an “Alternate Optional Conversion”, and the date of such Alternate Optional Conversion, an “Alternate Optional
Conversion Date”) all, or any part, of this Note into ADSs (such portion of the Conversion Amount subject to such Alternate
Optional Conversion, the “Alternate Optional Conversion Amount”) at the Alternate Conversion Price.
(2)
Alternate Conversion Upon an Event of Default. Subject to Section 3(d), at any time after the occurrence of an Event of Default
(regardless of whether such Event of Default has been cured, or if the Company has delivered an Event of Default Notice to the Holder
or if the Holder has delivered an Event of Default Redemption Notice to the Company or otherwise notified the Company that an Event of
Default has occurred), the Holder may, at the Holder’s option, convert (each, an “Alternate Event of Default Conversion”
and together with each Alternate Optional Conversion, each, an “Alternate Conversion”, and the date of such Alternate
Event of Default Conversion, each, an “Alternate Event of Default Conversion Date”, and together with each Alternate
Optional Conversion Date, each, an “Alternate Conversion Date”) all, or any part of, the Conversion Amount (such portion
of the Conversion Amount subject to such Alternate Conversion, the “Alternate Event of Default Conversion Amount”
and together with each Alternate Optional Conversion Amount, each, an “Alternate Conversion Amount”) into ADSs at
the Alternate Conversion Price.
(ii)
Mechanics of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion
Amount pursuant to Section 3(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all purposes
hereunder with respect to such Alternate Conversion and, solely with respect to the calculation of the number of ADSs issuable upon conversion
of any Conversion Amount in an Alternate Event of Default Conversion, with “Redemption Premium of the Conversion Amount”
replacing “Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect to such Alternate Conversion)
by designating in the Conversion Notice delivered pursuant to this Section 3(e) of this Note that the Holder is electing to use the Alternate
Conversion Price for such conversion. Notwithstanding anything to the contrary in this Section 3(e), but subject to Section 3(d), until
the Company delivers ADSs representing the applicable Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may
be converted by the Holder into ADSs pursuant to Section 3(c) without regard to this Section 3(e).
4.
RIGHTS UPON EVENT OF DEFAULT.
(a)
Event of Default. Each of the following events shall constitute an “Event of Default” and each of the events
in clauses (vii), (viii) and (ix) shall constitute a “Bankruptcy Event of Default”:
(i)
the suspension from trading or the failure of the ADSs to be trading or listed (as applicable) on an Eligible Market for a period of
five (5) consecutive Trading Days;
(ii)
the Company’s (A) failure to cure a Conversion Failure by delivery of the required number of ADSs within five (5) Trading Days
after the applicable Conversion Date or exercise date (as the case may be) or (B) notice, written or oral, to any holder of the Notes,
including, without limitation, by way of public announcement or through any of its agents, at any time, of its intention not to comply,
as required, with a request for conversion of any Notes into ADSs that is requested in accordance with the provisions of the Notes, other
than pursuant to Section 3(d);
(iii)
except to the extent the Company is in compliance with Section 12(b) below, at any time following the tenth (10th) consecutive
day that the Holder’s Authorized Share Allocation (as defined in Section 12(a) below) is less than the number of ADSs that the
Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without regard to any limitations on
conversion set forth in Section 3(d) or otherwise);
(iv)
the Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Make-Whole Amount, Interest, Late
Charges or other amounts when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s
failure to pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase
Agreement) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated
hereby and thereby, except, in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure
remains uncured for a period of at least two (2) Trading Days;
(v)
the Company fails to remove any restrictive legend on any ADR certificate or any ADSs issued to the Holder upon conversion or exercise
(as the case may be) of any Securities (as defined in the Securities Purchase Agreement) acquired by the Holder under the Securities
Purchase Agreement (including this Note) as and when required by such Securities or the Securities Purchase Agreement, unless otherwise
then prohibited by applicable federal securities laws of the United States of America, and any such failure remains uncured for at least
five (5) days;
(vi)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $500,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;
(vii)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within thirty (30) days of their initiation;
(viii)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of
creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or
the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the
Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal, state or foreign law;
(ix)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar
document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance
of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed
and in effect for a period of thirty (30) consecutive days;
(x)
a final judgment or judgments for the payment of money aggregating in excess of $500,000 are rendered against the Company and/or any
of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $500,000 amount set forth
above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
(xi)
the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $500,000 due to any third party (other than, with respect to unsecured
Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings
and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach
or violation of any agreement for monies owed or owing in an amount in excess of $500,000, which breach or violation permits the other
party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or
event that would, with or without the passage of time or the giving of notice, result in a default or event of default under any agreement
binding the Company or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the
business, assets, operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects
of the Company or any of its Subsidiaries, individually or in the aggregate;
(xii)
other than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation
or warranty, or any covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or
other term or condition that is curable, only if such breach remains uncured for a period of two (2) consecutive Trading Days;
(xiii)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the Equity
Conditions are satisfied, (B) there has been no Equity Conditions Failure, or (C) as to whether any Event of Default has occurred;
(xiv)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 15 of this Note;
(xv)
any Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs; or
(xvi)
any Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.
(b)
Notice of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other
Note, the Company shall within one (1) Business Day deliver written notice thereof via electronic mail and overnight courier (with next
day delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s
receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder may require the Company to redeem
(regardless of whether such Event of Default has been cured) all or any portion of this Note by delivering written notice thereof (the
”Event of Default Redemption Notice”) to the Company, which Event of Default Redemption Notice shall indicate the
portion of this Note the Holder is electing to redeem. Each portion of this Note subject to redemption by the Company pursuant to this
Section 4(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (A) the Conversion Amount to be redeemed
multiplied by (B) the Redemption Premium and (ii) the product of (X) the quotient of (a) the Conversion Amount to be redeemed divided
by (b) the Alternate Conversion Price then in effect at such time as the Holder delivers an Event of Default Redemption Notice multiplied
by (Y) the product of (1) the Redemption Premium multiplied by (2) the greatest Closing Sale Price of the ADSs on any Trading Day during
the period commencing on the date immediately preceding such Event of Default and ending on the date the Company makes the entire payment
required to be made under this Section 4(b) (the “Event of Default Redemption Price”). Redemptions required by this
Section 4(b) shall be made in accordance with the provisions of Section 13. To the extent redemptions required by this Section 4(b) are
deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed
to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 3(e), but subject to Section 3(d), until the Event
of Default Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption
under this Section 4(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into ADSs pursuant
to the terms of this Note. In the event of the Company’s redemption of any portion of this Note under this Section 4(b), the Holder’s
damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the
uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due
under this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss
of its investment opportunity and not as a penalty. Any redemption upon an Event of Default shall not constitute an election of remedies
by the Holder, and all other rights and remedies of the Holder shall be preserved.
(c)
Mandatory Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, and notwithstanding any
conversion that is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following the Maturity
Date, the Company shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal, Make-Whole Amount,
accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal, Make-Whole Amount and Interest, multiplied by (ii)
the Redemption Premium, in addition to any and all other amounts due hereunder, without the requirement for any notice or demand or other
action by the Holder or any other person or entity, provided that the Holder may, in its sole discretion, waive such right to receive
payment upon a Bankruptcy Event of Default, in whole or in part, and any such waiver shall not affect any other rights of the Holder
hereunder, including any other rights in respect of such Bankruptcy Event of Default, any right to conversion, and any right to payment
of the Event of Default Redemption Price or any other Redemption Price, as applicable.
5.
RIGHTS UPON FUNDAMENTAL TRANSACTION.
(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions
of this Section 5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior
to such Fundamental Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of the
Successor Entity evidenced by a written instrument substantially similar in form and substance to the Notes, including, without limitation,
having a principal amount and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held
by such holder, having similar conversion rights as the Notes and having similar ranking and security to the Notes, and satisfactory
to the Holder and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common equity is
quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and
the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of a Fundamental Transaction,
the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion or redemption of this Note at
any time after the consummation of such Fundamental Transaction, in lieu of the ADSs (or other securities, cash, assets or other property
(except such items still issuable under Sections 6 and 16, which shall continue to be receivable thereafter)) issuable upon the conversion
or redemption of the Notes prior to such Fundamental Transaction, such shares of the publicly traded common equity (or their equivalent)
of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of such
Fundamental Transaction had this Note been converted immediately prior to such Fundamental Transaction (without regard to any limitations
on the conversion of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder
may elect, at its sole option, by delivery of written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction
without the assumption of this Note. The provisions of this Section 5 shall apply similarly and equally to successive Fundamental Transactions
and shall be applied without regard to any limitations on the conversion of this Note.
(b)
Notice of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days
prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the public announcement
of such Change of Control, the Company shall deliver written notice thereof via electronic mail and overnight courier to the Holder (a
“Change of Control Notice”). At any time during the period beginning after the Holder’s receipt of a Change
of Control Notice or the Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to the Holder in
accordance with the immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later of (A) the
date of consummation of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of the announcement
of such Change of Control, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice
thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate
the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section 5 shall
be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control Redemption Premium
multiplied by (y) the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption Premium multiplied by
(y) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing
Sale Price of the ADSs during the period beginning on the date immediately preceding the earlier to occur of (1) the consummation of
the applicable Change of Control and (2) the public announcement of such Change of Control and ending on the date the Holder delivers
the Change of Control Redemption Notice by (II) the Conversion Price then in effect and (iii) the product of (y) the Change of Control
Redemption Premium multiplied by (z) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the
aggregate cash consideration and the aggregate cash value of any non-cash consideration per ADS to be paid to the holders of the ADSs
upon consummation of such Change of Control (any such non-cash consideration constituting publicly-traded securities shall be valued
at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation of such Change
of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public announcement of such proposed
Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to the public announcement of such
proposed Change of Control) divided by (II) the Conversion Price then in effect (the “Change of Control Redemption Price”).
Redemptions required by this Section 5 shall be made in accordance with the provisions of Section 13 and shall have priority to payments
to shareholders in connection with such Change of Control. To the extent redemptions required by this Section 5(b) are deemed or determined
by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 5, but subject to Section 3(d), until the Change of Control Redemption
Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 5(b)
(together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into ADSs pursuant to Section 3. In the
event of the Company’s redemption of any portion of this Note under this Section 5(b), the Holder’s damages would be uncertain
and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability
of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended
by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and
not as a penalty.
6.
RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 7 and 16 below, if at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase shares, warrants, securities or other property pro rata to all or
substantially all of the record holders of any class of ADSs and/or Ordinary Shares, as applicable (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of ADSs (or underlying Ordinary Shares, as applicable) acquirable upon complete
conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming
for such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to
the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of ADSs and/or Ordinary Shares, as applicable, are to be determined for the grant, issue or sale of such
Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled
to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such
ADSs as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such
extent shall be held in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such
term shall be extended by such number of days held in abeyance, if applicable) for the benefit of the Holder until such time or times,
if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which
time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or
on any subsequent Purchase Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date or other
similar provision, such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent as if there
had been no such limitation).
(b)
Other Corporate Events. In addition to and not in substitution for any other rights
hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders
of ADSs or Ordinary Shares, as applicable, are entitled to receive securities or other assets
with respect to or in exchange for ADSs and/or Ordinary Shares, as applicable (a “Corporate
Event”), the Company shall make appropriate provision to ensure that the Holder
will thereafter have the right to receive upon a conversion of this Note, at the Holder’s
option (i) in addition to the ADSs receivable upon such conversion, such securities or other
assets to which the Holder would have been entitled with respect to such ADSs had such ADSs
been held by the Holder upon the consummation of such Corporate Event (without taking into
account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu
of the ADSs otherwise receivable upon such conversion, such securities or other assets received
by the holders of ADSs or Ordinary Shares, as applicable, in connection with the consummation
of such Corporate Event in such amounts as the Holder would have been entitled to receive
had this Note initially been issued with conversion rights for the form of such consideration
(as opposed to ADSs) at a conversion rate for such consideration commensurate with the Conversion
Rate. Provision made pursuant to the preceding sentence shall be in a form and substance
satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally
to successive Corporate Events and shall be applied without regard to any limitations on
the conversion or redemption of this Note.
7.
RIGHTS UPON ISSUANCE OF OTHER SECURITIES.
(a)
Adjustment of Conversion Price upon Issuance of ADSs. If and whenever on or after the Subscription Date the Company grants, issues
or sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section 7(a) is deemed to have granted, issued
or sold, any ADSs (including the granting, issuance or sale of ADSs owned or held by or for the account of the Company, but excluding
any Excluded Securities granted, issued or sold or deemed to have been granted, issued or sold) for a consideration per share (the “New
Issuance Price”) less than a price equal to the Conversion Price in effect immediately prior to such granting, issuance or
sale or deemed granting, issuance or sale (such Conversion Price then in effect is referred to herein as the “Applicable Price”)
(the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Conversion Price then in
effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation,
determining the adjusted Conversion Price and the New Issuance Price under this Section 7(a)), the following shall be applicable:
(i)
Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell)
any Options and the lowest price per share for which one ADS is at any time issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof
is less than the Applicable Price, then such ADS shall be deemed to be outstanding and to have been issued and sold by the Company at
the time of the granting, issuance or sale of such Option for such price per share. For purposes of this Section 7(a)(i), the “lowest
price per share for which one ADS is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof” shall be equal
to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one ADS upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange
of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise
price set forth in such Option for which one ADS is issuable (or may become issuable assuming all possible market conditions) upon the
exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such
Option or otherwise pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Option (or
any other Person) with respect to any one ADS upon the granting, issuance or sale of such Option, upon exercise of such Option and upon
conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms
thereof plus the value of any other consideration (including, without limitation, consideration consisting of cash, debt forgiveness,
assets or any other property) received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except
as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such ADS or of such Convertible
Securities upon the exercise of such Options or otherwise pursuant to the terms thereof or upon the actual issuance of such ADSs upon
conversion, exercise or exchange of such Convertible Securities.
(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell)
any Convertible Securities and the lowest price per share for which one ADS is at any time issuable upon the conversion, exercise or
exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such ADS shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the issuance or sale (or the time of execution of such agreement to issue
or sell, as applicable) of such Convertible Securities for such price per share. For the purposes of this Section 7(a)(ii), the “lowest
price per share for which one ADS is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to
the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable
by the Company with respect to one ADS upon the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the
Convertible Security and upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof
and (y) the lowest conversion price set forth in such Convertible Security for which one ADS is issuable (or may become issuable assuming
all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the
sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person) with respect to any one ADS upon
the issuance or sale (or the agreement to issue or sell, as applicable) of such Convertible Security plus the value of any other consideration
received or receivable (including, without limitation, any consideration consisting of cash, debt forgiveness, assets or other property)
by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated below, no further
adjustment of the Conversion Price shall be made upon the actual issuance of such ADSs upon conversion, exercise or exchange of such
Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is
made upon exercise of any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other provisions
of this Section 7(a), except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such issuance
or sale.
(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for ADSs increases or decreases at any time (other than proportional changes
in conversion or exercise prices, as applicable, in connection with an event referred to in Section 7(b) below), the Conversion Price
in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been in effect at such
time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or
increased or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes of this Section
7(a)(iii), if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible Security that
was outstanding as of the Subscription Date) are increased or decreased in the manner described in the immediately preceding sentence,
then such Option or Convertible Security and the ADSs deemed issuable upon exercise, conversion or exchange thereof shall be deemed to
have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 7(a) shall be made if such adjustment
would result in an increase of the Conversion Price then in effect.
(iv)
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary
Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”),
together comprising one integrated transaction (or one or more transactions if such issuances or sales or deemed issuances or sales of
securities of the Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity to
each other and/or (C) are consummated under the same plan of financing), the aggregate consideration per ADS with respect to such Primary
Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one ADS was issued (or was deemed
to be issued pursuant to Section 7(a)(i) or 7(a)(ii) above, as applicable) in such integrated transaction solely with respect to such
Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black Scholes Consideration Value of each such
Option, if any, (II) the fair market value (as determined by the Holder in good faith) or the Black Scholes Consideration Value, as applicable,
of such Adjustment Right, if any, and (III) the fair market value (as determined by the Holder) of such Convertible Security, if any,
in each case, as determined on a per share basis in accordance with this Section 7(a)(iv). If any ADSs, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining
the consideration paid for such ADSs, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes
Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor. If any ADSs, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company (for the
purpose of determining the consideration paid for such ADSs, Option or Convertible Security, but not for the purpose of the calculation
of the Black Scholes Consideration Value) will be the fair value of such consideration, except where such consideration consists of publicly
traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average
of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any ADSs, Options or
Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the
surviving entity, the amount of consideration therefor (for the purpose of determining the consideration paid for such ADSs, Option or
Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the fair
value of such portion of the net assets and business of the non-surviving entity as is attributable to such ADSs, Options or Convertible
Securities (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an
event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
(v)
Record Date. If the Company takes a record of the holders of ADSs for the purpose of entitling them (A) to receive a dividend
or other distribution payable in ADSs, Options or in Convertible Securities or (B) to subscribe for or purchase ADSs, Options or Convertible
Securities, then such record date will be deemed to be the date of the issuance or sale of the ADSs deemed to have been issued or sold
upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription
or purchase (as the case may be).
(b)
Adjustment of Conversion Price upon Subdivision or Combination of ADSs. Without limiting any provision of Section 6, Section
16 or Section 7(a), if the Company at any time on or after the Subscription Date (i) pays a share dividend on one or more classes
of its then outstanding ADSs and/or Ordinary Shares (or changes the ratio of Ordinary Shares to ADSs) or otherwise makes a distribution
on any class of share capital that is payable in ADSs or Ordinary Shares, (ii) subdivides (by any share split, share dividend, recapitalization
or otherwise) one or more classes of its then outstanding ADSs and/or Ordinary Shares, as applicable, into a larger number of shares
or (iii) combines (by combination, reverse share split or otherwise) one or more classes of its then outstanding ADSs and/or Ordinary
Shares, as applicable, into a smaller number of shares, then in each such case the Conversion Price shall be multiplied by a fraction
of which the numerator shall be the number of ADSs outstanding immediately before such event (or, if applicable, the Ordinary Shares
outstanding immediately before such event, assuming solely for such purpose that all ADSs were exchanged into Ordinary Shares immediately
before such event) and of which the denominator shall be the number of ADSs outstanding immediately after such event (or, if applicable,
the Ordinary Shares outstanding immediately before such event, assuming solely for such purpose that all ADSs were exchanged into Ordinary
Shares immediately after such event). Any adjustment pursuant to this Section 7(b) shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an adjustment under this Section 7(b) occurs during the period that a
Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such
event.
(c)
Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section
7, if the Company in any manner issues or sells or enters into any agreement to issue or sell, any ADSs, Options or Convertible Securities
(any such securities, “Variable Price Securities”), after the Subscription Date that are issuable pursuant to such
agreement or convertible into or exchangeable or exercisable for ADSs at a price which varies or may vary with the market price of the
ADSs, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution
provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable
price being herein referred to as, the “Variable Price”), the Company shall provide written notice thereof via electronic
mail and overnight courier to the Holder on the date of such agreement and the issuance of such ADSs, Convertible Securities or Options.
From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the Holder shall have the
right, but not the obligation, in its sole discretion to substitute the Variable Price for the Conversion Price upon conversion of this
Note by designating in the Conversion Notice delivered upon any conversion of this Note that solely for purposes of such conversion the
Holder is relying on the Variable Price rather than the Conversion Price then in effect. The Holder’s election to rely on a Variable
Price for a particular conversion of this Note shall not obligate the Holder to rely on a Variable Price for any future conversion of
this Note.
(d)
Share Combination Event Adjustments. If at any time and from time to time on or after the Subscription Date there occurs any share
split, share dividend, share combination recapitalization or other similar transaction involving the ADSs (each, a “Share Combination
Event”, and such date thereof, the “Share Combination Event Date”) and the Event Market Price is less than
the Conversion Price then in effect (after giving effect to the adjustment in Section 7(b) above), then on the sixteenth (16th)
Trading Day immediately following such Share Combination Event Date, the Conversion Price then in effect on such sixteenth (16th)
Trading Day (after giving effect to the adjustment in Section 7(b) above) shall be reduced (but in no event increased) to the Event Market
Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the
Conversion Price hereunder, no adjustment shall be made.
(e)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of
share appreciation rights, phantom share rights or other rights with equity features), then the Company’s board of directors shall
in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder, provided
that no such adjustment pursuant to this Section 7(e) will increase the Conversion Price as otherwise determined pursuant to this Section
7, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such
dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank
of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest
error and whose fees and expenses shall be borne by the Company.
(f)
Calculations. All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of ADSs outstanding at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be considered an issue or sale of ADSs.
(g)
Issuances (and Deemed Issuances) of Ordinary Shares without ADSs. Notwithstanding anything herein to the contrary, to the extent
the Company, directly or indirectly, issues (or enters into any agreement to issue) any Ordinary Shares without a corresponding issuance
of (or agreement to subsequently issue) ADSs, in full, for the purpose of this Section 7, the Company shall be deemed to have issued
ADSs, in full, with respect thereto.
(h)
Voluntary Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during
the term of this Note, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce
the then current Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the board of directors
of the Company.
8.
REDEMPTIONS AT THE COMPANY’S ELECTION.
(a)
Company Optional Redemption. At any time the Company shall have the right to redeem all, but not less than all, of the Conversion
Amount then remaining under this Note (the “Company Optional Redemption Amount”) on the Company Optional Redemption
Date (each as defined below) (a “Company Optional Redemption”). The portion of this Note subject to redemption pursuant
to this Section 8(a) shall be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”)
equal to 110% of the greater of (i) the Conversion Amount being redeemed as of the Company Optional Redemption Date and (ii) the product
of (1) the quotient of (A) the Conversion Amount being redeemed divided by (b) the Alternate Conversion Price then in effect as of the
Company Optional Redemption Date multiplied by (2) the greatest Closing Sale Price of the ADSs on any Trading Day during the period commencing
on the date immediately preceding such Company Optional Redemption Notice Date and ending on the Trading Day immediately prior to the
date the Company makes the entire payment required to be made under this Section 8(a). The Company may exercise its right to require
redemption under this Section 8(a) by delivering a written notice thereof by electronic mail and overnight courier to all, but not less
than all, of the holders of Notes (the “Company Optional Redemption Notice” and the date all of the holders of Notes
received such notice is referred to as the “Company Optional Redemption Notice Date”). The Company may deliver only
one Company Optional Redemption Notice hereunder and such Company Optional Redemption Notice shall be irrevocable. The Company Optional
Redemption Notice shall (x) state the date on which the Company Optional Redemption shall occur (the “Company Optional Redemption
Date”) which date shall not be less than ten (10) Trading Days nor more than twenty (20) Trading Days following the Company
Optional Redemption Notice Date, and (y) state the aggregate Conversion Amount of the Notes which is being redeemed in such Company Optional
Redemption from the Holder and all of the other holders of the Notes pursuant to this Section 8(a) (and analogous provisions under the
Other Notes) on the Company Optional Redemption Date. Notwithstanding anything herein to the contrary, at any time prior to the date
the Company Optional Redemption Price is paid, in full, the Company Optional Redemption Amount may be converted, in whole or in part,
by the Holder into ADSs pursuant to Section 3. All Conversion Amounts converted by the Holder after the Company Optional Redemption Notice
Date shall reduce the Company Optional Redemption Amount of this Note required to be redeemed on the Company Optional Redemption Date.
Redemptions made pursuant to this Section 8(a) shall be made in accordance with Section 13. In the event of the Company’s redemption
of any portion of this Note under this Section 8(a), the Holder’s damages would be uncertain and difficult to estimate because
of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 8(a) is intended by the parties to be, and shall
be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. For the avoidance
of doubt, the Company shall have no right to effect a Company Optional Redemption if any Event of Default has occurred and continuing,
but any Event of Default shall have no effect upon the Holder’s right to convert this Note in its discretion.
(b)
Pro Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section
8(a), then it must simultaneously take the same action with respect to all of the Other Notes.
9.
SUBSEQUENT PLACEMENT OPTIONAL REDEMPTION
(a)
General. At any time from and after the earlier of (x) the date the Holder becomes aware of the occurrence of a Subsequent Placement
(as defined in the Securities Purchase Agreement) (the “Holder Notice Date”) and (y) the time of consummation of a
Subsequent Placement (in each case, other than with respect to Excluded Securities (as defined in the Securities Purchase Agreement))
(each, an “Eligible Subsequent Placement”), the Holder shall have the right, in its sole discretion, to require that
the Company redeem (each an “Subsequent Placement Optional Redemption”) all, or any portion, of the Conversion Amount
under this Note not in excess of (together with any Subsequent Placement Optional Redemption Amount (as defined in the applicable other
Note of the Holder) of any other Notes of the Holder) the Holder’s Holder Pro Rata Amount of 25% of the gross proceeds of such
Eligible Subsequent Placement (the “Eligible Subsequent Placement Optional Redemption Amount”) by delivering written
notice thereof (an “Subsequent Placement Optional Redemption Notice”) to the Company. Notwithstanding the foregoing,
upon the written request of the Holder, the Company shall permit the Holder to participate in such Subsequent Placement and the Company
shall apply all, or any part, as set forth in such written request, of any amounts that would otherwise be payable to the Holder in such
Subsequent Placement Optional Redemption, on a dollar-for-dollar basis, against the purchase price of the securities to be purchased
by the Holder in such Eligible Subsequent Placement (which, for the avoidance of doubt, shall not be less than securities with a purchase
price equal to the portion of the Subsequent Placement Optional Redemption Amount the Holder elects to apply against thereto).
