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 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2024
Commission File Number: 001-39127
Canaan Inc.
28 Ayer Rajah Crescent
#06-08
Singapore 139959
(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
x Form 40-F ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Canaan Inc. Announces the Execution of a Securities
Purchase Agreement
On November 19, 2024, Canaan Inc. (NASDAQ:
CAN) (“Canaan” or the “Company” or “We”), entered into a securities
purchase agreement (the “Securities Purchase Agreement”) with an institutional
investor (the “Buyer”), pursuant to which the Company shall issue and sell to
the Buyer up to 30,000 Series A-1 Preferred Shares (the “Series A-1 Preferred Shares”) at the price of US$1,000.00 for each
Series A-1 Preferred Share. Canaan agreed that the proceeds from the sale of the Series A-1
Preferred Shares will be used by the Company and/or its subsidiaries to manufacture
or invest in digital mining sites and equipment to be deployed or sold in North America, including any acquisition or disposition of assets
from or between subsidiaries. The closing of the sale of the Series A-1 Preferred Shares under the
Securities Purchase Agreement was conditioned upon general customary closing conditions.
The Company
has adopted a certificate of designations (the “Certificate of Designations”) of Series A-1 Preferred Shares, par value US$0.00000005
per share, creating the Series A-1 Preferred Shares and providing for the designations, preferences and relative, participating, optional
or other rights, and the qualifications, limitations or restrictions thereof, of the Series A-1 Preferred Shares, which has become effective
upon such adoption.
On September 30, 2024, the Company closed the
third and final tranche of a Series A preferred shares financing under a securities purchase agreement with the Buyer, pursuant to which
the Company agreed to issue and sell to the Buyer up to 125,000 Series A Convertible Preferred Shares.
The Securities
Purchase Agreement contains customary representations, warranties and agreements by the Company and the Buyer, and indemnification
obligations of the Company against certain liabilities, including for liabilities under the Securities Act of 1933, as amended. The provisions
of the Securities Purchase Agreement, including the representations and warranties contained
therein, are not for the benefit of any party other than the parties to such agreement and are not intended as a document for investors
and the public to obtain factual information about the current state of affairs of the Company. Rather, investors and the public should
look to other disclosures contained in the Company’s filings with the SEC.
The foregoing description does not purport to be complete and is qualified
in its entirety by reference to the full text of the Securities Purchase Agreement and the
Certificate of Designations attached hereto as Exhibits 10.1 and 10.2, each of which are incorporated
herein by reference. Capitalized terms used in this 6-K without definition shall have the meanings given to them in the Securities
Purchase Agreement, the Certificate of Designations, and any amendments thereto.
This
Form 6-K is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any securities, which
is made only by means of a prospectus supplement and related prospectus. There will be no sale of these securities in any jurisdiction
in which such an offer, solicitation of an offer to buy or sale would be unlawful.
Safe Harbor Statement
This Form 6-K contains forward−looking
statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward−looking statements can be identified by terminology such as “will,” “expects,”
“anticipates,” “future,” “intends,” “plans,” “believes,” “estimates”
and similar statements. Among other things, Canaan Inc.’s anticipated financing plans and its intended use of proceeds contain
forward−looking statements. Canaan Inc. may also make written or oral forward−looking statements in its periodic reports
to the U.S. Securities and Exchange Commission (“SEC”) on Forms 20−F and 6−K, in its annual report to shareholders,
in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements
that are not historical facts, including statements about Canaan Inc.’s beliefs and expectations, are forward−looking statements.
Forward−looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially
from those contained in any forward−looking statement, including but not limited to the following: the Company’s goals and
strategies; the Company’s future business development, financial condition and results of operations; the expected growth of the
bitcoin industry and the price of bitcoin; the Company’s expectations regarding demand for and market acceptance of its products,
especially its bitcoin mining machines; the Company’s expectations regarding maintaining and strengthening its relationships with
production partners and customers; the Company’s investment plans and strategies, fluctuations in the Company’s quarterly
operating results; competition in its industry; and relevant government policies and regulations relating to the Company and cryptocurrency.
Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided
in this Form 6-K and in the attachments is as of the date of this Form 6-K, and Canaan Inc. does not undertake any obligation
to update any forward−looking statement, except as required under applicable law.
Exhibit Index
SIGNATURE
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.
| Canaan Inc. |
|
| |
|
| By: |
/s/ Nangeng Zhang |
|
| Name: Nangeng
Zhang |
|
| Title: Chairman and Chief Executive Officer |
|
Date: November 20, 2024
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of November 19, 2024, by and among Canaan Inc., a Cayman
Islands exempted company, with headquarters located at 28 Ayer Rajah Crescent, #06-08, Singapore 139959 (the “Company”),
and the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).
WHEREAS:
A. The
Company desires to sell, and the Buyers desire to purchase, the Preferred Shares (as defined below) pursuant to the Registration Statement
(as defined below) which is currently effective, has at least $300,000,000 of initial offering price of unallocated securities available
for sale as of the date hereof and has been declared effective in accordance with the Securities Act of 1933, as amended (the “1933
Act”), by the United States Securities and Exchange Commission (the “SEC”).
B. The
Company has authorized a new series of convertible preferred shares of the Company of US$0.00000005 each and designated as Series A-1
Convertible Preferred Shares (the “Preferred Shares”), the terms of which are set forth in the certificate of designations
for such Preferred Shares, in the form attached hereto as Exhibit A (the “Certificate of Designations”),
which Preferred Shares shall be convertible into Class A Ordinary Shares that can be deposited with The Bank of New York Mellon for
the issuance of American Depositary Shares (“ADSs”) issued pursuant to the Deposit Agreement dated as of November 20,
2019 among the Company, The Bank of New York Mellon, as Depositary (including any successor depositary, the “Depositary”),
and the owners and holders of ADSs from time to time, as such agreement may be amended or supplemented, each ADS representing fifteen
(15) Class A ordinary shares of the Company, par value US$0.00000005 per share (the “Ordinary Shares”), in accordance
with the terms of the Certificate of Designations (all ADSs and the underlying Ordinary Shares represented by such ADSs, issued or issuable
pursuant to the terms of the Certificate of Designations, collectively, the “Conversion Shares”), which Conversion Shares
shall be registered pursuant to the Registration Statement.
C. The
Preferred Shares and the Conversion Shares are collectively referred to herein as the “Securities.”
NOW,
THEREFORE, the Company and each Buyer hereby agree as follows:
1. PURCHASE
AND SALE OF PREFERRED SHARES.
(a) Purchase
of Preferred Shares. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7, the Company shall
issue and sell to the Buyers, and each Buyer, severally, but not jointly with the other Buyers, agrees to purchase from the Company on
the Closing Date (as defined below), an aggregate number of Preferred Shares set forth opposite such Buyer’s name in column (3) of
the Schedule of Buyers attached hereto;
(b) Purchase
Price. Each Buyer shall pay US$1,000.00 for each Preferred Share to be purchased by such Buyer at the Closing (as defined below) (the
aggregate amount paid by each Buyer at the Closing, the “Purchase Price”). Buyer (the “Lead Investor”),
may withhold from its Purchase Price paid at the Closing any amounts set forth in Section 4(f).
(c) Closing.
The date and time of the closing (the “Closing”) shall be 10:00 a.m., New York City time, on the date hereof (or such
other date and time as is mutually agreed by the Company and the Lead Investor) after notification of satisfaction (or waiver) of the
conditions to Closing set forth in Sections 6 and 7 (the “Closing Date”) at the offices of Hansen Black Anderson Ashcraft
PLLC. The Closing may also be undertaken remotely by electronic transfer of Closing documentation.
(d) Form of
Payment. On the Closing Date, (i) each Buyer shall acquire the applicable Preferred Shares for such Closing by paying its respective
Purchase Price (less, in the case of the Lead Investor, any amounts withheld pursuant to Section 4(f)) to the Company by wire transfer
of immediately available funds in accordance with the Wire Instructions (as defined below and provided always that the Purchase Price
shall in no event be less than the par value of the Preferred Shares) and (ii) the Company shall deliver to each Buyer such Preferred
Shares to be issued and delivered at such Closing (allocated in the amounts as the Buyers shall request), duly executed on behalf of the
Company and registered in the name of such Buyer or its designee.
2. BUYER’S
REPRESENTATIONS AND WARRANTIES. Each Buyer, severally and not jointly, represents and warrants with respect to only itself
that, as of the date hereof and as of the Closing Date:
(a) Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Buyer and constitutes 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 applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(b) 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, (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 would 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.
(c) No Short Selling.
During the period beginning thirty (30) days prior to the Closing Date and ending on the date the Preferred Shares have been repaid in
full or sold by Buyer to a third party (including the sale of the Ordinary Shares underlying the Preferred Shares and the ADSs represented
by such Ordinary Shares) that is not an affiliate of Buyer, neither Buyer nor any of its subsidiaries, directors, officers, employees
or other affiliates has or will directly or indirectly engage in any open market Short Sales (as defined below) of the Ordinary Shares
of the Company or any other publicly traded securities, including the ADSs, of the Company; provided; however, that unless and until Company
has affirmatively demonstrated by the use of specific evidence that Buyer is engaging in open market Short Sales, Buyer shall be assumed
to be in compliance with the provisions of this Section 2(c) and Company shall remain fully obligated to fulfill all of its
obligations under the Transaction Documents; and provided, further, that (i) Company shall under no circumstances be entitled to
request or demand that Buyer either (A) provide trading or other records of Buyer or of any party or (B) affirmatively demonstrate
that Buyer or any other party has not engaged in any such Short Sales in breach of these provisions as a condition to Company’s
fulfillment of its obligations under any of the Transaction Documents, (ii) Company shall not assert Buyer’s or any other party’s
failure to demonstrate such absence of such Short Sales or provide any trading or other records of Buyer or any other party as all or
part of a defense to any breach of Company’s obligations under any of the Transaction Documents, and (iii) Company shall have
no setoff right with respect to any such Short Sales. As used herein, “Short Sale” has the meaning provided in Rule 200
promulgated under Regulation SHO under the 1934 Act, and all short positions effected through any direct or indirect stock pledges (other
than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls,
swaps and similar arrangements (including on a total return basis), or sales or other short transactions through non-U.S. broker dealers
or foreign regulated brokers.
The Company acknowledges and
agrees that each Buyer does not make or has not made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in this Section 2.
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) Shelf
Registration Statement.
(i) The
Company has prepared and filed in conformity with the requirements of the 1933 Act and the published rules and regulations thereunder
(the “Rules and Regulations”) adopted by the SEC a “shelf” registration statement on Form F-3 (No. 333-278762),
which became effective on September 5, 2024, including a base prospectus (the “Base Prospectus”) relating to Ordinary
Shares, preferred shares, warrants, debt securities and subscription rights units of the Company that may be sold from time to time by
the Company, in accordance with Rule 415 of the 1933 Act, and such amendments, including post-effective amendments, thereof as may
have been required to the date of this Agreement. The term “Registration Statement” as used in this Agreement means such
registration statement, including all exhibits, financial schedules and all documents and information deemed to be part of the Registration
Statement by incorporation by reference or otherwise, as amended from time to time, including the information (if any) contained in the
form of final prospectus filed with the SEC pursuant to Rule 424(b) of the Rules and Regulations and deemed to be part
thereof at the time of effectiveness pursuant to Rules 430A and 430B of the Rules and Regulations. The term “Preliminary
Prospectus” means the Base Prospectus, together with any preliminary prospectus supplement used or filed with the SEC pursuant
to Rule 424 of the Rules and Regulations. The term “Prospectus” means the Base Prospectus, any Preliminary
Prospectus and any amendments or further supplements to such prospectus filed with the SEC, and including, without limitation, the final
prospectus supplement (the “Prospectus Supplement”), filed pursuant to and within the limits described in Rule 424(b) with
the SEC in connection with the proposed sale of the Securities contemplated by this Agreement through the date of such Prospectus Supplement.
Unless otherwise stated herein, any reference herein to the Registration Statement, any Preliminary Prospectus, the Statutory Prospectus
(as defined below) and the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, including
pursuant to Item 6 of Form F-3 under the 1933 Act, which were filed or furnished under the Securities Exchange Act of 1934,
as amended (the “1934 Act”), on or before the date hereof or are so filed or furnished hereafter. Any reference herein
to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement any Preliminary
Prospectus, the Statutory Prospectus or the Prospectus shall be deemed to refer to and include any such document filed or furnished or
to be filed or furnished under the 1934 Act after the date of the Registration Statement, any such Preliminary Prospectus, the Statutory
Prospectus or Prospectus, as the case may be, and deemed to be incorporated therein by reference.
(ii) As
of the date of this Agreement, the Company is eligible to use Form F-3 under the 1933 Act and it meets the transaction requirements
with respect to the aggregate market value of securities being sold pursuant to this offering in accordance with General Instruction I.B.1
of Form F-3. The Company filed with the SEC the Registration Statement, including a Base Prospectus, for registration under the 1933
Act of the offering and sale of the Securities, and the Company has prepared and used a Preliminary Prospectus in connection with the
offer and sale of the Securities. When the Registration Statement or any amendment or supplement thereto was or is declared effective
and as of the date of the most recent amendment to the Registration Statement, it (i) complied or will comply, in all material respects,
with the requirements of the 1933 Act and the Rules and Regulations and (ii) did not or will not, contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein
not misleading. When any Preliminary Prospectus or Prospectus was first filed with the SEC (whether filed as part of the Registration
Statement or any amendment thereto or pursuant to Rule 424 of the Rules) and when any amendment or supplement thereto was first filed
with the SEC, such Preliminary Prospectus or Prospectus as amended or supplemented complied in all material respects with the applicable
provisions of the 1933 Act and the Rules and Regulations and did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make the statements therein not misleading. Notwithstanding the
foregoing, the Company makes no representations or warranties as to information contained in or omitted from the Registration Statement
or any Preliminary Prospectus or Prospectus, in reliance upon, and in conformity with, written information furnished to the Company by
or on behalf of the Buyers, specifically for use therein.
(b) Prospectus.
As of the Applicable Time (as defined below) and as of the Closing Date, neither (x) the General Use Free Writing Prospectus(es)
(as defined below) issued at or prior to the Applicable Time and the Statutory Prospectus, all considered together (collectively, the
“General Disclosure Package”), nor (y) any individual Limited Use Free Writing Prospectus (as defined below), when
considered together with the General Disclosure Package, included, includes or will include any 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. Notwithstanding the foregoing, the Company makes no representations or warranties as
to information contained in or omitted from any General Use Free Writing Prospectus, the Statutory Prospectus or any Limited Use Free
Writing Prospectus in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of the Buyers,
specifically for use therein. As used in this subsection and elsewhere in this Agreement:
(i) “Applicable
Time” means 9:30 (New York time) on the date of this Agreement or such other time as agreed to by the Company and the
Buyers.
(ii) “Statutory
Prospectus” as of any time means the Preliminary Prospectus included in the Registration Statement immediately prior to that
time.
(iii) “Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 under the 1933 Act,
relating to the Securities in the form filed or required to be filed with the SEC or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g) under the 1933 Act.
(iv) “General
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is identified on Schedule I hereto.
(v) “Limited
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not a General Use Free Writing Prospectus.
(c) Organization.
The Company has been duly incorporated and is validly existing as an exempted company in good standing under the laws of the Cayman Islands,
with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement,
the General Disclosure Package and the Prospectus. Each of the Company’s Significant Subsidiaries (as defined in Regulation S-X)
is set forth on Exhibit 8.1 to the Company’s most recent Annual Report on Form 20-F filed with the SEC) and has been duly
incorporated or otherwise organized and is validly existing as an entity in good standing (where such concept is applicable) under the
laws of the jurisdiction of its incorporation or organization, with the requisite corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus. The Company and
each of the Significant Subsidiaries are duly qualified to transact business in all jurisdictions in which the conduct of their business
requires such qualification, except where the failure to be so qualified would not reasonably be expected to result in any material adverse
effect on (i) the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise)
or prospects of the Company and the Significant Subsidiaries, taken as a whole, whether or not occurring in the ordinary course of business,
or (ii) on the ability of the Company to timely perform its obligations under the Transaction Documents or (iii) on the legality,
validity, binding effect or enforceability of any of the Transaction Documents (collectively a “Material Adverse Effect”).
The issued and outstanding shares of share capital of each of the Significant Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and are owned by the Company or another Significant Subsidiary free and clear of all liens, encumbrances,
equities and claims, except as disclosed in the General Disclosure Package; and, except as disclosed in the General Disclosure Package,
no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligations
into shares of capital or ownership interests in the Significant Subsidiaries are outstanding.
(d) Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations under
this Agreement, the Certificate of Designations (collectively, the “Transaction Documents”) and to issue the Securities
in accordance with the terms hereof and thereof. The execution and delivery 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 Preferred Shares
and the reservation for issuance and the issuance of the Conversion Shares, have been duly authorized by the Company’s Board of Directors,
and no further filing, consent or authorization is required by the Company’s Board of Directors or its shareholders for such execution,
delivery and consummation. This Agreement and the other Transaction Documents have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their 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.
The resolutions approving the Certificate of Designations has been filed with the Registrar of Companies in the Cayman Islands (the “Registrar”)
and are in full force and effect and have not been amended.
(e) Issuance
of Securities. The issued and outstanding Ordinary Shares and Class B ordinary shares, par value US$0.00000005 per share, of
the Company (the “Class B Ordinary Shares”) have been duly authorized and validly issued and are fully paid and
non-assessable; the Securities to be issued and sold by the Company hereunder have been duly authorized and when issued and paid for as
contemplated herein in accordance with the terms of the Transaction Documents will be free from all taxes, liens and charges with respect
to the issue thereof, validly issued, fully paid and non-assessable; and no preemptive rights of shareholders exist with respect to any
of the Securities or the issue and sale thereof. As of the Closing, a number of Ordinary Shares shall have been duly authorized
and reserved for issuance which equals or exceeds (the “Required Reserve Amount”) the sum of 175% of the maximum number
of underlying Ordinary Shares representing the ADSs necessary to effect the conversion of the Preferred Shares at the then applicable
Conversion Rate (as defined in the Certificate of Designations) (without regard to any limitations herein on any such conversion) using
the then applicable Alternate Conversion Price (as defined in the Certificate of Designations) with respect to the then applicable Conversion
Amount (as defined in the Certificate of Designations) of each Preferred Share, assuming that all of the Preferred Shares issuable pursuant
to this Agreement have been issued. As of the date hereof, there are 995,464,352,803 Ordinary Shares authorized and unissued in the capital
of the Company. Neither the filing of the Registration Statement nor the offering or sale of the Securities as contemplated by this Agreement
gives rise to any rights, other than those which have been waived or satisfied, for or relating to the registration of any Ordinary Shares.
(f) Equity
Capitalization. As of the date hereof and as of the Closing Date, the Company has or will have, as the case may be, an authorized,
issued and outstanding capitalization as is set forth in the Registration Statement and the Prospectus (subject, in each case, to the
issuance of Ordinary Shares upon exercise of share options and warrants disclosed as outstanding in the Registration Statement and the
Prospectus, the grant or issuance of options or shares under existing equity compensation plans or share purchase plans described in the
Registration Statement or the Prospectus), and such authorized share capital conforms to the description thereof set forth in the Registration
Statement and the Prospectus. The form of certificates for the Preferred Shares and the Conversion Shares, as applicable, will conform
to the corporate law of the jurisdiction of the Company’s incorporation. As of the date hereof, the authorized share capital of the Company
consists of (1) 999,643,050,556 Class A Ordinary Shares, of which as of the date hereof, 4,223,697,753 Class A Ordinary
Shares are issued and outstanding, (2) 356,624,444 Class B Ordinary Shares, of which as of the date hereof, 311,624,444 Class B
Ordinary Shares are issued and outstanding, (3) 125,000 shares of Series A Preferred Shares, par value US$0.00000005 per share,
of which as of the date hereof 50,000 are issued and outstanding, and (4) 200,000 Preferred Shares, par value US$0.00000005 per share,
none of which are issued and outstanding as of the date hereof. Except as disclosed in the General Disclosure Package (i) 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 of capital of the Company, or contracts, commitments, understandings
or arrangements by which the Company is or may become bound to issue additional shares of capital of the Company 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 of capital of the Company; (ii) there are no material outstanding debt securities,
notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness (as defined in the Certificate
of Designations) of the Company or any of its Significant Subsidiaries or by which the Company or any of its Significant Subsidiaries
is or may become bound; (iii) there are no financing statements securing obligations in any material amounts, either singly or in
the aggregate, filed in connection with the Company or any of its Significant Subsidiaries; (iv) there are no agreements or arrangements
under which the Company or any of its Significant Subsidiaries is obligated to register the sale of any of their securities under the
1933 Act; (v) there are no outstanding securities or instruments of the Company or any of its Significant 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 Significant Subsidiaries is or may become bound to redeem a security of the Company or any of its Significant Subsidiaries;
(vi) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance
of the Securities; (vii) the Company does not have any share appreciation rights or “phantom share” plans or agreements
or any similar plan or agreement; and (viii) the Company and its Significant Subsidiaries have no liabilities or obligations required
to be disclosed in the Registration Statement and Prospectus but not so disclosed in the Registration Statement and Prospectus, other
than those incurred in the ordinary course of the Company’s or any of its Significant Subsidiary’s respective businesses and which, individually
or in the aggregate, do not or would not have a Material Adverse Effect. The General Disclosure Package sets forth the material terms
of any outstanding warrants of the Company, including, without limitation, the exercise price, put rights or other special features and
expiration date thereof.
(g) Disclosure.
(i) The
SEC has not issued an order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus relating to the proposed offering of the Securities, and no proceeding for that purpose or pursuant to Section 8A of the
1933 Act has been instituted or, to the Company’s knowledge, threatened by the SEC. The Registration Statement conforms, and the Prospectus
and any amendments or supplements thereto will conform, to the requirements of the 1933 Act and the Rules and Regulations. The documents
incorporated, or to be incorporated, by reference in the Prospectus, at the time filed with the SEC conformed in all material respects,
or will conform in all respects, to the requirements of the 1934 Act, or the 1933 Act, as applicable, and the Rules and Regulations.
The Registration Statement and any amendments and supplements thereto do not contain, and on the Closing Date will not contain, any untrue
statement of a material fact and do not omit, and on the Closing Date will not omit, to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Prospectus and any amendments and supplements thereto do not contain,
and on the Closing Date will not contain, any untrue statement of a material fact, and do not omit, and on the Closing Date will not 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. Notwithstanding the foregoing, the Company makes no representations or warranties as to information contained in
or omitted from the Registration Statement, any amendment or supplement thereto, the Prospectus and any amendment or supplement thereto,
in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of the Buyers, specifically for
use therein.
(ii) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of
the Securities or until any earlier date that the Company notified or notifies the Buyers as described in the next sentence, did not,
does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration
Statement or the Prospectus, including any document incorporated by reference therein that has not been superseded or modified. If at
any time following issuance of an Issuer Free Writing Prospectus, there occurred or occurs an event or development as a result of which
such Issuer Free Writing Prospectus included or would include an untrue statement of a material fact or omitted or would 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 has notified or will notify promptly the Buyers so that any use of such Issuer Free Writing Prospectus may cease until it
is amended or supplemented.
(iii) 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 material, non-public information concerning the Company and its Significant Subsidiaries, taken as a
whole, that will not be included in the 6-K Filing (as defined below). 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 or any of its Significant Subsidiaries, their business and the transactions contemplated hereby, including the General Disclosure
Package, furnished by or on behalf of the Company 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.
(h) Offering
Materials. The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection with
the offering and sale of the Securities hereunder other than any Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus and other materials, if any, permitted under the 1933 Act. The Company will file with the SEC all Issuer Free Writing Prospectuses
in the time required under Rule 433(d) under the 1933 Act. The Company has satisfied or will satisfy the conditions in Rule 433
under the 1933 Act to avoid a requirement to file with the SEC any electronic road show.
(i) Ineligible
Issuer Status. At the time of filing the Registration Statement and as of the date hereof, the Company was not and is not an “ineligible
issuer” (as defined in Rule 405 under the 1933 Act, without taking into account any determination by the SEC pursuant to Rule 405
under the 1933 Act that it is not necessary that the Company be considered an ineligible issuer), including, without limitation, for purposes
of Rules 164 and 433 under the 1933 Act with respect to the offering of the Securities as contemplated by the Registration Statement.
(j) Financial
Statements. The consolidated financial statements of the Company and the Significant Subsidiaries, together with related notes and
schedules as set forth or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus,
present fairly in all material respects the financial position of the Company and the consolidated Significant Subsidiaries and the results
of operations and cash flows of the Company and the consolidated Significant Subsidiaries, at the indicated dates and for the indicated
periods. Such consolidated financial statements and related schedules have been prepared in accordance with United States generally accepted
accounting principles consistently applied throughout the periods involved (“GAAP”), except as disclosed therein, and
all adjustments necessary for a fair presentation of results for such periods have been made. The summary and selected consolidated financial
and statistical data, if any, included or incorporated by reference in the Registration Statement, the General Disclosure Package and
the Prospectus presents fairly in all material respects the information shown therein, at the indicated dates and for the indicated periods,
and such data has been compiled on a basis consistent with the financial statements presented therein and the books and records of the
Company. All disclosures, if any, contained in the Registration Statement, the General Disclosure Package and the Prospectus regarding
“non-GAAP financial measures” (as such term is defined by the Rules and Regulations) comply in all material respects with
Regulation G of the 1934 Act and Item 10 of Regulation S-K under the 1933 Act, to the extent applicable. The Company and the Significant
Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations or
any “variable interest entities” within the meaning of Financial Accounting Standards Board Interpretation No. 46), not
disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. There are no financial statements (historical
or pro forma) that are required to be included in the Registration Statement, the General Disclosure Package or the Prospectus that are
not included as required.
(k) Accountants.
KPMG Huazhen LLP, who has certified certain of the financial statements filed with the SEC as part of, or incorporated by reference in,
the Registration Statement, the General Disclosure Package and the Prospectus, has represented to the Company that it is an independent
registered public accounting firm with respect to the Company within the meaning of the 1933 Act and the applicable Rules and Regulations
and the Public Company Accounting Oversight Board (United States).
(l) Weaknesses
or Changes in Internal Accounting Controls. Except as disclosed in the General Disclosure Package, neither the Company nor any of
the Significant Subsidiaries is aware of (i) any material weakness in its internal control over financial reporting or (ii) change
in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(m) Sarbanes-Oxley.
Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated by the SEC and The
Nasdaq Global Market (the “Principal Market”), if applicable, thereunder (collectively, the “Sarbanes-Oxley Act”)
has been applicable to the Company, there is and has been no failure on the part of the Company to comply in all material respects with
any provision of the Sarbanes-Oxley Act.
(n) Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court, public
board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its Significant Subsidiaries or any of the Company’s or its Significant Subsidiaries’ officers or directors,
whether of a civil or criminal nature or otherwise, in their capacities as such, except as disclosed in the General Disclosure Package
or the Company Disclosure Letter attached hereto or as would not reasonably be expected to have a Material Adverse Effect.
(o) Title
to Assets. The Company and the Significant Subsidiaries do not own any real property and have good and marketable title, or
have valid and marketable rights to lease or otherwise use, all real property and all personal property owned by them that is material
to the business of the Company and the Significant Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as
do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such
property by the Company and the Significant Subsidiaries and (ii) Liens for the payment of federal, state, foreign or other taxes,
for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject
to penalties. Any real property and facilities held under lease by the Company and the Significant Subsidiaries are held by them under
valid, subsisting and enforceable leases with which the Company and the Significant Subsidiaries are in compliance, except where such
non-compliance would not reasonably be expected to have a Material Adverse Effect.
(p) Taxes.
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect,
the Company and its Significant Subsidiaries each (i) has made or filed all necessary United States federal, state and local income
and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, and (ii) has
set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which
such returns, reports or declarations apply.
(q) Absence
of Certain Changes. Except as disclosed in the General Disclosure Package, since the date of the Company’s latest audited
consolidated financial statements, (i) the Company has, not declared or paid any dividends, (ii) the Company and the Significant
Subsidiaries have not sold to third parties any material assets outside the ordinary course of business and (iii) the Company and
the Significant Subsidiaries have not had material capital expenditures outside the ordinary course of business. The Company and the Significant
Subsidiaries have no material contingent obligations which are not disclosed in the Company’s consolidated financial statements which
are included in the Registration Statement, the General Disclosure Package and the Prospectus. Neither
the Company nor any of its Significant Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy law nor does the
Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact that would reasonably lead a creditor to do so. The Company, on a standalone basis and together with its Significant
Subsidiaries on a consolidated basis, is 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 Agreement, (x) “Insolvent” means, with respect to any Person, (i) the present
fair saleable value of such Person’s assets is less than the amount required to pay such Person’s total Indebtedness, (ii) such Person
is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured,
(iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature
or (iv) such Person has 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.
(r) 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 Securities), will not (i) result
in a violation of its memorandum and articles of association, any certificate of designations or other organizational documents 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 under any agreement, indenture, mortgage, deed of trust, lease,
contract, indenture or other agreement or instrument or obligation to which the Company or any Significant Subsidiary is a party or by
which the Company or any Significant Subsidiary, or any of their respective properties, is bound or (iii) result in a violation of
any law, rule, regulation, order, judgment, writ or decree of any court or of any government, regulatory body or administrative agency
or other governmental body having jurisdiction (including U.S. federal and state securities laws and regulations and the rules and
regulations of the Principal Market applicable to the Company or any of its Significant Subsidiaries) or by which any property
or asset of the Company or any of its Significant Subsidiaries is bound, except with respect to clauses (ii) and (iii), for such
violations, conflicts, breaches, defaults or rights which would not, individually or in the aggregate, have a Material Adverse Effect.
(s) Contracts.
There is no document, contract or other agreement required to be described in the Registration Statement or Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or filed as required by the 1933 Act or the Rules and Regulations.
Each description of a contract, document or other agreement in the Registration Statement and the Prospectus accurately reflects in all
material respects the terms of the underlying contract, document or other agreement. Each contract, document or other agreement described
in the Registration Statement and Prospectus or listed in the exhibits to the Registration Statement or incorporated by reference is in
full force and effect and is valid and enforceable by and against the Company in accordance with its terms (except as rights to indemnity
and contribution thereunder may be limited by federal or state securities laws and matter of public policy and except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’
rights generally and by general equitable principle). Except as disclosed in the General Disclosure Package, neither the Company nor any
of its Significant Subsidiaries nor, to the Company’s knowledge, any other party is in default in the observance or performance
of any term or obligation to be performed by it under any such agreement or any other agreement or instrument to which the Company or
its Significant Subsidiaries is a party or by which the Company or its Significant Subsidiaries or their respective properties or businesses
may be bound, and no event has occurred which with notice or lapse of time or both would constitute such a default, in any such case in
which the default or event, individually or in the aggregate, would have a Material Adverse Effect.
(t) Regulatory
Approvals. Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative
or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation
of the transactions herein contemplated (except such additional steps as may be required by the SEC, the Financial Industry Regulatory
Authority, Inc. (FINRA) or such additional steps as may be required under state securities or Blue Sky laws ) has been made or will
be made as soon as practical after the applicable Closing Date of the transactions.
(u) Conduct
of Business. Except as disclosed in the General Disclosure Package, neither the Company nor any of its Significant Subsidiaries
is in material violation of any term of or in default under the amended and restated memorandum and articles of association of the Company
as in effect on the date hereof and on the applicable Closing Date (“Articles of Association”), any certificate of designations,
preferences or rights of any other outstanding series of preferred shares of the Company or any of its Significant Subsidiaries or their
organizational charter, certificate of formation or certificate of incorporation or bylaws, respectively. Except as disclosed in the General
Disclosure Package, neither the Company nor any of its Significant Subsidiaries is in material violation of any judgment, decree or order
or any statute, ordinance, rule or regulation applicable to the Company or its Significant Subsidiaries. The Company has satisfied
all material eligibility requirements necessary to enable its ADSs to be listed or quoted on one or more Eligible Markets (as defined
in the Certificate of Designations). During the two (2) years prior to the date hereof, (i) the ADSs have been listed or designated
for quotation on the Principal Market or another Eligible 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 (or other
Eligible Market on which the ADSs were previously listed) regarding the suspension or delisting of the ADSs from such Principal Market
or other Eligible Market. The Company and its Significant Subsidiaries possess all material certificates, authorizations and permits issued
by the appropriate federal, state or foreign 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 Significant Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit. Without limiting the generality of the foregoing, neither the Company not any of its
Significant Subsidiaries is in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge
of any facts or circumstances that would reasonably lead to delisting or suspension of the ADSs by the Principal Market in the foreseeable
future.
(v) Intellectual
Property. The Company and the Significant Subsidiaries have or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None
of, and neither the Company nor any Significant Subsidiary has received a written notice that any of, the Intellectual Property Rights
has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date
of this Agreement. Neither the Company nor any Significant Subsidiary has received, since the date of the latest audited financial statements
included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate
or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To
the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights, except as would not, individually or in aggregate, reasonably be expected to have a Material
Adverse Effect. The Company and its Significant Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(w) Manipulation
of Prices. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result in, or that would reasonably be expected to cause or result in, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, or (ii) sold, bid for, purchased,
or paid any compensation for soliciting purchases of, any of the Securities.
(x) Investment
Company Act. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company”
as that term is defined in the Investment Company Act of 1940, as amended.
(y) Internal
Accounting Controls.
(i) The
Company and each of the Significant Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets
and liabilities; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(ii) The
Company has established and maintains “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under
the 1934 Act); the Company’s “disclosure controls and procedures” are designed to ensure that all information (both financial
and non-financial) 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.
(z) Industry
and Market Data. The statistical, industry-related and market-related data included in the Registration Statement, the General Disclosure
Package and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and
accurate, and such data agree in all material respects with the sources from which they are based on or derived.