(b)
Mechanics. Each Subsequent Placement Optional Redemption Notice shall indicate that all, or such applicable portion, as set forth
in the applicable Subsequent Placement Optional Redemption Notice, of the Eligible Subsequent Placement Optional Redemption Amount the
Holder is electing to have redeemed (the “Subsequent Placement Optional Redemption Amount”) and the date of such Subsequent
Placement Optional Redemption (the “Subsequent Placement Optional Redemption Date”), which shall be the later of (x)
the fifth (5th) Business Day after the date of the applicable Subsequent Placement Optional Redemption Notice and (y) the
date of the consummation of such Eligible Subsequent Placement. The portion of the Conversion Amount of this Note subject to redemption
pursuant to this Section 9 shall be redeemed by the Company in cash at a price equal to 105% of the greater of (i) the Subsequent Placement
Optional Redemption Amount being redeemed as of the Subsequent Placement Optional Redemption Date and (ii) the product of (1) the quotient
of (A) the Subsequent Placement Optional Redemption Amount being redeemed divided by (b) the Alternate Conversion Price then in effect
as of the Subsequent Placement Optional Redemption Date multiplied by (2) the greatest Closing Sale Price of the ADSs on any Trading
Day during the period commencing on the date immediately preceding such Company Optional Redemption Notice Date and ending on the Trading
Day immediately prior to the date the Company makes the entire payment required to be made under this Section 9 (the “Subsequent
Placement Optional Redemption Price”). Redemptions required by this Section 9 shall be made in accordance with the provisions
of Section 13.
10.
ASSET SALE OPTIONAL REDEMPTION
(a)
General. At any time from and after the earlier of (x) the date the Holder becomes aware of the occurrence of an Asset Sale (including
any insurance and condemnation proceeds thereof) (the “Holder Notice Date”) and (y) the time of consummation of an
Asset Sale (other than sales of inventory and product in the ordinary course of business) (each, an “Eligible Asset Sale”),
the Holder shall have the right, in its sole discretion, to require that the Company redeem (each an “Asset Sale Optional Redemption”)
all, or any portion, of the Conversion Amount under this Note not in excess of (together with any Asset Sale Optional Redemption Amount
(as defined in the applicable other Note of the Holder) of any other Notes of the Holder) the Holder’s Holder Pro Rata Amount of
25% of the gross proceeds (including any insurance and condemnation proceeds with respect thereto) of such Eligible Asset Sale (the “Eligible
Asset Sale Optional Redemption Amount”) by delivering written notice thereof (an “Asset Sale Optional Redemption Notice”)
to the Company.
(b)
Mechanics. Each Asset Sale Optional Redemption Notice shall indicate that all, or such applicable portion, as set forth in the
applicable Asset Sale Optional Redemption Notice, of the Eligible Asset Sale Optional Redemption Amount the Holder is electing to have
redeemed (the “Asset Sale Optional Redemption Amount”) and the date of such Asset Sale Optional Redemption (the “Asset
Sale Optional Redemption Date”), which shall be the later of (x) the fifth (5th) Business Day after the date of
the applicable Asset Sale Optional Redemption Notice and (y) the date of the consummation of such Eligible Asset Sale. The portion of
the Conversion Amount of this Note subject to redemption pursuant to this Section 10 shall be redeemed by the Company in cash at a price
equal to 105% of the greater of (i) the Asset Sale Optional Redemption Amount being redeemed as of the Asset Sale Optional Redemption
Date and (ii) the product of (1) the quotient of (A) the Asset Sale Optional Redemption Amount being redeemed divided by (b) the Alternate
Conversion Price then in effect as of the Asset Sale Optional Redemption Date multiplied by (2) the greatest Closing Sale Price of the
ADSs on any Trading Day during the period commencing on the date immediately preceding such Company Optional Redemption Notice Date and
ending on the Trading Day immediately prior to the date the Company makes the entire payment required to be made under this Section 10
(the “Subsequent Placement Optional Redemption Price”). (the “Asset Sale Optional Redemption Price”).
Redemptions required by this Section 10 shall be made in accordance with the provisions of Section 13.
11.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Association
(as defined in the Securities Purchase Agreement), Memorandum of Association (as defined in the Securities Purchase Agreement) or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times
in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder
of this Note. Without limiting the generality of the foregoing or any other provision of this Note or the other Transaction Documents,
the Company (a) shall not increase the par value of any Ordinary Shares or change the ratio of Ordinary Shares to ADSs, as applicable,
such that the par value of the Ordinary Shares underlying an ADS receivable upon conversion of this Note would exceed the Conversion
Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Ordinary Shares and ADSs upon the conversion of this Note. Notwithstanding anything herein
to the contrary, if after the sixty (60) calendar day anniversary of the Issuance Date, the Holder is not permitted to convert this Note
in full for any reason (other than pursuant to restrictions set forth in Section 3(d) hereof), the Company shall use its best efforts
to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to permit such conversion
into Ordinary Shares and ADSs.
12.
RESERVATION OF AUTHORIZED SHARES.
(a)
Reservation. So long as any Notes remain outstanding, the Company shall at all times reserve at least 300% of the number of Ordinary
Shares and ADSs as shall from time to time be necessary to effect the conversion, including without limitation, Alternate Conversions,
of all of the Notes then outstanding (without regard to any limitations on conversions and assuming such Notes remain outstanding until
the Maturity Date) at the Alternate Conversion Price then in effect (the “Required Reserve Amount”). The Required
Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the
holders of the Notes based on the original principal amount of the Notes held by each holder on the Closing Date or increase in the number
of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell
or otherwise transfer any of such holder’s Notes, each transferee shall be allocated a pro rata portion of such holder’s
Authorized Share Allocation. Any Ordinary Shares and/or ADSs, as applicable, reserved and allocated to any Person which ceases to hold
any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount of the Notes then held by such
holders.
(b)
Insufficient Authorized Shares. If, notwithstanding Section 12(a), and not in limitation thereof, at any time while any of the
Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved Ordinary Shares and/or ADSs, as applicable,
to satisfy its obligation to reserve for issuance upon conversion of the Notes at least a number of Ordinary Shares and/or ADSs, as applicable,
equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all
action necessary to increase the Company’s authorized Ordinary Shares and/or ADSs, as applicable, to an amount sufficient to allow
the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence,
as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, (i) if with respect to Ordinary Shares, the Company shall hold a meeting of its shareholders
for the approval of an increase in the number of authorized Ordinary Shares or (ii) if with respect to ADSs, the Company shall amend,
modify or replace, as applicable, the Deposit Agreement then in effect with the Depositary (or its successor) to increase the aggregate
number of ADSs issuable thereunder. In connection with any such shareholder meeting, the Company shall provide each shareholder with
a proxy statement and shall use its best efforts to solicit its shareholders’ approval of such increase in authorized Ordinary
Shares and to cause its board of directors to recommend to the shareholders that they approve such proposal. In the event that the Company
is prohibited from issuing Ordinary Shares or ADSs pursuant to the terms of this Note due to the failure by the Company to have sufficient
Ordinary Shares available out of the authorized but unissued Ordinary Shares or ADSs available for issuance pursuant to the Deposit Agreement
then in effect (such unavailable number of ADSs related thereto, the “Authorized Failure Shares”), as applicable,
in lieu of delivering such Authorized Failure Shares to the Holder, the Company shall pay cash in exchange for the redemption of such
portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x)
such number of Authorized Failure Shares and (y) the greatest Closing Sale Price of the ADSs on any Trading Day during the period commencing
on the date the Holder delivers the applicable Conversion Notice with respect to such Authorized Failure Shares to the Company and ending
on the date of such issuance and payment under this Section 12(a); and (ii) to the extent the Holder purchases (in an open market transaction
or otherwise) ADSs to deliver in satisfaction of a sale by the Holder of Authorized Failure Shares, any brokerage commissions and other
out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in Section 12(a) or this Section 12(b)
shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
13.
REDEMPTIONS.
(a)
Mechanics. The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business
Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has submitted a Change
of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption Price
to the Holder in cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation
of such Change of Control and within five (5) Business Days after the Company’s receipt of such notice otherwise. The Company shall
deliver the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. The
Company shall deliver the applicable Asset Sale Optional Redemption Price to the Holder in cash on the applicable Asset Sale Optional
Redemption Date. The Company shall deliver the applicable Subsequent Placement Optional Redemption Price to the Holder in cash on the
applicable Subsequent Placement Optional Redemption Date. Notwithstanding anything herein to the contrary, in connection with any redemption
hereunder at a time the Holder is entitled to receive a cash payment under any of the other Transaction Documents, at the option of the
Holder delivered in writing to the Company, the applicable Redemption Price hereunder shall be increased by the amount of such cash payment
owed to the Holder under such other Transaction Document and, upon payment in full or conversion in accordance herewith, shall satisfy
the Company’s payment obligation under such other Transaction Document. In the event of a redemption of less than all of the Conversion
Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section
19(d)) representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable
Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption
Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or
any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption
Price (together with any Late Charges thereon) has not been paid. Upon the Company’s receipt of such notice, (x) the applicable
Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately return this Note,
or issue a new Note (in accordance with Section 19(d)), to the Holder, and in each case the principal amount of this Note or such
new Note (as the case may be) shall be increased by an amount equal to the difference between (1) the applicable Redemption Price (as
the case may be, and as adjusted pursuant to this Section 13, if applicable) minus (2) the Principal portion of the Conversion Amount
submitted for redemption and (z) the Conversion Price of this Note or such new Notes (as the case may be) shall be automatically adjusted
with respect to each conversion effected thereafter by the Holder to the lowest of (A) the Conversion Price as in effect on the date
on which the applicable Redemption Notice is voided, (B) 75% of the lowest Closing Bid Price of the ADSs during the period beginning
on and including the date on which the applicable Redemption Notice is delivered to the Company and ending on and including the date
on which the applicable Redemption Notice is voided and (C) 75% of the quotient of (I) the sum of the five (5) lowest VWAPs of the ADSs
during the twenty (20) consecutive Trading Day period ending and including the applicable Conversion Date divided by (II) five (5) (it
being understood and agreed that all such determinations shall be appropriately adjusted for any share dividend, share split, share combination
or other similar transaction during such period). The Holder’s delivery of a notice voiding a Redemption Notice and exercise of
its rights following such notice shall not affect the Company’s obligations to make any payments of Late Charges which have accrued
prior to the date of such notice with respect to the Conversion Amount subject to such notice.
(b)
Redemption by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption
or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b) or Section
5(b) (each, an “Other Redemption Notice”), the Company shall immediately, but no later than one (1) Business Day of
its receipt thereof, forward to the Holder by electronic mail a copy of such notice. If the Company receives a Redemption Notice and
one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is two (2) Business
Days prior to the Company’s receipt of the Holder’s applicable Redemption Notice and ending on and including the date which
is two (2) Business Days after the Company’s receipt of the Holder’s applicable Redemption Notice and the Company is unable
to redeem all principal, make-whole amount, interest and other amounts designated in such Redemption Notice and such Other Redemption
Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes
(including the Holder) based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such
Other Redemption Notices received by the Company during such seven (7) Business Day period.
14.
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without
limitation, the Cayman Companies Act) and as expressly provided in this Note.
15.
COVENANTS. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:
(a)
Rank. All payments due under this Note (a) shall rank pari passu with all Other Notes and (b) shall be senior to all other
Indebtedness of the Company and its Subsidiaries.
(b)
Incurrence of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note and the Other
Notes and (ii) other Permitted Indebtedness).
(c)
Existence of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other
than Permitted Liens.
(d)
Restricted Payments and Investments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in
whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any
Indebtedness (other than the Notes) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness
or make any Investment, as applicable, if at the time such payment with respect to such Indebtedness and/or Investment, as applicable,
is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event of Default has occurred and is
continuing or (ii) an event that with the passage of time and without being cured would constitute an Event of Default has occurred and
is continuing.
(e)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its share capital.
(f)
Restriction on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights
of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other
than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company
and its Subsidiaries in the ordinary course of business consistent with its past practice and (ii) sales of inventory and product in
the ordinary course of business.
(g)
Maturity of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
permit any Indebtedness of the Company or any of its Subsidiaries to mature or accelerate prior to the Maturity Date.
(h)
Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly
contemplated to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially related
or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify
its or their corporate structure or purpose.
(i)
Preservation of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and
in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its
business makes such qualification necessary.
(j)
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(k)
Maintenance of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary
or advisable to maintain all of the Intellectual Property Rights (as defined in the Securities Purchase Agreement) of the Company and/or
any of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.
(l)
Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts
and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally
in accordance with sound business practice by companies in similar businesses similarly situated.
(m)
Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend
or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer
or exchange of property or assets of any kind or the rendering of services of any kind) with any affiliate, except transactions in the
ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation
of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable
arm’s length transaction with a Person that is not an affiliate thereof.
(n)
Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of a majority
in aggregate principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated by the Securities Purchase
Agreement and the Notes) or (ii) issue any other securities that would cause a breach or default under the Notes.
(o)
Stay, Extension and Usury Laws. To the extent that it may lawfully do so, the Company (A) agrees that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law (wherever
or whenever enacted or in force) that may affect the covenants or the performance of this Note; and (B) expressly waives all benefits
or advantages of any such law and agrees that it will not, by resort to any such law, hinder, delay or impede the execution of any power
granted to the Holder by this Note, but will suffer and permit the execution of every such power as though no such law has been enacted.
(p)
Taxes. The Company and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together
with any related interest or penalties) now or hereafter imposed or assessed against the Company and its Subsidiaries or their respective
assets or upon their ownership, possession, use, operation or disposition thereof or upon their rents, receipts or earnings arising therefrom
(except where the failure to pay would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries).
The Company and its Subsidiaries shall file on or before the due date therefor all personal property tax returns (except where the failure
to file would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries). Notwithstanding
the foregoing, the Company and its Subsidiaries may contest, in good faith and by appropriate proceedings, taxes for which they maintain
adequate reserves therefor in accordance with GAAP.
(q)
Pre-Delivery ADSs.
(i)
General. By accepting this Note, the Holder hereby agrees not to sell, assign or transfer the Pre-Delivery ADSs (or underlying
Pre-Delivery Shares) (in each case, as defined in the Securities Purchase Agreement) to any Person other than (x) proportionally in connection
with any transfer in whole, or in part, as applicable, of this Note to any other Person and (y) in accordance with Section 15(q)(ii)
below.
(ii)
Application of Pre-Delivery ADSs; Delivery ADSs. At any time the Company is required to deliver ADSs to the Holder hereunder (each
such ADS, a “Delivery ADS”, and such underlying Ordinary Shares, each a “Delivery Share”), whether
upon conversion or otherwise, and the Holder (or its designee) holds one or more Pre-Delivery Shares, the Holder shall apply (each, a
“Delivery ADS Application”) one or more Pre-Delivery Shares, on an ADS-for-ADS basis, as available, against the aggregate
number of ADSs required to then be delivered by the Company to the Holder hereunder (such aggregate number of ADSs subject to such Delivery
ADS Application, each a “Delivery ADS Application Amount”) to avoid the occurrence of a Conversion Failure hereunder
with respect thereto, at which point in time, each such applied Pre-Delivery ADS shall cease to be a Pre-Delivery ADS hereunder and shall
become a Delivery ADS hereunder (with such Delivery ADS Applicable Amount of ADSs issued (or issuable) in such conversion becoming Pre-Delivery
ADSs upon such issuance and delivery to the Holder); provided, that if the aggregate Pre-Delivery ADSs held by the Holder is greater
than or equal to the ADSs then issuable upon a conversion of this Note, upon any subsequent conversion of this Note, in lieu of the Company’s
obligation to issue and deliver new Delivery ADSs to the Holder, each such applicable Pre-Delivery ADSs, on a ADS-by-ADS basis with respect
to such aggregate number of Delivery ADSs otherwise issuable in such conversion of this Note, shall cease to be a Pre-Delivery ADS hereunder
and shall become a Delivery ADS hereunder in satisfaction of the Company’s obligation to deliver such Delivery ADS to the Holder
in such applicable conversion.
(iii)
Limitations on Voting, Dividends and Distributions. The Holder and the Company hereby agree that, without limiting any rights
of the Holder hereunder in its capacity as the holder of this Note (including, without limitation, pursuant to Sections 5, 6, 7, and
16 herein, which shall not be amended, modified or waived hereunder as a result of this Section 15(q)(iii) and shall remain in full force
and effect), solely in the Holder’s capacity as the beneficial holder of any Pre-Delivery ADSs (and/or any underlying Pre-Delivery
Shares, as applicable), if any, but subject to the Company’s compliance in full with Sections 5, 6, 7, and 16 of this Note, the
Holder hereby (A) waives any voting rights with respect to such Pre-Delivery ADSs (and/or such underlying Pre-Delivery Shares), as applicable,
(B) agrees not to exercise any right regarding any such Pre-Delivery ADSs (and/or such underlying Pre-Delivery Shares, as applicable),
and, for the avoidance of doubt, any purposed exercise of such a right shall be deemed void by the Company, (C) waives any entitlement
to dividends that may be declared or paid by the Company with respect to such Pre-Delivery ADSs (and/or the underlying Pre-Delivery Shares,
as applicable), (D) waives any right to receive distributions (whether in cash or otherwise) of the Company’s assets, including
any distributions to shareholders of the Company in the event of winding up or liquidation of the Company with respect to such Pre-Delivery
ADSs (and/or the underlying Pre-Delivery Shares, as applicable) and (E) agrees that any allotment of Ordinary Shares as fully paid bonus
shares in respect of a Pre-Delivery ADSs (and/or the underlying Pre-Delivery Shares, as applicable) shall be treated as a Pre-Delivery
ADSs (and/or the underlying Pre-Delivery Shares, as applicable) hereunder; provided, that this Section 15(q)(iii) shall cease to apply
to any applicable Pre-Delivery ADS (and the underlying Pre-Delivery Shares) at such time as such Pre-Delivery ADS (and/or the underlying
Pre-Delivery Shares, as applicable) become Delivery ADSs (and/or the underlying Delivery Shares thereof, as applicable) as a result of
a Delivery ADS Application hereunder (provided further that nothing in this Section 15(q)(iii) shall amend, modify or waive any term
or condition of Section 3 above (including, without limitation, and voting limitation therein, if applicable), which shall remain in
full force and effect notwithstanding the applicability of this Section 15(q)(iii) to any Ordinary Shares and/or ADSs of the Company).
(iv)
Surrender and Cancellation of Pre-Delivery ADSs. The Holder hereby covenants and agrees that if the Holder holds any Pre-Delivery
ADSs (and/or Pre-Delivery Shares) after such date that this Note (and any other Notes then held by the Holder) are no longer outstanding
(whether following the conversion or redemption, as applicable, of all Notes then held by the Holder, but after any applicable Delivery
Share Applications related thereto), such remaining Pre-Delivery ADSs (and/or Pre-Delivery Shares, as applicable) shall be deemed surrendered
and cancelled by the Holder on the date such Holder of the Notes ceases to hold any Notes.
(r)
Independent Investigation. At the request of the Holder either (x) at any time when an Event of Default has occurred and is continuing,
(y) upon the occurrence of an event that with the passage of time or giving of notice would constitute an Event of Default or (z) at
any time the Holder reasonably believes an Event of Default may have occurred or be continuing, the Company shall hire an independent,
reputable investment bank selected by the Company and approved by the Holder to investigate as to whether any breach of this Note has
occurred (the “Independent Investigator”). If the Independent Investigator determines that such breach of this Note
has occurred, the Independent Investigator shall notify the Company of such breach and the Company shall deliver written notice to each
holder of a Note of such breach. In connection with such investigation, the Independent Investigator may, during normal business hours,
inspect all contracts, books, records, personnel, offices and other facilities and properties of the Company and its Subsidiaries and,
to the extent available to the Company after the Company uses reasonable efforts to obtain them, the records of its legal advisors and
accountants (including the accountants’ work papers) and any books of account, records, reports and other papers not contractually
required of the Company to be confidential or secret, or subject to attorney-client or other evidentiary privilege, and the Independent
Investigator may make such copies and inspections thereof as the Independent Investigator may reasonably request. The Company shall furnish
the Independent Investigator with such financial and operating data and other information with respect to the business and properties
of the Company as the Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss
the affairs, finances and accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company’s
officers, directors, key employees and independent public accountants or any of them (and by this provision the Company authorizes said
accountants to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such
reasonable times, upon reasonable notice, and as often as may be reasonably requested.
16.
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Sections 6 and 7, if the Company shall declare or make any
dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of Ordinary Shares or ADSs, as
applicable, by way of return of capital or otherwise (including without limitation, any distribution of cash, shares or other securities,
property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar
transaction) (the “Distributions”), then the Holder will be entitled to such Distributions as if the Holder had held
the number of ADSs (or underlying Ordinary Shares, as applicable) acquirable upon complete conversion of this Note (without taking into
account any limitations or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted
at the Alternate Conversion Price as of the applicable record date) immediately prior to the date on which a record is taken for such
Distribution or, if no such record is taken, the date as of which the record holders of Ordinary Shares or ADSs, as applicable, are to
be determined for such Distributions (provided, however, that to the extent that the Holder’s right to participate in any such
Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership
of such ADSs or Ordinary Shares, as applicable, as a result of such Distribution (and beneficial ownership) to the extent of any such
excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever,
as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time
or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any
subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
17.
AMENDING THE TERMS OF THIS NOTE. Except for Section 3(d) and this Section 17, which may not be amended, modified or waived by
the parties hereto, the prior written consent of the Holder shall be required for any change, waiver or amendment to this Note.
18.
TRANSFER. This Note and any ADSs issued upon conversion of this Note may be offered, sold, assigned or transferred by the Holder
without the consent of the Company.
19.
REISSUANCE OF THIS NOTE.
(a)
Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Note (in accordance with Section 19(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a
new Note (in accordance with Section 19(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and
any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following conversion
or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on
the face of this Note.
(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in
customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute
and deliver to the Holder a new Note (in accordance with Section 19(d)) representing the outstanding Principal.
(c)
Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 19(d) and in principal amounts of at least $1,000) representing
in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal
as is designated by the Holder at the time of such surrender.
(d)
Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note
(i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 19(a) or Section 19(c), the Principal designated by the Holder which,
when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as
this Note, and (v) shall represent accrued and unpaid Make-Whole Amount, Interest and Late Charges on the Principal, Make-Whole Amount
and Interest of this Note, from the Issuance Date.
20.
REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual
and consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the part of the Holder
to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Holder of any right, power or remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under this Note or any
of the documents shall not be deemed to be an election of Holder’s rights or remedies under such documents or at law or equity.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of
the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event
of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the
terms and conditions of this Note (including, without limitation, compliance with Section 7).
21.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note
or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings
affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the
Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that no amounts
due under this Note shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the original
Principal amount hereof.
22.
CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be
construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form
part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed
to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed broadly as if followed by the words “without limitation.”
The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note instead
of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Note.
Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
23.
FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 23 shall
permit any waiver of any provision of Section 3(d).
24.
DISPUTE RESOLUTION.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a
Black-Scholes Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate or the applicable
Redemption Price (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing),
the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company,
within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time
after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve
such dispute relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion Price, such
Black-Scholes Consideration Value, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such
applicable Redemption Price (as the case may be), at any time after the second (2nd) Business Day following such initial notice
by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder
may, at its sole option, select an independent, reputable investment bank to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 24 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the
Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 24 constitutes an agreement to arbitrate between
the Company and the Holder (and constitutes an arbitration agreement) under the Delaware Rapid Arbitration Act, as amended, (ii) a dispute
relating to a Conversion Price includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale
of ADSs occurred under Section 7(a), (B) the consideration per share at which an issuance or deemed issuance of ADSs occurred, (C) whether
any issuance or sale or deemed issuance or sale of ADSs was an issuance or sale or deemed issuance or sale of Excluded Securities, (D)
whether an agreement, instrument, security or the like constitutes and Option or Convertible Security and (E) whether a Dilutive Issuance
occurred, (iii) the terms of this Note and each other applicable Transaction Document shall serve as the basis for the selected investment
bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make
all findings, determinations and the like that such investment bank determines are required to be made by such investment bank in connection
with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and
the like to the terms of this Note and any other applicable Transaction Documents, (iv) the Holder (and only the Holder), in its sole
discretion, shall have the right to submit any dispute described in this Section 24 to any state or federal court sitting in Wilmington,
Delaware in lieu of utilizing the procedures set forth in this Section 24 and (v) nothing in this Section 24 shall limit the Holder from
obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in
this Section 24).
25.
NOTICES; CURRENCY; PAYMENTS.
(a)
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given
in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice
of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the
Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15)
days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon
the ADSs, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase shares, warrants,
securities or other property to holders of ADSs or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution
or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice
being provided to the Holder.
(b)
Currency. All dollar amounts referred to in this Note are in United States Dollars (”U.S. Dollars”), and all
amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted
into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as
published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated
with reference to, or over, a period of time, the date of calculation shall be the final date of such period of time).
(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly
set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the account
of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing
(which address, in the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds
by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due
on the next succeeding day which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which
is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount
at the rate of fifteen percent (15%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).
26.
CANCELLATION. After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid
in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.