(aa) Compliance
with Anti-Money Laundering Laws. The operations of the Company and its Significant
Subsidiaries are and has been conducted at all times in compliance with all applicable U.S. and non-U.S. Laws, rules and regulations
relating to terrorism or money laundering, including, without limitation, the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the U.S. Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and the U. S. Money Laundering Control Act of 1986 (18
U.S.C. §§1956 and 1957), as amended, and any applicable law prohibiting or directed against the financing or support of terrorist
activities (e.g., 18 U.S.C. §§ 2339A and 2339B), and the rules and regulations promulgated thereunder, and any related
or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency or self-regulatory body (collectively,
the “Anti-Money Laundering Laws”), and, except as disclosed in the General Disclosure Package, no action, suit or proceeding
by or before any court or governmental agency, authority or body or any arbitrator involving the Company or its Significant Subsidiaries
with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company or its Significant Subsidiaries, threatened.
(bb) No
Conflicts with Sanctions Laws. Neither the Company nor any of its Significant Subsidiaries nor, to the Company’s knowledge,
any director, officer, employee, agent, affiliate or other Person acting on behalf of the Company or its Significant Subsidiaries
is, or is directly or indirectly, individually or in the aggregate, owned or controlled by any Person
that is, currently the subject or the target of any sanctions administered or enforced by the U.S. government including, without limitation,
the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Departments of State
or Commerce and including, without limitation, the designation as a “Specially Designated National” or on the “Sectoral
Sanctions Identifications List” (collectively, “Blocked Persons”), the United Nations Security Council, the European
Union, His Majesty’s Treasury of the United Kingdom or any other relevant sanctions authority (collectively, “Sanctions Laws”),
or any Person with whom or with which a U.S. Person is prohibited from dealing under any of the
Sanctions Laws; neither the Company nor any of its Significant Subsidiaries nor, to the Company’s knowledge, any director, officer,
employee, agent, affiliate or other Person acting on behalf of the Company or its Significant Subsidiaries,
is located, organized, resident or doing business in a country or territory that is the subject or target of a comprehensive embargo or
Sanctions Laws, which as of the date hereof, include, without limitation, the Crimea, Dontesk, and Luhansk regions of Ukraine,
Cuba, Iran, North Korea, and Syria (each, a “Sanctioned Country”); the Company
and its Significant Subsidiaries are in compliance with all Sanctions Laws; the Company and its Significant Subsidiaries maintain
in effect and enforce policies and procedures designed to ensure compliance by the Company and its
Significant Subsidiaries with applicable Sanctions Laws; none of the Company or its
Significant Subsidiaries, or, to the Company’s knowledge, any director, officer, employee,
agent, affiliate or other Person acting on behalf of the Company or its Significant Subsidiaries, acting in any capacity in connection
with the operations of the Company or its Significant Subsidiaries, conducts any business with or for the benefit of any Blocked
Person or engages in making or receiving any contribution of funds, goods or services to, from or for the benefit of any Blocked Person,
or deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked or subject to blocking
pursuant to any applicable Sanctions Laws; no action of the Company or its Significant Subsidiaries
in connection with (i) the execution, delivery and performance of this Agreement and the other Transaction Documents, (ii) the
issuance and sale of the Securities hereunder, or (iii) the direct or indirect use of
proceeds from the Securities or the consummation of any other transaction contemplated hereby
or by the other Transaction Documents or the fulfillment of the terms hereof or thereof, will result in the proceeds of the transactions
contemplated hereby and thereby being used, or loaned, contributed or otherwise made available, directly or indirectly, to any Significant
Subsidiary, joint venture partner or other Person, (i) for the purpose of unlawfully funding or facilitating any activities of or
business with any Person that, at the time of such funding or facilitation, is the subject or target of Sanctions Laws, (ii) for
the purpose of unlawfully funding or facilitating any activities of or business in any Sanctioned Country or (iii) in any other manner
that will result in a violation by any Person (including any Person participating in the transactions contemplated by the Transaction
Documents, whether as advisor, investor or otherwise) of Sanctions Laws. For the past five (5) years, each of the Company and its
Significant Subsidiaries has not knowingly engaged in and is not now knowingly engaged in any dealings or transactions with any Person
that at the time of the dealing or transaction is or was the subject or the target of Sanctions Laws or with any Sanctioned Country.
(cc) Anti-Bribery.
None of the Company or its Significant Subsidiaries nor anyone acting on their behalf have made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation of any law. None of the Company or its Significant Subsidiaries,
nor to the Company’s knowledge any director, officer, agent, employee or other Person acting on behalf of the Company or its Significant
Subsidiaries, has (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful expense, (ii) made
any direct or indirect unlawful payment to any foreign or domestic government official or employee, to any employee or agent of a government-owned
or controlled entity with which any of the Company or its Significant Subsidiaries does or seeks to do business or to foreign or domestic
political parties or campaigns, (iii) violated or is in violation of any provision of any applicable law or regulation implementing
the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any applicable provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act 2010, or any other similar
law of any other jurisdiction in which any of the Company or its Significant Subsidiaries operates its business, including, in each case,
the rules and regulations thereunder (collectively, the “Anti-Bribery Laws”), (iv) taken, is currently taking
or will take any action in furtherance of an offer, payment, gift or anything else of value, directly or indirectly, to any Person while
knowing that all or some portion of the money or value will be offered, given or promised to anyone to improperly influence official action,
to unlawfully obtain or retain business or otherwise to secure any improper advantage or (v) otherwise made any offer, bribe, rebate,
payoff, influence payment, unlawful kickback or other unlawful payment; each of the Company and its Significant Subsidiaries has instituted
and maintained, and will continue to maintain, policies and procedures reasonably designed to promote and achieve compliance with the
Anti-Bribery Laws; none of the Company or its Significant Subsidiaries will directly or indirectly use the proceeds of the Securities
or lend, contribute or otherwise make available such proceeds to any subsidiary, affiliate, joint venture partner or other Person for
the purpose of financing or facilitating any activity that would violate the Anti-Bribery Laws; except as disclosed in the General Disclosure
Package, there are, and have been, no allegations, investigations or inquiries with regard to a potential violation of any Anti-Bribery
Laws by the Company or its Significant Subsidiaries, or any of their respective current or former directors, officers, employees, representatives,
agents or other Persons acting on their behalf.
(dd) Insurance.
The Company and each of the Significant Subsidiaries carry, or are covered by, insurance by insurers of recognized financial responsibility
in such amounts and covering such losses and risks, including, but not limited to, directors and officers insurance coverage, as is adequate
for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged
in similar businesses. Neither the Company nor any such Significant Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers, in each case, as
may be necessary to continue its business at a cost that, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(ee) Employee
Relations. Except as disclosed in the General Disclosure Package: (i) no material labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material
Adverse Effect; (ii) none of the Company’s or its Significant Subsidiaries’ employees is a member of a union that relates
to such employee’s relationship with the Company or such Significant Subsidiary, neither the Company nor any of its Significant
Subsidiaries is a party to a collective bargaining agreement, and the Company and its Significant Subsidiaries believe that their relationships
with their employees are good; (iii) to the knowledge of the Company, no executive officer of the Company or any Significant Subsidiary,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or noncompetition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Significant Subsidiaries
to any liability with respect to any of the foregoing matters; (iv) the Company and its Significant Subsidiaries are in compliance
with all applicable U.S. federal, state, local and applicable foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(ff) Transactions
with Affiliates. Except as set forth in the General Disclosure Package, none of the officers or directors of the Company or any Significant
Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Significant
Subsidiary is presently a party to any transaction with the Company or any Significant Subsidiary
(other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from
or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company,
any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder,
member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including share option
agreements under any share option plan of the Company.
(gg) Environmental
Laws. Except as disclosed in the General Disclosure Package, the Company and its Significant Subsidiaries (i) are in compliance
with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient
air, surface water, groundwater, land surface or subsurface strata), including 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 (“Environmental
Laws”); (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval
where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect.
(hh) Listing;
1934 Act Registration. As of the date hereof, the ADSs are quoted for trading on the Principal Market. As of the date hereof, the
Company has taken no action designed to, or likely to have the effect of, terminating the registration of the ADSs under the 1934 Act
or the quotation of the ADSs on the Principal Market, nor has the Company received any notification that the SEC or the Principal Market
is contemplating terminating such registration or quotation.
(ii) No
Integrated Offering. The Company has not sold or issued any securities that would be integrated with the offering of the Securities
contemplated by this Agreement pursuant to the 1933 Act, the Rules and Regulations or the interpretations thereof by the SEC.
(jj) Brokerage
Fees; Commissions. Except as described in the Registration Statement and the Prospectus, neither the Company nor any of its Significant
Subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the
Company or the Buyers for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities
hereunder. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s commissions
(other than for Persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby.
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 such claim (other than for claims made by Persons engaged by any Buyer or
its investment advisor). Neither the Company nor any of its Significant Subsidiaries has engaged any placement agent or other agent
in connection with the sale of the Securities hereunder.
(kk) Consents.
Other than as described in Section 3(t), or as have been previously obtained, filed or made, neither the Company nor any of its Significant
Subsidiaries is required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its 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 of its Significant Subsidiaries is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to each applicable Closing Date (or in the case of filings detailed above, will be
made timely after such applicable Closing Date) and the Company is unaware of any facts or circumstances which might prevent the Company
from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents.
(ll) 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 Significant Subsidiaries, (ii) an “affiliate” (as defined
in Rule 405 of the 1933 Act) of the Company or any of its Significant Subsidiaries or (iii) to the knowledge of the Company,
a “beneficial owner” (as defined for purposes of Rule 13d-3 of the 1934 Act) of more than 10% of the Ordinary Shares. The
Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Significant 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 decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and
its representatives.
(mm) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares issuable pursuant to the terms of the
Certificate of Designations will increase in certain circumstances. The Company further acknowledges that its obligations to issue Conversion
Shares in accordance with this Agreement and the Certificate of Designations is absolute and unconditional regardless of the dilutive
effect that such issuance may have on the ownership interests of other shareholders of the Company.
(nn) 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 the Company’s issuance of the Securities and any Buyer’s ownership of the Securities from the provisions of any
control share acquisition, interested shareholder, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Articles of Association or the laws of the jurisdiction of its incorporation 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 Securities and each Buyer’s ownership of the Securities. Except as set forth in the Registration Statement and
the Prospectus, the Company does not have any shareholder rights plan or similar arrangement relating to accumulations of beneficial ownership
of Ordinary Shares or a change in control of the Company.
(oo) Subsidiary
Rights. The Company or one of its Significant 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 Significant Subsidiaries as owned by the Company
or such Significant Subsidiary.
(pp) Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company 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 would be reasonably likely to have a Material Adverse Effect.
(qq) Transfer
Taxes. On the Closing Date, all share transfer or other similar taxes (other than income or similar taxes) which are required
to be paid in connection with the 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.
(rr) Acknowledgement
Regarding Buyers’ Trading Activity. The Company acknowledges and agrees that (i) none of the Buyers has been asked to agree,
nor has any Buyer agreed, to desist from purchasing or selling securities based on securities issued by the Company or to hold the Securities
for any specified term; and (ii) past or future open market or other transactions by any Buyer, before or after the closing of the
transactions contemplated by this Agreement or future transactions, may negatively impact the market price of the Company’s publicly-traded
securities. The Company further understands and acknowledges that (a) one or more Buyers may engage in trading activities at various
times during the periods that the Securities are outstanding, including, without limitation, during the period that the value of the Conversion
Shares deliverable with respect to Securities are being determined and (b) such trading activities (if any) could reduce the value
of the existing shareholders’ equity interests in the Company at and after the time that the trading activities are being conducted. The
Company acknowledges that such aforementioned trading activities do not constitute a breach of this Agreement, the Certificate of Designations,
or any of the documents executed in connection herewith.
(ss) Shell
Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1).
(tt) Bank
Holding Company. Neither the Company nor any of its Significant Subsidiaries or affiliates 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 Significant Subsidiaries or affiliates owns or controls directly or indirectly,
five percent or more of the outstanding shares of any class of voting securities or twenty-five percent 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 Significant
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.
(uu) Indebtedness
and Other Contracts. Except as disclosed in the General Disclosure Package, neither the Company nor any of its Significant Subsidiaries,
(i) has any outstanding Indebtedness, (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 would reasonably be expected to result in a Material Adverse
Effect, (iii) 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 (iv) 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. The General Disclosure Package provides a detailed description of the
material terms of any such outstanding Indebtedness, including, without limitation, descriptions of any defaults, forbearances, accounts
receivable and accounts payable thereunder.
(vv) Share
Option Plans. Each share option granted by the Company was granted (i) in accordance with the terms of the applicable
Company share option plan and (ii) with an exercise price at least equal to the fair market value of the Ordinary Shares 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 Company policy
or practice 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 Significant Subsidiaries or their financial results
or prospects.
(ww) 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.
(xx) Home
Country Rules. (i) The Company has notified the Principal Market of its intention to be subject to the home country practice
of the Cayman Islands, (ii) the Company has made all applicable filings with the SEC with respect to relying on home country practice
in accordance with Nasdaq Listing Rule 5615(a)(3) and (iii) Nasdaq Listing Rule 5635 does not apply to the Company.
(yy) Dealer
Registration. The Company acknowledges that Lead Investor is not registered as a ‘dealer’ under the 1934 Act.
(zz) Due
Diligence. The Company has performed background research on Lead Investor and its affiliates and has received and reviewed the due
diligence packet provided by Lead Investor.
The Company, being aware of the matters and legal
issues described in subsections (yy) and (zz) above, acknowledges and agrees that such matters, or any similar matters, have no bearing
on the transactions contemplated this Agreement and the Certificate of Designation and covenants and agrees that it will not use any such
information or legal theory as a defense to performance of its obligations under this Agreement or the Certificate of Designation or in
any attempt to avoid, modify, reduce, rescind or void such obligations.
4. COVENANTS.
(a) Best
Efforts. Each party shall use its best efforts timely to satisfy each of the covenants and the conditions to be satisfied by it as
provided in Sections 6 and 7.
(b) Maintenance
of Registration Statement. For so long as any of the Preferred Shares remain outstanding or remain issuable hereunder, the Company
shall maintain the effectiveness of the Registration Statement, file necessary amendments to the Registration Statement or file a new
registration statement on Form F-3 (or other applicable forms) for the issuance thereunder of the Relevant Securities (as defined
below); provided that, if at any time while the Preferred Shares are outstanding or remain issuable hereunder, the Company shall be ineligible
to utilize Form F-3 (or any successor form) for the purpose of issuance of the Relevant Securities, the Company shall convert such
registration statement to the proper EDGAR submission type as may be necessary to maintain
the effectiveness of the Registration Statement for this purpose. For the purpose of this Agreement, “Relevant Securities”
means (i) the Conversion Shares and (ii) any shares of capital of the Company issued or issuable with respect to the Preferred
Shares and/or the Conversion Shares as a result of any share split, share dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on issuance, conversion or exercise thereof.
(c) Prospectus
Supplement and Blue Sky. In the manner required by law, the Company shall have delivered to the Buyers, and as soon as practicable
after the Closing, the Company shall file, the Prospectus Supplement with respect to the Securities as required under and in conformity
with the 1933 Act, including Rule 424(b) thereunder. If required, the Company, on or before the Closing Date, shall 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. The Company shall make all filings and reports relating to the offer and sale of the Securities hereunder
required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.
(d) Use
of Proceeds. The proceeds from the sale of the Securities will be used by Company and/or its subsidiaries to manufacture or invest
in digital mining sites and equipment to be deployed or sold in North America, including any acquisition or disposition of assets from
or between subsidiaries.
(e) Listing.
The Company shall promptly secure the listing of all of the Conversion Shares upon each securities exchange and automated quotation system,
if any, upon which the ADSs are then listed, including the Principal Market (subject to official notice of issuance) and shall maintain
such listing of all the Conversion Shares from time to time issuable under the terms of the Transaction Documents. The Company shall maintain
the authorization for quotation of the ADSs on the Principal Market or any other Eligible Market. Neither the Company nor any of its Significant
Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the ADSs on the Principal
Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(e).
(f) Fees.
The Company shall pay the Lead Investor or its designee(s) $25,000.00 for due diligence and legal costs and expenses incurred in
connection with the transactions contemplated by the Transaction Documents. Such costs and expenses, to the extent not reimbursed by the
Company on or prior to the Closing, may, at the option of the Lead Investor, be withheld by the Lead Investor from its applicable Purchase
Price at the Closing. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees or broker’s
commissions (other than for Persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated
hereby. 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 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.
(g) Pledge
of Securities. The Company acknowledges and agrees that the Securities may be pledged by any Buyer in connection with a bona fide
margin agreement or other loan or financing arrangement that is secured by the Securities. Any such pledge of Securities shall not be
deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer 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.
(h) Reporting
Status. Until the date on which none of the Preferred Shares are outstanding or remain issuable hereunder (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 during the Reporting Period unless pursuant to
a Fundamental Transaction (as defined in the Certificate of Designations).
(i) Disclosure
of Transactions and Other Material Information. On or before the Disclosure Time (as defined below), the Company shall, after receiving
approval by the Lead Investor (which approval shall not be unreasonably withheld), issue a press release and furnish a Report of Foreign
Private Issuer on Form 6-K describing the material terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement (and all schedules
and exhibits to this Agreement)) and the form of Certificate of Designations as exhibits to such filing (including all attachments, the
“6-K Filing”). As of immediately following the furnishing of the 6-K Filing to the SEC, no Buyer shall be in possession
of any material, non-public information received from the Company, any of its Significant Subsidiaries or any of their respective officers,
directors, employees, affiliates or agents, that is not disclosed in the 6-K Filing or in prior filings with (or in documents furnished
to) the SEC. In addition, effective upon furnishing 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 Significant Subsidiaries or any of
their respective officers, directors, employees, affiliates or agents, on the one hand, and any of the Buyers or any of their affiliates,
on the other hand, shall terminate and be of no further force or effect. The Company shall not, and shall cause each of its Significant
Subsidiaries and its and each of their respective officers, directors, employees, affiliates and agents, not to, provide any Buyer with
any material, non-public information regarding the Company or any of its Significant Subsidiaries from and after the date hereof without
the express written consent of such Buyer, except with respect to the occurrence of a Triggering Event (as defined in the Certificate
of Designations) the disclosure of which shall be governed by the Certificate of Designations. To the extent that the Company, its Significant
Subsidiaries or any of its or their respective officers, directors, employees, affiliates or agents
delivers any material, non-public information to a Buyer without such Buyer’s prior written consent, except with respect to the
occurrence of a Triggering Event the disclosure of which shall be governed by the Certificate of Designations, the Company hereby covenants
and agrees that such Buyer shall not have any duty of confidentiality to the Company, any of its Significant Subsidiaries or any of their
respective officers, directors, employees, affiliates or agents with respect to, or a duty to the Company, any of its Significant Subsidiaries
or any of their respective officers, directors, employees, affiliates or agents not to trade on the basis of, such material, non-public
information. Subject to the foregoing, neither the Company nor any of its Significant Subsidiaries shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby without the prior express written consent of each Buyer;
provided, however, that the Company shall be entitled, without such prior approval of each Buyer, to make any press release
or other public disclosure with respect to such transactions (i) in substantial conformity with the 6-K Filing and press release
contemplated by this Section 4(j) and (ii) as is required by applicable law, regulation or any Eligible Market on which
the Company’s securities are then listed or quoted (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 any applicable Buyer, neither the Company nor any of its Significant Subsidiaries or affiliates shall disclose the name of such Buyer
in any filing, announcement, release or otherwise other than in connection with the Registration Statement unless such disclosure is required
by law, regulation or any Eligible Market on which the Company’s securities are then listed or quoted. As used herein, “Disclosure
Time” means, (i) if this Agreement is signed after 8:30 a.m. (New York City time) and before midnight (New York City
time) on any Trading Day, 8:31 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise
instructed as to an earlier time by the Lead Investor, or (ii) if this Agreement is signed between midnight (New York City time)
and 8:30 a.m. (New York City time) on any Trading Day, no later than 8:31 a.m. (New York City time) on the date hereof, unless
otherwise instructed as to an earlier time by the Lead Investor.
(j) Additional
Preferred Shares. For so long as any Preferred Shares remain issued and outstanding, the Company will not issue any Preferred Shares
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 Certificate of Designations. The Company further agrees that it will not issue or sell any Preferred Shares to any Buyers under
this Agreement other than Lead Investor without Lead Investor’s prior written consent, which consent may be granted or withheld
in Lead Investor’s sole discretion.
(k) Corporate
Existence. For so long as any Preferred Shares remain issued and outstanding or remain issuable hereunder, the Company shall
maintain its corporate existence and shall not be party to any Fundamental Transaction (as defined in the Certificate of Designations)
unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Certificate of
Designations.
(l) Reservation
of Shares. So long as any Preferred Shares remain outstanding or remain issuable hereunder, the Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of issuance no less than the Required Reserve Amount. If at any
time the number of Ordinary Shares authorized and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company
shall take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, (i) calling
an extraordinary meeting of shareholders to authorize an increase in the amount of Ordinary Shares to be authorized and reserved to meet
the Company’s obligations under Section 3(e), (ii) obtaining shareholders’ approval of such increase in such authorized number
of shares, (iii) using best efforts to cause the Board of Directors of the Company to unanimously recommend to the shareholders of
the Company that they approve such resolutions, (iv) using best efforts to cause its officers and directors who hold Ordinary Shares
to be present at the shareholder meeting for quorum purposes (including by proxy) and (v) using best efforts to cause management’s
shares of the Company to be voted in favor of such increase in the authorized shares of the Company, to ensure that the number of authorized
shares is sufficient to meet the Required Reserve Amount. The Required Reserve Amount and any increase in the number of shares so reserved
shall be allocated pro rata among the Buyers, based on the total number of Ordinary Shares issuable pursuant to the terms of the Certificate
of Designations (without regard to any limitations on the issuance of shares pursuant to the terms of the Certificate of Designations)
issued to each Buyer on the Closing Date (the “Authorized Share Allocation”). In the event that a Buyer shall sell or
otherwise transfer any of its Preferred Shares, each transferee shall be allocated a pro rata portion of such Buyer’s Authorized Share
Allocation with respect to such Buyer’s Preferred Shares being transferred. Any Ordinary Shares reserved and allocated to any Person which
ceases to hold any Preferred Shares shall be allocated to the holders of the remaining Preferred Shares, pro rata based on the Conversion
Shares issuable pursuant to the terms of the Certificate of Designations (without regard to any limitations on the issuance of shares
pursuant to the terms of the Certificate of Designations).
(m) Conduct
of Business. The business of the Company and its Significant Subsidiaries shall not be conducted in violation of applicable Anti-Bribery
Laws, Sanctions Laws and Anti-Money Laundering Laws.
(i) The
Company shall maintain in effect and enforce policies and procedures designed to ensure compliance by the Company and its Significant
Subsidiaries and their directors, officers, employees, agents and representatives with the Sanctions Laws and the Anti-Bribery Laws.
(ii) The
Company will promptly notify the Buyers in writing if the Company or any of its Significant Subsidiaries, or to the Company’s
knowledge, any of their directors, officers, employees, representatives or agents, shall become
a Blocked Person, or become directly or indirectly owned or controlled by a Blocked Person.
(iii) The
Company shall promptly notify the Buyers in writing if it cannot comply with the covenants set forth in this Section 4(m).
(n) Subsequent
Placements.
(i) For
purposes of this Section 4(n), the following definitions shall apply.
(1) “Convertible
Securities” means any shares or securities (other than Options (as defined below)) convertible into or exercisable or
exchangeable for Ordinary Shares or ADSs.
(2) “Options”
means any rights, warrants or options to subscribe for or purchase Ordinary Shares, ADSs or Convertible Securities.
(3) “Ordinary
Share Equivalents” means, collectively, Options and Convertible Securities.
(ii) From
the date hereof until ninety (90) days from the Closing Date, the Company will not (A) directly or indirectly, file any registration
statement with the SEC other than the Registration Statement and shall not file any Prospectus Supplement with respect to any Subsequent
Placement (as defined below), (B) directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or
announce any offer, sale, grant or any option to purchase or other disposition of) any of its equity or equity equivalent securities,
including without limitation any debt, preferred shares or other instrument or security that is, at any time during its life and under
any circumstances, convertible into or exchangeable or exercisable for Ordinary Shares, ADSs or Ordinary Share Equivalents (any such offer,
sale, grant, disposition or announcement being referred to as a “Subsequent Placement”), or (C) be party to any
solicitations, negotiations or discussions with regard to the foregoing. Notwithstanding the foregoing, this Section 4(n) shall
not apply in respect of an issuance (i) of Ordinary Shares or ADSs or options to purchase Ordinary Shares or ADSs to directors, officers,
employees or consultants of the Company or the Significant Subsidiaries 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 (including those underlying any ADSs)
issuable upon exercise of such options) after the date hereof pursuant to this clause (i) do not, in the aggregate, exceed 251,549,733
Ordinary Shares (as adjusted for any share splits, share dividends, share combinations, recapitalizations or other similar transactions
relating to the Ordinary Shares occurring after the date hereof) and (2) the exercise price of any such options is not lowered, the
number of shares issuable thereunder is not increased, the term of such options is not extended and none of such options are otherwise
amended in any manner that adversely affects any of the Buyers (other than, in each case under clause (2), to reflect any share splits,
share dividends, share combinations, recapitalizations or other similar transactions relating to the Ordinary Shares occurring after the
date hereof) and (ii) pursuant to an ATM Offering (as defined in the Certificate of Designations)(each of the foregoing in clauses
(i) through (ii), collectively the “Excluded Securities”). As used herein, “Approved Share Plan”
means any employee benefit plan or incentive 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 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.
(iii) Other
than the transactions contemplated by this Agreement, until the one (1) year anniversary of the later of (x) such date that
no Preferred Shares are outstanding and (y) no Preferred Shares remain issuable pursuant to this Agreement, the Company will not,
directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(n)(iii).
(1) At
least five (5) Business 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 such Buyer 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 with respect to such
Subsequent Placement upon its written request. Upon the written request of a Buyer within two (2) Business 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
6:00 p.m. New York Time on the second (2nd) Business Day after the delivery to such Buyer of such Pre-Notice, 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 (w) identify and describe the Offered Securities, (x) 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, (y) identify
the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to
issue and sell to or exchange with such Buyers at least thirty percent (30%) of the Offered Securities, allocated among such Buyers (a) based
on such Buyer’s pro rata portion of the Preferred Shares purchased hereunder (the “Basic Amount”), and (b) 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 the Buyers shall have an opportunity
to subscribe for any remaining Undersubscription Amount.
(2) To
accept an Offer, in whole or in part, such Buyer must deliver a written notice (the “Notice of Acceptance”) to the Company
prior to the end of the tenth (10th) Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”),
setting forth (i) the portion of such Buyer’s Basic Amount that such Buyer elects to purchase and (ii) if such Buyer shall elect
to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase. 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, that 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 its deems reasonably necessary. Notwithstanding anything to the contrary contained herein,
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 the Buyers a new Offer Notice and the Offer Period shall expire on the tenth (10th) Business Day after such
Buyer’s receipt of such new Offer Notice.
(3) The
Company shall have five (5) Business Days from the expiration of the Offer Period above to (A) 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 the Buyers (the “Refused Securities”)
pursuant to a definitive agreement (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 (I) the execution of such Subsequent Placement Agreement, and (II) either (x) the consummation
of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent Placement Agreement,
in each case, which shall be furnished to the SEC on a Report of Foreign Private Issuer on Form 6-K with such Subsequent Placement
Agreement and any documents contemplated therein filed as exhibits thereto.
(4) 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(n)(iii)(3)), then each Buyer may, at its sole option and in its sole discretion, 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(n)(iii)(2) 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 Section 4(n)(iii)(3) 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(n)(iii)(1).
(5) Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from the Company,
and the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced
pursuant to Section 4(n)(iii)(3) if the Buyers have so elected, upon the terms and conditions specified in the Offer. The purchase
by the Buyers of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Buyers
of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Buyers and their respective
counsel.
(6) Any
Offered Securities not acquired by the Buyers or other persons in accordance with Section 4(n)(iii)(3) may not be issued, sold
or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement.
(7) The
Company and the Buyers agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with respect
to such Offer nor any other transaction documents related thereto shall include any term or provisions whereby any Buyer shall be required
to agree to any restrictions in trading as to any securities of the Company owned by such Buyer prior to such Subsequent Placement or
whereby the terms or provisions of the transactions contemplated by this Agreement are negatively affected and the Buyers shall be entitled
to the same registration rights provided to other investors in the Subsequent Placement.
(iv) Notwithstanding
anything to the contrary in this Section 4(n) and unless otherwise agreed to by the Buyers, the Company shall either confirm
in writing to the Buyers 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 the Buyers will not be in possession of material
non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by the twentieth (20th)
Business Day following delivery of the Offer Notice 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 the Buyers, such transaction shall be
deemed to have been abandoned and the Buyers shall not be deemed to be in possession of any material, non-public information with respect
to the Company. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide
each Buyer with another Offer Notice and each Buyer will again have the right of participation set forth in this Section 4(o)(iii).
The Company shall not be permitted to deliver more than one such Offer Notice to the Buyers in any 60-day period (other than the Offer
Notices contemplated by the last sentence of Section 4(o)(iii)(2)).
(v) The
restrictions contained in this Section 4(n) shall not apply in connection with the issuance of any Excluded Securities. The
Company shall not circumvent the provisions of this Section 4(n) by providing terms or conditions to one Buyer that are not
provided to all.
(o) Taxes.
Following the Closing, the Company shall make an annual determination whether the Company will be classified as a (i) “controlled
foreign corporation” within the meaning of Section 957 or the Code or (ii) “passive foreign investment company”
within the meaning of Section 1297 of the Code. The Company shall promptly provide to the Buyers any information that the Buyers
reasonably requests and is necessary in order for each Buyer to (x) comply with its federal, state, or local tax return filing and
information reporting obligations, (y) make and maintain a “qualified electing fund” election (as defined in the Code)
with respect to the Company as a result of the Company being classified as a “passive foreign investment company”, and (z) comply
with filing requirements that arise as a result of the Company being classified as a “controlled foreign corporation” for U.S.
federal income tax purposes.
(p) Integration.
None of the Company, its Significant Subsidiaries, their affiliates and any Person acting on their behalf shall sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that would be integrated
with the offer or sale of the Securities in a manner that would be integrated with the offer or sale of the Securities for purposes of
the rules and regulations of any Eligible Market such that it would require shareholder approval prior to the closing of such other
transaction.
(q) FAST
Compliance. While any Securities are outstanding and held by a Buyer, the Company shall maintain a transfer agent that participates
in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program.
(r) Company’s
Operations. While any Securities are outstanding or remain issuable hereunder, the Company shall (i) not be an “investment
company”, as such term is defined in the Investment Company Act of 1940, as amended; (ii) not become a U.S. real property holding
corporation within the meaning of Section 897 of the Code (and the Company so certify upon any Buyer’s request); (iii) not become
subject to the BHCA or regulation by the Federal Reserve; (iv) not own or control, directly or indirectly, five percent or more of
the outstanding shares of any class of voting securities or twenty-five percent 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; and (v) not exercise 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.
(s) Return
of Pre-Delivery Shares. Notwithstanding anything to the contrary contained herein, each Buyer, severally and not jointly with any
other Buyer, hereby covenants and agrees with the Company (and not with any other Buyer) that, upon the later of (i) such date that
no Preferred Shares remain potentially issuable to such Buyer hereunder pursuant to the Closing, and (ii) such date no Preferred
Shares or Series A Preferred Shares of the Company are then held by such Buyer (whether following the conversion or redemption, as
applicable, of all Preferred Shares then held by such Buyer), such Buyer shall within thirty (30) Trading Days deliver to the Company
a number of ADSs equal to the number of ADSs previously issued to such Buyer in connection with such Buyer’s purchase of Series A
Preferred Shares (the “Pre-Delivery Shares”) (as adjusted for any share splits, share dividends, share combinations,
recapitalizations or other similar transactions occurring after the date hereof), and the Company shall pay such Buyer US$0.00000075 for
each such Pre-Delivery Share (as adjusted for any share splits, share dividends, share combinations, recapitalizations or other similar
transactions occurring after the date hereof).
(t) Use
of Pre-Delivery Shares. Following the delivery of a Conversion Notice (as defined in the Certificate of Designations) by a Buyer to
the Company but before receiving the ADSs issuable pursuant to such Conversion Notice, a Buyer holding Pre-Delivery Shares shall be authorized
to sell a number of Pre-Delivery Shares up to the number of ADSs to be issued as specified in such Conversion Notice. The ADSs issued
pursuant to the Conversion Notice, once delivered to the Buyer, shall automatically replenish the sold Pre-Delivery Shares.
(u) Closing
Documents. As soon as reasonably practicable after the Closing Date, the Company agrees to deliver, or cause to be delivered, to each
Buyer, a complete closing set (which may be solely in electronic format) of the executed copies of the Transaction Documents, Securities
and other documents required to be delivered to any party pursuant to Section 7.
5. REGISTER;
Depositary INSTRUCTIONS; Assistance in ADS Conversion.
(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 Preferred Shares), a register for the Preferred Shares in which the Company shall record the name and address of the
Person in whose name the Preferred Shares have been issued (including the name and address of each transferee). 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) Depositary
Instructions. The Company shall deposit Ordinary Shares with the Depositary’s Custodian and such other documents and opinions
as the Depositary shall reasonably request including issue irrevocable delivery order instructions to the Depositary to deliver ADSs,
registered in the name of each Buyer or its respective nominee(s), for the Conversion Shares in such amounts as specified from time to
time by each Buyer to the Company pursuant to the terms of the Certificate of Designations(the “Irrevocable Depositary Instructions”).
The Company represents and warrants that no instruction other than the Irrevocable Depositary Instructions referred to in this Section 5
will be given by the Company to the Depositary and any subsequent depositary with respect to the Securities, and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the other
Transaction Documents. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyers.
Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 will be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5, that the Buyers 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.