27.
WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and
all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities
Purchase Agreement.
28.
GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of Delaware, without giving effect to
any provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Delaware. Except as otherwise required by Section 24 above, the Company hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall
be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations,
or to enforce a judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to limit,
any provision of Section 24. The Company (on behalf of itself and each of its Subsidiaries) hereby appoints the agent for service of
process listed in Schedule 9(a) to the Securities Purchase Agreement, as its agent for service of process in Delaware. THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The choice of the laws of the State of
Delaware as the governing law of this Note is a valid choice of law and would be recognized and given effect to in any action brought
before a court of competent jurisdiction in the Cayman Islands, except for those laws (i) which such court considers to be procedural
in nature, (ii) which are revenue or penal laws or (iii) the application of which would be inconsistent with public policy, as such term
is interpreted under the laws of the Cayman Islands. The choice of laws of the State of Delaware as the governing law of this Note will
be honored by competent courts in the PRC, subject to compliance with relevant PRC civil procedural requirements. The Company or any
of their respective properties, assets or revenues does not have any right of immunity under Cayman Islands, the PRC or Delaware law,
from any legal action, suit or proceeding, from the giving of any relief in any such legal action, suit or proceeding, from set-off or
counterclaim, from the jurisdiction of any Cayman Islands and the PRC, Delaware or United States federal court, from service of process,
attachment upon or prior to judgment, or attachment in aid of execution of judgment, or from execution of a judgment, or other legal
process or proceeding for the giving of any relief or for the enforcement of a judgment, in any such court, with respect to its obligations,
liabilities or any other matter under or arising out of or in connection with this Note; and, to the extent that the Company, or any
of its properties, assets or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which
proceedings may at any time be commenced, the Company hereby waives such right to the extent permitted by law and hereby consents to
such relief and enforcement as provided in this Note and the other Transaction Documents.
29.
JUDGMENT CURRENCY.
(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 29 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:
(i)
the date actual payment of the amount due, in the case of any proceeding in the courts of Delaware or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 29(a)(ii) being hereinafter referred to as the “Judgment Conversion Date”).
(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 29(a)(ii) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.
30.
SEVERABILITY. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court
of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply
to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations
to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible
to that of the prohibited, invalid or unenforceable provision(s).
31.
MAXIMUM PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed
to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the
event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.
32.
CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect
to, any issuance or sale (or deemed issuance or sale in accordance with Section 7) of ADSs (other than rights of the type described in
Section 6(a) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect
to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(d)
“ADSs” means (i) the American Depositary Shares of the Company, each ADS as of the Issuance Date represents one-third
(1/3) of one (1) Ordinary Share or (ii) any share capital into which such ADSs shall have been changed or any share capital resulting
from any exchange, modification, restructuring or reclassification of such ADSs.
(e)
“ADRs” means the American Depositary Receipts of the Company evidencing ADSs.
(f)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the shares having ordinary voting power for the election
of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(g)
“Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the lower of
(i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion and (ii) either
(I) if no Event of Default then exists, 92% of the lowest VWAP of the ADSs during the ten (10) consecutive Trading Day period ending
and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice or (II) if an
Event of Default then exists, the lowest of (A) 80% of the VWAP of the ADSs as of the Trading Day immediately preceding the delivery
or deemed delivery of the applicable Conversion Notice, (B) 80% of the VWAP of the ADSs as of the Trading Day immediately preceding the
date of the occurrence of such applicable Event of Default, (C) 80% of the VWAP of the ADSs as of the Trading Day of the delivery or
deemed delivery of the applicable Conversion Notice, and (D) 80% of the price computed as the quotient of (I) the sum of the VWAP of
the ADSs for each of the three (3) Trading Days with the lowest VWAP of the ADSs during the twenty (20) consecutive Trading Day period
ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, divided
by (II) three (3)) (any such applicable measuring period or applicable measuring date in clauses (i) and (ii) above, each an “Alternate
Conversion Measuring Period”). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or similar transaction (including, without limitation, any transaction or other event that proportionately
decreases or increases the ratio of an Ordinary Share per ADS) during such Alternate Conversion Measuring Period.
(h)
“Approved Share Plan” means any employee benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the Subscription Date pursuant to which Ordinary Shares, ADSs and standard options to purchase Ordinary Shares
and/or ADSs may be issued to any employee, officer, director or consultant for services provided to the Company in their capacity as
such.
(i)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s ADSs would or could be aggregated with
the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing
is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(j)
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right
(as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the ADSs on the Trading Day immediately
preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option, Convertible Security
or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to
the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance of such Option,
Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the
greater of 100% and the 100 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day
annualization factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible Security or Adjustment
Right (as the case may be).
(k)
“Bloomberg” means Bloomberg, L.P.
(l)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification,
commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(m)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct
or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the Ordinary Shares or ADSs in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the
authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such
entity or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected
solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(n)
“Change of Control Redemption Premium” means 125%.
(o)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing
bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price
(as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade
price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of
the bid prices, or the ask prices, respectively, of any market makers for such security as reported in The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices). If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the
case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 24. All such determinations shall be appropriately adjusted for any share splits, share dividends, share
combinations, recapitalizations or other similar transactions (including, without limitation, any transaction or other event that proportionately
decreases or increases the ratio of an Ordinary Share per ADS, if applicable) during such period.
(p)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company
initially issued Notes pursuant to the terms of the Securities Purchase Agreement.
(q)
“Convertible Securities” means any shares or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any ADSs and/or Ordinary Shares.
(r)
“Depository” means Citibank N.A. as ADS Depository appointed by the Company via the Deposit Agreement dated as of
March 9, 2023.
(s)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global
Select Market or the Nasdaq Global Market.
(t)
“Equity Conditions” means, with respect to an given date of determination: (i) on each day during the period beginning
thirty calendar days prior to the applicable date of determination and ending on and including the applicable date of determination (the
“Equity Conditions Measuring Period”), the ADSs (including all ADSs issuable upon conversion of this Note) are listed
or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market
(other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements
by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting
occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending
as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance requirements of
the Eligible Market on which the ADSs are then listed or designated for quotation (as applicable); (ii) during the Equity Conditions
Measuring Period, the Company shall have delivered all ADSs issuable upon conversion of this Note on a timely basis as set forth in Section
3 hereof and all other shares of share capital required to be delivered by the Company on a timely basis as set forth in the other Transaction
Documents; (iii) any ADSs to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion
Amount being redeemed in the event requiring this determination) may be issued in full without violating Section 3(d) hereof; (iv) any
ADSs to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed
in the event requiring this determination (without regards to any limitations on conversion set forth herein)) may be issued in full
without violating the rules or regulations of the Eligible Market on which the ADSs are then listed or designated for quotation (as applicable);
(v) on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental
Transaction shall have occurred which has not been abandoned, terminated or consummated; (vi) no Current Public Information Failure (as
defined in the Securities Purchase Agreement) then exists or is continuing; (vii) the Holder shall not be in (and no other holder of
Notes shall be in) possession of any material, non-public information provided to any of them by the Company, any of its Subsidiaries
or any of their respective affiliates, employees, officers, representatives, agents or the like; (viii) on each day during the Equity
Conditions Measuring Period, the Company otherwise shall have been in compliance with each, and shall not have breached any representation
or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which
may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, including, without limitation,
the Company shall not have failed to timely make any payment pursuant to any Transaction Document; (ix) on each Trading Day during the
Equity Conditions Measuring Period, there shall not have occurred any Volume Failure or Price Failure as of such applicable date of determination;
(x) on the applicable date of determination (A) no Authorized Share Failure shall exist or be continuing and all ADSs to be issued in
connection with the event requiring this determination (or issuable upon conversion of the Conversion Amount being redeemed in the event
requiring this determination at the Alternate Conversion Price thein in effect (without regard to any limitations on conversion set forth
herein)) (each, a “Required Minimum Securities Amount”) are available under the certificate of incorporation of the
Company and reserved by the Company to be issued pursuant to the Notes and (B) all ADSs to be issued in connection with the event requiring
this determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination (without
regards to any limitations on conversion set forth herein)) may be issued in full without resulting in an Authorized Share Failure; (xi)
on each day during the Equity Conditions Measuring Period, there shall not have occurred and there shall not exist an Event of Default
or an event that with the passage of time or giving of notice would constitute an Event of Default; (xii) no bone fide dispute shall
exist, by and between any of holder of Notes, the Company, the Principal Market (or such applicable Eligible Market in which the ADSs
of the Company is then principally trading) and/or FINRA with respect to any term or provision of any Note or any other Transaction Document
and (xiii) the ADSs issuable pursuant the event requiring the satisfaction of the Equity Conditions are duly authorized and listed and
eligible for trading without restriction on an Eligible Market.
(u)
“Equity Conditions Failure” means that on any day during the period commencing twenty (20) Trading Days prior to the
applicable date of determination, the Equity Conditions have not been satisfied (or waived in writing by the Holder).
(v)
“Event Market Price” means, with respect to any Share Combination Event Date, the quotient determined by dividing
(x) the sum of the VWAP of the ADSs for each of the five (5) Trading Days with the lowest VWAP of the ADSs during the fifteen (15) consecutive
Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after such Share Combination
Event Date, divided by (y) five (5). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or similar transaction (including, without limitation, any transaction or other event that proportionately
decreases or increases the ratio of an Ordinary Share per ADS) during such measuring period.
(w)
“Excluded Securities” means (i) Ordinary Shares, ADSs or standard options to purchase ADSs issued to directors, officers,
consultants or employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Share
Plan (as defined above), provided that (A) all such issuances (taking into account the Ordinary Shares or ADSs issuable upon exercise
of such options) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Ordinary
Shares or ADSs issued and outstanding immediately prior to the Subscription Date and (B) the exercise price of any such options is not
lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of
any such options are otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) Ordinary Shares or ADSs
issued upon the conversion or exercise of Convertible Securities or Options (other than standard options to purchase Ordinary Shares
or ADSs issued pursuant to an Approved Share Plan that are covered by clause (i) above) issued prior to the Subscription Date, provided
that the conversion price of any such Convertible Securities (other than standard options to purchase Ordinary Shares or ADSs issued
pursuant to an Approved Share Plan that are covered by clause (i) above) is not lowered, none of such Convertible Securities or Options
(other than standard options to purchase ADSs issued pursuant to an Approved Share Plan that are covered by clause (i) above) are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities or Options
(other than standard options to purchase Ordinary Shares or ADSs issued pursuant to an Approved Share Plan that are covered by clause
(i) above) are otherwise materially changed in any manner that adversely affects any of the Buyers; and (iii) the Ordinary Shares or
ADSs issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes; provided, that the terms of the Notes are
not amended, modified or changed on or after the Subscription Date (other than antidilution adjustments pursuant to the terms thereof
in effect as of the Subscription Date).
(x)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Ordinary Shares and/or ADSs, as applicable, be subject to or party to one or more Subject Entities making, a purchase,
tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding Ordinary Shares and/or ADSs, as
applicable, (y) 50% of the outstanding Ordinary Shares and/or ADSs, as applicable, calculated as if any Ordinary Shares and/or ADSs,
as applicable, held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase,
tender or exchange offer were not outstanding; or (z) such number of Ordinary Shares and/or ADSs, as applicable, such that all Subject
Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become
collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding Ordinary Shares and/or
ADSs, as applicable, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire, either (x) at least 50% of the outstanding Ordinary Shares and/or ADSs, as applicable, (y)
at least 50% of the outstanding Ordinary Shares and/or ADSs, as applicable, calculated as if any Ordinary Shares and/or ADSs, as applicable,
held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock or share purchase
agreement or other business combination were not outstanding; or (z) such number of Ordinary Shares and/or ADSs, as applicable, such
that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of
the outstanding Ordinary Shares and/or ADSs, as applicable, or (v) reorganize, recapitalize or reclassify its Ordinary Shares and/or
ADSs, as applicable, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in
one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase,
assignment, conveyance, tender, tender offer, exchange, reduction in outstanding Ordinary Shares and/or ADSs, as applicable, merger,
consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization
or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding Ordinary Shares and/or ADSs, as applicable, (y) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding Ordinary Shares and/or ADSs, as applicable, not held by all such Subject Entities as of the date of this Note
calculated as if any Ordinary Shares and/or ADSs, as applicable, held by all such Subject Entities were not outstanding, or (z) a percentage
of the aggregate ordinary voting power represented by issued and outstanding Ordinary Shares and/or ADSs, as applicable, or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other shareholders of the Company to surrender their Ordinary Shares and/or ADSs, as applicable, without approval of the shareholders
of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the
intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective
or inconsistent with the intended treatment of such instrument or transaction.
(y)
“GAAP” means United States generally accepted accounting principles, consistently applied.
(z)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.
(aa)
“Holder Pro Rata Amount” means a fraction (i) the numerator of which is the original Principal amount of this Note
on the Closing Date and (ii) the denominator of which is the aggregate original principal amount of all Notes issued to the initial purchasers
pursuant to the Securities Purchase Agreement on the Closing Date.
(bb)
“Indebtedness” shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(cc)
“Interest Conversion Price” means, with respect to any given Interest Date, that price which shall be the lowest of
(i) the applicable Conversion Price as in effect on the applicable Interest Date, (ii) 92% of the lowest VWAP of the ADSs during the
ten (10) consecutive Trading Day period ending and including the Trading Day immediately preceding the applicable Interest Date (such
period, the “Interest Conversion Measuring Period”). All such determinations to be appropriately adjusted for any
stock dividend, stock split, stock combination, reclassification or similar transaction (including, without limitation, any transaction
or other event that proportionately decreases or increases the ratio of an Ordinary Share per ADS) during such Interest Conversion Measuring
Period.
(dd)
“Interest Date” means, with respect to any given calendar month, the first Trading Day of such calendar month.
(ee)
“Interest Rate” means six percent (6%) per annum, as may be adjusted from time to time in accordance with Section
2.
(ff)
“Investment” means any beneficial ownership (including stock, partnership or limited liability company interests)
of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, or substantially all, of the
assets of another Person or the purchase of any assets of another Person for greater than the fair market value of such assets.
(gg)
“Make-Whole Amount” means, as of any given date and as applicable, in connection with any conversion, redemption or
other repayment hereunder, an amount equal to the amount of additional Interest that would accrue under this Note at the Interest Rate
then in effect assuming for calculation purposes that the outstanding Principal of this Note as of the Closing Date remained outstanding
through and including the Maturity Date.
(hh)
“Maturity Date” shall mean 360-days after the Issuance Date.
(ii)
“Options” means any rights, warrants or options to subscribe for or purchase Ordinary Shares, ADSs and/or Convertible
Securities.
(jj)
“Ordinary Shares” means (i) the Company’s ordinary shares, $0.00005 par value per share, and (ii) any share
capital into which such ordinary shares shall have been changed or any share capital resulting from a reclassification of such ordinary
shares.
(kk)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(ll)
“Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness set
forth on Schedule 3(s) to the Securities Purchase Agreement, as in effect as of the Subscription Date and (iii) Indebtedness secured
by Permitted Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens.
(mm)
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary
course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv)
Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment
or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment
at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the
proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount not to exceed $1,000,000, (v) Liens
incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clause
(iv) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien
and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods, and
(vii) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(x).
(nn)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.
(oo)
“Price Failure” means, with respect to a particular date of determination, the VWAP of the ADSs on any Trading Day
during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination fails to exceed
$0.75 (as adjusted for share splits, share dividends, share combinations, recapitalizations or other similar transactions (including,
without limitation, any transaction or other event that proportionately decreases or increases the ratio of an Ordinary Share per ADS)
occurring after the Subscription Date). All such determinations to be appropriately adjusted for any share splits, share dividends, share
combinations, recapitalizations or other similar transactions (including, without limitation, any transaction or other event that proportionately
decreases or increases the ratio of an Ordinary Share per ADS) during any such measuring period.
(pp)
“Principal Market” means the Nasdaq Global Market.
(qq)
“Redemption Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption
Notices, the Asset Sale Optional Redemption Notices, the Subsequent Placement Optional Redemption Notices and the Change of Control Redemption
Notices, and each of the foregoing, individually, a “Redemption Notice.”
(rr)
“Redemption Premium” means 125%.
(ss)
“Redemption Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices,
the Asset Sale Optional Redemption Prices, the Subsequent Placement Optional Redemption Prices and the Company Optional Redemption Prices,
and each of the foregoing, individually, a “Redemption Price.”
(tt)
“SEC“ means the United States Securities and Exchange Commission or the successor thereto.
(uu)
“Securities Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription Date,
by and among the Company and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be amended from
time to time.
(vv)
“Subscription Date” means June 17, 2024.
(ww)
“Subsidiaries“ shall have the meaning as set forth in the Securities Purchase Agreement.
(xx)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(yy)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from
or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(zz)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the
ADSs, any day on which the ADSs is traded on the Principal Market, or, if the Principal Market is not the principal trading market for
the ADSs, then on the principal securities exchange or securities market on which the ADSs is then traded, provided that “Trading
Day” shall not include any day on which the ADSs is scheduled to trade on such exchange or market for less than 4.5 hours or any
day that the ADSs is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New
York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations
other than price determinations relating to the ADSs, any day on which The New York Stock Exchange (or any successor thereto) is open
for trading of securities.
(aaa)
“Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading volume
(as reported on Bloomberg) of the ADSs on the Principal Market on any Trading Day during the twenty (20) Trading Day period ending on
the Trading Day immediately preceding such date of determination (such period, the “Volume Failure Measuring Period”),
is less than $100,000.
(bbb)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal
Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange
or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00
p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 24. All such determinations shall be appropriately
adjusted for any share dividend, share split, share combination, recapitalization or other similar transaction (including, without limitation,
any transaction or other event that proportionately decreases or increases the ratio of an Ordinary Share per ADS) during such period.
33.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance
with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute
material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York
city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information
on a Report of Foreign Private Issuer on Form 6-K or otherwise. In the event that the Company believes that a notice contains material,
non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in
writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written
indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be
entitled to presume that information contained in the notice does not constitute material, non-public information relating to the Company
or any of its Subsidiaries. Nothing contained in this Section 33 shall limit any obligations of the Company, or any rights of the Holder,
under Section 4(l) of the Securities Purchase Agreement.
34.
ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent
of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such
an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by
the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any
such information to any third party.
[signature
page follows]
IN
WITNESS WHEREOF, the Company and the Holder has caused this Note to be duly executed as of the Issuance Date set out above.
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THE
COMPANY:
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XIAO-I
CORPORATION
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By: |
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Name: |
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Title: |
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Agreed
and accepted, as of this _____
of
________ by:
THE
HOLDER: |
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By: |
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Name: |
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Senior
Convertible Note - Signature Page
EXHIBIT
I
XIAO-I
CORPORATION
CONVERSION NOTICE
Reference
is made to the Senior Convertible Note (the “Note”) issued to the undersigned by Xiao-I Corporation, an exempted company
incorporated under the laws of the Cayman Islands (the “Company”). In accordance with and pursuant to the Note, the
undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into Ordinary Shares,
$0.001 (the “ADSs”), each of which represents [ ] ordinary shares, $[ ] par value
of the Company, as of the date specified below. Capitalized terms not defined herein shall have the meaning as set forth in the Note.
Date of Conversion: |
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Aggregate
Principal to be converted: |
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Aggregate
accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such
Aggregate Interest to be converted: |
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AGGREGATE CONVERSION AMOUNT
TO BE CONVERTED: |
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Please
confirm the following information: |
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Conversion
Price: |
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Number
of ADSs to be issued: |
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☐ If this
Conversion Notice is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use the following
Alternate Conversion Price:____________
Please
issue the ADSs into which the Note is being converted to Holder, or for its benefit, as follows:
☐
Check here if requesting delivery as an ADR certificate to the following name and to the following address: |
☐ Check here if
requesting delivery by Deposit/Withdrawal at Custodian as follows:
For
Deliveries of ADSs into DTC:
DTC
Participant Name: ____________
DTC
Participant Account No.: _______
Beneficial
Owner Name: _______
Beneficial
Owner Account Name: ______
Beneficial
Owner Account No.: ______
Reference
Code (if any): _____
Contact
Person at DTC Participant: ________
Date:
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Name
of Registered Holder |
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Tax
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E-mail
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Exhibit
II
ACKNOWLEDGMENT
TO REGISTRAR SERVICE PROVIDER
The
Company hereby acknowledges this Conversion Notice and hereby directs ______________ to issue the above indicated number of ordinary
shares, $0.00005 par value (the “Ordinary Shares”), of Xiao-I Corporation, an exempted company incorporated under
the laws of the Cayman Islands (the “Company”) in accordance with the Registrar Service Provider Instructions dated
_________, 20__, from the Company and acknowledged and agreed to by _______________.
Please
take this Acknowledgement, together with such prior Registrar Service Provider Instruction, as your instruction to (i) register the Ordinary
Shares noted below to be issued pursuant to this Conversion Notice at par, (ii) update the register of members of the Company and (iii)
prepare new share certificates and deliver the same to the recipients as detailed below:
Number
of ordinary shares |
Name
of shareholder |
Name
and place of recipient |
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[INSERT
DEPOSITARY NAME] |
[INSERT
DEPOSITARY ADDRESS] |
Please
promptly fax a copy of the updated register of members to [INSERT DEPOSITARY NAME] at ________________.
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XIAO-I
CORPORATION |
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EXHIBIT
III
FORM
OF CONVERSION AND ISSUANCE INSTRUCTIONS
Citibank,
N.A., |
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Citibank
Hong Kong |
as
Depositary |
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as
Custodian |
Email:
[____] |
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Email:
[__] |
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XIAO-I
Conversion Shares |
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Dear
Sirs:
1.
Reference is hereby made to (i) the Deposit Agreement, dated as of March 9, 2023 (as amended and supplemented from time to time,
the “Deposit Agreement”), by and among XIAO-I Corporation (the “Company”), Citibank, N.A., as Depositary
(the “Depositary”), and the Holders and Beneficial Owners of American Depositary Shares issued thereunder, and (ii)
the Letter Agreement, dated as of June [●], 2024 (the “Letter Agreement”), by and between the Company and the
Depositary. Capitalized terms used but not defined herein shall have the meanings given to them in the Deposit Agreement, or, in the
event so noted herein, in the Letter Agreement.
2.
This Conversion ADS Issuance Instruction is being delivered to the Depositary in respect of the Conversion Shares and/or Pre-Delivery
Shares (each as defined in the Letter Agreement). We hereby instruct the Depositary to arrange for the issuance and delivery of the ADSs
specified below under the Deposit Agreement.
3.
We confirm that, as of the date hereof, the Company’s confirmation, representations and warranties specified in the Letter Agreement
in respect of the Conversion ADSs specified above, and the Conversion Shares represented thereby, are true, accurate and correct.
4.
We agree to pay the Depositary Fees and Expenses specified in the Letter Agreement and confirm that the indemnification obligations of
the Company contained in Section 5.8 of the Deposit Agreement shall apply to the actions taken upon the instructions contained herein
and the information provided to the Depositary herein.
Number of Conversion
Shares to be deposited in the ADR facility: |
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Conversion Shares |
Number of Conversion ADSs to
be issued: |
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Conversion ADSs |
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Delivery information for corresponding
ADSs |
For
Deliveries of ADSs into DTC:
DTC Participant
Name: ____
DTC Participant
Account No.: ____
Beneficial
Owner Name: ____
Beneficial
Owner Account Name: ____
Beneficial
Owner Account No.: _____
Reference
Code (if any): ____
Contact
Person at DTC Participant: ______ |
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XIAO-I
CORPORATION |
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By: |
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Name: |
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Title: |
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Date: |
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Exhibit
10.1
EXECUTION
VERSION
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of June 17, 2024, is by and among Xiao-I Corporation,
a company organized under the laws of the Cayman Islands with offices located at 5/F, Building 2, No. 2570, Hechuan Road, Minhang District,
Shanghai, China 201101 (the “Company”), and each of the investors listed on the Schedule of Buyers attached hereto
(individually, a “Buyer” and collectively, the “Buyers”).
RECITALS
A.
The Company and each Buyer desire to enter into this transaction to purchase Notes (as defined below) pursuant to (i) a currently effective
shelf registration statement on Form F-3, which has sufficient availability for the issuance of the Securities (as defined below) on
the Closing Date (as defined below) (Registration Number 333-279306) (the “Registration Statement”) and has been declared
effective in accordance with the Securities Act of 1933, as amended, (the “1933 Act”), by the U.S. Securities and
Exchange Commission (the “SEC”) and (ii) a registration statement on Form F-6, as amended, which has 100,000,000 ADSs
(as defined below) issuable upon deposit of Ordinary Shares (as defined below) (Registration No. 333-269502) (the “ADS Registration
Statement”), which ADS Registration Statement has been declared effective in accordance with the 1933 Act by the SEC.
B.
The Ordinary Shares of the Company are, as of the date hereof, represented by American Depository Shares (the “ADSs”),
each ADS representing one-third (1/3) of one (1) Ordinary Share, issued pursuant to the Deposit Agreement, dated as of March 9, 2023,
by and among the Company, Citibank, N.A., as Depositary (the “Depositary”) and the holders and beneficial owners from
time to time of the ADSs issued thereunder (as amended, the “Deposit Agreement”).
C.
The Company has authorized a new series of senior convertible notes of the Company, in the aggregate original principal amount of $3,260,869.57,
substantially in the form attached hereto as Exhibit A (the “Notes”), which Notes shall be convertible
into Ordinary Shares (as defined below) in the form of ADSs (the Ordinary Shares issuable pursuant to the terms of the Notes) or otherwise,
collectively, the “Conversion Shares” and the ADSs representing the Conversion Shares, the “Conversion ADSs”),
in accordance with the terms of the Notes.
D.
Each Buyer wishes to purchase, and the Company wishes to sell at the Closing (as defined below), upon the terms and conditions stated
in this Agreement, (i) a Note in the aggregate original principal amount set forth opposite such Buyer’s name in column (3) on
the Schedule of Buyers (which aggregate principal amount for all Buyers shall not exceed $3,260,869.57)(each, an “Note”,
and collectively, the “Notes”) and (ii) Ordinary Shares (the “Pre-Delivery Shares”) represented
by such aggregate number of ADSs as set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers (the “Pre-Delivery
ADSs”).
E.
The Notes, the Pre-Delivery Shares, the Pre-Delivery ADSs, the Conversion Shares and the Conversion ADSs are collectively referred to
herein as the “Securities.”
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
1.
PURCHASE AND SALE OF NOTES AND PRE-DELIVERY ADSs.
(a)
Purchase of Notes and Pre-Delivery ADSs. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company
on the Closing Date (as defined below), (i) a Note in the original principal amount as is set forth opposite such Buyer’s name
in column (3) on the Schedule of Buyers and (ii) Pre-Delivery Shares represented by such aggregate number of Pre-Delivery ADSs as set
forth opposite such Buyer’s name in column (4) on the Schedule of Buyers.
(b)
Closing. The closing (the “Closing”) of the purchase of the Notes and Pre-Delivery ADSs by the Buyers shall
occur at the offices of Kelley Drye & Warren LLP, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007. The date and time
of the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day (as defined
below) on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually
agreed to by the Company and each Buyer). As used herein “Business Day” means any day other than Saturday, Sunday
or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any
physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(c)
Purchase Price. The aggregate purchase price for the Notes and the Pre-Delivery ADSs (and underlying Pre-Delivery Shares) to be
purchased by each Buyer (the “Purchase Price”) shall be the amount set forth opposite such Buyer’s name in column
(5) on the Schedule of Buyers. Each Buyer shall pay the Purchase Price of approximately $926 for each $1,000 of aggregate principal amount
of the Notes and the Pre-Delivery ADSs to be purchased by each Buyer at the Closing. Each Buyer and the Company agree that the Notes
and the Pre-Delivery ADSs constitute an “investment unit” for purposes of Section 1273(c)(2) of the Internal Revenue Code
of 1986, as amended (the “Code”). The Buyers and the Company mutually agree that the allocation of the issue price
of such investment unit between the Notes and the Pre-Delivery ADSs in accordance with Section 1273(c)(2) of the Code and Treasury Regulation
Section 1.1273-2(h) shall be an aggregate amount equal to the aggregate par value of the Pre-Delivery ADSs allocated to the Pre-Delivery
ADSs and the balance of the Purchase Price allocated to the Notes, and neither the Buyers nor the Company shall take any position inconsistent
with such allocation in any tax return or in any judicial or administrative proceeding in respect of taxes.
(d)
Form of Payment. On the Closing Date, (A) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer,
the amounts withheld pursuant to Section 4(j)) to the Company for the Notes to be issued and sold to such Buyer at the Closing, by wire
transfer of immediately available funds in accordance with the Flow of Funds Letter (as defined below) and (B) the Company shall
deliver to each Buyer (x) a Note in the aggregate original principal amount as is set forth opposite such Buyer’s name in column
(3) of the Schedule of Buyers duly executed on behalf of the Company and registered in the name of such Buyer or its designee and (y)
cause the Depositary through the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, to credit
such aggregate number of Pre-Delivery ADSs that each Buyer is purchasing as is set forth opposite such Buyer’s name in column (4)
of the Schedule of Buyers to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian
system, Direct Registration System and/or Profile Modification System, as applicable.
2.
BUYER’S REPRESENTATIONS AND WARRANTIES.
Each
Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and
as of the Closing Date:
(a)
Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
(b)
Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Buyer and
shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with its terms,
except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies.
(c)
No Affiliate Status. Such Buyer is not an “affiliate” of the Company (as defined in Rule 144).
(d)
No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer, or (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party,
or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws)
applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which
could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to
perform its obligations hereunder.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:
(a)
Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing
and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each
of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As used
in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets,
liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary
(as defined below), individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents
or any other agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability of the
Company or any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined
below).
(i)
Subsidiaries and Affiliated Entities. Each of the Company’s direct and indirect subsidiaries as defined under Rule 405 (each
a “Subsidiary” and collectively, the “Subsidiaries”) has been identified on Schedule 3(a)(i) hereto,
and each of the consolidated entities which the Company controls and through which the Company conducts its operations in the People’s
Republic of China (“PRC”) by way of contractual arrangements (each an “Affiliated Entity” and collectively,
the “Affiliated Entities”) has been identified on Schedule 3(a)(i) hereto. Each of the Subsidiaries and Affiliated
Entities has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to conduct its business; all of the equity interests of
each Subsidiary have been duly and validly authorized and issued, are owned directly or indirectly by the Company, are fully paid and
non-assessable and, are free and clear of all liens, encumbrances, equities or claims; all of the equity interests in each Affiliated
Entity have been duly and validly authorized and issued, are fully paid in accordance with its constitutive or organizational documents
and non-assessable and are owned directly, free and clear of all liens, encumbrances, equities or claims. None of the outstanding share
capital or equity interest in any Subsidiary was issued in violation of pre-emptive or similar rights of any security holder of such
Subsidiary. All of the constitutive or organizational documents of each of the Subsidiaries and Affiliated Entities comply with the requirements
of applicable laws of its jurisdiction of incorporation or organization and are in full force and effect. Apart from the Subsidiaries
and Affiliated Entities, the Company has no direct or indirect Subsidiaries.
(ii)
The description of the corporate structure of the Company and each of the contracts among the Subsidiaries, the shareholders of the Affiliated
Entities and the Affiliated Entities, as the case may be (each a “VIE Agreement” and collectively the “VIE
Agreements”), as set forth in the SEC Documents (as defined below), is true and accurate in its material respects and nothing
has been omitted from such description which would make it materially misleading. There is no other agreement, contract or other document
relating to the corporate structure or the operation of the Company together with its Subsidiaries and Affiliated Entities taken as a
whole, which has not been previously disclosed or made available to the Buyers and disclosed in SEC Documents.
(iii)
Each VIE Agreement has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and legally binding
obligation of the parties thereto, enforceable in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights
and general equity principles. No consent, approval, authorization, or order of, or filing or registration with, any person (including
any governmental agency or body or any court) is required for the performance of the obligations under any VIE Agreement by the parties
thereto, except as already obtained or disclosed in the SEC Documents; no consent, approval, authorization, order, filing or registration
that has been obtained is being withdrawn or revoked or is subject to any condition precedent which has not been fulfilled or performed.
The corporate structure of the Company complies with all applicable laws and regulations of the PRC, and neither the corporate structure
nor the VIE Agreements violate, breach, contravene or otherwise conflict with any applicable laws of the PRC. There is no legal or governmental
proceeding, inquiry or investigation pending against the Company, the Subsidiaries and Affiliated Entities or shareholders of the Affiliated
Entities in any jurisdiction challenging the validity of any of the VIE Agreements, and, to the best knowledge of the Company, no such
proceeding, inquiry or investigation is threatened in any jurisdiction.
(iii)
The execution, delivery and performance of each VIE Agreement by the parties thereto do not and will not result in a breach or violation
of any of the terms and provisions of or constitute a default under, or result in the imposition of any lien, encumbrance, equity or
claim upon any property or assets of the Company or any of the Subsidiaries and Affiliated Entities pursuant to (A) the constitutive
or organizational documents of the Company or any of the Subsidiaries and Affiliated Entities, (B) any statute, rule, regulation or order
of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of the Subsidiaries
and Affiliated Entities or any of their properties, or any arbitration award, or (C) any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of the Subsidiaries and Affiliated Entities is a party or by which the Company
or any of the Subsidiaries and Affiliated Entities is bound or to which any of the properties of the Company or any of the Subsidiaries
and Affiliated Entities is subject, except, in the case of (B) and (C), where such conflict, breach, violation or default would not reasonably
be expected to have a Material Adverse Effect (as defined below). Each VIE Agreement is in full force and effect and none of the parties
thereto is in breach or default in the performance of any of the terms or provisions of such VIE Agreement. None of the parties to any
of the VIE Agreements has sent or received any communication regarding termination of, or intention not to renew, any of the VIE Agreements,
and no such termination or non-renewal has been threatened by any of the parties thereto.
(iv)
The Company possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the Affiliated
Entities, through its rights to authorize the shareholders of the Affiliated Entities to exercise their voting rights.
(b)
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the Pre-Delivery ADSs
(including the underlying Pre-Delivery Shares) and the reservation for issuance and issuance of the Conversion Shares and the Conversion
ADSs) have been duly authorized by the Company’s board of directors and each of its Subsidiaries’ board of directors or other
governing body, as applicable, and (other than (i) the filing with the SEC of (A) the applicable 6-K Filing (as defined below), (D) a
prospectus supplement in connection with the Closing as required by the Registration Statement pursuant to Rule 424(b) under the 1933
Act (the “Prospectus Supplement”) supplementing the base prospectus forming part of the Registration Statement (the
“Prospectus”), and (E) any other filings as may be required by any state securities agencies (collectively, the “Required
Approvals”)) no further filing, consent or authorization is required by the Company, its Subsidiaries, their respective boards
of directors or their shareholders or other governing body. This Agreement has been, and the other Transaction Documents to which it
is a party will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may
be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification
and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively,
this Agreement, the Notes, the Pre-Delivery ADSs, the Irrevocable Registrar Service Provider Instructions (as defined below), the Irrevocable
Depositary Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any of the parties
hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
(c)
Issuance of Securities; Registration Statement; ADS Registration Statement. The issuance of the Notes are duly authorized and
upon issuance in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free
from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances,
security interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof. As of the Closing,
the Company shall have reserved from its duly authorized share capital not less than 300% of the maximum number of Conversion Shares
(and Conversion ADSs) issuable upon conversion of the Notes (assuming for purposes hereof that (x) the Notes are convertible at the Alternate
Conversion Price (as defined in the Notes) assuming an Alternate Conversion Date (as defined in the Notes) as of the date hereof, (y)
interest on the Notes shall accrue through the first anniversary of the Closing Date and will be converted in Ordinary Shares represented
by ADSs at a conversion price equal to the Alternate Conversion Price assuming an Alternate Conversion Date as of the date hereof and
(z) any such conversion shall not take into account any limitations on the conversion of the Notes set forth in the Notes). Upon issuance
or conversion in accordance with this Agreement and/or the Notes, as applicable, and the Pre-Delivery ADSs (including the underlying
Pre-Delivery Shares) and the Conversion Shares (and Conversion ADSs), when issued, will be validly issued, fully paid and nonassessable
and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of existing Ordinary Shares represented by ADSs. The ADS Registration Statement is effective and the Company has
not received any notice that the SEC has issued or intends to issue a stop-order with respect to the ADS Registration Statement or that
the SEC otherwise has suspended or withdrawn the effectiveness of the ADS Registration Statement, either temporarily or permanently,
or intends or has threatened in writing to do so. As of the Closing Date, the ADS Registration Statement will have sufficient ADSs available
to effect the issuance in full of the Required Reserve Amount of ADSs in accordance therewith. The issuance by the Company of the Securities
has been registered under the 1933 Act, the Securities are being issued pursuant to the Registration Statement and all of the Securities
are freely transferable and freely tradable by each of the Buyers without restriction, whether by way of registration or some exemption
therefrom. The Registration Statement is effective and available for the issuance of the Securities thereunder and the Company has not
received any notice that the SEC has issued or intends to issue a stop-order with respect to the Registration Statement or that the SEC
otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or
has threatened in writing to do so. The “Plan of Distribution” section under the Registration Statement permits the issuance
and sale of the Securities hereunder and as contemplated by the other Transaction Documents. Upon receipt of the Securities, each of
the Buyers will have good and marketable title to the Securities. The Registration Statement and any prospectus included therein, including
the Prospectus and the Prospectus Supplement, complied in all material respects with the requirements of the 1933 Act and the Securities
Exchange Act of 1934, as amended (the “1934 Act”) and the rules and regulations of the SEC promulgated thereunder
and all other applicable laws and regulations. At the time the Registration Statement and any amendments thereto became effective, at
the date of this Agreement and at each deemed effective date thereof pursuant to Rule 430B(f)(2) of the 1933 Act, the Registration Statement
and any amendments thereto complied and will comply in all material respects with the requirements of the 1933 Act and did not and will
not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any amendments or supplements thereto (including, without limitation the
Prospectus Supplement), at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, complied,
and will comply, in all material respects with the requirements of the 1933 Act and did not, and will not, contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Company meets all of the requirements for the use of Form F-3 under the 1933 Act for
the offering and sale of the Securities contemplated by this Agreement and the other Transaction Documents, and the SEC has not notified
the Company of any objection to the use of the form of the Registration Statement pursuant to Rule 401(g)(1) under the 1933 Act. The
Registration Statement meets the requirements set forth in Rule 415(a)(1)(x) under the 1933 Act. At the earliest time after the filing
of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)
under the 1933 Act) relating to any of the Securities, the Company was not and is not an “Ineligible Issuer” (as defined
in Rule 405 under the 1933 Act). The Company (i) has not distributed any offering material in connection with the offer or sale of any
of the Securities and (ii) until no Buyer holds any of the Securities, shall not distribute any offering material in connection with
the offer or sale of any of the Securities to, or by, any of the Buyers (if required), in each case, other than the Registration Statement,
the Prospectus or the Prospectus Supplement. In accordance with Rule 5110(b)(7)(C)(i) of the Financial Industry Regulatory Authority
Manual, the offering of the Securities has been registered with the SEC on Form F-3 under the 1933 Act pursuant to the standards for
Form F-3 in effect prior to October 21, 1992, and the Securities are being offered pursuant to Rule 415 promulgated under the 1933 Act.
(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the Pre-Delivery
ADSs (including the underlying Pre-Delivery Shares) and the reservation for issuance and issuance of the Conversion Shares and the Conversion
ADSs) will not (i) result in a violation of the certificate of incorporation, as may be amended from time to time, of the Company, the
Memorandum and Articles of Association (as defined below), or the certificate of formation, memorandum of association, articles of association,
bylaws or other organizational documents of the Company or any of its Subsidiaries, or any share capital or other securities of the Company
or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations
and the rules and regulations of the Nasdaq Global Market (the “Principal Market”) and including all applicable foreign,
federal and state laws, rules and regulations, including, without limitation, the laws, rules and regulations of the Cayman Islands or
PRC applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries
is bound or affected).
(e)
Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any
filing or registration with (other than the Required Approvals), any Governmental Entity (as defined below) or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by
the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings
and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained
or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances
which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings
contemplated by the Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge
of any facts or circumstances which could reasonably lead to delisting or suspension of the ADSs in the foreseeable future. “Governmental
Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal,
state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising,
or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any
nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public
international organization or any of the foregoing.
(f)
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”)) of
the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the Ordinary Shares
(including, without limitation, any Ordinary Shares underlying any ADSs then outstanding) (as defined for purposes of Rule 13d-3 of the
1934 Act). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its
Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby,
and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents
to each Buyer that the Company’s and each Subsidiary’s decision to enter into the Transaction Documents to which it is a
party has been based solely on the independent evaluation by the Company, each Subsidiary and their respective representatives.
(g)
Placement Agent’s Fees. The Company shall be responsible for the payment of any placement agent’s fees, financial
advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby, including, without limitation, placement agent fees payable to FT Global Capital, Inc.,
as placement agent (the “Placement Agent”) in connection with the sale of the Securities. The fees and expenses of
the Placement Agent to be paid by the Company or any of its Subsidiaries are as set forth on Schedule 3(g) attached hereto. The Company
shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney’s fees
and out-of-pocket expenses) arising in connection with any such claim. The Company acknowledges that it has engaged the Placement Agent
in connection with the sale of the Securities. Other than the Placement Agent, neither the Company nor any of its Subsidiaries has engaged
any placement agent or other agent in connection with the offer or sale of the Securities.
(h)
No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would cause this offering of the Securities to require approval of shareholders of the Company under any applicable shareholder
approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates
nor any Person acting on their behalf will take any action or steps that would cause the offering of any of the Securities to be integrated
with other offerings of securities of the Company.
(i)
Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares (and the Conversion ADSs) will
increase in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares (and the Conversion
ADSs) pursuant to the terms of the Notes in accordance with this Agreement and the Notes is, in each case, absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.
(j)
Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, interested shareholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), shareholder rights plan or other similar anti-takeover provision under
the Memorandum and Articles of Association or the laws of the jurisdiction of its incorporation or otherwise which is or could become
applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Securities and any Buyer’s ownership of the Securities. The Company and its board of directors have taken all necessary
action, if any, in order to render inapplicable any shareholder rights plan or similar arrangement relating to accumulations of beneficial
ownership of Ordinary Shares (including, without limitation, any Ordinary Shares underlying any ADSs then outstanding) or ADSs or a change
in control of the Company or any of its Subsidiaries.
(k)
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports,
schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and
financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the
“SEC Documents”). The Company has delivered or has made available to the Buyers or their respective representatives
true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared
in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or
in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon
facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to be accrued by
the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for by the Company
in its financial statements or otherwise. No other information provided by or on behalf of the Company to any of the Buyers which is
not included in the SEC Documents (including, without limitation, information in the disclosure schedules to this Agreement) contains
any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading,
in the light of the circumstance under which they are or were made. The Company is not currently contemplating to amend or restate any
of the financial statements (including, without limitation, any notes or any letter of the independent accountants of the Company with
respect thereto) included in the SEC Documents (the “Financial Statements”), nor is the Company currently aware of
facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for
any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed
by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is
any need for the Company to amend or restate any of the Financial Statements.
(l)
Absence of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form
20-F, there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties,
operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries. Since
the date of the Company’s most recent audited financial statements contained in a Form 20-F, neither the Company nor any of its
Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary
course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business.
Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy,
insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason
to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any
fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually and on a consolidated basis, are
not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent
(as defined below). For purposes of this Section 3(l), “Insolvent” means, (i) with respect to the Company and its
Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the Company’s and its Subsidiaries’ assets
is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below), (B) the
Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured or (C) the Company and its Subsidiaries intend to incur or believe that they will incur debts
that would be beyond their ability to pay as such debts mature; and (ii) with respect to the Company and each Subsidiary, individually,
(A) the present fair saleable value of the Company’s or such Subsidiary’s (as the case may be) assets is less than the amount
required to pay its respective total Indebtedness, (B) the Company or such Subsidiary (as the case may be) is unable to pay its respective
debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company
or such Subsidiary (as the case may be) intends to incur or believes that it will incur debts that would be beyond its respective ability
to pay as such debts mature. Neither the Company nor any of its Subsidiaries has engaged in any business or in any transaction, and is
not about to engage in any business or in any transaction, for which the Company’s or such Subsidiary’s remaining assets
constitute unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and
is proposed to be conducted.
(m)
No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i)
would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form F-1 filed with
the SEC relating to an issuance and sale by the Company of its Ordinary Shares and/or ADSs, as applicable, and which has not been publicly
announced, (ii) could have a material adverse effect on any Buyer’s investment hereunder or (iii) could have a Material Adverse
Effect.
(n)
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in
default under its Memorandum and Articles of Association, any certificate of designation, preferences or rights of any other outstanding
series of preferred shares of the Company or any of its Subsidiaries, or its organizational charter, certificate of formation, memorandum
of association, articles of association, certificate of incorporation or bylaws, as applicable. Neither the Company nor any of its Subsidiaries
is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except
in all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting
the generality of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market
and has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the ADSs by the Principal
Market in the foreseeable future. During the two years prior to the date hereof, (i) the ADSs has been listed or designated for quotation
on the Principal Market, (ii) trading in the ADSs has not been suspended by the SEC or the Principal Market and (iii) the Company has
received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the ADSs from
the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations
or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary
has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit. There
is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the
Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries
or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than such effects, individually or
in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse Effect on the Company or any of
its Subsidiaries.
(o)
Foreign Corrupt Practices. Neither the Company, the Company’s subsidiary or any director, officer, agent, employee, nor
any other person acting for or on behalf of the foregoing (individually and collectively, a “Company Affiliate”) have
violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption
laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised
to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for
any Governmental Entity to any political party or official thereof or to any candidate for political office (individually and collectively,
a “Government Official”) or to any person under circumstances where such Company Affiliate knew or was aware of a
high probability that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to
any Government Official, for the purpose of:
(i)
(A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to
do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official
to influence or affect any act or decision of any Governmental Entity, or
(ii)
assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its
Subsidiaries.
(p)
Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.
(q)
Transactions With Affiliates. Except as otherwise disclosed in the SEC Documents, no current or former employee, partner, director,
officer or shareholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company,
any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently,
or has ever been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement or other arrangement
providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such
director, officer or shareholder or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as
employees, officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any
corporation, firm, association or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries
(except for a passive investment (direct or indirect) in less than 5% of the common equity of a company whose securities are traded on
or quoted through an Eligible Market (as defined in Section 4(i))), nor does any such Person receive income from any source other than
the Company or its Subsidiaries which relates to the business of the Company or its Subsidiaries or should properly accrue to the Company
or its Subsidiaries. No employee, officer, shareholder or director of the Company or any of its Subsidiaries or member of his or her
immediate family is indebted to the Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted
(or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered,
(ii) reimbursement for reasonable expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally
available to all employees or executives (including share option agreements outstanding under any share option plan approved by the Board
of Directors of the Company).
(r)
Equity Capitalization.
(i)
Definitions:
(A)
“ADSs” means (x) the American Depositary Shares of the Company, which as of the date hereof and the Closing Date represents
one-third (1/3) of one (1) Ordinary Share per each ADS or (y) any share capital into which such Ordinary Shares shall have been changed
or any share capital resulting from any exchange, modification, restructuring or reclassification of such Ordinary Shares.
(B)
“Ordinary Shares” means (x) the Company’s ordinary shares, $0.00005 par value per share, and (y) any share capital
into which such ordinary shares shall have been changed or any share capital resulting from a reclassification of such ordinary shares.
(C)
“Preferred Shares” means (x) the Company’s blank check preferred shares, $0.00005 par value per share, the terms
of which may be designated by the board of directors of the Company in a certificate of designations and (y) any share capital into which
such preferred shares shall have been changed or any share capital resulting from a reclassification of such preferred shares (other
than a conversion of such preferred shares into Ordinary Shares and/or ADSs, as applicable, in accordance with the terms of such certificate
of designations).
(ii)
Authorized and Outstanding Share Capital. As of the date hereof, the authorized share capital of the Company consists of (A) 1,000,000,000
Ordinary Shares, of which, 24,325,592 Ordinary Shares are issued and outstanding and there are no Convertible Securities (as defined
below) (other than the Notes) exercisable or exchangeable for, or convertible into, Ordinary Shares outstanding, (B) 100,000,000 ADSs,
of which, 18,435,690 are issued and outstanding as of June 5, 2024 and no shares have been reserved for issuance pursuant to Convertible
Securities (as defined below) (other than the Notes and the Pre-Delivery ADSs) exercisable or exchangeable for, or convertible into,
ADSs and (C) 3,700,000 Preferred Shares, all of which are issued and outstanding. 1,140,000 Ordinary Shares and 3,420,000 ADSs are Pre-Delivery
Shares and Pre-Delivery ADSs, respectively, which are held by the Depositary. “Convertible Securities” means any share
capital or other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly
convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any share capital or other
security of the Company (including, without limitation, Ordinary Shares and ADSs) or any of its Subsidiaries.
(iii)
Valid Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of Ordinary Shares and
ADSs, as applicable, that are (A) reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Notes)
and (B) that are, as of the date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and
calculated based on the assumption that only officers, directors and holders of at least 10% of the Company’s issued and outstanding
Ordinary Shares and/or ADSs, as applicable, are “affiliates” without conceding that any such Persons are “affiliates”
for purposes of federal securities laws) of the Company or any of its Subsidiaries. To the Company’s knowledge, no Person owns
10% or more of the Company’s issued and outstanding Ordinary Shares and/or ADSs, as applicable, (calculated based on the assumption
that all Convertible Securities (as defined below), whether or not presently exercisable or convertible, have been fully exercised or
converted (as the case may be) taking account of any limitations on exercise or conversion (including “blockers”) contained
therein without conceding that such identified Person is a 10% shareholder for purposes of federal securities laws).
(iv)
Existing Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s
shares, interests or share capital is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the
Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests
or share capital of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares, interests or share capital of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares, interests or share capital of the Company or any of its Subsidiaries;
(C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the 1933 Act (except pursuant to this Agreement); (D) there are no outstanding securities or instruments of
the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of
its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by
the issuance of the Securities; and (F) neither the Company nor any Subsidiary has any share appreciation rights or “phantom share”
plans or agreements or any similar plan or agreement.