(c) Assistance
in ADS Conversion. In addition to, and not in derogation from, any provision set forth in any of the Transaction Documents, upon written
request by a Buyer, the Company shall provide reasonable assistance to such Buyer in the conversion of any such Preferred Shares pursuant
to the terms of the Certificate of Designations or the conversion of any Ordinary Shares into freely tradeable ADSs, subject to the rules and
regulations of the Securities Act. The Company shall use reasonable best efforts to: (a) request its counsels to submit a request,
and if requested, opinions, to the Depositary, the Company’s transfer agent, the Company’s corporate registrar and all other applicable
parties (as applicable, collectively “Agent”) to facilitate the conversion of Preferred Shares into Conversion Shares
and conversion of Ordinary Shares into freely tradeable ADSs, (b) pay the conversion, maintenance, registration and other fees and
expenses related to the conversion of Preferred Shares into Conversion Shares and the conversion of Ordinary Shares into freely tradeable
ADSs (and to the extent a Buyer incurs any such fees, the Company shall reimburse such Buyer for such fees), and (c) provide conversion
approvals and instructions to the Agent and all other applicable parties (as applicable).
6. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.
The obligation of the Company
hereunder to issue and sell the applicable Preferred Shares 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:
(i) Such
Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.
(ii) Such
Buyer and each other Buyer shall have delivered to the Company the applicable Purchase Price (less, in the case of the Lead Investor,
the amounts withheld pursuant to Section 4(f)) by wire transfer of immediately available funds pursuant to the Wire Instructions
provided by the Company.
(iii) The
representations and warranties of such Buyer shall be true and correct in all respects as of the date when made and as of the Closing
Date as though 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 specified date), and such Buyer shall have performed, satisfied and complied in all 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.
(iv) No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
7. CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE.
The
obligation of each Buyer hereunder to purchase the applicable Preferred Shares 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:
(i) The
Company shall have duly executed and delivered to such Buyer (i) each of the Transaction Documents and (ii) the Preferred Shares
(allocated in such amounts as the Buyer shall reasonably request) being purchased by such Buyer at the Closing pursuant to this Agreement.
(ii) Each
Buyer shall have received the opinion of Kirkland & Ellis LLP, the Company’s U.S. counsel, dated as of the Closing Date, substantially
in the form attached hereto as Exhibit B-1 and of Maples and Calder (Hong Kong) LLP, the Company’s Cayman Islands counsel,
dated as of the Closing Date, substantially in the form attached hereto as Exhibit B-2.
(iii) 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 Registrar (or comparable office) of such jurisdiction, as of a date within ten (10) days prior
to the Closing Date.
(iv) The
Company shall have delivered to such Buyer a certified copy of the Articles of Association as certified by the Registrar of the Cayman
Islands (or a fax or pdf copy of such certificate) within ten (10) days prior to the Closing Date.
(v) The
Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing Date, as
to (i) the resolutions consistent with Section 3(d) as adopted by the Company’s Board of Directors in a form reasonably
acceptable to such Buyer and (ii) the Company’s Articles of Association, each as in effect at the Closing, substantially in the form
attached hereto as Exhibit C.
(vi) The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the
Closing Date as though 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 specified date) and the Company shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior
to the Closing Date. Such Buyer shall have received a certificate, 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 substantially in the
form attached hereto as Exhibit D.
(vii) (I) The
ADSs shall be designated for quotation or listed on the Principal Market, (II) the ADSs 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 (A) in writing by the SEC or the Principal Market or (B) by falling
below the minimum listing maintenance requirements of the Principal Market and (III) Nasdaq Listing Rule 5635 shall not be applicable
to the transactions contemplated by this Agreement.
(viii) The
Registration Statement shall be effective and available for the issuance and sale of the Securities hereunder and the Company shall have
delivered to such Buyer the Prospectus and the Prospectus Supplement as required thereunder and the Company shall have no knowledge
of any fact that would reasonably be expected to cause any Registration Statement to not be effective or the Prospectus contained therein
to not be available for the issuance and sale of the Securities.
(ix) No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
(x) Since
the date of this Agreement, no event or series of events shall have occurred that reasonably could be expected to result in a Material
Adverse Effect.
(xi) The
Company shall have provided to such Buyer the Company’s wire instructions, on the Company’s letterhead and duly executed by the Company’s
Chief Executive Officer (the “Wire Instructions”).
(xii) The
resolutions approving the Certificate of Designations shall have been filed with the Registrar and shall be in full force and effect,
enforceable against the Company in accordance with their terms and shall not have been amended.
(xiii) The
Company shall have delivered to such Buyer such other documents 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 Lead Investor on or before five (5) Business Days from the
date hereof due to the Company’s or Lead Investor’s failure to satisfy the conditions set forth in Sections 6 and 7 (and the nonbreaching
party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date by delivering a written notice to that effect to each other party
to this Agreement and without liability of any party to any other party. If this Agreement is terminated pursuant to this Section 8,
the Company shall remain obligated to reimburse the Lead Investor or its designee(s), as applicable, for the expenses described in Section 4(f) and
each Buyer shall remain obligated to deliver the number of ADSs equal to such Buyer’s Pre-Delivery Shares to the Company, and the
Company shall remain obligated to pay such Buyer for such ADSs, as described in Section 4(s).
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 Cayman Islands, without giving effect to any choice of law or conflict of law provision
or rule (whether of the Cayman Islands or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the Cayman Islands. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the Cayman Islands,
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby, 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. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY. In addition to, but not in limitation of, any other rights of a Buyer hereunder, if (a) this
Agreement is placed in the hands of an attorney for collection of any indemnification or other obligation hereunder then outstanding or
enforcement or any such obligation is collected or enforced through any legal proceeding or a Buyer otherwise takes action to collect
amounts due under this Agreement or to enforce the provisions of this Agreement or (b) there occurs any bankruptcy, reorganization,
receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Agreement, then
the Company shall pay the costs incurred by such Buyer 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 Agreement shall be affected, or limited, by the fact that the Purchase Price paid
for the Preferred Shares was less than the original principal amount thereof.
(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. Counterparts may be delivered
via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com)
or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and
effective for all purposes.
(c) Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
(d) Severability.
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).
(e) Entire
Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between
the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement,
the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with
respect to the matters covered herein and therein and, 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. No provision of this Agreement may be
amended or waived other than by an instrument in writing signed by the Company and the Buyers holding at least a majority of the aggregate
number of the Preferred Shares issued and issuable under this Agreement and shall include the Lead Investor (the “Required Holders”),
and any amendment or waiver to 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. No such amendment shall be effective to the extent that it applies to less than all
of the holders of the applicable Securities then outstanding. No consideration shall be offered or paid to any Person to amend or consent
to a waiver or modification of any provision of this Agreement unless the same consideration (other than the reimbursement of legal fees)
also is offered to all of the parties to this Agreement and the holders of the Preferred Shares, as the case may be. Each Buyer hereby
acknowledges and agrees that any action taken pursuant to this Section may result in, or be perceived to result in, a disproportionate
impact on such Buyer compared to the impact of such action on one or more other Buyer(s). This provision constitutes a separate right
granted to each Buyer by the Company and shall not in any way be construed as the Buyers acting in concert or as a group with respect
to the purchase, disposition or voting of securities or otherwise. Without limiting the foregoing, the Company confirms that, except as
set forth in this Agreement, no Buyer has made any commitment or promise to it or has any other obligation to provide any financing to
the Company.
(f) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement or any of the
other Transaction Documents must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally;
(ii) upon delivery, when sent by electronic mail (provided that the sending party does not receive an automated rejection notice);
or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive
the same. The addresses and e-mail addresses for such communications shall be:
If to the Company:
Canaan Inc.
28 Ayer Rajah Crescent, #06-08
Singapore 139959
Attention: Legal
Department
E-mail: canaan_legal@canaan-creative.com
with a copy (for informational purposes only) to:
Kirkland &
Ellis International LLP
58th Floor, China World Tower A
No. 1 Jian Guo Men Wai Avenue
Chaoyang District, Beijing 100004
People’s Republic of China
Attention: Justin
You Zhou, Esq.
E-mail: justin.zhou@kirkland.com
If to a Buyer, to its 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:
Hansen Black Anderson Ashcraft PLLC
3051 West Maple Loop Drive, Suite 325
Lehi, Utah 84043
Attention: Jonathan Hansen
E-mail: jhansen@hbaa.law
or to such other 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 at least
five (5) days prior to the effectiveness of such change. 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, recipient e-mail and an image of the first page of such transmission or (C) provided by an overnight courier service
shall be rebuttable evidence of personal service 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 the Preferred Shares. The Company shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Required Holders, including by way of a Fundamental Transaction (unless the Company is in compliance
with the applicable provisions governing Fundamental Transactions set forth in the Certificate of Designations). A Buyer shall not assign
any of its rights or obligations hereunder without the prior written consent of the Company.
(h) No
Third Party Beneficiaries. A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties)
Act (As Revised) to enforce any term of this Agreement.
(i) Survival.
Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5 and 9 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 indemnify and hold harmless
each Buyer 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, 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 (a) any breach of any representation or warranty made by the Company in this Agreement, (b) any breach
of any covenant, agreement or obligation of the Company contained in this Agreement or (c) any cause of action, suit 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) and
arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant
to Section 4(j) or (iv) the status of such Buyer as an investor in the Company pursuant to the transactions contemplated
by the Transaction Documents. 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 for indemnification in respect
thereof is to be made against any indemnifying party under this Section 9(k), deliver to the indemnifying party a written notice
of the commencement thereof, and, except in the case of a direct claim against the indemnifying party, the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly
noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnitee; provided,
however, that an Indemnitee shall have the right to retain its own counsel with the fees and expenses of not more than one counsel
for such Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion of the Indemnitee, the representation by such
counsel of the Indemnitee and the indemnifying party would be inappropriate due to actual or potential differing interests between such
Indemnitee and any other party represented by such counsel in such proceeding. Legal counsel referred to in the immediately preceding
sentence shall be selected by the Required Holders. The Indemnitee shall cooperate fully with the indemnifying party in connection with
any negotiation or defense of any such action or Indemnified Liabilities by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnitee that relates to such action or Indemnified Liabilities. The indemnifying
party shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect
thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding arising out of any third party claim
effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, 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 Liabilities or litigation. Following
indemnification as provided for hereunder, the indemnifying party 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 indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party
of any liability to the Indemnitee under this Section 9(k) except to the extent that the indemnifying party has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such failure. For the avoidance of doubt, the provisions of this
Section 9(k)(ii) shall not apply to direct claims between the Company and a Buyer.
(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, as and when bills are received or Indemnified Liabilities are incurred.
(iv) The
indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (y) any liabilities the indemnifying party may be subject to pursuant to the law.
(l) No
Strict 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.
(m) Remedies.
Each Buyer and each holder of the 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 fails to timely perform, observe, or discharge
any or all of its obligations under the Transaction Documents, any remedy at law may prove to be inadequate relief to the Buyers. The
Company therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages and without posting a bond or other security.
(n) Rescission
and 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 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, any relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.
(o) Payment
Set Aside. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or 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.
(p) Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under any Transaction Document 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 entity, or create a presumption that the Buyers are in any way 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 and the Company acknowledges that the Buyers are not acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. The Company acknowledges and each Buyer confirms that it has independently
participated 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.
(q) Sections
8 and 19(3) of the Electronic Transactions Act (As Revised) of the Cayman Islands shall not apply.
[Signature Pages Follow]
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement
to be duly executed as of the date first written above.
| |
By: |
/s/
Nangeng Zhang |
| |
|
Name: Nangeng Zhang |
| |
|
Title: Chief Executive Officer |
[Signature Page to
Securities Purchase Agreement]
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above.
| |
Maximum Percentage to be included in the Preferred Shares: |
SCHEDULE OF BUYERS
| (1) |
(2) |
(3) |
(4) |
|
Buyer |
Address,
and Email |
Number of
Preferred
Shares to
be Purchased at the
Closing |
Legal
Representative’s
Address and Email |
| |
|
|
|
EXHIBITS
| Exhibit A |
Form of Certificate of Designations |
| Exhibit B-1 |
Form of Opinion of Company’s
U.S. Counsel |
| Exhibit B-2 |
Form of Opinion of Company’s
Cayman Islands Counsel |
| Exhibit C |
Form of Secretary’s
Certificate |
| Exhibit D |
Form of Officer’s Certificate |
SCHEDULES
| Schedule I |
List of General Use Free Writing Prospectus |
| Schedule II |
Company Disclosure Letter |
Exhibit 10.2
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES A-1 CONVERTIBLE PREFERRED SHARES
OF
CANAAN INC.
Canaan Inc. (the “Company”),
an exempted company incorporated and existing under the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”),
does hereby certify that, pursuant to authority conferred upon the Board of Directors of the Company (the “Board”) by
the Amended and Restated Memorandum and Articles of Association of the Company (the “Memorandum and Articles of Association”),
and pursuant to the provisions of the Companies Act, the Board adopted resolutions (i) re-designating 200,000 authorized but unissued
class A ordinary shares, par value US$0.00000005 (the “Class A Ordinary Shares”) each into Series A-1 Preferred
Shares (as defined below) , and (ii) providing for the designations, preferences and relative, participating, optional or other rights,
and the qualifications, limitations or restrictions thereof, of 200,000 Series A-1 Preferred Shares of the Company, as follows:
RESOLVED, that pursuant and
in accordance with the authority delegated to the Board under Article 9 of the Memorandum and Articles of Association, the authorized
share capital of the Company be re-designated from US$50,000 divided into 1,000,000,000,000 shares comprising (i) 999,643,250,556
Class A Ordinary Shares, (ii) 356,624,444 class B ordinary shares, par value US$0.0000005 each (the “Class B Ordinary
Shares”, and together with the Class A Ordinary Shares, the “Ordinary Shares”), and (iii) 125,000
Series A Convertible Preferred Shares, par value US$0.00000005 per share (the “Series A Preferred Shares”),
to US$50,000 divided into 1,000,000,000,000 shares comprising (i) 999,643,050,556 Class A Ordinary Shares, (ii) 356,624,444
Class B Ordinary Shares, (iii) 125,000 Series A Preferred Shares, and (iv) 200,000 Series A-1 Convertible Preferred
Shares, par value US$0.00000005 (the “Series A-1 Preferred Shares”), by the re-designation of 200,000 authorized
but unissued Class A Ordinary Shares in the authorized share capital of the Company as 200,000 Series A-1 Preferred Shares,
which shall have the following powers, designations, preferences and other special rights:
(1) RANKING.
The Series A-1 Preferred Shares shall rank prior and superior to all of the Ordinary Shares and any other shares in the capital of
the Company (other than the Series A Preferred Shares) with respect to the preferences as to dividends, distributions and payments
upon a Liquidation Event (such shares being referred to hereinafter collectively as “Junior Shares”). The rights of the
Junior Shares shall be of junior rank to and subject to the preferences and relative rights of the Series A-1 Preferred Shares. The
Series A-1 Preferred Shares shall rank equally with the Series A Preferred Shares with respect to the preferences as to dividends,
distributions and payments upon a Liquidation Event.
(2) PAYMENTS
OF STATED VALUE; PREPAYMENT. If any Series A-1 Preferred Shares remain issued and outstanding on the Maturity Date, the Company
shall redeem such Series A-1 Preferred Shares in cash in an amount equal to 105% of the Conversion Amount (as defined in Section 5(b)(i))
for each such Series A-1 Preferred Share. The “Maturity Date” with respect to any Series A-1 Preferred Shares
shall be the date that is twelve (12) months immediately following the applicable Issuance Date of such Series A-1 Preferred Shares,
as may be extended at the option of each Holder (i) in the event that, and for so long as, a Triggering Event (as defined in Section 6(a))
shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 2) or any event shall have
occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 2) that with the passage of time and
the failure to cure would result in a Triggering Event and (ii) through the date that is ten (10) Business Days after the consummation
of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 7(c))
is delivered prior to the Maturity Date. Other than as specifically permitted by this Certificate of Designations, the Company may not
prepay any portion of the outstanding Stated Value, accrued and unpaid dividends, if any, or accrued and unpaid Late Charges (as defined
in Section 26(b)) on Stated Value and dividends, if any.
(3) LIQUIDATION.
(a) Preferential
Payment to Holders. In the event of a Liquidation Event, holders of Series A-1 Preferred Shares (each, a “Holder”
and collectively, the “Holders”) shall be entitled to receive in cash out of the assets of the Company, whether from
capital or from earnings available for distribution to its shareholders (the “Liquidation Funds”), upon such Liquidation
Event, but before any amount shall be paid to the holders of any Junior Shares, an amount per Series A-1 Preferred Share equal
to the greater of (i) the Conversion Amount and (ii) the amount that would have been received had such Series A-1 Preferred
Shares been converted into the Class A Ordinary Shares underlying the ADSs issuable upon conversion of the Series A-1 Preferred
Shares immediately prior to such Liquidation Event at the then effective Alternate Conversion Price (without regard to any limitations
on conversion); provided that, if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares
of other classes or series of preferred shares of the Company, if any, that are of equal rank with the Series A-1 Preferred Shares
as to payments of Liquidation Funds (such shares being referred to hereinafter collectively as “Pari Passu Shares”),
if any, then each Holder and each holder of any such Pari Passu Shares shall receive a percentage of the Liquidation Funds equal to the
full amount of Liquidation Funds payable to such Holder as a liquidation preference, in accordance with their respective Certificate of
Designations, Preferences and Rights, as a percentage of the full amount of Liquidation Funds payable to all holders of Series A-1
Preferred Shares and Pari Passu Shares.