(v)
Organizational Documents. The Company has furnished to the Buyers true, correct and complete copies of the Company’s certificate
of incorporation, as amended and as in effect on the date hereof, and the Company’s memorandum of association (as amended and as
in effect on the date hereof, the “Memorandum of Association”) and articles of association (as amended and as in effect
on the date hereof, the “Articles of Association”), and the terms of all Convertible Securities and the material rights
of the holders thereof in respect thereto.
(s)
Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed on Schedule 3(s),
has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound, (ii)
is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such
contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) has any financing statements
securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries; (iv) is in violation of any term
of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults
would not result, individually or in the aggregate, in a Material Adverse Effect, or (v) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed
in the SEC Documents which are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s
or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse
Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness
for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including,
without limitation, “capital leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course
of business consistent with past practice), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds
and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations
so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets
acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement
which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness
referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and
(H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G)
above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise,
of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect thereto.
(t)
Litigation. Except as otherwise disclosed in the SEC Documents, there is no action, suit, arbitration, proceeding, inquiry or
investigation before or by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or
body pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Ordinary
Shares and/or ADSs, as applicable, or any of the Company’s or its Subsidiaries’ officers or directors, whether of a civil
or criminal nature or otherwise, in their capacities as such. No director, officer or employee of the Company or any of its subsidiaries
has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation. Without limitation of
the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the
SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the Company or any of its Subsidiaries.
The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company
under the 1933 Act or the 1934 Act, including, without limitation, the Registration Statement and/or the ADS Registration Statement.
After reasonable inquiry of its employees, the Company is not aware of any fact which might result in or form the basis for any such
action, suit, arbitration, investigation, inquiry or other proceeding. Neither the Company nor any of its Subsidiaries is subject to
any order, writ, judgment, injunction, decree, determination or award of any Governmental Entity.
(u)
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(v)
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs
any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No current (or former)
executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries
has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate
such officer’s employment with the Company or any such Subsidiary. No current (or former) executive officer or other key employee
of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may be) does not
subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries
are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices
and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(w)
Title.
(i)
Real Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities
or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject
to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Liens
for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of
the property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company or any of its Subsidiaries.
(ii)
Fixtures and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest
in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by
the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). The Fixtures
and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they are being put,
are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the conduct of
the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the Closing. Each of
the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a) liens for current
taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property
subject thereto.
(x)
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications
and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now
conducted and presently proposed to be conducted. As of June 8, 2024, the Company has applied for 578 patents of which 334 have been
granted and the Company has obtained 256 registered trademarks and 138 computer software copyrights. Except as set forth in Schedule
3(x)(i), none of the Company’s Intellectual Property Rights have been pledged to guarantee debts of the Company or any of its
Subsidiaries as of the date of this Agreement. The Company does not have any knowledge of any infringement by the Company or its Subsidiaries
of Intellectual Property Rights of others. Except as otherwise disclosed in the SEC Documents, there is no claim, action or proceeding
being made or brought, or to the knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of
its Subsidiaries regarding its Intellectual Property Rights. Neither the Company nor any of its Subsidiaries is aware of any facts or
circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.
(y)
Environmental Laws. (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined
below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each
of the foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases
of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(ii)
No Hazardous Materials:
(A)
have been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in violation of any Environmental
Laws; or
(B)
are present on, over, beneath, in or upon any Real Property or any portion thereof in quantities that would constitute a violation of
any Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates any Environmental
Laws, which violation would have a material adverse effect on the business of the Company or any of its Subsidiaries.
(iii)
Neither the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed
of or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and
polychlorinated biphenyls.
(iv)
None of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.
(z)
Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed
by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such
Subsidiary.
(aa)Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis
for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined in
Section 1297 of the Code. The net operating loss carryforwards (“NOLs”) for United States federal income tax purposes
of the consolidated group of which the Company is the common parent, if any, shall not be adversely effected by the transactions contemplated
hereby. The transactions contemplated hereby do not constitute an “ownership change” within the meaning of Section 382 of
the Code, thereby preserving the Company’s ability to utilize such NOLs.
(bb)
Internal Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and
to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with
the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company
maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring
that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed,
summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls
and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under
the 1934 Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. Except as otherwise
disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries has received any notice or correspondence from any accountant,
Governmental Entity or other Person relating to any potential material weakness or significant deficiency in any part of the internal
controls over financial reporting of the Company or any of its Subsidiaries.
(cc)
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act
filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.
(dd)
Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”
as such terms are defined in the Investment Company Act of 1940, as amended.
(ee)
Acknowledgement Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following
the public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the
Buyers have been asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or short)
any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold any of the
Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the Ordinary Shares and/or ADSs, as applicable,
which was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; (iii) each
Buyer shall not be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative”
transaction; and (iv) each Buyer may rely on the Company’s obligation to timely deliver Ordinary Shares and ADSs upon conversion,
exercise or exchange, as applicable, of the Securities as and when required pursuant to the Transaction Documents for purposes of effecting
trading in the ADSs of the Company. The Company further understands and acknowledges that following the public disclosure of the transactions
contemplated by the Transaction Documents one or more Buyers may engage in hedging and/or trading activities (including, without limitation,
the location and/or reservation of borrowable ADSs) at various times during the period that the Securities are outstanding, including,
without limitation, during the periods that the value and/or number of the Conversion ADSs deliverable with respect to the Securities
are being determined and such hedging and/or trading activities (including, without limitation, the location and/or reservation of borrowable
ADSs), if any, can reduce the value of the existing shareholders’ equity interest in the Company both at and after the time the
hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities
do not constitute a breach of this Agreement, the Notes or any other Transaction Document or any of the documents executed in connection
herewith or therewith.
(ff)
Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting
on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the Placement Agent),
(iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company or
any of its Subsidiaries or (iv) paid or agreed to pay any Person for research services with respect to any securities of the Company
or any of its Subsidiaries.
(gg)
U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section 897
of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.
(hh)
Registration Eligibility. The Company is eligible to register the Securities for issuance to the Buyers using Form F-3 promulgated
under the 1933 Act.
(ii)
Transfer Taxes. On the Closing Date, all share transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.
(jj)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of
a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(kk)
Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).
(ll)
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of
the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents
or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company
or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution
or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person
or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal
political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.
(mm)
Money Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the laws,
regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not
limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR,
Subtitle B, Chapter V.
(nn)
Management. During the past ten year period, no current or former officer or director or, to the knowledge of the Company, no
current ten percent (10%) or greater shareholder of the Company or any of its Subsidiaries has been the subject of:
(i)
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before the filing
of such petition or such appointment, or any corporation or business association of which such person was an executive officer at or
within two years before the time of the filing of such petition or such appointment;
(ii)
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not relate
to driving while intoxicated or driving under the influence);
(iii)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining any such person from, or otherwise limiting, the following activities:
(1)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of
any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director
or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct
or practice in connection with such activity;
(2)
Engaging in any particular type of business practice; or
(3)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of
securities laws or commodities laws;
(iv)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to
be associated with persons engaged in any such activity;
(v)
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities law,
regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed,
suspended or vacated; or
(vi)
a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.
(oo)
Share Option Plans. Each share option granted by the Company was granted (i) in accordance with the terms of the applicable share
option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Ordinary Shares and/or ADSs,
as applicable, on the date such share option would be considered granted under GAAP and applicable law. No share option granted under
the Company’s share option plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy
or practice of the Company to knowingly grant, share options prior to, or otherwise knowingly coordinate the grant of share options with,
the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results
or prospects.
(pp)
No Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company had
discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions, the Company
has no reason to believe that it will need to restate any such financial statements or any part thereof.
(qq)
No Additional Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.
(rr)
Public Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.
(ss)
Federal Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility”
under the Federal Power Act, as amended.
(tt)
Communist Chinese Military Companies. The Company does not constitute a “Communist Chinese Military Company” under
Executive Order 13959, issued by former President Trump on November 12, 2020 under the authority of Section 1237 of the National Defense
Authorization Act for Fiscal Year 1999.
(ww)
Compliance with PRC Overseas Investment and Listing Regulations. Each of the Company and its Subsidiaries and Affiliated Entities
has complied, and has taken all reasonable steps to ensure compliance by each of its shareholders, directors and officers that is, or
is directly or indirectly owned or controlled by, a PRC resident or citizen with any applicable rules and regulations of the relevant
PRC government agencies (including but not limited to the Ministry of Commerce, the National Development and Reform Commission, the China
Securities Regulatory Commission (“CSRC”) and the State Administration of Foreign Exchange (the “SAFE”))
relating to overseas investment by PRC residents and citizens (the “PRC Overseas Investment and Listing Regulations”),
including, without limitation, requesting each such Person that is, or is directly or indirectly owned or controlled by, a PRC resident
or citizen, to complete any registration and other procedures required under applicable PRC Overseas Investment and Listing Regulations
(including any applicable rules and regulations of the SAFE).
(xx)
M&A Rules. The Company is aware of and has been advised as to the content of the Rules on Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors and any official clarifications, guidance, interpretations or implementation rules in connection with
or related thereto (the “PRC Mergers and Acquisitions Rules”) jointly promulgated by the Ministry of Commerce, the
State Assets Supervision and Administration Commission, the State Tax Administration, the State Administration of Industry and Commerce,
the CSRC and the State Administration of Foreign Exchange on August 8, 2006 and amended on June 22, 2009, including the provisions thereof
which purport to require offshore special purpose entities formed for listing purposes and controlled directly or indirectly by PRC companies
or individuals to obtain the approval of the CSRC prior to the listing and trading of their securities on an overseas stock exchange.
The Company has received legal advice specifically with respect to the PRC Mergers and Acquisitions Rules from its PRC counsel, and the
Company understands such legal advice. In addition, the Company has communicated such legal advice in full to each of its directors that
signed the Registration Statement and each such director has confirmed that he or she understands such legal advice. The issuance and
sale of the Securities, the listing and trading of the Underlying Securities (as defined below) on NASDAQ Capital Market and the consummation
of the transactions contemplated by this Agreement (i) are not and will not be, as of the date hereof or at the Closing Date, adversely
affected by the PRC Mergers and Acquisitions Rules and (ii) do not require the prior approval of the CSRC.
(uu)
Ranking of Notes. Other than Permitted Indebtedness (as defined in the Notes) secured by Permitted Liens (as defined in the Notes),
if any, no Indebtedness of the Company, at the Closing, will be senior to, or pari passu with, the Notes in right of payment,
whether with respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.
(vv)
Cybersecurity. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks,
hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate
and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries
as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants
that would reasonably be expected to have a Material Adverse Effect on the Company’s business. The Company and its Subsidiaries
have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards
to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all
IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data”
means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax
identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number;
(ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act,
as amended; (iii) “personal data” as defined by the European Union General Data Protection Regulation (“GDPR”)
(EU 2016/679); (iv) any information which would qualify as “protected health information” under the Health Insurance Portability
and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”);
and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection
or analysis of any data related to an identified person’s health or sexual orientation. There have been no breaches, violations,
outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the
duty to notify any other person or such, nor any incidents under internal review or investigations relating to the same except in each
case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The
Company and its Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations
of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy
and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access,
misappropriation or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(ww)
Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in compliance with all applicable
state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its Subsidiaries
have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance
with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”) except in each case, where such would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with the Privacy
Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance
in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure,
handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries have at all times made
all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures
made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory
rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice
of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge
of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for,
in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any
order, decree, or agreement that imposes any obligation or liability under any Privacy Law.
(xx)
No Defenses. The Company has no defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims,
actions or causes of action of any kind or nature whatsoever against a Buyer, directly or indirectly, arising out of, based upon, or
in any manner connected with, the transactions contemplated hereby, whether known or unknown, which occurred, existed, was taken, permitted,
or begun prior to the execution of this Agreement and occurred, existed, was taken, permitted or begun in accordance with, pursuant to,
or by virtue of any of the terms or conditions of the Transaction Documents. To the extent any such defenses, affirmative or otherwise,
rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action exist or existed, such defenses, rights, claims,
counterclaims, actions and causes of action are hereby waived, discharged and released. The Company hereby acknowledges and agrees that
the execution of this Agreement by a Buyer shall not constitute an acknowledgment of or admission by a Buyer of the existence of any
claims or of liability for any matter or precedent upon which any claim or liability may be asserted.
(yy)
Registration Rights. No holder of securities of the Company has rights to the registration of any securities of the Company because
of the filing of the Registration Statement or the issuance of the Securities hereunder that could expose the Company to material liability
or any Buyer to any liability or that could impair the Company’s ability to consummate the issuance and sale of the Securities
in the manner, and at the times, contemplated hereby, which rights have not been waived by the holder thereof as of the date hereof.
(zz)
Compliance With FINRA Rule 5110. At the time the Registration Statement was declared effective by the SEC, and as of the date
hereof and as of the Closing Date, the Company has (i) a 1934 Act reporting history in excess of 36 months and (ii) a non-affiliate,
public common float of at least $100 million and annual trading volume of at least three million shares.
(aaa)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their
agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the
other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the
Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made,
not misleading. All of the written information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries
to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and
correct in all material respects as of the date on which such information is so provided and will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during the twelve (12)
months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or
any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions
(financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or
announcement by the Company but which has not been so publicly disclosed. All financial projections and forecasts that have been prepared
by or on behalf of the Company or any of its Subsidiaries and made available to you have been prepared in good faith based upon reasonable
assumptions and represented, at the time each such financial projection or forecast was delivered to each Buyer, the Company’s
best estimate of future financial performance (it being recognized that such financial projections or forecasts are not to be viewed
as facts and that the actual results during the period or periods covered by any such financial projections or forecasts may differ from
the projected or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made any representations or warranties
with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.
4.
COVENANTS.
(a)
Best Efforts. Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied
by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the covenants hereunder
and conditions to be satisfied by it as provided in Section 7 of this Agreement.
(b)
Amendments to the Registration Statement; Prospectus Supplements; Free Writing Prospectuses.
(i)
Amendments to the Registration Statement; Prospectus Supplements; Free Writing Prospectuses. Except as provided in this Agreement
and other than periodic reports required to be filed pursuant to the 1934 Act, the Company shall not file with the SEC any amendment
to the Registration Statement that relates to the Buyer, this Agreement or any other Transaction Document or the transactions contemplated
hereby or thereby or file with the SEC any Prospectus Supplement that relates to the Buyer, this Agreement or any other Transaction Document
or the transactions contemplated hereby or thereby with respect to which (a) the Buyer shall not previously have been advised, (b) the
Company shall not have given due consideration to any comments thereon received from the Buyer or its counsel, or (c) the Buyer shall
reasonably object after being so advised, unless the Company reasonably has determined that it is necessary to amend the Registration
Statement or make any supplement to the Prospectus to comply with the 1933 Act or any other applicable law or regulation, in which case
the Company shall promptly (but in no event later than 24 hours) so inform the Buyer, the Buyer shall be provided with a reasonable opportunity
to review and comment upon any disclosure relating to the Buyer and the Company shall expeditiously furnish to the Buyer an electronic
copy thereof. In addition, for so long as, in the reasonable opinion of counsel for the Buyer, the Prospectus (or in lieu thereof, the
notice referred to in Rule 173(a) under the 1933 Act) is required to be delivered in connection with any acquisition or sale of Securities
by the Buyer, the Company shall not file any Prospectus Supplement with respect to the Securities without delivering or making available
a copy of such Prospectus Supplement, together with the Prospectus, to the Buyer promptly.
(ii)
The Company has not made, and agrees that unless it obtains the prior written consent of the Buyer it will not make, an offer relating
to the Securities that would constitute an “issuer free writing prospectus” as defined in Rule 433 promulgated under the
1933 Act (an “Issuer Free Writing Prospectus”) or that would otherwise constitute a “free writing prospectus”
as defined in Rule 405 promulgated under the 1933 Act (a “Free Writing Prospectus”) required to be filed by the Company
or the Buyer with the SEC or retained by the Company or the Buyer under Rule 433 under the 1933 Act. The Buyer has not made, and agrees
that unless it obtains the prior written consent of the Company it will not make, an offer relating to the Securities that would constitute
a Free Writing Prospectus required to be filed by the Company with the SEC or retained by the Company under Rule 433 under the 1933 Act.
Any such Issuer Free Writing Prospectus or other Free Writing Prospectus consented to by the Buyer or the Company is referred to in this
Agreement as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will treat, as
the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply,
as the case may be, with the requirements of Rules 164 and 433 under the 1933 Act applicable to any Permitted Free Writing Prospectus,
including in respect of timely filing with the SEC, legending and record keeping.
(c)
Prospectus Delivery. Immediately prior to execution of this Agreement, the Company shall have delivered to the Buyer, and as soon
as practicable after execution of this Agreement the Company shall file, Prospectus Supplements with respect to the Securities to be
issued on the Closing Date, as required under, and in conformity with, the 1933 Act, including Rule 424(b) thereunder. The Company shall
provide the Buyer a reasonable opportunity to comment on a draft of each Prospectus Supplement and any Issuer Free Writing Prospectus,
shall give due consideration to all such comments and, subject to the provisions of Section 4(b) hereof, shall deliver or make available
to the Buyer, without charge, an electronic copy of each form of Prospectus Supplement, together with the Prospectus, and any Permitted
Free Writing Prospectus on the Closing Date. The Company consents to the use of the Prospectus (and of any Prospectus Supplements thereto)
in accordance with the provisions of the 1933 Act and with the securities or “blue sky” laws of the jurisdictions in which
the Securities may be sold by the Buyer, in connection with the offering and sale of the Securities and for such period of time thereafter
as the Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) is required by the 1933 Act to be delivered
in connection with sales of the Securities. If during such period of time any event shall occur that in the judgment of the Company and
its counsel is required to be set forth in the Registration Statement or the Prospectus or any Permitted Free Writing Prospectus or should
be set forth therein in order to make the statements made therein (in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading, or if it is necessary to amend the Registration Statement or supplement or amend the Prospectus
or any Permitted Free Writing Prospectus to comply with the 1933 Act or any other applicable law or regulation, the Company shall forthwith
prepare and, subject to Section 4(b) above, file with the SEC an appropriate amendment to the Registration Statement or Prospectus Supplement
to the Prospectus (or supplement to the Permitted Free Writing Prospectus) and shall expeditiously furnish or make available to the Buyer
an electronic copy thereof.
(d)
Stop Orders. The Company shall advise the Buyer promptly (but in no event later than 24 hours) and shall confirm such advice in
writing: (i) of the Company’s receipt of notice of any request by the SEC for amendment of or a supplement to the Registration
Statement, the Prospectus, any Permitted Free Writing Prospectus or for any additional information; (ii) of the Company’s receipt
of notice of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or prohibiting or suspending
the use of the Prospectus or any Prospectus Supplement, or of the suspension of qualification of the Securities for offering or sale
in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; (iii) of the Company becoming aware
of the happening of any event, which makes any statement of a material fact made in the Registration Statement, the Prospectus or any
Permitted Free Writing Prospectus untrue or which requires the making of any additions to or changes to the statements then made in the
Registration Statement, the Prospectus or any Permitted Free Writing Prospectus in order to state a material fact required by the 1933
Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, or of the necessity to amend the Registration Statement or supplement the Prospectus
or any Permitted Free Writing Prospectus to comply with the 1933 Act or any other law or (iv) if at any time following the date hereof
the Registration Statement is not effective or is not otherwise available for the issuance of the Securities or any Prospectus contained
therein is not available for use for any other reason. Thereafter, the Company shall promptly notify such holders when the Registration
Statement, the Prospectus, any Permitted Free Writing Prospectus and/or any amendment or supplement thereto, as applicable, is effective
and available for the issuance of the Securities. If at any time the SEC shall issue any stop order suspending the effectiveness of the
Registration Statement or prohibiting or suspending the use of the Prospectus or any Prospectus Supplement, the Company shall use best
efforts to obtain the withdrawal of such order at the earliest possible time.
(e)
Blue Sky. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. Without limiting any other obligation
of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities
required under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable
“Blue Sky” laws), and the Company shall comply with all applicable foreign, federal, state and local laws, statutes, rules,
regulations and the like relating to the offering and sale of the Securities to the Buyers.
(f)
Reporting Status. Until the date on which the Buyers shall have sold all of the Underlying Securities (the “Reporting
Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination.
(g)
Use of Proceeds
.
The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not, directly or indirectly, for
(i) the satisfaction of any indebtedness of the Company or any of its Subsidiaries, (ii) the redemption or repurchase of any securities
of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding litigation.
(h)
Financial Information. The Company agrees to send the following to each holder of Notes (each, an “Investor”)
during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Report on Form 20-F, Report of
Foreign Issuer on Form 6-K, any other interim reports or any consolidated balance sheets, income statements, shareholders’ equity
statements and/or cash flow statements for any period other than annual, any Report of Foreign Issuer on Form 6-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the
SEC through EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as
the release thereof, e-mail copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless the following
are filed with the SEC through EDGAR, copies of any notices and other information made available or given to the shareholders of the
Company generally, contemporaneously with the making available or giving thereof to the shareholders.
(i)
Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying
Securities upon each national securities exchange and automated quotation system, if any, upon which the Ordinary Shares and/or ADSs,
as applicable, is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain
such listing or designation for quotation (as the case may be) of all Underlying Securities from time to time issuable under the terms
of the Transaction Documents on such national securities exchange or automated quotation system. The Company shall maintain the ADS’s
listing or authorization for quotation (as the case may be) on The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market,
the Nasdaq Global Select Market, or the Nasdaq Global Market (each, an “Eligible Market”). Neither the Company nor
any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Ordinary
Shares and/or ADSs, as applicable, on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(i). “Underlying Securities” means (i) and the Pre-Delivery ADSs (including the underlying
Pre-Delivery Shares), (ii) the Conversion Shares (and the Conversion ADSs), and (iii) any capital stock of the Company issued or issuable
with respect to the Conversion Shares (and the Conversion ADSs) or the Notes respectively, including, without limitation, (1) as a result
of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital stock of the Company
into which ADSs and/or the Ordinary Shares (as applicable) are converted or exchanged and shares of capital stock of a Successor Entity
(as defined in the Notes) into which the ADSs and/or the Ordinary Shares (as applicable) are converted or exchanged, in each case, without
regard to any limitations on conversion of the Notes.
(j)
Fees. The Company shall reimburse the lead Buyer a non-accountable amount of $100,000 for all costs and expenses incurred by it
or its affiliates in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the
Transaction Documents (including, without limitation, as applicable, all reasonable legal fees of outside counsel and disbursements of
Kelley Drye & Warren LLP, counsel to the lead Buyer, any other reasonable fees and expenses in connection with the structuring, documentation,
negotiation and closing of the transactions contemplated by the Transaction Documents and due diligence and regulatory filings in connection
therewith) (the “Transaction Expenses”) and shall be withheld by the lead Buyer from its Purchase Price at the Closing,
less $20,000 previously paid by the Company to the lead investor; provided, that the Company shall promptly reimburse Kelley Drye &
Warren LLP on demand for all Transaction Expenses not so reimbursed through such withholding at the Closing. The Company shall be responsible
for the payment of any placement agent’s fees, financial advisory fees, registrar service provider fees, depositary fees, ADS issuance
fees, DTC fees or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions
contemplated hereby (including, without limitation, any fees or commissions payable to the Placement Agent, who is the Company’s
sole placement agent in connection with the transactions contemplated by this Agreement). The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses)
arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party
to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.
(k)
Pledge of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees
that the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute and
deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such
pledgee by a Buyer.
(l)
Disclosure of Transactions and Other Material Information.
(i)
Disclosure of Transaction. On or before 9:30 a.m., New York time, on the [first (1st) Business Day after the]1
date of this Agreement, the Company shall file a Report of Foreign Issuer on Form 6-K describing all the material terms
of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction
Documents (including, without limitation, this Agreement and the form of Notes) (including all attachments, the “6-K Filing”).
From and after the earlier of (x) filing of the Prospectus Supplement and (y) filing of the 6-K Filing, the Company shall have disclosed
all material, non-public information (if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their
respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In
addition, effective upon the earlier of (x) filing of the Prospectus Supplement and (y) filing of the 6-K Filing, the Company acknowledges
and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of
the Buyers or any of their affiliates, on the other hand, shall terminate.
(ii)
Limitations on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their
respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the
Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may
be granted or withheld in such Buyer’s sole discretion) except as required by applicable law and regulations or pursuant to Section
4(r) hereof. In the event of a breach of any of the foregoing covenants, including, without limitation, Section 4(r) of this Agreement,
or any of the covenants or agreements contained in any other Transaction Document, by the Company, any of its Subsidiaries, or any of
its or their respective officers, directors, employees and agents (as determined in the reasonable good faith judgment of such Buyer),
in addition to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right to make a public disclosure,
in the form of a press release, public advertisement or otherwise, of such breach or such material, non-public information, as applicable,
without the prior approval by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries, or any of its or their respective officers, directors,
employees, affiliates, shareholders or agents, for any such disclosure. To the extent that the Company delivers any material, non-public
information to a Buyer without such Buyer’s consent, the Company hereby covenants and agrees that such Buyer shall not have any
duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information. Subject to the
foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect
to the transactions contemplated hereby; provided, however, the Company shall be entitled, without the prior approval of any Buyer, to
make the Press Release and any press release or other public disclosure with respect to such transactions (i) in substantial conformity
with the 6-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case
of clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior
to its release). Without the prior written consent of the applicable Buyer (which may be granted or withheld in such Buyer’s sole
discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in
any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication
that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Buyer shall have (unless expressly agreed
to by a particular Buyer after the date hereof in a written definitive and binding agreement executed by the Company and such particular
Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality with
respect to, or a duty not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.
1 | If
signed after market close and prior to 11:59PM. |
(m)
Additional Registration Statements. At any time during the Restricted Period (as defined below), the Company shall not file a
registration statement or an offering statement under the 1933 Act relating to securities that are not the Underlying Securities (other
than a registration statement on Form S-8 or such supplements or amendments to registration statements that are outstanding and have
been declared effective by the SEC as of the date hereof (solely to the extent necessary to keep such registration statements effective
and available and not with respect to any Subsequent Placement)).
(n)
Additional Issuance of Securities. During the period commencing on the date hereof and ending on the date no Notes remain outstanding,
the Company will not, without the prior written consent of the Required Holders, issue any Notes (other than to the Buyers as contemplated
hereby) and the Company shall not issue any other securities that would cause a breach or default under the Notes. The Company agrees
that for the period commencing on the date hereof and ending on the date immediately following the 30th calendar day after
the Closing Date (provided that such period shall be extended by the number of calendar days during such period and any extension thereof
contemplated by this proviso on which any Registration Statement is not effective or any prospectus contained therein is not available
for use or any Current Public Information Failure exists) (the “Restricted Period”), neither the Company nor any of
its Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or
announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked
or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated
under the 1933 Act), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights) (any such
issuance, offer, sale, grant, disposition or announcement (whether occurring during the Restricted Period or at any time thereafter)
is referred to as a “Subsequent Placement”). Notwithstanding the foregoing, this Section 4(n) shall not apply in respect
of the issuance of (i) Ordinary Shares, ADSs or standard options to purchase ADSs to directors, officers or employees of the Company
in their capacity as such pursuant to an Approved Share Plan (as defined below), provided that (1) all such issuances (taking into account
the Ordinary Shares or ADSs issuable upon exercise of such options) after the date hereof pursuant to this clause (i) do not, in the
aggregate, exceed more than 5% of the Ordinary Shares or ADSs issued and outstanding immediately prior to the date hereof and (2) the
exercise price of any such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder
and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely affects any of
the Buyers; (ii) Ordinary Shares or ADSs issued upon the conversion or exercise of Convertible Securities (other than standard options
to purchase Ordinary Shares or ADSs issued pursuant to an Approved Share Plan that are covered by clause (i) above) issued prior to the
date hereof, provided that the conversion, exercise or other method of issuance (as the case may be) of any such Convertible Security
is made solely pursuant to the conversion, exercise or other method of issuance (as the case may be) provisions of such Convertible Security
that were in effect on the date immediately prior to the date of this Agreement, the conversion, exercise or issuance price of any such
Convertible Securities (other than standard options to purchase Ordinary Shares or ADSs issued pursuant to an Approved Share Plan that
are covered by clause (i) above) is not lowered, none of such Convertible Securities (other than standard options to purchase Ordinary
Shares or ADSs issued pursuant to an Approved Share Plan that are covered by clause (i) above) are amended to increase the number of
shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than standard options to purchase
Ordinary Shares or ADSs issued pursuant to an Approved Share Plan that are covered by clause (i) above) are otherwise materially changed
in any manner that adversely affects any of the Buyers; (iii) the Pre-Delivery ADSs (including the underlying Pre-Delivery Shares) and
the Conversion Shares and the Conversion ADSs, and (iv) securities issued in connection with any bona fide strategic or commercial alliances,
acquisitions, mergers, licensing arrangements, strategic transactions and strategic partnerships (including, without limitation, joint
ventures, marketing or distribution arrangements, collaboration agreements or intellectual property license agreements) approved by a
majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities”
(as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection
therewith during the Restricted Period, provided, further, that (w) the primary purpose of such issuance is not to raise capital as reasonably
determined by a majority of the disinterested directors of the Company, and (x) the purchaser or acquirer or recipient of the securities
in such issuance solely consists of either (I) the actual participants in such strategic or commercial alliance, strategic or commercial
licensing arrangement or strategic or commercial partnership, (II) the actual owners of such assets or securities acquired in such acquisition
or merger or (III) the shareholders, partners, employees, consultants, officers, directors or members of the foregoing Persons, in each
case, which is, itself or through its subsidiaries, an operating company or an owner of an asset, in a business synergistic with the
business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, (y) the number or
amount of securities issued to such Persons by the Company shall not be disproportionate to each such Person’s actual participation
in (or fair market value of the contribution to) such strategic or commercial alliance or strategic or commercial partnership or ownership
of such assets or securities to be acquired by the Company, as applicable (each of the foregoing in clauses (i) through (v), collectively
the “Excluded Securities”). “Approved Share Plan” means any employee benefit plan which has been
approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which Ordinary Shares, ADSs and
standard options to purchase Ordinary Shares or ADSs may be issued to any employee, officer or director for services provided to the
Company in their capacity as such.
(o)
Reservation of Shares. So long as any of the Notes remain outstanding, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, no less than 300% of the maximum number of Ordinary Shares and ADSs issuable
upon conversion of all the Notes then outstanding (assuming for purposes hereof that (x) the Notes are convertible at the Alternate Conversion
Price as of such applicable date of determination, (y) interest on the Notes shall accrue through the first anniversary of the Closing
Date and will be converted in Ordinary Shares at a conversion price equal to the Alternate Conversion Price as of such applicable date
of determination and (z) any such conversion shall not take into account any limitations on the conversion of the Notes set forth in
the Notes) (collectively, the “Required Reserve Amount”); provided that at no time shall the number of Ordinary Shares
and ADSs reserved pursuant to this Section 4(o) be reduced other than proportionally in connection with any conversion, exercise and/or
redemption, as applicable of Notes. If at any time the number of Ordinary Shares and/or ADSs, as applicable, authorized and reserved
for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to
authorize and reserve a sufficient number of shares, including, without limitation, amending, modifying or replacing, as applicable,
the Deposit Agreement then in effect with the Depositary (or its successor) to increase the aggregate number of ADSs issuable thereunder
and/or calling a special meeting of shareholders to authorize additional Ordinary Shares to meet the Company’s obligations pursuant
to the Transaction Documents, and in the case of an insufficient number of authorized Ordinary Shares, obtaining shareholder approval
of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized
Ordinary Shares of the Company, to ensure that the number of authorized Ordinary Shares is sufficient to meet the Required Reserve Amount.
If at any time the ADS Registration Statement does not have sufficient ADSs available to effect the issuance in full of the Required
Reserve Amount of ADSs, the Company shall promptly either file an amendment thereto or a new Registration Statement on Form F-6, as necessary,
to cure such failure.
(p)
Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance
or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.
(q)
Other Notes; Variable Securities. From the date hereof until the date no Notes remain outstanding, the Company and each Subsidiary
shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company or any Subsidiary (i) issues or sells any Convertible
Securities either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices
of or quotations for the ADSs at any time after the initial issuance of such Convertible Securities, or (B) with a conversion, exercise
or exchange price that is subject to being reset at some future date after the initial issuance of such Convertible Securities or upon
the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the
ADSs, other than pursuant to a customary “weighted average” anti-dilution provision or (ii) enters into any agreement (including,
without limitation, an equity line of credit or an “at-the-market” offering) whereby the Company or any Subsidiary may sell
securities at a future determined price (other than standard and customary “preemptive” or “participation” rights).
Each Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which
remedy shall be in addition to any right to collect damages.
(r)
Participation Right. At any time on or prior to the first anniversary of Closing Date, neither the Company nor any of its Subsidiaries
shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(r). The
Company acknowledges and agrees that the right set forth in this Section 4(r) is a right granted by the Company, separately, to each
Buyer.
(i)
At least five (5) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a written
notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without
limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains
material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B)
if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes
or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public
information and (z) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to
such Subsequent Placement upon its written request. Upon the written request of a Buyer within three (3) Trading Days after the Company’s
delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company shall promptly, but no later than
one (1) Trading Day after such request, deliver to such Buyer an irrevocable written notice (the “Offer Notice”) of
any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe
the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued,
sold or exchanged and (D) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s
pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right
to subscribe for under this Section 4(r) shall be (x) based on such Buyer’s pro rata portion of the aggregate original principal
amount of the Notes purchased hereunder by all Buyers (the “Basic Amount”), and (y) with respect to each Buyer that
elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers
as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), which process shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription
Amount.
(ii)
To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the fifth (5th)
Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion
of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth
an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for,
the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference
between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”),
each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription
Amount as the Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts,
subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires
to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each
Buyer a new Offer Notice and the Offer Period shall expire on the fifth (5th) Business Day after such Buyer’s receipt
of such new Offer Notice.
(iii)
The Company shall have five (5) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused Securities”)
pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in
the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer
Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of
the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement,
which shall be filed with the SEC on a Report of Foreign Issuer on Form 6-K with such Subsequent Placement Agreement and any documents
contemplated therein filed as exhibits thereto.
(iv)
In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms
specified in Section 4(r)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw its Notice of
Acceptance or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be
not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(r)(ii) above
multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes
to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(r) prior to such
reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects
to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange
more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers
in accordance with Section 4(r)(i) above.
(v)
Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from the
Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance,
as reduced pursuant to Section 4(r)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the Offer.
The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company
and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to
such Buyer and its counsel.
(vi)
Any Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(r) may not be issued, sold or
exchanged until they are again offered to such Buyer under the procedures specified in this Agreement.
(vii)
The Company and each Buyer agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement Agreement
with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in
connection with, any agreement previously entered into with the Company or any instrument received from the Company, and (y) representation
and warranties of an Investor in the Subsequent Placement Documents shall not be more restrictive than those of the Buyers in this Agreement
(other than such changes as necessary to comply with applicable law, rules and regulations, the manner of sale of such security in such
Subsequent Placement and/or the type of such security to be sold in such Subsequent Placement).
(viii)
Notwithstanding anything to the contrary in this Section 4(r) and unless otherwise agreed to by such Buyer, the Company shall either
confirm in writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession of any
material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by such fifth
(5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and
no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been
abandoned and such Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its
Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide
such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section 4(r). The Company
shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated
by the last sentence of Section 4(r)(ii).
(ix)
The restrictions contained in this Section 4(r) shall not apply in connection with the issuance of any Excluded Securities. The Company
shall not circumvent the provisions of this Section 4(r) by providing terms or conditions to one Buyer that are not provided to all.
(s)
Dilutive Issuances. For so long as any Notes remain outstanding, the Company shall not, in any manner, enter into or affect any
Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required to issue upon
conversion of any Notes any ADSs in excess of that number of ADSs which the Company may issue upon conversion of the Notes without breaching
the Company’s obligations under the rules or regulations of the Principal Market.
(t)
Passive Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their
respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment
company within the meaning of Section 1297 of the Code.
(u)
Restriction on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of the Buyers.
(v)
Corporate Existence. So long as any Buyer beneficially owns any Notes, the Company shall not be party to any Fundamental Transaction
(as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth
in the Notes.
(w)
Share Splits. Until the Notes and all notes issued pursuant to the terms thereof are no longer outstanding, the Company shall
not effect any share combination, reverse share split or other similar transaction (or make any public announcement or disclosure with
respect to any of the foregoing) without the prior written consent of the Required Holders (as defined below).
(x)
Conversion Procedures. The form of Conversion Notice (as defined in the Notes) included in the Notes set forth the totality of
the procedures required of the Buyers in order to convert the Notes. No legal opinion, other information or instructions shall be required
of the Buyers to convert their Notes. The Company shall honor conversions of the Notes and shall deliver the Conversion Shares (and the
Conversion ADSs) in accordance with the terms, conditions and time periods set forth in the Notes.
(y)
Regulation M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution
of the Securities contemplated hereby.
(z)
Surrender and Cancellation of Pre-Delivery ADSs. Each Buyer, severally, hereby covenants and agrees that if such Buyer holds any
Pre-Delivery ADSs (and/or Pre-Delivery Shares) after such date that no Notes are then held by such Buyer (whether following the conversion
or redemption, as applicable, of all Notes then held by such Buyer, but after any applicable Delivery Share Applications (as defined
in the Notes) related thereto), such remaining Pre-Delivery ADSs (and/or Pre-Delivery Shares, as applicable) shall be deemed surrendered
and cancelled by such Buyer on the date such Buyer of the Notes ceases to hold any Notes.
(aa)
Current Information. At any time any Notes remain outstanding, the Registration Statement is not available for the issuance of
all of the Securities then issuable pursuant to this Securities Purchase Agreement, including, without limitation, if the Company shall
fail for any reason to satisfy the requirements of Rule 144(c)(1) and Rule 144(i)(2) (as applicable) (a “Current Public Information
Failure”) then, as partial relief for the damages to the Buyers hereunder (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each such Buyer an amount in cash equal to two percent (2.0%) of the
aggregate Purchase Price of such Buyer’s Notes on the day of a Current Public Information Failure and on every thirtieth day (pro-rated
for periods totaling less than thirty days) thereafter until the earlier of (i) the date such Current Public Information Failure is cured
and (ii) such time that such public information is no longer required pursuant to Rule 144. The payments to which a holder shall be entitled
pursuant to this Section 4(aa) are referred to herein as “Current Public Information Failure Payments.” Current Public
Information Failure Payments shall be paid on the earlier of (I) the last day of the calendar month during which such Current Public
Information Failure Payments are incurred and (II) the third Business Day after the event or failure giving rise to the Current Public
Information Failure Payments is cured. In the event the Company fails to make Current Public Information Failure Payments in a timely
manner, such Current Public Information Failure Payments shall bear interest at the rate of two percent (2.0%) per month (prorated for
partial months) until paid in full.
(bb)
Closing Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause
to be delivered, to each Buyer and Kelley Drye & Warren LLP a complete closing set of the executed Transaction Documents, Securities
and any other document required to be delivered to any party pursuant to Section 7 hereof or otherwise.
5.
REGISTER; IRREVOCABLE INSTRUCTIONS; LEGEND.
(a)
Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may
designate by notice to each holder of Securities), a register for the Notes in which the Company shall record the name and address of
the Person in whose name the Notes have been issued (including the name and address of each transferee), the principal amount of the
Notes held by such Person, the number of Pre-Delivery Shares (and the Pre-Delivery ADSs) and Conversion Shares (and the Conversion ADSs)
issuable pursuant to the terms of the Notes held by such Person. The Company shall keep the register open and available at all times
during business hours for inspection of any Buyer or its legal representatives.
(b)
Irrevocable Instructions.
(i)
Registrar Service Provider Instructions. The Company shall issue irrevocable (unless revocation is required to comply with applicable
laws) instructions to the Company’s registrar service provider (the “Registrar Service Provider”) in the form
previously provided to the Company (the “Irrevocable Registrar Service Provider Instructions”) to deposit Ordinary
Shares with Citibank, N.A. – Hong Kong branch, the custodian for the Depositary (or any successor custodian thereto, the “Custodian”),
as applicable, underlying the Pre-Delivery ADSs and Conversion ADSs, respectively, in such amounts as specified from time to time by
each Buyer to the Company in connection with the conversion of the Notes. The Company represents and warrants that no instruction other
than the Irrevocable Registrar Service Provider Instructions referred to in this Section 5(b)(i) will be given by the Company to the
Registrar Service Provider with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books
and records of the Company. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to
each Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b)(i) will
be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b)(i), that
each Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.
The Company shall, to the extent permitted by applicable law, use reasonably best effort to cause its counsel to issue the legal opinion
referred to in the Irrevocable Registrar Service Provider Instructions to the Registrar Service Provider to the extent reasonably required
or requested by the Registrar Service Provider in connection with the issuance of the Conversion Shares. Any fees (with respect to the
Registrar Service Provider, counsel to the Company or otherwise) associated with such deposit or the issuance of such opinion shall be
borne by the Company.
(ii)
Depositary Instructions. Upon the issuance of the Pre-Delivery ADSs at the Closing in accordance herewith and upon any conversion
of the Notes in accordance with the applicable Conversion Notice (as defined in the Notes), the Company shall issue irrevocable instructions
to the Depositary in the form previously provided to the Company (the “Irrevocable Depositary Instructions”) to issue
to such Investor (or its designee) one or more ADR certificates or credit ADSs to the applicable balance accounts at DTC in such name
and in such denominations as specified by such Investor (or its designee) shall request. The Depositary shall issue such Pre-Delivery
ADSs and Conversion ADSs to such Investor (or designee) without any restrictive legend. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to each Buyer. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Section 5(b)(ii) will be inadequate and agrees, in the event of a breach or threatened breach
by the Company of the provisions of this Section 5(b)(ii) that each Buyer shall be entitled, in addition to all other available remedies,
to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required. The Company shall cause its counsel to issue the legal opinion referred
to in the Irrevocable Depositary Instructions to the Depositary (or its successor) on the Closing Date. Any fees (with respect to the
Registrar Service Provider, the Depositary, counsel to the Company or otherwise) associated with the issuance of such opinion or the
removal of any legends on any of the Securities shall be borne by the Company.
(c)
No Legends. Certificates and any other instruments evidencing the Securities shall not bear any restrictive or other legend.
(d)
FAST Compliance. While any Notes remain outstanding, the Company shall maintain a Depositary that participates in DTC Fast Automated
Securities Transfer Program.
6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
The
obligation of the Company hereunder to issue and sell the Notes to each Buyer at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may
be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:
(a)
Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.
(b)
Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 4(j)) for the Note being purchased by such Buyer at the Closing by wire transfer of immediately available funds
in accordance with the Flow of Funds Letter (as defined below).
(c)
The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of
the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.
7.
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
The
obligation of each Buyer hereunder to purchase its Note at the Closing is subject to the satisfaction, at or before the Closing Date,
of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived by such
Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:
(a)
The Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company
shall have (i) duly executed and delivered to such Buyer a Note in such original principal amount as is set forth across from such Buyer’s
name in column (3) of the Schedule of Buyers as being purchased by such Buyer at the Closing pursuant to this Agreement and (ii) delivered
the Pre-Delivery Shares represented by such aggregate number of Pre-Delivery ADSs as is set forth across from such Buyer’s name
in column (4) of the Schedule of Buyers as being purchased by such Buyer at the Closing pursuant to this Agreement, by deposit/withdrawal
at custodian, Direct Registration System and/or Profile Modification System, as applicable, to the broker of each such Buyer in accordance
with the deposit instructions of each such broker delivered to the Company on or prior to the Closing Date.
(b)
Such Buyer shall have received the legal opinion with respect to matters of Cayman Islands law of Conyers, Dill & Pearman, the Company’s
Cayman Islands legal counsel, and the legal opinion with respect to matters of U.S. law of Squire Patton Boggs (US) LLP, the Company’s
United States counsel, each dated as of the Initial Closing Date, in the form acceptable to such Buyer.
(c)
The Company shall have delivered to such Buyer a copy of the Irrevocable Registrar Service Provider Instructions, in the form acceptable
to such Buyer, which instructions shall have been delivered to and acknowledged in writing by the Registrar Service Provider.
(d)
The Company shall have delivered to such Buyer a copy of the Irrevocable Depositary Instructions, in the form acceptable to such Buyer,
which instructions shall have been delivered to and acknowledged in writing by the Depositary.
(e)
The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within
ten (10) days of the Closing Date.
(f)
The Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation and
good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and
is required to so qualify, as of a date within ten (10) days of the Closing Date.
(g)
The Company shall have delivered to such Buyer a certified copy of the Articles of Association as issued by the Cayman Islands Registry
of Companies within ten (10) days of the Closing Date.
(h)
The Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary or the
Chief Financial Officer of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted
by the Company’s board of directors in a form reasonably acceptable to such Buyer, (ii) the Articles of Association of the Company
and (iii) the Memorandum of Association of the Company, each as in effect at the Closing.
(i)
Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date
as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true
and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer
shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer.
(j)
The Company shall have delivered to such Buyer (x) a letter from the Registrar Service Provider certifying the number of Ordinary Shares
outstanding on the Closing Date immediately prior to the Closing and (y) a letter from the Depositary certifying the number of ADSs outstanding
on the Closing Date immediately prior to the Closing.
(k)
The ADSs (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been suspended,
as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal Market or (II) by falling
below the minimum maintenance requirements of the Principal Market.
(l)
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of
the Securities, including without limitation, those required by the Principal Market, if any.
(m)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.
(n)
Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.
(o)
The Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Pre-Delivery
ADSs and the Conversion ADSs.
(p)
From the date hereof to the Closing Date, (i) trading in the ADSs shall not have been suspended by the SEC or the Principal Market (except
for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing),
and, (ii) at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended
or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on the Principal
Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have
occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect
on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Buyer, makes it impracticable
or inadvisable to purchase the Securities at the Closing
(q)
The Registration Statement shall be effective and available for the issuance and sale of the Notes to be issued in the Closing, the Pre-Delivery
Shares (and the Pre-Delivery ADSs) and the Conversion Shares (and the Conversion ADSs) issuable upon conversion thereof pursuant to the
terms hereof and the Company shall have delivered to such Buyer the Prospectus and the Prospectus Supplement with respect thereto as
required hereunder and thereunder.
(r)
Such Buyer shall have received a letter on the letterhead of the Company (the “Flow of Funds Letter”) duly executed
by the Chief Executive Officer of the Company, setting forth the wire amounts of each Buyer and the wire transfer instructions of the
Company.
(s)
The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.
8.
TERMINATION.
In
the event that the Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall
have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business
on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this
Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated
by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the Notes
shall be applicable only to such Buyer providing such written notice, provided further that no such termination shall affect any obligation
of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(j) above. Nothing contained
in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions
of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement or the other Transaction Documents.
9.
MISCELLANEOUS.
(a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect to any provision or rule (whether
of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of Delaware. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington,
Delaware, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or
with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. The Company hereby appoints GKL Corporate/Search, Inc. (with offices located at One Capitol Mall, Suite
660, Sacramento, CA 95814, and Telephone No. (800) 446-5455), as its agent for service of process in Delaware. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed
or operate to preclude any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY. The choice of the laws of the State of Delaware as the governing law of this Agreement
is a valid choice of law and would be recognized and given effect to in any action brought before a court of competent jurisdiction in
the Cayman Islands, except for those laws (i) which such court considers to be procedural in nature, (ii) which are revenue or penal
laws or (iii) the application of which would be inconsistent with public policy, as such term is interpreted under the laws of the Cayman
Islands. The choice of laws of the State of Delaware as the governing law of this Agreement will be honored by competent courts in the
PRC, subject to compliance with relevant PRC civil procedural requirements. The Company or any of their respective properties, assets
or revenues does not have any right of immunity under Cayman Islands, the PRC or Delaware law, from any legal action, suit or proceeding,
from the giving of any relief in any such legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any
Cayman Islands and the PRC, Delaware or United States federal court, from service of process, attachment upon or prior to judgment, or
attachment in aid of execution of judgment, or from execution of a judgment, or other legal process or proceeding for the giving of any
relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any other matter under
or arising out of or in connection with this Agreement; and, to the extent that the Company, or any of its properties, assets or revenues
may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may at any time be commenced,
the Company hereby waives such right to the extent permitted by law and hereby consents to such relief and enforcement as provided in
this Agreement and the other Transaction Documents.
(b)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event
that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page were an original thereof.
(c)
Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.
(d)
Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything
to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required
or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries
(as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation,
any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable
law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents
is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed
to have been made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted
with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable
law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of
interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction
Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or
received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest”
or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which
they relate.
(e)
Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by any
Buyer with respect to Ordinary Shares, the ADSs or the Securities, and the other matters contained herein and therein, and this Agreement,
the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein
contain the entire understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing
contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any
Buyer has entered into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries prior to the date
hereof with respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any
obligations of the Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement
entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any
Buyer received from the Company and/or any of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall
continue in full force and effect. Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement.
No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders (as
defined below), and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e)
shall be binding on all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective to the extent
that it (A) applies to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability on
any Buyer without such Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion).
Notwithstanding anything in any Transaction Document to the contrary, no waiver shall be effective unless it is in writing and signed
by an authorized representative of the waiving party, provided that the Required Holders may waive any provision of this Agreement or
any other Transaction Document, and any waiver of any provision of this Agreement or any other Transaction Document made in conformity
with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that
no such waiver shall be effective to the extent that it (1) applies to less than all of the holders of the Securities then outstanding
(unless a party gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s
prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No consideration (other than reimbursement
of legal fees) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration also is offered to all of the parties to the Transaction Documents, all holders of
the Notes. From the date hereof and while any Notes are outstanding, the Company shall not be permitted to receive any consideration
from a Buyer or a holder of Notes that is not otherwise contemplated by the Transaction Documents in order to, directly or indirectly,
induce the Company or any Subsidiary (i) to treat such Buyer or holder of Notes in a manner that is more favorable than to other similarly
situated Buyers or holders of Notes, or (ii) to treat any Buyer(s) or holder(s) of Notes in a manner that is less favorable than the
Buyer or holder of Notes that is paying such consideration; provided, however, that the determination of whether a Buyer has been treated
more or less favorably than another Buyer shall disregard any securities of the Company purchased or sold by any Buyer. The Company has
not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that,
except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing
to the Company, any Subsidiary or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company expressly
acknowledges and agrees that (x) no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any
of its representatives shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception
to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document and (y) unless
a provision of this Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the
SEC Documents,” nothing contained in any of the SEC Documents shall affect such Buyer’s right to rely on, or shall modify
or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement
or any other Transaction Document. “Required Holders” means (I) prior to the Closing Date, each Buyer entitled to
purchase Notes at a Closing and (II) on or after the Closing Date, holders of a majority of the Underlying Securities as of such time
(excluding any Underlying Securities held by the Company or any of its Subsidiaries as of such time and excluding any purchasers of Underlying
Securities, unless pursuant to a written assignment by such Buyer) issued or issuable hereunder or pursuant to the Notes (or the Buyers,
with respect to any waiver or amendment of Section 4(r)); provided, that such majority must include _____.