(b) Maximum
Percentage. Notwithstanding the foregoing, to the extent that a Holder’s right to participate in any liquidation pursuant to this
Section 3 would result in such Holder and such Holder’s other Attribution Parties exceeding the Maximum Percentage (as defined in
Section 5(d)), if applicable, then such Holder shall not be entitled to participate in such liquidation to such extent (and shall
not be entitled to beneficial ownership of such Class A Ordinary Shares as a result of such liquidation (and beneficial ownership)
to such extent) and the portion of such liquidation shall be held in abeyance for such Holder until such time or times as its right
thereto would not result in such Holder and its other Attribution Parties exceeding the Maximum Percentage, if applicable, at which time
or times such Holder shall be granted such rights (and any rights under this Section 3 to be held similarly in abeyance) to the same
extent as if there had been no such limitation.
(4) DIVIDENDS.
(a) From
and after the applicable Issuance Date, the Holders shall be entitled to receive dividends per Series A-1 Preferred Share when, as
and if declared by the Board.
(b) In
addition to the dividends, if any, referred to in Section 4(a), from and after each Issuance Date, the Holders shall be entitled
to receive such dividends paid and distributions made to the holders of ADSs or Class A Ordinary Shares to the same extent as if
such Holders had converted the Series A-1 Preferred Shares into ADSs or Class A Ordinary Shares underlying such ADSs (without
regard to any limitations on conversion and assuming for such purpose that the Series A-1 Preferred Shares were converted at the
Alternate Conversion Price as of the applicable record date) and had held such ADSs or Class A Ordinary Shares on the record date
for such dividends and distributions. Payments under the preceding sentence shall be made concurrently with the dividends or distribution
to the holders of ADSs or Class A Ordinary Shares. Following the occurrence of a Liquidation Event and the payment in full
to a Holder of its applicable liquidation preference as set forth in Section 3 above, such Holder shall cease to have any rights
hereunder to participate in any future dividends or distributions made to the holders of ADSs or Class A Ordinary Shares. The Company
shall not declare or pay any dividends on any Junior Shares or Pari Passu Shares unless the Holders of Series A-1 Preferred Shares
then issued and outstanding shall simultaneously receive dividends on a pro rata basis as if the Series A-1 Preferred Shares had
been converted into ADSs or the underlying Class A Ordinary Shares represented by such ADSs issuable upon conversion of the Series A-1
Preferred Shares pursuant to Section 5 immediately prior to the record date for determining the shareholders eligible to receive
such dividends (without regard to any limitations on conversion). Notwithstanding the foregoing, to the extent that a Holder’s right to
participate in any such dividends or distribution pursuant to this Section 4 would result in such Holder and its other Attribution
Parties exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such dividends or distribution to such
extent (and shall not be entitled to beneficial ownership of such Class A Ordinary Shares as a result of such dividends or distribution
(and beneficial ownership) to such extent) and the portion of such dividends or distribution shall be held in abeyance for such Holder
until such time or times as its right thereto would not result in such Holder and its other Attribution Parties exceeding the Maximum
Percentage, at which time or times such Holder shall be granted such rights (and any rights under this Section 4 on such initial
rights or on any subsequent such rights to be held similarly in abeyance) to the same extent as if there had been no such limitation.
(5) CONVERSION
OF SERIES A-1 PREFERRED SHARES. The Series A-1 Preferred Shares shall be convertible into Class A Ordinary Shares that can
be deposited with the Depositary for the issuance of ADSs at any time or times following the applicable Issuance Date of such Series A-1
Preferred Shares on the terms and conditions set forth in this Section 5.
(a) Conversion
Right. Subject to the provisions of Section 5(d), at any time or times on or after the applicable Issuance Date, any Holder shall
be entitled to convert any portion of the outstanding and unpaid Conversion Amount into fully paid and non-assessable ADSs in accordance
with Section 5(c), at the Conversion Rate (as defined below), subject to the delivery of legal opinion(s) and representation
letter(s) in form and substance reasonably satisfactory to the Depositary in connection with such proposed conversion and deposit
of the ADSs (if so requested by the Depositary). 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 ADS up to the nearest whole share.
The Company shall pay any and all transfer, stamp and similar taxes 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 pursuant to Section 5(a) shall be determined
by dividing (x) such Conversion Amount by (y) the Conversion Price less the Issuance Fee (as defined below) (the “Conversion
Rate”).
(i) “Conversion
Amount” means the sum of (A) the portion of the Stated Value to be converted, redeemed or otherwise with respect to which
this determination is being made, (B) accrued and unpaid dividends, if any, with respect to such Stated Value, and (C) accrued
and unpaid Late Charges, if any, with respect to such Stated Value and dividends.
(ii) “Conversion
Price” means, as of any Conversion Date or other date of determination, the lower of (x) US$4.00 (the “Fixed Conversion
Price”) and (y) the Market Price as in effect on the applicable date of determination, subject to adjustment as provided
herein.
(iii) “Issuance
Fee” means the fee charged by the Depositary (as defined in the Securities Purchase Agreement (as defined below)) for the issuance
of each ADS.
(c) Mechanics
of Conversion.
(i) Optional
Conversion. To convert Series A-1 Preferred Shares into ADSs on any date (a “Conversion Date”), a Holder shall
(A) deliver 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 (a “Conversion Notice”) to the Company and (B) if required by Section 5(c)(iv),
but without delaying the Company’s requirement to deliver ADSs on the applicable Share Delivery Date (as defined below), surrender the
original certificates representing the Series A-1 Preferred Shares (the “Series A-1 Preferred Share Certificates”)
being converted to a common carrier for delivery to the Company as soon as practicable on or following such date (or an indemnification
undertaking with respect to such Series A-1 Preferred Share Certificates in the case of its loss, theft, destruction or mutilation
in compliance with the procedures set forth in Section 28). In lieu of converting the accrued and unpaid dividends, if any, on the
portion of the Conversion Amount that a Holder elects to convert and Late Charges, if any, on such Conversion Amount and dividends in
a number of fully paid and nonassessable ADSs (rounded to the nearest whole share in accordance with Section 5(a)), such Holder may
indicate in a Conversion Notice it elects to have all or any portion of any accrued and unpaid dividends on such Conversion Amount and
Late Charges, if any, on such Conversion Amount and dividends be paid in cash, by wire transfer of immediately available funds in accordance
with the Holder’s wire instructions. No ink-original Conversion Notice shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Conversion Notice be required. Notwithstanding anything herein to the contrary, if, by virtue
of clause (y) of the definition of “Conversion Price”, the Conversion Price with respect to a Holder’s conversion of Series A-1
Preferred Shares is less than the Conversion Price specified by such Holder in its Conversion Notice, such Holder may, in its sole and
absolute discretion, deliver an updated Conversion Notice to the Company on or before the first (1st) Trading Day immediately
following the delivery by a Holder of its Conversion Notice (an “Updated Conversion Notice”) updating (x) the Conversion
Price (and aggregate number of ADSs to be issued upon such conversion) and (y) the aggregate number of Series A-1 Preferred
Shares subject to such Conversion Notice, as specified in such Holder’s Conversion Notice.
(ii) Company’s
Response. On or before the first (1st) Business Day following the date of delivery of a Conversion Notice, the Company shall transmit
via electronic mail a confirmation of receipt of such Conversion Notice to the applicable Holder and the Company’s transfer agent (the
“Transfer Agent”) and Depositary. On or before the sixth (6th) Business Day following the date on which
a Holder has delivered a Conversion Notice to the Company, provided, however that if a Holder delivers an Updated Conversion Notice to
the Company after 10:00 a.m., New York time on the Trading Day immediately following the applicable Conversion Date, such date, solely
with respect to the applicable conversion by such Holder, shall be extended by one (1) Trading Day (a “Share Delivery Date”),
the Company shall cause the Depositary to credit such aggregate number of ADSs to which such Holder shall be entitled to such Holder’s
or its designee’s balance account with the Depository Trust Company (“DTC”). If the number of Series A-1 Preferred
Shares represented by the Series A-1 Preferred Share Certificate(s) submitted for conversion, as required by Section 5(c)(iv),
is greater than the number of Series A-1 Preferred Shares being converted, then the Company shall as soon as practicable and in no
event later than three (3) Business Days after receipt of the Series A-1 Preferred Share Certificate(s) and at its own
expense, issue and deliver to such Holder a new Series A-1 Preferred Share Certificate representing the number of Series A-1
Preferred Shares not converted. The Person or Persons entitled to receive the ADSs issuable upon a conversion of Series A-1 Preferred
Shares shall be treated for all purposes as the record holder or holders of such ADSs and underlying Class A Ordinary Shares on the
applicable Conversion Date, irrespective of the date such ADSs are credited to such Holder’s account with DTC.
(iii) Company’s
Failure to Timely Convert. If the Company shall fail on or prior to the applicable Share Delivery Date to cause the Depositary
to credit such Holder’s balance account with DTC for the number of ADSs to which such Holder is entitled upon such Holder’s conversion
of any Conversion Amount (a “Conversion Failure”), then (A) if such Conversion Failure continues for five (5) consecutive
Trading Days, the Company shall pay damages to such Holder for each Trading Day following such fifth (5th) consecutive Trading
Day of such Conversion Failure in an amount equal to 1.5% of the product of (1) the sum of the number of ADSs not issued to such
Holder on or prior to the Share Delivery Date and to which such Holder is entitled, and (2) any trading price of the ADSs selected
by such Holder in writing as in effect at any time during the period beginning on the applicable Conversion Date and ending on the date
of such payment and (B) such 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 such Holder’s Series A-1 Preferred Shares 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. In addition to the foregoing, if the Company shall fail on or prior
to the applicable Share Delivery Date to cause the Depositary to credit such Holder’s balance account with DTC for the number of ADSs
to which such Holder is entitled upon such Holder’s conversion of any Conversion Amount or on any date of the Company’s obligation to
cause the Depositary to deliver ADSs as contemplated pursuant to clause (y) below, and if on or after such Trading Day such Holder
purchases (in an open market transaction or otherwise) ADSs to deliver in satisfaction of a sale by such Holder of ADSs issuable upon
such conversion that such Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within
five (5) Trading Days after such Holder’s request and in such Holder’s discretion, either (x) pay cash to such Holder in an
amount equal to such Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the
ADSs so purchased (the “Buy-In Price”), at which point the Company’s obligation to issue and deliver such certificate
or credit such Holder’s balance account with DTC for the ADSs to which such Holder is entitled upon such Holder’s conversion of the applicable
Conversion Amount shall terminate, or (y) promptly honor its obligation to credit such Holder’s balance account with DTC for such
ADSs and pay cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number
of ADSs, times (B) the price at which the sell order giving rise to such purchase obligation was executed. Notwithstanding the foregoing,
on up to two (2) separate occasions, the Company, at its election, will have an additional ten (10) Trading Days following the
five (5) Trading Day grace period following the Conversion Failure to deliver the applicable ADSs without the application of the
failure to deliver fees set forth above.
(iv) Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of Series A-1 Preferred Shares in accordance with the
terms hereof, a Holder shall not be required to physically surrender the certificate representing the Series A-1 Preferred Shares
to the Company unless (A) the full or remaining number of Series A-1 Preferred Shares represented by the certificate are being
converted or (B) a Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice)
requesting reissuance of Series A-1 Preferred Shares upon physical surrender of any Series A-1 Preferred Shares. Each Holder
and the Company shall maintain records showing the number of Series A-1 Preferred Shares so converted and the dates of such conversions
or shall use such other method, reasonably satisfactory to the Holders and the Company, so as not to require physical surrender of the
certificate representing the Series A-1 Preferred Shares upon each such conversion. If the Company does not update its records to
record such Stated Value, dividends 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 Company’s records shall be automatically
deemed updated to reflect such occurrence. In the event of any dispute or discrepancy, such records of the Company establishing the number
of Series A-1 Preferred Shares to which the record holder is entitled shall be controlling and determinative in the absence of manifest
error. Notwithstanding the foregoing, if Series A-1 Preferred Shares represented by a certificate are converted as aforesaid, a Holder
may not transfer the certificate representing the Series A-1 Preferred Shares unless such Holder first physically surrenders the
certificate representing the Series A-1 Preferred Shares to the Company, whereupon the Company will forthwith issue and deliver upon
the order of such Holder a new certificate of like tenor, registered as such Holder may request, representing in the aggregate the remaining
number of Series A-1 Preferred Shares represented by such certificate. A Holder and
any assignee, by acceptance of a certificate, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion
of any Series A-1 Preferred Shares, the number of Series A-1 Preferred Shares represented by such certificate may be less than
the number of Series A-1 Preferred Shares stated on the face thereof. Each certificate for Series A-1 Preferred Shares shall
bear the following legend:
ANY TRANSFEREE OF THIS CERTIFICATE SHOULD
CAREFULLY REVIEW THE TERMS OF THE COMPANY’S CERTIFICATE OF DESIGNATIONS RELATING TO THE SERIES A-1 PREFERRED SHARES REPRESENTED BY THIS
CERTIFICATE, INCLUDING SECTION 5(c)(iv) THEREOF. THE NUMBER OF SERIES A-1 PREFERRED SHARES REPRESENTED BY THIS CERTIFICATE
MAY BE LESS THAN THE NUMBER OF SERIES A-1 PREFERRED SHARES STATED ON THE FACE HEREOF PURSUANT TO SECTION 5(c)(iv) OF THE
CERTIFICATE OF DESIGNATIONS RELATING TO THE SERIES A-1 PREFERRED SHARES REPRESENTED BY THIS CERTIFICATE.
(v) Pro
Rata Conversion; Disputes. In the event the Company receives a Conversion Notice from more than one Holder for the same Conversion
Date and the Company can convert some, but not all, of such Series A-1 Preferred Shares submitted for conversion, the Company, subject
to Section 5(d), shall convert from each Holder electing to have Series A-1 Preferred Shares converted on such date, a pro rata
amount of such Holder’s Series A-1 Preferred Shares submitted for conversion based on the Stated Value of Series A-1 Preferred
Shares submitted for conversion on such date by such Holder relative to the Stated Value of all Series A-1 Preferred Shares submitted
for conversion on such date. In the event of a dispute as to the number of ADSs issuable to a Holder in connection with a conversion of
Series A-1 Preferred Shares, the Company shall issue to such Holder the number of ADSs not in dispute and resolve such dispute in
accordance with Section 26. If a Conversion Notice delivered by a Holder to the Company would result in a breach of Section 5(d) below,
and such Holder does not elect in writing to withdraw, in whole, such Conversion Notice, the Company shall hold such Conversion Notice
in abeyance for such Holder until such time as such Conversion Notice may be satisfied without violating Section 5(d) below
(with such calculations thereunder made as of the date such Conversion Notice was initially delivered to the Company).
(d) Beneficial
Ownership Conversion Limitation. Notwithstanding anything to the contrary contained herein, the Company shall not issue any
Series A-1 Preferred Shares pursuant to the terms of this Certificate of Designations, and Holder shall not have the right to
any Series A-1 Preferred Shares otherwise issuable pursuant to the terms of this Certificate of Designations and such issuance
shall be null and void and treated as if never made, to the extent that after giving effect to such issuance, such Holder together
with the other Attribution Parties collectively would beneficially own in excess of 4.99% or 9.99%, as the Buyers shall have
indicated on their respective signature pages attached to the Securities Purchase Agreement or as any subsequent transferee of
Series A-1 Preferred Shares indicates in a written notice to the Company (as applicable, the “Maximum
Percentage”) of the Class A Ordinary Shares issued and outstanding immediately after giving effect to such issuance.