(f)
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the
sending party does not receive an automatically generated message from the recipient’s email server that such e-mail could not
be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications
shall be:
If
to the Company:
Xiao-I
Corporation
5F, Building #2, No.2570 Hechuan Road
Minhang
District, Shanghai,China
Telephone: (+86) 021-52270508
Attention: Chief Executive Officer
E-Mail: max@xiaoi.com
With
a copy (for informational purposes only) to:
5F,
Building #2, No.2570 Hechuan Road
Minhang
District, Shanghai,China
Telephone: (+86) 021-52270508
Attention: legal director
E-Mail: chao.xu@xiaoi.com
If
to the Registrar Service Provider:
ICS
Corporate Services (Cayman) Limited
Room 502-504, Tower 5, 99 Shaohong Road
Shanghai,
China
Telephone:
+86 153 1621 5347
Attention: Luna Liang, Project Manager
E-Mail: luna.liang@icscs.com
If
to the Depositary:
Citibank,
N.A.
ADR Department, Citibank N.A.
388
Greenwich Street
New York, NY 10013
Telephone: +86 21 2896 6557
Attention: Account Manager Team
E-Mail: dr.china@citi.com
If
to a Buyer, to its mailing address and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives
as set forth on the Schedule of Buyers,
with
a copy (for informational purposes only) to:
Kelley
Drye & Warren LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7540
Attention: Michael A. Adelstein, Esq.
E-mail: madelstein@kelleydrye.com
or
to such other mailing address and/or e-mail address and/or to the attention of such other Person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye &
Warren LLP shall only be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s e-mail containing
the time, date and recipient’s e-mail or (C) provided by an overnight courier service shall be rebuttable evidence of personal
service, receipt by e-mail or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.
(g)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Notes (but excluding any purchasers of Underlying Securities, unless pursuant to
a written assignment by such Buyer). The Company shall not assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction (as defined in the Notes)
(unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer
may assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of the Company,
in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.
(h)
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the
Indemnitees referred to in Section 9(k).
(i)
Survival. The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible
only for its own representations, warranties, agreements and covenants hereunder.
(j)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(k)
Indemnification.
(i)
In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and
in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Buyer and each holder of any Securities and all of their shareholders, partners, members, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any
Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made
by the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the
Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought
or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or
any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance
or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly,
with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such Buyer pursuant to Section 4(l), or (D)
the status of such Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by
the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any
action or proceeding for injunctive or other equitable relief). To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.
(ii)
Promptly after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to
be made against the Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof, and the Company
shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel
mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own
counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the Company has agreed in writing to pay such fees
and expenses; (B) the Company shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably
satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the named parties to any such Indemnified Liability (including
any impleaded parties) include both such Indemnitee and the Company, and such Indemnitee shall have been advised by counsel that a conflict
of interest is likely to exist if the same counsel were to represent such Indemnitee and the Company (in which case, if such Indemnitee
notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, then the Company shall not have
the right to assume the defense thereof and such counsel shall be at the expense of the Company), provided further, that in the case
of clause (C) above the Company shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel
for the Indemnitees. The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any
such action or Indemnified Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee
which relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any
action, claim or proceeding effected without its prior written consent, provided, however, that the Company shall not unreasonably withhold,
delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment
or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement
shall not include any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the Company
shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to the Company within a reasonable time of the commencement
of any such action shall not relieve the Company of any liability to the Indemnitee under this Section 9(k), except to the extent that
the Company is materially and adversely prejudiced in its ability to defend such action.
(iii)
The indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.
(iv)
The indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the
Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.
(l)
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the
generality or applicability of a more general representation or warranty. Each and every reference to share prices, Ordinary Shares,
ADSs and any other numbers in this Agreement that relate to the Ordinary Shares and/or ADSs shall be automatically adjusted for any share
splits, share dividends, share combinations, recapitalizations or other similar transactions that occur with respect to the Ordinary
Shares or the ADSs, as applicable, after the date of this Agreement. Notwithstanding anything in this Agreement to the contrary, for
the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions
with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities of the
Company in order for such Buyer (or its broker or other financial representative) to effect short sales or similar transactions in the
future.
(m)
Remedies. Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities,
shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore,
the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such
Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the
Buyers. The Company therefore agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent
injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual
damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall
be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in
equity (including a decree of specific performance and/or other injunctive relief).
(n)
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary
does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.
(o)
Payment Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to
any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff
had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents
are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other Transaction
Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation
to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in
the Wall Street Journal on the relevant date of calculation.
(p)
Judgment Currency.
(i)
If for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:
(1)
the date actual payment of the amount due, in the case of any proceeding in the courts of Delaware or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(2)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion
Date”).
(ii)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change in
the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party
shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange
Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(iii)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement or any other Transaction Document.
(q)
Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are
several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that
the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with respect
to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the
Buyers are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or
the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction
Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent
for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such
Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents.
The Company and each Buyer confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation
of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction
Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.
The use of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of
the Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and
not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in
this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between the
Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.
[signature
pages follow]
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
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COMPANY: |
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XIAO-I CORPORATION |
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Name: |
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Title: |
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IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
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BUYER: |
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[_____] |
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SCHEDULE
OF BUYERS
(1)
Buyer | |
(2)
Address and Facsimile Number | |
| (3)
Original
Principal
Amount of
Notes | | |
| (4)
Aggregate
Number of
Pre-Delivery
ADSs | | |
| (5)
Purchase
Price | | |
(6)
Legal Representative’s
Address and Facsimile Number |
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Exhibit 10.2
PLACEMENT AGENCY AGREEMENT
FT Global Capital, Inc.
1688 Meridian Avenue, Suite
700
Miami Beach, FL 33139
June 17, 2024
Ladies and Gentlemen:
This letter (this “Agreement”)
constitutes the agreement between XIAO-I Corporation (NASDAQ: AIXI) (the “Company”) and FT Global Capital, Inc. (“FT
Global” or the “Placement Agent”) pursuant to which FT Global shall serve as the placement agent for the
Company, on a reasonable “best efforts” basis, in connection with the proposed offer and sale (the “Offering”)
by the Company of its Securities (as defined Section 3 of this Agreement) (the “Services”). The Company expressly acknowledges
and agrees that FT Global’s obligations hereunder are on a reasonable “best efforts” basis only and that the execution
of this Agreement does not constitute a commitment by FT Global to purchase the Securities and does not ensure the successful placement
of the Securities or any portion thereof or the success of FT Global with respect to securing any other financing on behalf of the Company.
| 1. | Appointment of FT Global as Exclusive Placement Agent. |
On the basis of the representations,
warranties, covenants and agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement, the
Company hereby appoints the Placement Agent as its exclusive placement agent in connection with a distribution of its Notes (as defined
below) to be offered and sold by the Company pursuant to the Registration Statement (as defined below), and the Placement Agent agrees
to act as the Company’s exclusive placement agent. Pursuant to this appointment, the Placement Agent will solicit offers for the
purchase of or attempt to place all or part of the Securities of the Company in the proposed Offering. Until the final closing or upon
termination of this Agreement pursuant to Section 5 hereof, the Company shall not, without the prior written consent of the Placement
Agent, solicit or accept offers to purchase the Securities other than through the Placement Agent. The Placement Agent will use its reasonable
“best efforts” to solicit offers to purchase the Securities from the Company on the terms, and subject to the conditions,
set forth in the Prospectus (as defined below). The Placement Agent shall use commercially reasonable efforts to assist the Company in
obtaining performance by each Purchaser (as defined below) whose offer to purchase Securities has been solicited by the Placement Agent,
but the Placement Agent shall not, except as otherwise provided in this Agreement, be obligated to disclose the identity of any potential
purchaser or have any liability to the Company in the event any such purchase is not consummated for any reason. The Company acknowledges
that under no circumstances will the Placement Agent be obligated to underwrite or purchase any Securities for its own account and, in
soliciting purchases of the Securities, the Placement Agent shall act solely as an agent of the Company. The Services provided pursuant
to this Agreement shall be on an “agency” basis and not on a “principal” basis. Following the prior written consent
of the Company, the Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection
with the Offering.
The Placement Agent will solicit
offers for the purchase of the Securities in the Offering at such times and in such amounts as the Placement Agent deems advisable. The
Company shall have the sole right to accept offers to purchase Securities and may reject any such offer, in whole or in part. The Company
and Placement Agent shall negotiate the timing and terms of the Offering and acknowledge that the Offering and the provision of the Services
related to the Offering are subject to market conditions and the receipt of all required related clearances and approvals.
| 2. | Fees; Expenses; Other Arrangements. |
A. Placement
Agent’s Fee. As compensation for services rendered, the Company shall pay to the Placement Agent in cash by wire transfer in
immediately available funds to an account or accounts designated by the Placement Agent an amount (the “Placement Fee”)
equal to a percentage of the aggregate gross proceeds received by the Company from the sale of the Securities, at the closing of the Offering
(the “Closing” and the date on which the Closing occurs, the “Closing Date”), which percentage shall
be seven and one-half percent (7.5%) of the aggregate gross proceeds. The Placement Agent may deduct from the net proceeds of the Offering
payable to the Company on the Closing Date the Placement Fee set forth herein to be paid by the Company to the Placement Agent.
B. Offering
Expenses. The Company will be responsible for and will pay all expenses relating to the Offering, including, without limitation, (a)
all filing fees and expenses relating to the registration of the Securities with the Commission; (b) all FINRA filing fees; (c) all fees
and expenses relating to the listing of the Securities on the NASDAQ Stock Market (the “Exchange”); (d) the costs of
all mailing and printing of the documents related to the Offering; (e) transfer and/or stamp taxes, if any, payable upon the transfer
of Securities from the Company to Investors; (f) the fees and expenses of the Company’s accountants; (g) FT Global’s travel,
due diligence and related expenses not to exceed $40,000; and (h) legal fees of FT Global’s counsel not to exceed $50,000. The Placement
Agent may deduct from the net proceeds of the Offering payable to the Company on the Closing Date the expenses set forth herein to be
paid by the Company to the Placement Agent, provided, however, that in the event that the Offering is terminated, the Company agrees to
reimburse the Placement Agent to the extent required by Section 5 hereof promptly after such termination.
C. Tail
Financing. The Placement Agent shall be entitled to fees per Section 2.A. of this Agreement with respect to any public or private
offering or other financing or capital-raising transaction of any kind (“Tail Financing”) to the extent that such Tail
Financing is provided, directly or indirectly, to the Company or its affiliates by any persons or entities (or any entity under common
management or having a common investment advisor) that the Placement Agent has introduced to the Company through an in-person, an electronic,
a telephonic or other form of communication or persons or entities that the Placement Agent had “wall-crossed” in connection
with this Offering, if such Tail Financing is consummated at any time within the 12-month period following the termination of this Agreement.
Any right to the fees provided by this paragraph shall be terminated upon termination of this Agreement by the Company for “Cause,”
which shall mean a material breach by the Placement Agent of this Agreement or a material failure by the Placement Agent to provide the
Services as contemplated by this Agreement. Prior to ten (10) days after termination or expiration of this Agreement, the Placement Agent
will provide by electronic mail a written list of such persons or entities that the Placement Agent had introduced to the Company or "wall-crossed"
in connection with this Offering during the term of this Agreement, which list shall be deemed to include entities under common management
or having a common investment advisor with the entities included on such list.
D. Following
the closing of this Offering, the term of the Placement Agent’s exclusive engagement shall continue as forth in Section 5 hereof.
Notwithstanding anything to the contrary contained herein, the provisions concerning confidentiality, indemnification and contribution
contained herein and the Company’s obligations contained in the indemnification provisions will survive any expiration or termination
of this Agreement, and the Company’s obligation to pay fees actually earned and payable and to reimburse expenses actually incurred
and reimbursable pursuant to Section 1 hereof and which are permitted to be reimbursed under FINRA Rule 5110(f)(2)(D)(i), will survive
any expiration or termination of this Agreement. Nothing in this Agreement shall be construed to limit the ability of the Placement Agent
or its Affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business
relationship with Persons (as defined below) other than the Company. As used herein (i) “Persons” means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government
(or an agency or subdivision thereof) or other entity of any kind and (ii) “Affiliate” means any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are
used in and construed under Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”).
E. The
Services provided by the Placement Agent hereunder are solely for the benefit of the Company and are not intended to confer any rights
upon any persons or entities not a party hereto (including, without limitation, securityholders, employees or creditors of the Company)
as against the Placement Agent or its directors, officers, agents and employees.
| 3. | Description of the Offering. |
The Securities to be offered
directly to various investors (each, an “Investor” or “Purchaser” and, collectively, the “Investors”
or the “Purchasers”) pursuant to the Securities Purchase Agreement dated on or about the date hereof between the Company
and the Investors (the “Securities Purchase Agreement”) shall consist of 8% senior secured convertible notes of the
Company in the original principal amount of $ 3,260,869.57 (the “Notes”) which Notes shall be convertible into the
Company’s ordinary shares represented by American Depository Shares (the “ADS”) (the “Securities”).
The ordinary shares of the Company are, as of the date hereof, represented by the ADS, each ADS representing one-third (1/3) of one (1)
ordinary share, issued pursuant to the Deposit Agreement, dated as of March 9, 2023, by and among the Company, Citibank, N.A., as depositary,
and the holders and beneficial owners from time to time of the ADSs issued thereunder. The Company shall also concurrently with the Note
offering shall issue and deliver to the Investors an additional 1,000,000 ADS, at par. The Company shall sell and issue the Notes pursuant
to (i) a currently effective shelf registration statement on Form F-3, which has sufficient availability for the issuance of the Securities
on the Closing Date (as defined below) (SEC File No. 333-279306) (the “Registration Statement”) and has been declared
effective in accordance with the Securities Act of 1933, as amended, (the “1933 Act”), by the U.S. Securities and Exchange
Commission (the “SEC”) and (ii) a registration statement on Form F-6, as amended, which has 100,000,000 ADSs issuable
upon deposit of ordinary shares (SEC File No. 333-269502) (the “ADS Registration Statement”), which registration statement
has been declared effective in accordance with the 1933 Act by the SEC. If the Company shall default in its obligations to deliver the
Notes to a Purchaser whose offer it has accepted and who has tendered payment, the Company shall indemnify and hold the Placement Agent
harmless against any loss, claim, damage or expense arising from or as a result of such default by the Company under this Agreement.
| 4. | Delivery and Payment; Closing. |
Settlement of the Securities
purchased by an Investor shall be made as set forth in the Securities Purchase Agreement and the Notes. On the Closing Date, the Securities
to which the Closing relates shall be delivered through such means as the parties to the Securities Purchase Agreement may hereafter agree.
The Securities shall be registered in such name or names and in such authorized denominations as set forth in the Securities Purchase
Agreement. The term “Business Day” means any day other than a Saturday, a Sunday, a legal holiday or a day on which
banking institutions are authorized or obligated by law to close in New York, New York.
| 5. | Term and Termination of Agreement. |
Following the closing of this
Offering the term of the Placement Agent’s exclusive engagement with and by the Company shall continue and shall terminate on September
11, 2024. Notwithstanding anything to the contrary contained herein, any provision in this Agreement concerning or relating to confidentiality,
indemnification, contribution, advancement, the Company’s representations and warranties and the Company’s obligations to
pay fees, including without limitation as set forth in Section 2 above, and reimburse expenses will survive any expiration or termination
of this Agreement. If any condition specified in Section 8 is not satisfied when and as required to be satisfied, this Agreement may be
terminated by the Placement Agent by notice to the Company at any time on or prior to a Closing Date, which termination shall be without
liability on the part of any party to any other party, except that those portions of this Agreement specified in Section 19 shall at all
times be effective and shall survive such termination. Except as forth in this Section, the parties agree that the certain Engagement
Agreement dated March 12, 2024 between the Company and the Placement Agent (the “Engagement Agreement”) shall continue to
be effective and the terms therein shall continue to survive and be enforceable by the Placement Agent in accordance with its terms, including,
without limitation, Sections 1 and 7 therein, notwithstanding the termination of this Agreement in accordance of this Section.
Nothing in this Agreement
shall be construed to limit the ability of the Placement Agent, its officers, directors, employees, agents, associated persons and any
individual or entity “controlling,” “controlled by,” or “under common control” with the Placement
Agent (as those terms are defined in Rule 405 under the Securities Act) to conduct its business including without limitation the ability
to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business relationship with
any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
| 7. | Representations, Warranties and Covenants of the Company. |
As of the date and time of
the execution of this Agreement, the Closing Date and the Applicable Time (as defined herein), the Company (i) makes such representations
and warranties to the Placement Agent as the Company makes to the Investors pursuant to the Securities Purchase Agreement, and (ii) further
represents, warrants and covenants to the Placement Agent, other than as disclosed in Prospectus (as defined below) or in any of its filings
with the Securities and Exchange Commission (the “SEC” or the “Commission”) that are incorporated
by reference into the Registration Statement (as defined below), that:
A. Registration
Matters. The Company has filed with the SEC the Registration Statement under the Securities Act, which was filed on May 10, 2024 and
declared effective on May 20, 2024 for the registration of the Securities under the Securities Act. The Company has filed with the SEC
the ADS Registration Statement under the Securities Act, which was filed on February 1, 2023 and and declared effective on March 8, 2024
for the registration of the Securities under the Securities Act. Following the determination of pricing among the Company and the prospective
Investors introduced to the Company by the Placement Agent, the Company will file with the Commission pursuant to Rule 424(b) under the
Securities Act, and the rules and regulations of the Commission promulgated thereunder, a prospectus and prospectus supplement relating
to the placement of the Securities, their respective pricing and the plan of distribution thereof and will advise the Placement Agent
of all further information (financial and other) with respect to the Company required to be set forth therein. The “Registration
Statement,” as of any time, means such registration statement as amended by any post-effective amendments thereto at such time,
including the exhibits and any schedules thereto at such time, the documents incorporated or deemed to be incorporated by reference therein
at such time and the documents otherwise deemed to be a part thereof as of such time pursuant to Rule 430A (“Rule 430A”)
or Rule 430B under the Securities Act Regulations (“Rule 430B”); provided, however, that the “Registration Statement”
without reference to a time means such registration statement as amended by any post-effective amendments thereto as of the time of the
first contract of sale for the Securities, which time shall be considered the “new effective date” of such registration statement
with respect to the Securities within the meaning of paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto as of
such time, the documents incorporated or deemed incorporated by reference therein at such time and the documents otherwise deemed to be
a part thereof as of such time pursuant to Rule 430A or Rule 430B. Any registration statement filed pursuant to Rule 462(b) of the Securities
Act Regulations is hereinafter called the “Rule 462(b) Registration Statement,” and after such filing the term “Registration
Statement” shall include the Rule 462(b) Registration Statement. The prospectus offering the Securities in the form first used to
confirm sales of the Securities (or in the form first made available to the Placement Agent by the Company to meet requests of purchasers
pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Base Prospectus.” The Base Prospectus,
as supplemented by the prospectus supplement specifically related to the Securities in the form first used to confirm sales of the Securities
(or in the form first made available to the Placement Agent by the Company to meet requests of purchasers pursuant to Rule 173 under the
Securities Act), is hereinafter referred to, collectively, as the “Prospectus,” and the term “Preliminary
Prospectus” means any preliminary form of the Prospectus, including any preliminary prospectus supplement specifically related
to the Securities filed with the Commission by the Company with the consent of the Placement Agent. All references in this Agreement to
financial statements and schedules and other information which is “contained,” “included” or “stated”
(or other references of like import) in the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to include
all such financial statements and schedules and other information incorporated or deemed incorporated by reference in the Registration
Statement, such Preliminary Prospectus or the Prospectus, as the case may be, prior to the execution and delivery of this Agreement; and
all references in this Agreement to amendments or supplements to the Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to include the filing of any document under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the rules and regulations thereunder (the “Exchange Act Regulations”), incorporated or deemed to be incorporated
by reference in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be, at or after the execution
and delivery of this Agreement. The term “Disclosure Package” means (i) the Base Prospectus and the Preliminary Prospectus,
if any, as most recently amended or supplemented immediately prior to the Initial Sale Time (as defined herein), and (ii) the Issuer Free
Writing Prospectuses (as defined below), if any, identified in Schedule I hereto. The term “Issuer Free Writing Prospectus”
means any issuer free writing prospectus, as defined in Rule 433 of the Securities Act Regulations. The term “free writing prospectus”
means any free writing prospectus, as defined in Rule 405 of the Securities Act Regulations. Any Preliminary Prospectus when filed with
the Commission, and the Registration Statement as of each effective date and as of the date hereof, complied or will comply, and the Prospectus
and any further amendments or supplements to the Registration Statement, any Preliminary Prospectus or the Prospectus will, when they
become effective or are filed with the Commission, as the case may be, comply, in all material respects, with the requirements of the
Securities Act and the Securities Act Regulations; and the documents incorporated by reference in the Registration Statement, any Preliminary
Prospectus or the Prospectus complied, and any further documents so incorporated will comply, when filed with the Commission, in all material
respects to the requirements of the Exchange Act and Exchange Act Regulations. The issuance by the Company of the Securities has been
registered under the Securities Act. The Securities will be issued pursuant to the Registration Statement and each of the Securities will
be freely transferable and freely tradable by each of the Investors without restriction, unless otherwise restricted by applicable law
or regulation. The Company is eligible to use Form F-3 and F-6 under the Securities Act and it meets the transaction requirements with
respect to the public float requirements of General Instruction I.B.1 of Form F-3.
B. Stock
Exchange Listing. The ADS are approved for listing on the Exchange and the Company has taken no action designed to, or likely to have
the effect of, delisting the ADS from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating
such listing.
C. No
Stop Orders, etc. Neither the Commission nor, to the Company's knowledge, any state regulatory authority has issued any order preventing
or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the Company's
knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with each request (if any)
from the Commission for additional information.
D. Disclosures
in Registration Statement.
i. Compliance
with Securities Act and 10b-5 Representation. The Registration Statement, as amended, (and any further documents to be filed with
the Commission) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective
amendment thereto, at the time it became effective, complied in all material respects with the Securities Act and the applicable Rules
and Regulations and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Registration Statement, the Preliminary Prospectus, and the Final Prospectus,
each as of its respective date, comply or will comply in all material respects with the Securities Act and the applicable Rules and Regulations.
Each of the Registration Statement, the Preliminary Prospectus, and the Final Prospectus, as amended or supplemented, did not and will
not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading. The Incorporated Documents, if any,
when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable
Rules and Regulations promulgated thereunder, and none of such documents, when they were filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to Incorporated
Documents incorporated by reference in the Registration Statement, the Preliminary Prospectus, and the Final Prospectus), in light of
the circumstances under which they were made not misleading. No post-effective amendment to the Registration Statement reflecting any
facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information
set forth therein is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection
with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed
within the requisite time period. There are no contracts or other documents required to be described in the Registration Statement, the
Preliminary Prospectus, and the Final Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not
been described or filed as required. Neither the Company nor any of its directors and officers has distributed and none of them will distribute,
prior to each Closing Date, any offering material in connection with the offering and sale of the Securities other than the Registration
Statement, the Preliminary Prospectus, and the Final Prospectus, copies of the documents incorporated by reference therein and any other
materials permitted by the Securities Act
ii. Neither
the Prospectus nor any amendment or supplement thereto, as of its issue date, at the time of any filing with the Commission pursuant to
Rule 424(b), or at the Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will
omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty shall not apply to the Placement Agent's Information.
iii. Disclosure
of Agreements. The Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the requirements
of the Exchange Act and the applicable Rules and Regulations, and none of such documents, when they were filed with the Commission, contained
any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to
Incorporated Documents incorporated by reference in the Prelminary Prospectus or Final Prospectus), in the light of the circumstances
under which they were made not misleading; and any further documents so filed and incorporated by reference in the Registration Statement,
the Prelinary Prospectus, or the Final Prospectus, when such documents are filed with the Commission, will conform in all material respects
to the requirements of the Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Each agreement or other instrument (however characterized or described) to which the Company is
a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Preliminary Prospectus
and the Final Prospectus, and (ii) is material to the Company's business, has been duly authorized and validly executed by the Company,
is in full force and effect in all material respects and is enforceable against the Company and, to the Company's knowledge, the other
parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally, (y) as enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company's knowledge, any
other party is in default thereunder and, to the Company's knowledge, no event has occurred that, with the lapse of time or the giving
of notice, or both, would constitute a default thereunder, except as disclosed in the Registration Statement, the Prelinary Prospectus,
and the Final Prospectus. To the Company's knowledge, performance by the Company of the material provisions of such agreements or instruments
will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation,
those relating to environmental laws and regulations.
iv. Changes
After Dates in Registration Statement.
(a) No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement and the Prospectus,
except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial position or results of
operations of the Company, nor any change or development that, singularly or in the aggregate, would involve a material adverse change,
in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company (a “Material
Adverse Change”); (ii) there have been no material transactions entered into by the Company, other than as contemplated pursuant
to this Agreement; and (iii) no officer or director of the Company has resigned from any position with the Company.
(b) Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement, the
Prelinary Prospectus, and the Final Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration
Statement, the Prelinary Prospectus, and the Final Prospectus, the Company has not: (i) issued any securities (other than (i) grants under
any share compensation plan and (ii) Ordinary Shares issued upon the exercise or conversion of option, warrants or convertible securities
described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus) or incurred any liability or obligation,
direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its
capital stock.
E. Transactions
Affecting Disclosure to FINRA.
i. Finder's
Fees. There are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder's, consulting
or origination fee by the Company or any executive officer or director of the Company with respect to the sale of the Securities hereunder
or any other arrangements, agreements or understandings of the Company or, to the Company's knowledge, any of its stockholders.
ii. Payments
Within Twelve (12) Months. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any
person, as a finder's fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing
to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any
direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the date hereof, other than
the payment to the Placement Agent as provided hereunder in connection with the Offering.
iii. Use
of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates,
except as specifically authorized herein.
iv. FINRA
Affiliation. There is no (i) officer or director of the Company, (ii) to the Company’s knowledge, beneficial owner of 10% or
more of any class of the Company's securities or (iii) to the Company’s knowledge, beneficial owner of the Company's unregistered
equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement that is
an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations
of FINRA).
F. Integration.
Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering to be integrated
with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such securities under
the Securities Act.
G. Restriction
on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that it will not, for a period of ninety
(90) days after the date of the final prospectus (the “Lock-Up Period”), without the prior written consent of the Placement
Agent (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file
or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, other than (i) those already
contractually agreed to with other parties prior to the date of the Engagement Agreement pursuant to a registration statement on Form
S-8 for employee benefit plans; or (iii) publicly announce an intention to effect any transaction specified in clause (i) or (ii). The
restrictions contained in this section shall not apply to (i) the issuance by the Company of Ordinary Shares upon the exercise of stock
options, warrants or the conversion of a security, in each case, that is outstanding on the date hereof or issued in the Offering, provided
that such securities have not been amended since the date hereof to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities (other than in connection with share splits or combinations) or to extend
the term of such securities; (ii) the grant by the Company of stock options or other stock-based awards, or the issuance of shares of
capital stock of the Company under any stock compensation plan of the Company in effect on the date hereof; and (iii) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that
such securities are issued as “restricted securities” (as defined in Rule 144 under the Securities Act) and carry no registration
rights that require or permit the filing of any registration statement in connection therewith during the Lock-Up Period, and provided
that any such issuance shall only be to a person (or to the equityholders of a person) which is, itself or through its subsidiaries, an
operating company or an owner of an asset in a business synergistic with the current business of the Company at such time and shall provide
to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
| 8. | Conditions of the Obligations of the Placement Agent. |
The obligations of the Placement
Agent hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section
7 hereof, in each case as of the date hereof and as of the Closing Date as though then made, to the timely performance by each of the
Company of its covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions:
A. Regulatory
Matters.
i. Effectiveness
of Registration Statement; Rule 424 Information. The Registration Statement is effective on the date of this Agreement, and, on the
Closing Date no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been
issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued
and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated by
the Commission. The Company has complied with each request (if any) from the Commission for additional information. All filings with the
Commission required by Rule 424 under the Securities Act to have been filed by the Closing Date shall have been made within the applicable
time period prescribed for such filing by Rule 424.
ii. FINRA
Clearance. On or before the Closing Date, the Placement Agent shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Placement Agent as described in the Prospectus.
B. Company
Counsel Matters. On the Closing Date, the Placement Agent shall have received the favorable opinion and negative assurance letter
of Squire Patton Boggs LLP (US legal counsel to the Company), Conyers Dill & Pearman LLP (Cayment Islands legal counsel to the Company)
and Jingtian Law firm (PRC counsel to the Company), or of other counsels reasonably satisfactory to the Placement Agent, in each case
dated the Closing Date and addressed to the Placement Agent, and in each case substantially in form and substance reasonably satisfactory
to the Placement Agent.
C. Comfort
Letter. The Placement Agent shall have received letters dated the date of this Agreement and the Closing Date, each in form and substance
satisfactory to the Placement Agent, from the Company's independent public accountants, containing statements and information of the type
ordinarily included in accountants’ “comfort letters” with respect to the financial statements and certain financial
information contained in the Registration Statement and Prospectus.
D. Officers’
Certificate. On the Closing Date, the Placement Agent shall have received a certificate of the chief executive officer and chief financial
officer of the Company, dated the Closing Date, to the effect that, (i) such officers have carefully examined the Registration Statement,
the Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each
amendment thereto, as of the Applicable Time and through the Closing Date did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the
Disclosure Package, as of the Applicable Time through the Closing Date, any Issuer Free Writing Prospectus as of its date and as of the
Closing Date, the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did
not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not misleading; and (ii) as of the Closing Date the representations
and warranties of the Company contained herein and in the Securities Purchase Agreement were and are accurate in all material respects,
and that the obligations to be performed by the Company hereunder have been fully performed in all material respects.
E. Secretary’s
Certificate. On the Closing Date, the Placement Agent shall have received from the Company a certificate of the corporate secretary
of the Company, dated the Closing Date, certifying to the organizational documents of the Company, good standing in the jurisdiction of
formation of the Company and board resolutions authorizing the Offering of the Securities.
F. Intentionally
deleted.
G. No
Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Change or development involving
a prospective Material Adverse Change in the condition or prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Registration Statement, the Disclosure Package and the Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any affiliates of
the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision,
ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company,
except as set forth in the Registration Statement, the Disclosure Package and the Prospectus; (iii) no stop order shall have been issued
under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration
Statement, the Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which
are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material
respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Disclosure
Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading.
H. Delivery
of Agreements. At the Closing Date, Placement Agent’s counsel shall have been furnished with such documents and opinions as
they may require in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Placement Agent and Placement Agent’s counsel.
| 9. | Indemnification and Contribution; Procedures. |
A. Indemnification
of the Placement Agent. The Company agrees to indemnify and hold harmless the Placement Agent, its affiliates and each person controlling
such Placement Agent (within the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of the
Placement Agent, its affiliates and each such controlling person (the Placement Agent, and each such entity or person hereafter is referred
to as an “Indemnified Person”) from and against any losses, claims, damages, judgments, assessments, costs and other
liabilities (collectively, the “Liabilities”), and shall reimburse each Indemnified Person for all fees and expenses
(including the reasonable fees and expenses of counsel for the Indemnified Persons, except as otherwise expressly provided in this Agreement)
(collectively, the “Expenses”) incurred by an Indemnified Person in investigating, preparing, pursuing or defending
any actions, whether or not any Indemnified Person is a party thereto, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) the Registration Statement, the Disclosure Package, the Preliminary Prospectus, the Prospectus
or in any Issuer Free Writing Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information
provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road
show” or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application
or other document or written communication (in this Section 9, collectively called “application”) executed by the Company
or based upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities
laws thereof or filed with the Commission, any state securities commission or agency, any national securities exchange; or the omission
or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon, and in conformity
with, the Placement Agent’s information. The Company also agrees to reimburse each Indemnified Person for all Expenses as they are
incurred in connection with such Indemnified Person’s enforcement of his or its rights under this Agreement. Each Indemnified Person
is an intended third party beneficiary with the same rights to enforce the indemnification that each Indemnified Person would have if
he was a party to this Agreement. The Company agrees to reimburse such expenses incurred by an Indemnified Person pursuant to which indemnity
may be sought hereunder within thirty (30) days after receipt by the Company of a statement requesting such reimbursement from time to
time, whether prior to or after final disposition of any proceeding.
B. Procedure.
Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with respect to which indemnity may
reasonably be expected to be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing; provided
that failure by any Indemnified Person so to notify the Company shall not relieve the Company from any obligation or liability which the
Company may have on account of this Section 9 or otherwise to such Indemnified Person, except to the extent
(and only to the extent) that its ability to assume the defense of any such action (as contemplated in the next sentence) is actually
impaired by such failure or delay. The Company shall, if requested by the Placement Agent, assume the defense of any such action
(including the employment of counsel reasonably satisfactory to the Placement Agent). Any Indemnified Person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless: (i) the Company has failed promptly to assume the defense and employ counsel for the benefit
of the Placement Agent and the other Indemnified Persons or (ii) such Indemnified Person shall have been advised that in the opinion of
counsel that there is an actual or potential conflict of interest that prevents (or makes it imprudent for) the counsel engaged by the
Company for the purpose of representing the Indemnified Person, to represent both such Indemnified Person and any other person represented
or proposed to be represented by such counsel, it being understood, however, that the Company shall not
be liable for the expenses of more than one separate counsel (together with local counsel),
representing the Placement Agent and all Indemnified Persons who are parties to such action.
The Company shall not be liable for any settlement of any action effected without its written consent (which shall not be unreasonably
withheld). In addition, the Company shall not, without the prior written consent of the Placement Agent, settle, compromise or consent
to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement,
indemnification or contribution may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement,
compromise, consent or termination (i) includes an unconditional release of each Indemnified Person, acceptable to such Indemnified Party,
from all Liabilities arising out of such action for which indemnification or contribution may be sought hereunder and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Person. The advancement,
reimbursement, indemnification and contribution obligations of the Company required hereby shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as every Liability and Expense is incurred and is due and payable, and in such
amounts as fully satisfy each and every Liability and Expense as it is incurred (and in no event later than 30 days following the date
of any invoice therefor).
C. Indemnification
of the Company. The Placement Agent agrees to indemnify and hold harmless the Company, its directors, its officers who signed the
Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all Liabilities, but only with respect to untrue statements or omissions, or alleged untrue statements or
omissions made in the Registration Statement, any Preliminary Prospectus, the Disclosure Package or Prospectus or any amendment or supplement
thereto, in reliance upon, and in strict conformity with, the Placement Agent’s Information. In case any action shall be brought
against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Disclosure
Package or Prospectus or any amendment or supplement thereto, and in respect of which indemnity may be sought against the Placement Agent,
the Placement Agent shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall
have the rights and duties given to the Placement Agent by the provisions of Section 9.B. The Company agrees promptly to notify the Placement
Agent of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with
the issuance and sale of the Securities or in connection with the Registration Statement, the Disclosure Package, the Prospectus or any
Issuer Free Writing Prospectus, provided, that failure by the Company so to notify the Placement
Agent shall not relieve the Placement Agent from any obligation or liability which the Placement Agent may have on account of this Section
9.C. or otherwise to the Company, except to the extent the Placement Agent is materially prejudiced as a proximate result of such failure.
D. Contribution.
In the event that a court of competent jurisdiction makes a finding that indemnity is unavailable to any indemnified person, then each
indemnifying party shall contribute to the Liabilities and Expenses paid or payable by such indemnified person in such proportion as is
appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any other Indemnified
Person, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding
clause is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company, on the one hand,
and the Placement Agent and any other Indemnified Person, on the other hand, in connection with the matters as to which such Liabilities
or Expenses relate, as well as any other relevant equitable considerations; provided that in no event shall the Company contribute less
than the amount necessary to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities and Expenses in
excess of the amount of commissions actually received by the Placement Agent pursuant to this Agreement. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the one hand or the Placement Agent on the other and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the
Placement Agent agree that it would not be just and equitable if contributions pursuant to this subsection (D) were determined by pro
rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in
this subsection (D). For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to the Placement Agent
on the other hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as: (a) the total value
received by the Company in the Offering, whether or not such Offering is consummated, bears to (b) the commissions paid to the Placement
Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.
E. Limitation.
The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement,
the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services
or transactions, except to the extent that a court of competent jurisdiction has made a finding that Liabilities (and related Expenses)
of the Company have resulted primarily from such Indemnified Person’s gross negligence or willful misconduct in connection with
any such advice, actions, inactions or services.
F. Survival.
The advancement, reimbursement, indemnity and contribution obligations set forth in this Section 9 shall remain in full force and effect
regardless of any termination of, or the completion of any Indemnified Person’s services under or in connection with, this Agreement.
Each Indemnified Person is an intended third-party beneficiary of this Section 9, and has the right to enforce the provisions of Section
9 as if he/she/it was a party to this Agreement.
| 10. | Limitation of FT Global’s Liability to the Company. |
FT Global and the Company
further agree that neither FT Global nor any of its affiliates or any of their respective officers, directors, controlling persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents shall have any liability to the
Company, its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company (whether direct
or indirect, in contract or tort, for an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or
equitable relief arising out of or relating to this Agreement or the Services rendered hereunder, except for losses, fees, damages, liabilities,
costs or expenses that arise out of or are based on any action of or failure to act by FT Global and that are finally judicially determined
to have resulted solely from the gross negligence or willful misconduct of FT Global.
| 11. | Limitation of Engagement to the Company. |
The Company acknowledges that
FT Global has been retained only by the Company, that FT Global is providing services hereunder as an independent contractor (and not
in any fiduciary or agency capacity) and that the Company’s engagement of FT Global is not deemed to be on behalf of, and is not
intended to confer rights upon, any shareholder, owner or partner of the Company or any other person not a party hereto as against FT
Global or any of its affiliates, or any of its or their respective officers, directors, controlling persons (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act), employees or agents. Unless otherwise expressly agreed in writing by FT Global,
no one other than the Company is authorized to rely upon any statement or conduct of FT Global in connection with this Agreement. The
Company acknowledges that any recommendation or advice, written or oral, given by FT Global to the Company in connection with FT Global’s
engagement is intended solely for the benefit and use of the Company’s management and directors in considering a possible Offering,
and any such recommendation or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person or be used
or relied upon for any other purpose. FT Global shall not have the authority to make any commitment binding on the Company. The Company,
in its sole discretion, shall have the right to reject any investor introduced to it by FT Global. If any purchase agreement and/or related
transaction documents are entered into between the Company and the investors in the Offering, FT Global will be entitled to rely on the
representations, warranties, agreements and covenants of the Company contained in any such purchase agreement and related transaction
documents as if such representations, warranties, agreements and covenants were made directly to FT Global by the Company.
| 12. | Amendments and Waivers. |
No supplement, modification
or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise
any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall
any such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.
In the event of the consummation
or public announcement of any Offering, FT Global shall have the right to disclose its participation in such Offering, including, without
limitation, the placement at its cost of “tombstone” advertisements in financial and other newspapers and journals. FT Global
agrees not to use any confidential information concerning the Company provided to FT Global by the Company for any purposes other than
those contemplated under this Agreement.
The headings of the various
sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be part of this Agreement.
This Agreement may be executed
in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original
and all such counterparts shall together constitute one and the same instrument. The words “execution,” “signed”
and “signature” and words of like import in this Agreement and all documents relating thereto, shall (to the extent permissible
under governing documents) include images of manually executed signatures transmitted by facsimile or other electronic format (including,
without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures (including, without limitation,
DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other
record created, generated, sent, communicated, received or stored by electronic means) shall be of the same legal effect, validity and
enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable
law, including, without limitation, the Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act and any other applicable law.
The invalidity, illegality
or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity, legality or enforceability
of any other section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined
to be invalid, illegal or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary
to make it valid and enforceable.
The Company will furnish FT
Global such written information as FT Global reasonably requests in connection with the performance of its services hereunder. The Company
understands, acknowledges and agrees that, in performing its services hereunder, FT Global will use and rely entirely upon such information
as well as publicly available information regarding the Company and other potential parties to an Offering and that FT Global does not
assume responsibility for independent verification of the accuracy or completeness of any information, whether publicly available or otherwise
furnished to it, concerning the Company or otherwise relevant to an Offering, including, without limitation, any financial information,
forecasts or projections considered by FT Global in connection with the provision of its services.
| 18. | Absence of Fiduciary Relationship. |
The Company acknowledges and
agrees that: (a) the Placement Agent has been retained solely to act as Placement Agent in connection with the sale of the Securities
and that no fiduciary, advisory or agency relationship between the Company and the Placement Agent has been created in respect of any
of the transactions contemplated by this Agreement, irrespective of whether the Placement Agent has advised or is advising the Company
on other matters; (b) the Purchase Price and other terms of the Securities set forth in this Agreement were established by the Company
following discussions and arms-length negotiations with the Investors and the Company is capable of evaluating and understanding and understands
and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised that the Placement
Agent and its affiliates are engaged in a broad range of transactions that may involve interests that differ from those of the Company
and that the Placement Agent has no obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory
or agency relationship; and (d) it has been advised that the Placement Agent is acting, in respect of the transactions contemplated by
this Agreement, solely for the benefit of the Placement Agent, and not on behalf of the Company and that the Placement Agent may have
interests that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have
against the Placement Agent arising from an alleged breach of fiduciary duty in connection with the Offering.
| 19. | Survival of Indemnities, Representations, Warranties, Etc. |
The respective indemnities,
covenants, agreements, representations, warranties and other statements of the Company and Placement Agent, as set forth in this Agreement
or made by them respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation made
by or on behalf of the Placement Agent, the Company, the Purchasers or any person controlling any of them and shall survive delivery of
and payment for the Securities. Notwithstanding any termination of this Agreement, including without limitation any termination pursuant
to Section 5, the payment, reimbursement, indemnity, contribution, advancement and limitation of liability agreements contained in Sections
2, 3, 9, 10, and 11, and the Company’s covenants, representations, and warranties set forth in this Agreement, shall not terminate
and shall remain in full force and effect at all times. The indemnity and contribution provisions contained in Section 9 and the covenants,
warranties and representations of the Company contained in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any of the Placement Agent, any person who controls
the Placement Agent within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or any affiliate of
the Placement Agent, or by or on behalf of the Company, its directors or officers or any person who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and (iii) the issuance and delivery of the Securities.
This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein,
without regard to its choice of law provisions. Any disputes that arise under this Agreement, even after the termination of this Agreement,
will be heard only in the state or federal courts located in the City and County of New York, Borough of Manhattan. The parties hereto
expressly agree to submit themselves to the jurisdiction of the foregoing courts in the City and County of New York, Borough of Manhattan.
The parties hereto expressly waive any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the
City and County of New York, Borough of Manhattan. The Company hereby appoints Puglisi & Associates, as its authorized agent (the
“Authorized Agent”) upon whom process may be served in any suit, action or proceeding arising out of or based upon
this Agreement or the transactions contemplated herein. The Company hereby represents and warrants that the Authorized Agent has accepted
such appointment and has agreed to act as said agent for service of process, and the Company agrees to take any and all action, including
the filing of any and all documents that may be necessary to continue such appointment in full force and effect as aforesaid. Service
of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Company.
All communications hereunder
shall be in writing and shall be mailed or hand delivered and confirmed to the parties hereto as follows:
If to the Company:
Attn: Mr. Hui Yuan
Chairman and Chief Executive
Officer
XIAO-I Corporation
5F, Building #2, No.2570 Hechuan
Road,
Minhang District, Shanghai,
China 201103
If to the Placement Agent:
FT Global Capital, Inc.
1688 Meridian Avenue, Suite
700, Miami Beach, FL 33139
786-220-6129 (Office); 786-655-8201
(Fax)
Attention: President, CEO
Any party hereto may change
the address for receipt of communications by giving written notice to the others.
This Agreement constitutes
the entire agreement of FT Global and the Company, and supersedes any prior agreements, with respect to the subject matter hereof. If
any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision
in any other respect, and the remainder of this Agreement shall remain in full force and effect. Notwithstanding anything herein to the
contrary, the Engagement Agreement between the Company and the Placement Agent, shall continue to be effective and the terms therein shall
continue to survive and be enforceable by the Placement Agent in accordance with its terms, including, without limitation, Sections 1
and 7 therein.
This Agreement will inure
to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and directors and controlling
persons referred to in Section 9 hereof, and to their respective successors, and personal representatives, and, except as set forth in
Section 9 of this Agreement, no other person will have any right or obligation hereunder.
[SIGNATURE PAGE TO FOLLOW]
PLACEMENT AGENCY AGREEMENT
Signature Page
In acknowledgment that the
foregoing correctly sets forth the understanding reached by FT Global and the Company, and intending to be legally bound, please sign
in the space provided below, whereupon this letter shall constitute a binding agreement as of the date executed.
Very truly yours, |
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XIAO-I CORPORATION |
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By: |
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Name: |
Hui Yuan |
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Title: |
Chief Executive Officer |
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FT GLOBAL CAPITAL, INC. |
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By: |
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Name: |
Patrick Ko |
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Title: |
President and Chief Executive Officer |
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SCHEDULE I
Issuer General Use Free Writing
Prospectuses
None.
16
Exhibit 99.1
XIAO-I CORPORATION Announces Pricing of $3,260,870
Senior Convertible Notes Offering
SHANGHAI,
China, June 17, 2024 – Xiao-I Corporation (“Xiao-I” or the “Company”) (NASDAQ: AIXI) announced
today that it has entered into a securities purchase agreement with an institutional investor (the “Investor”) to issue
and sell an aggregate principal amount of $3,260,870 senior convertible notes (the “Notes”) with an 8% Original Issue Discount
to the Investor, convertible into the Company’s ordinary shares (“Conversion Shares”) in the form of American Depositary
Shares (“Conversion ADSs”) (the “SPA”). Each ADS represents one third of an ordinary share.
The Company is also concurrently offering an additional
1,000,002 ADS (the “Pre-Delivery ADSs”), at par, representing 333,334 of its ordinary shares (the “Pre-Delivery Shares”),
to the Investor. Each holder of Pre-Delivery Shares is not permitted to sell, assign or transfer such Pre-Delivery ADSs except in connection
with a conversion of the Note of such holder to facilitate T+1 delivery of Conversion ADSs upon any conversion of a Note. At such time
when no Notes remain outstanding, the remaining Pre-Delivery ADSs will be deemed surrendered and cancelled by the holder on the date the
holder ceases to hold any Notes.
The Notes will mature 360-days after the Issuance Date (as defined in the Notes) and will be convertible into the Company’s ADSs
at a conversion price equal to $1.00 per ADS. The Notes will bear interest at a rate of 6.0% per annum, which rate will increase to 15%
in the event of occurrence and during the continuance of an event of default. All payments due under the Notes will be senior to all subordinated
indebtedness of the Company and/or its subsidiaries. Each holder of Notes may convert all, or any part, of the outstanding principal of
the Notes, together with accrued and unpaid interest, any make-whole amount and any late charges thereon, at any time, at such holder’s
option, into Conversion Shares represented by Conversion ADSs either: (1) at the “Conversion Price” of $1.00 per ADS, subject
to pro rata adjustment for any stock split, stock dividend, stock combination and/or similar transactions, or (2) at the “Alternative
Conversion Price” as defined in the SPA.
The Notes, Conversion ADSs and Pre-Delivery
ADSs are being offered through a prospectus supplement pursuant to the Company’s effective shelf registration statement on
Form F-3 and the base prospectus therein. Such prospectus supplement and accompanying prospectus relating to and describing the
terms of this offering will be filed with the SEC. When available, copies of such prospectus supplement and accompanying prospectus
may be obtained at the SEC’s website www.sec.gov or by contacting FT Global Capital Inc., 1688 Meridian Avenue Suite 700,
Miami Beach, FL 33139 USA.
FT Global
Capital Inc. acted as the exclusive placement agent in connection with this offering.
The offering
is expected to close on or about June 17, 2024, subject to the satisfaction of customary closing conditions.
The Company
intends to use the net proceeds from the offering for working capital and general corporate purposes.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction
in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any
such state or other jurisdiction.
About
Xiao-I Corporation
Xiao-I
Corporation is a leading cognitive intelligence enterprise in China that offers a diverse range of business solutions and services in
artificial intelligence, covering natural language processing, voice and image recognition, machine learning, and affective computing.
Since its inception in 2001, the Company has developed an extensive portfolio of cognitive intelligence technologies that are highly suitable
and have been applied to a wide variety of business cases. Xiao-I powers its cognitive intelligence products and services with its cutting-edge,
proprietary AI technologies to enable and promote industrial digitization, intelligent upgrading, and transformation. For more information,
please visit: www.xiaoi.com.
Forward-Looking
Statements
This press
release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other
statements that are other than statements of historical facts. When the Company uses words such as “may,” “will,”
“intend,” “should,” “believe,” “expect,” “anticipate,” “project,”
“estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results
to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to
uncertainties and risks including, but not limited to, the following: the Company’s ability to achieve its goals and strategies,
the Company’s future business development and plans for future business development, including its financial conditions and results
of operations, product and service demand and acceptance, reputation and brand, the impact of competition and pricing, changes in technology,
government regulations, fluctuations in general economic and business conditions in China, and assumptions underlying or related to any
of the foregoing and other risks contained in reports filed by the Company with the U.S. Securities and Exchange Commission (“SEC”).
For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press
release. Additional factors are discussed in the Company’s filings with the SEC, including under the section entitled “Risk
Factors” in its annual report on Form 20-F filed with the SEC on April 30, 2024, as well as its current reports on Form 6-K and
other filings, all of which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
For
investor and media inquiries, please contact:
Ms. Berry
Xia
Email:
ir@xiaoi.com
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