For purposes of the foregoing sentence, the aggregate number of Class A Ordinary Shares beneficially owned by a Holder and its
other Attribution Parties shall include the number of Class A Ordinary Shares (including those underlying any ADSs) held by
such Holder and all other Attribution Parties plus the number of Class A Ordinary Shares underlying the ADSs issuable upon
conversion of the Series A-1 Preferred Shares with respect to which the determination of such sentence is being made, but shall
exclude Class A Ordinary Shares (including the Class A Ordinary Shares underlying ADSs) which would be issuable upon
(A) conversion of the remaining, nonconverted Series A-1 Preferred Shares beneficially owned by such 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
such Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained
in this Section 5(d). For purposes of this Section 5(d), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act. For purposes of determining the number of ADSs a Holder may acquire upon the conversion
of Series A-1 Preferred Shares without exceeding the Maximum Percentage, such Holder may rely on the number of issued and
outstanding Class A Ordinary Shares as reflected in (x) the Company’s most recent Annual Report on Form 20-F,
Report of Foreign Private 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 Transfer Agent setting forth the
number of Class A Ordinary Shares issued and outstanding (the “Reported Outstanding Share Number”). If the
Company receives a Conversion Notice from a Holder at a time when the actual number of issued and outstanding Class A Ordinary
Shares is less than the Reported Outstanding Share Number, the Company shall notify such Holder in writing of the number of
Class A Ordinary Shares then outstanding and, to the extent that such Conversion Notice would otherwise cause such Holder’s
beneficial ownership, as determined pursuant to this Section 5(d), to exceed the Maximum Percentage, such Holder must notify
the Company of a reduced number of ADSs to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the
written request of any Holder, the Company shall within one (1) Trading Day confirm in writing or by electronic mail to such
Holder the number of Class A Ordinary Shares then outstanding. In any case, the number of issued and outstanding Class A
Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including the
Series A-1 Preferred Shares, by such 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 a Holder upon conversion of such Holder’s Series A-1
Preferred Shares results in such Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more
than the Maximum Percentage of the number of issued and outstanding Class A Ordinary Shares (as determined under
Section 13(d) of the Exchange Act), the number of ADSs so issued by which such 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 such Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery
of a written notice to the Company, any Holder may from time to time increase 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 such Holder and its other Attribution Parties and not to any other holder of Series A-1
Preferred Shares that is not an Attribution Party of such Holder. For purposes of clarity, the Class A Ordinary Shares
underlying ADSs issuable with respect to the Series A-1 Preferred Shares in excess of the Maximum Percentage shall not be
deemed to be beneficially owned by a Holder for any purpose including for purposes of Section 13(d) or
Rule 16a-1(a)(1) of the Exchange Act. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 5(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 5(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 and shall apply to a successor holder of Series A-1
Preferred Shares.
(e) Adjustments
to Fixed Conversion Price. The Fixed Conversion Price will be subject to adjustment from time to time as provided in this Section 5(e).
(i) Adjustment
of Fixed Conversion Price upon Issuance of ADSs or Class A Ordinary Shares. If and whenever on or after the Subscription Date,
the Company issues or sells, or in accordance with this Section 5(e)(i) is deemed to have issued or sold, any ADSs or Class A
Ordinary Shares (including the issuance or sale of ADSs or Class A Ordinary Shares owned or held by or for the account of the Company,
but excluding ADSs or Class A Ordinary Shares issued or sold or deemed to have been issued or sold in connection with any Excluded
Securities) for a consideration per share (after giving effect, in the case of any issuance or sale or deemed issuance or sale of Class A
Ordinary Shares, to the ratio of Class A Ordinary Shares to ADSs) (the “New Issuance Price”) less than a price (after
giving effect, in the case of any issuance or sale or deemed issuance or sale of Class A Ordinary Shares, to the ratio of Class A
Ordinary Shares to ADSs) (the “Applicable Price”) equal to the Fixed Conversion Price in effect immediately prior to
such issuance or sale or deemed issuance or sale (the foregoing, a “Dilutive Issuance”), then immediately after such
Dilutive Issuance, the Fixed Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price. For purposes
of determining the adjusted Fixed Conversion Price under this Section 5(e)(i), the following shall be applicable:
(A) Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one ADS or Class A
Ordinary Share is 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 is less than the Applicable Price, then such ADS or Class A Ordinary Share shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section 5(e)(i)(A), the “lowest price per share for which one ADS or Class A Ordinary Share
is 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” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one ADS or Class A Ordinary Share upon the granting or sale of the Option, upon exercise of the Option
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option less any consideration paid
or payable by the Company with respect to such one ADS or Class A Ordinary Share upon the granting 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. No further
adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such ADSs or Class A Ordinary Shares or of such
Convertible Securities upon the exercise of such Options or upon the actual issuance of such ADSs or Class A Ordinary Shares upon
conversion, exercise or exchange of such Convertible Securities.
(B) Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per share
for which one ADS or Class A Ordinary Share is issuable upon the conversion, exercise or exchange thereof is less than the
Applicable Price, then such ADS or Class A Ordinary Share shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 5(e)(i)(B),
the “lowest price per share for which one ADS or Class A Ordinary Share is issuable upon the conversion, exercise or exchange”
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one
ADS or Class A Ordinary Share upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of
such Convertible Security less any consideration paid or payable by the Company with respect to such one ADS or Class A Ordinary
Share upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security. No
further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such ADSs or Class A Ordinary Shares upon
conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of the Fixed Conversion Price had been or are to be made pursuant to other provisions
of this Section 5(e)(i), no further adjustment of the Fixed Conversion Price shall be made by reason of such issue or sale.
(C) 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 or Class A Ordinary Shares increases or decreases at any time,
the Fixed Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Fixed 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 5(e)(i)(C), if the terms of 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 and/or Class A Ordinary Shares 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 5(e)(i) shall be made if such adjustment
would result in an increase of the Fixed Conversion Price then in effect.
(D) Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value of such Options and
(y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the difference
of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the
terms of such other securities of the Company, less (II) the Option Value of such Options. If any ADSs or Class A Ordinary Shares,
Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received or receivable
therefor will be deemed to be the net amount received by the Company therefor. If any ADSs, Class A Ordinary Shares, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company 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 will be the Closing Sale Price of such publicly traded securities on the date of receipt of such
publicly traded securities. If any ADSs, Class A Ordinary Shares, 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
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 or Class A Ordinary Shares, 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 Required Holders. 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) Business Days after the tenth (10th) day following
the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. 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. Notwithstanding anything to the contrary contained herein, if any calculation pursuant to this Section 5(e)(i)(D) would
result in a dollar value that is lower than the par value of the Class A Ordinary Shares, then such dollar value shall be deemed
to equal the par value of the Class A Ordinary Shares.
(E) Record
Date. If the Company takes a record of the holders of ADSs or Class A Ordinary Shares for the purpose of entitling them
(I) to receive a dividend or other distribution payable in ADSs, Class A Ordinary Shares, Options or in Convertible Securities
or (II) to subscribe for or purchase ADSs, Class A Ordinary Shares, Options or Convertible Securities, then such record date
will be deemed to be the date of the issue or sale of the ADSs or Class A Ordinary Shares 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.
(F) Readjustments.
If the Fixed Conversion Price has been adjusted pursuant to this Section 5(e)(i) and the Dilutive Issuance that triggered such
adjustment does not occur, is not consummated, is unwound or is cancelled after the fact for any reason whatsoever, the Fixed Conversion
Price shall be readjusted to the Fixed Conversion Price in effect immediately prior to such adjustment pursuant to this Section 5(e)(i).
(f) Adjustment
of Fixed Conversion Price upon Subdivision or Combination of ADSs or Class A Ordinary Shares. If the Company at any time on or
after the Subscription Date subdivides (by any share split, share dividend, recapitalization or otherwise) one or more classes of its
outstanding ADSs or Class A Ordinary Shares into a greater number of ADSs or Class A Ordinary Shares, as applicable, the Fixed
Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time on or after
the Subscription Date combines (by combination, reverse share split or otherwise) one or more classes of its outstanding ADSs or Class A
Ordinary Shares into a smaller number of ADSs or Class A Ordinary Shares, as applicable, the Fixed Conversion Price in effect immediately
prior to such combination will be proportionately increased. Any adjustment under this Section 5(e)(i) shall become effective
at the close of business on the date the subdivision or combination becomes effective.
(g) Voluntary
Adjustment by Company. The Company may at any time, with the prior written consent of the Required Holders, reduce the then current
Fixed Conversion Price to any amount and for any period of time deemed appropriate by the Board.
(h) Change
in ADS Ratio. If after the Subscription Date the ratio of ADSs to Class A Ordinary Shares is increased or reduced, then the number
of ADSs to be delivered upon conversion of the Series A-1 Preferred Shares, the Conversion Price and any other prices referenced
herein will be appropriately adjusted.
(i) Change
from ADSs to Class A Ordinary Shares. Notwithstanding anything herein to the contrary, any Holder, in its sole and absolute discretion,
may elect to receive Class A Ordinary Shares upon conversion of such Holder’s Series A-1 Preferred Shares, in which case such
Series A-1 Preferred Shares shall then become convertible for Class A Ordinary Shares, and (i) the number of Class A
Ordinary Shares to be issued and delivered upon conversion of such Series A-1 Preferred Shares will equal the number of Class A
Ordinary Shares underlying the ADSs issuable upon conversion of such Series A-1 Preferred Shares immediately prior to such change
(without regard to any limitation on conversion set forth herein), (ii) the Conversion Price and any other prices referenced herein
shall be proportionately adjusted and (iii) in such instances, all references herein to ADSs issuable upon conversion of the Series A-1
Preferred Shares shall be deemed to be references to the Class A Ordinary Shares and shall be read with any appropriate adjustments.
(j) Right
of Alternate Conversion Upon a Triggering Event.
(A) General.
Subject to Section 5(d), at any time after a Triggering Event has occurred and is continuing, such Holder may, at such Holder’s option,
convert (each, an “Alternate Conversion”, and the date of such Alternate Conversion, each, an “Alternate Conversion
Date”) all, or any part of, the applicable Conversion Amount (such portion of the Conversion Amount subject to such Alternate
Conversion, each, an “Alternate Conversion Amount”) into ADSs by dividing (x) the applicable Conversion Amount,
by (y) the Alternate Conversion Price.
(B) Mechanics
of Alternate Conversion. On any Alternate Conversion Date, such Holder may voluntarily convert any Alternate Conversion Amount pursuant
to Section 5(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all purposes hereunder
with respect to such Alternate Conversion and with “115% 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 applicable
Conversion Notice delivered pursuant to this Section 5(j) that such Holder is electing to use the Alternate Conversion Price
for such conversion. Notwithstanding anything to the contrary in this Section 5(j), but subject to Section 5(d), until the Company
delivers ADSs representing the applicable Alternate Conversion Amount to such Holder, such Alternate Conversion Amount may be converted
by such Holder into ADSs pursuant to Section 5(c) without regard to this Section 5(j).
(C) Notwithstanding
the foregoing, if the Triggering Event has been cured or waived, such Holder shall not be entitled to the right of Alternate Conversion
with respect to such Triggering Event that has been cured or waived.
(6) RIGHTS
UPON TRIGGERING EVENT.
(a) Triggering
Event. Each of the following events shall constitute a “Triggering Event” and each of the events in clauses (vi) and
(vii) shall also constitute a “Bankruptcy Triggering Event”:
(i) (A) the
suspension of the ADSs from trading on an Eligible Market for a period of five (5) consecutive Trading Days or for more than an aggregate
of ten (10) Trading Days in any 365-day period or (B) the failure of the ADSs to be listed on an Eligible Market;
(ii) the
Company’s (A) failure to cure a Conversion Failure by delivery of the required number of ADSs within ten (10) Business Days
after the applicable Conversion Date or (B) written notice to any Holder, including by way of public announcement, or through any
of its agents, at any time, of its intention not to comply with a request for conversion of any Series A-1 Preferred Shares into
ADSs that is tendered in accordance with the provisions of this Certificate of Designations, other than pursuant to Section 5(d);
(iii) at
any time following the tenth (10th) consecutive Business Day that the Holder’s Authorized Share Allocation (as defined in Section 12(a))
is less than the Holder’s Pro Rata Amount of the Required Reserve Amount (as defined in Section 12(a));
(iv) the
Company’s failure to pay to such Holder any amount of Stated Value, dividends, Late Charges, Redemption Price or other amounts when and
as due under this Certificate of Designations or any other Transaction Document, except, in the case of a failure to pay dividends and/or
Late Charges when and as due, in which case only if such failure continues for a period of at least an aggregate of ten (10) Business
Days;
(v) there
occurs with respect to any Indebtedness of the Company or any of its Subsidiaries having an outstanding principal amount of $25,000,000
or more, (a) an event of default that has caused the holders thereof to declare such Indebtedness to be due and payable prior to
its stated maturity and/or (b) the failure to make a principal payment when due;
(vi) the
Company or any of its Significant Subsidiaries, pursuant to or within the meaning of Title 11, U.S. Code, or any similar federal, foreign
or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents
to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a receiver, trustee, assignee,
liquidator or similar official (a “Custodian”), (D) makes a general assignment for the benefit of its creditors
or (E) admits in writing that it is generally unable to pay its debts as they become due;
(vii) a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company or
any of its Significant Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or any of its Significant Subsidiaries
or (C) orders the liquidation of the Company or any of its Significant Subsidiaries, and such order or decree remains unstayed and
in effect for 60 consecutive days;
(viii) a
final judgment or judgments for the payment of money aggregating in excess of $25,000,000 are rendered against the Company or any of its
Subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within sixty (60) days after the expiration of such stay; provided, however, that any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $25,000,000 amount set forth
above so long as the Company provides the Holders a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holders) 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;
(ix) any Material
Adverse Effect occurs;
(x) Company
breaches: (A) any negative covenant set forth in Section 15 below, or (B) any of the covenants set forth Sections 4(b),
(h), (j), (k) or (n) of the Securities Purchase Agreement; and
(xi) Company
breaches: (A) any affirmative covenant set forth in Section 16 below, or (B) any of the covenants in Securities Purchase
Agreement not enumerated in subsection (x) above, provided that any such breach would have a Material Adverse Effect and the Buyers
shall be required to provide written notice to the Company of a Triggering Event under this section 6(x) and the Company shall have
ten (10) days to cure, provided that the incident resulting in such breach would need to be disclosed in the Company’s filing
with the SEC under the federal security laws.
(b) Redemption
Right. Upon the occurrence of a Triggering Event, the Company shall within one (1) Business Day deliver written notice thereof
via electronic mail (a “Triggering Event Notice”) to the Holders. At any time after the earlier of a Holder’s receipt
of a Triggering Event Notice or a Holder becoming aware of a Triggering Event, such Holder may require the Company to redeem (an “Triggering
Event Redemption”) all or any portion of such Holder’s Series A-1 Preferred Shares by delivering written notice thereof
(the “Triggering Event Redemption Notice”) to the Company, which Triggering Event Redemption Notice shall indicate the
number of such Holder’s Series A-1 Preferred Shares that such Holder is electing to require the Company to redeem. Each Series A-1
Preferred Share subject to redemption by the Company pursuant to this Section 6(b) shall be redeemed by the Company in cash
within five (5) Trading Days by wire transfer of immediately available funds at a price equal to 115% of the greater of (x) the
Conversion Amount being redeemed and (y) the product of (A) the Conversion Amount being redeemed and (B) the quotient determined
by dividing (I) the greatest Closing Sale Price of the ADSs during the period beginning on the date immediately preceding such Triggering
Event and ending on the date such Holder delivers the Triggering Event Redemption Notice, by (II) the lowest Alternate Conversion
Price in effect during such period (the “Triggering Event Redemption Price”). Redemptions required by this Section 6(b) shall
be made in accordance with the provisions of Section 13. To the extent redemptions required by this Section 6(b) are deemed
or determined by a court of competent jurisdiction to be prepayments of the Series A-1 Preferred Shares by the Company, such redemptions
shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 6, but subject to Section 5(d),
until the Triggering Event Redemption Price is paid in full, the Conversion Amount submitted for redemption under this Section 6(b) may
be converted, in whole or in part, by a Holder into ADSs pursuant to Section 5. The parties hereto agree that in the event of the
Company’s redemption of any Series A-1 Preferred Shares under this Section 6(b), each 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 such Holder. Accordingly, any Triggering Event redemption premium due under this Section 6(b) is
intended by the parties to be, and shall be deemed, a reasonable estimate of a Holder’s actual loss of its investment opportunity and
not as a penalty.
(c) Redemption
upon Bankruptcy Triggering Event. Notwithstanding anything to the contrary herein, and notwithstanding any conversion that is then
required or in process, upon any Bankruptcy Triggering Event occurring prior or following to the Maturity Date, the Company shall immediately
redeem, in cash, each of the Series A-1 Preferred Shares then outstanding at a redemption price equal to the applicable Triggering
Event Redemption Price (calculated as if such Holder shall have delivered the Triggering Event Redemption Notice immediately prior to
the occurrence of such Bankruptcy Triggering Event), without the requirement for any notice or demand or other action by any Holder or
any other Person, provided that a Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy Triggering
Event, in whole or in part, and any such waiver shall not affect any other rights of such Holder or any other Holder hereunder, including
any other rights in respect of such Bankruptcy Triggering Event, any right to conversion, and any right to payment of such Triggering
Event Redemption Price to another Holder or any other Redemption Price, as applicable.
(7) RIGHTS
UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.
(a) Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of
the obligations of the Company under this Certificate of Designations and the other Transaction Documents in accordance with the provisions
of this Section 7 pursuant to written agreements in form and substance reasonably satisfactory to the Required Holders and approved
by the Required Holders prior to such Fundamental Transaction, including agreements to deliver to each Holder in exchange for such Holder’s
Series A-1 Preferred Shares a security of the Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Certificate of Designations including, without limitation, having a stated value equal to the Stated Value and having
similar conversion rights, dividend rights and ranking to the Series A-1 Preferred Shares, and reasonably satisfactory to the Required
Holders. No later than (i) thirty (30) days prior to the occurrence or consummation of any Fundamental Transaction or (ii) if
later, the first Trading Day following the date the Company first becomes aware of the occurrence or potential occurrence of a Fundamental
Transaction, the Company shall deliver written notice thereof via electronic mail and overnight courier to the Holders. Upon the occurrence
or consummation of any Fundamental Transaction, and it shall be a required condition to the occurrence or consummation of any Fundamental
Transaction that, the Company and the Successor Entity or Successor Entities, jointly and severally, shall succeed to, and the Company
shall cause any Successor Entity or Successor Entities to jointly and severally succeed to, and be added to the term “Company”
under this Certificate of Designations (so that from and after the date of such Fundamental Transaction, each and every provision of this
Certificate of Designations referring to the “Company” shall refer instead to each of the Company and the Successor Entity or
Successor Entities, jointly and severally), and the Company and the Successor Entity or Successor Entities, jointly and severally, may
exercise every right and power of the Company prior thereto and shall assume all of the obligations of the Company prior thereto under
this Certificate of Designations with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally,
had been named as the Company in this Certificate of Designations; and, solely at the request of a Holder, if the Successor Entity and/or
Successor Entities is a publicly traded corporation whose common capital shares are quoted on or listed for trading on an Eligible Market,
shall deliver (in addition to and without limiting any right under this Certificate of Designations) to such Holder in exchange for such
Holder’s Series A-1 Preferred Shares a security of the Successor Entity and/or Successor Entities evidenced by a written instrument
substantially similar in form and substance to the Series A-1 Preferred Shares and convertible for a corresponding number of shares
of capital stock of the Successor Entity and/or Successor Entities (the “Successor Capital Shares”) equivalent (as set
forth below) to the ADSs acquirable and receivable upon conversion of such Holder’s Series A-1 Preferred Shares (without regard to
any limitations on the conversion of the Series A-1 Preferred Shares set forth in this Certificate of Designations) prior to such
Fundamental Transaction (such corresponding number of shares of Successor Capital Shares to be delivered to the Holders shall equal the
greater of (I) the quotient of (A) the aggregate dollar value of all consideration (including cash consideration and any consideration
other than cash (“Non-Cash Consideration”), in such Fundamental Transaction, as such values are set forth in any definitive
agreement for the Fundamental Transaction that has been executed at the time of the first public announcement of the Fundamental Transaction
or, if no such value is determinable from such definitive agreement, as determined in accordance with Section 25 with the term “Non-Cash
Consideration” being substituted for the term “Conversion Price”) that such Holder would have been entitled to receive
upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such
Fundamental Transaction, had such Holder’s Series A-1 Preferred Shares been converted immediately prior to such Fundamental Transaction
or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard to any
limitations on the conversion of the Series A-1 Preferred Shares) (the “Aggregate Consideration”) divided by (B) the
per share Closing Sale Price of such corresponding Successor Capital Shares on the Trading Day immediately prior to the consummation or
occurrence of the Fundamental Transaction and (II) the product of (A) the quotient obtained by dividing (x) the Aggregate
Consideration, by (y) the Closing Sale Price of the ADSs on the Trading Day immediately prior to the consummation or occurrence of
the Fundamental Transaction and (B) the highest exchange ratio pursuant to which any shareholder of the Company may exchange ADSs
or Class A Ordinary Shares for Successor Capital Shares) (provided, however, to the extent that a Holder’s right to
receive any such shares of publicly traded common shares (or their equivalent) of the Successor Entity would result in such Holder and
its other Attribution Parties exceeding the Maximum Percentage, then such Holder shall not be entitled to receive such shares to such
extent (and shall not be entitled to beneficial ownership of such publicly traded shares (or their equivalent) of the Successor Entity
as a result of such consideration to such extent) and the portion of such shares shall be held in abeyance for such Holder until such
time or times, as its right thereto would not result in such Holder and its other Attribution Parties exceeding the Maximum Percentage,
at which time or times such Holder shall be delivered such shares to the extent as if there had been no such limitation), and such security
shall be reasonably satisfactory to such Holder, and with an identical conversion price to the Conversion Price hereunder (such adjustments
to the number of capital shares and such conversion price being for the purpose of protecting after the consummation or occurrence of
such Fundamental Transaction the economic value of the Series A-1 Preferred Shares that was in effect immediately prior to the consummation
or occurrence of such Fundamental Transaction, as elected by such Holder solely at its option). Upon occurrence or consummation of the
Fundamental Transaction, and it shall be a required condition to the occurrence or consummation of such Fundamental Transaction that,
the Company and the Successor Entity or Successor Entities shall deliver to each Holder confirmation that there shall be issued upon conversion
of the Series A-1 Preferred Shares at any time after the occurrence or consummation of the Fundamental Transaction, as elected by
a Holder solely at its option, ADSs, Class A Ordinary Shares, Successor Capital Shares or, in lieu of the ADSs, Class A Ordinary
Shares or Successor Capital Shares (or other securities, cash, assets or other property purchasable upon the conversion of the Series A-1
Preferred Shares prior to such Fundamental Transaction), such shares, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights), which for purposes of clarification may continue to be ADSs or Class A Ordinary
Shares, if any, that such Holder would have been entitled to receive upon the happening of such Fundamental Transaction or the record,
eligibility or other determination date for the event resulting in such Fundamental Transaction, had such Holder’s Series A-1 Preferred
Shares been converted immediately prior to such Fundamental Transaction or the record, eligibility or other determination date for the
event resulting in such Fundamental Transaction (without regard to any limitations on the conversion of the Series A-1 Preferred
Shares), as adjusted in accordance with the provisions of this Certificate of Designations. The provisions of this Section 7 shall
apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion
of the Series A-1 Preferred Shares.
(b) Corporate
Events. In addition to and not in substitution for any other rights hereunder, prior to the occurrence or consummation of any Fundamental
Transaction pursuant to which holders of ADSs or Class A Ordinary Shares are entitled to receive securities, cash, assets
or other property with respect to or in exchange for ADSs or Class A Ordinary Shares (a “Corporate Event”), the
Company shall make appropriate provision to ensure that, and any applicable Successor Entity or Successor Entities shall ensure that such
Holder will thereafter have the right to receive at its option upon surrender of such Holder’s Series A-1 Preferred Shares upon the
occurrence or consummation of the Corporate Event, in lieu of the ADSs (or other securities, cash, assets or other property) such Holder
is entitled to receive upon the conversion of such Holder’s Series A-1 Preferred Shares prior to such Corporate Event (but not in
lieu of such items still issuable under Sections 4(b) and 8, which shall continue to be receivable on the ADSs or on such shares,
securities, cash, assets or any other property otherwise receivable with respect to or in exchange for ADSs), such shares, securities,
cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights and any ADSs or Class A
Ordinary Shares) which the Holders would have been entitled to receive upon the occurrence or consummation of such Corporate Event or
the record, eligibility or other determination date for the event resulting in such Corporate Event, had such Holder’s Series A-1
Preferred Shares been converted immediately prior to such Corporate Event or the record, eligibility or other determination date for the
event resulting in such Corporate Event (without regard to any limitations on conversion, including without limitation, the Maximum Percentage)
(provided, however, to the extent that a Holder’s right to receive any such shares of publicly traded common shares (or
their equivalent) of the Successor Entity would result in such Holder and its other Attribution Parties exceeding the Maximum Percentage,
then such Holder shall not be entitled to receive such shares to such extent (and shall not be entitled to beneficial ownership of such
shares of publicly traded shares (or their equivalent) of the Successor Entity as a result of such consideration to such extent) and the
portion of such shares shall be held in abeyance for such Holder until such time or times, as its right thereto would not result in such
Holder and its other Attribution Parties exceeding the Maximum Percentage, at which time or times such Holder shall be delivered such
shares to the extent as if there had been no such limitation). Provision made pursuant to the preceding sentence shall be in a form and
substance reasonably satisfactory to the Required Holders. The provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and shall be applied without regard to any limitations on the conversion of the Series A-1 Preferred Shares.
(c) Redemption
Right. No sooner than twenty (20) days nor later than fifteen (15) days prior to the consummation of a Change of Control, but
not prior to the public announcement of such Change of Control, the Company shall deliver written notice thereof via electronic mail to
the Holders (a “Change of Control Notice”). At any time during the period beginning on the earlier to occur of (x) any
agreement by the Company or any of its Subsidiaries, upon consummation of which the transaction contemplated thereby would reasonably
be expected to result in a Change of Control, (y) a Holder becoming aware of a Change of Control if the Change of Control Notice
is not delivered to such Holder in accordance with the immediately preceding sentence (as applicable) and (z) a Holder’s receipt
of a Change of Control Notice and ending twenty (20) Trading Days after the date of the consummation of such Change of Control, such Holder
may require the Company to redeem (a “Change of Control Redemption”) all or any portion of such Holder’s Series A-1
Preferred Shares by delivering written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change
of Control Redemption Notice shall indicate the Conversion Amount such Holder is electing to require the Company to redeem. Any Series A-1
Preferred Shares subject to redemption pursuant to this Section 7(c) shall be redeemed by the Company in cash by wire transfer
of immediately available funds at a price equal to 115% of the greater of (i) the Conversion Amount being redeemed and (ii) the
product of (A) the Conversion Amount being redeemed and (B) the quotient determined by dividing (1) the greatest Closing
Sale Price of the ADSs during the period beginning on the date immediately preceding the earlier to occur of (x) the consummation
of the Change of Control and (y) the public announcement of such Change of Control and ending on the date such Holder delivers the
Change of Control Redemption Notice, by (II) the lowest Conversion Price in effect during such period (the “Change of Control
Redemption Price”). Redemptions required by this Section 7(c) shall be made in accordance with the provisions of Section 13
and shall have priority to payments to shareholders in connection with a Change of Control. To the extent redemptions required by this
Section 7(c) are deemed or determined by a court of competent jurisdiction to be prepayments of the Series A-1 Preferred
Shares by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this
Section 7(c), but subject to Section 5(d), until the Change of Control Redemption Price is paid in full, the Conversion Amount
submitted for redemption under this Section 7(c) may be converted, in whole or in part, by a Holder into ADSs pursuant to Section 5.
The parties hereto agree that in the event of the Company’s redemption of any portion of the Series A-1 Preferred Shares under this
Section 7(c), the Holders’ 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 Holders. Accordingly, any
Change of Control redemption premium due under this Section 7(c) is intended by the parties to be, and shall be deemed, a reasonable
estimate of the Holders’ actual loss of its investment opportunity and not as a penalty.
(8) PURCHASE
RIGHTS. If at any time after the Subscription Date the Company grants, issues or sells any Options, Convertible Securities or rights
to purchase shares, warrants, securities or other property pro rata to the record holders of ADSs or Class A Ordinary Shares (the
“Purchase Rights”), then the Holders will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of ADSs (or Class A Ordinary
Shares underlying such ADSs) acquirable upon complete conversion of the Series A-1 Preferred Shares (without taking into account
any limitations or restrictions on the convertibility of the Series A-1 Preferred Shares and assuming for such purpose that the Series A-1
Preferred Shares were 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 or Class A Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that to the extent that a Holder’s right to participate in any such Purchase Right would result in such Holder and the
other Attribution Parties exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Purchase Right
to such extent (and shall not be entitled to beneficial ownership of such Class A Ordinary Shares as a result of such Purchase Right
(and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for such Holder until such
time or times as its right thereto would not result in such Holder and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times such 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 to be held similarly in abeyance) to the same extent as if there had been no such limitation).
(9) OPTIONAL
REDEMPTION AT THE HOLDER’S ELECTION. If, at any time the applicable Issuance Date, the ratio of Total Indebtedness as of such time
of determination to the quotient of (x) the sum of the Market Capitalization for each Trading Day during the ten (10) consecutive
Trading Day period ending on, and including, the Trading Day immediately preceding the applicable date of determination, divided by (y) ten
(10), is equal to or greater than 25% (such failure, a “DTM Failure”), the Company shall promptly, and in any event within
two (2) Business Days of a DTM Failure, deliver written notice of such DTM Failure to each Holder. From and after the DTM Trigger
Date, each Holder shall have the right, in its sole and absolute discretion, to require that the Company redeem (a “Holder DTM
Redemption”) all or any portion of the Holder’s Pro Rata Amount of the Conversion Amounts of ’Series A-1 Preferred Shares
as necessary (after giving effect to such Holder DTM Redemption by the Holders) to cause the ratio of Total Indebtedness as of such time
of determination to the quotient of (x) the sum of the Market Capitalization for each Trading Day during the ten (10) consecutive
Trading Day period ending on, and including, the Trading Day immediately preceding the applicable date of determination, divided by (y) ten
(10), to equal 15% (each, an “Eligible DTM Redemption Amount”) by delivering written notice thereof (a “Holder
DTM Redemption Notice” and the date such Holder delivers such notice to the Company, a “Holder DTM Redemption Notice
Date”) to the Company which notice shall state (i) the number of Series A-1 Preferred Shares that is being redeemed
by such Holder corresponding to a Conversion Amount that does not exceed such Holder’s Eligible DTM Redemption Amount, (ii) the date
on which such Holder DTM Redemption shall occur which date shall be not less than five (5) Business Days from the applicable Holder
DTM Redemption Notice Date (a “Holder DTM Redemption Date”) and (iii) the wire instructions for the payment of the
applicable Holder DTM Redemption Price (as defined below) to such Holder. The portion of such Holder’s Series A-1 Preferred Shares
subject to redemption pursuant to this Section 9 shall be redeemed by the Company in cash at a price equal to the Conversion Amount
being redeemed, including, without limitation, any accrued and unpaid dividends on such Conversion Amount and any accrued and unpaid Late
Charges on such Conversion Amount and dividends, if any, through the applicable Holder DTM Redemption Date (a “Holder DTM Redemption
Price”). Holder DTM Redemptions made pursuant to this Section 9 shall be made in accordance with Section 13. To the
extent redemptions required by this Section 9 are deemed or determined by a court of competent jurisdiction to be prepayments of
the Series A-1 Preferred Shares by the Company, such redemptions shall be deemed to be voluntary prepayments. The parties hereto
agree that in the event of the Company’s redemption of any portion of a Holder’s Series A-1 Preferred Shares under this Section 9,
such 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 such Holder.
(10) OFFER
TO REPURCHASE. If, at any time while any Series A-1 Preferred Shares remain outstanding, an Offer to Repurchase Event is consummated
or occurs, the Company shall deliver a written notice thereof within three (3) Business Days prior to the consummation or occurrence
of such Offer to Repurchase Event by electronic mail and overnight courier to all, but not less than all, Holders (the “Offer
to Repurchase Notice” and the date such notice is delivered to all the Holders is referred to as the “Offer to Repurchase
Notice Date”) and offer to repurchase (an “Offer to Repurchase”) such Holder’s Series A-1 Preferred Shares
in cash up to such Holder’s Pro Rata Amount of the applicable Available Cash (with respect to each Holder, the “Repurchase Amount”).
The Offer to Repurchase shall offer to redeem Series A-1 Preferred Shares for cash up to the Holder’s Repurchase Amount at a price
equal to the product obtained by multiplying (i) the Offer to Repurchase Event Redemption Premium and (ii) the greater of (x) the
Conversion Amount being redeemed and (y) the product of (A) the Conversion Amount being redeemed and (B) the quotient determined
by dividing (1) the greatest Closing Sale Price of the ADSs during the period beginning on the date immediately preceding the earlier
to occur of (x) the consummation or occurrence of the applicable Offer to Repurchase Event and (y) the public announcement of
such Offer to Repurchase Event and ending on the date such Holder delivers the related Acceptance Notice (as defined below), by (II) the
lowest Conversion Price in effect during such period (the “Offer to Repurchase Price”). At any time after the receipt
by a Holder of an Offer to Repurchase Notice, such Holder may require the Company or its Subsidiary, as applicable, to redeem, at the
Offer to Repurchase Price, such Holder’s Series A-1 Preferred Shares for an amount not to exceed such Holder’s Repurchase Amount
by delivering written notice thereof (the “Acceptance Notice”) to the Company, which Acceptance Notice shall indicate
the Conversion Amount of the Series A-1 Preferred Shares that such Holder is electing to redeem and the date chosen by such Holder
on which the Offer to Repurchase shall occur (the “Offer to Repurchase Date”). Each Offer to Repurchase Notice shall
(A) describe the Offer to Repurchase Event giving rise to the applicable Offer to Repurchase pursuant to this Section 10, including,
without limitation a certification by the Company’s or such Subsidiary’s, as the case may be, Chief Financial Officer demonstrating the
calculation of the aggregate Available Cash received by the Company or such Subsidiary in connection with such event and (B) state
the maximum Repurchase Amount to be paid to such Holder on such date. The Company shall publicly disclose (as part of an Annual Report
on Form 20-F or on a Report of Foreign Private Issuer on Form 6-K or otherwise), that (1) an Offer to Repurchase Event
has been consummated or has occurred and that, pursuant to the terms of this Certificate of Designations, the Holders may require the
Company or such Subsidiary, as applicable, to redeem Series A-1 Preferred Shares with any Available Cash and (2) the amount
of Available Cash received from, or paid in connection with, such Offer to Repurchase Event. In the event that the Company or such Subsidiary
shall subsequently determine after the Offer to Repurchase Date that the actual Available Cash received or paid exceeded the amount set
forth in the applicable Offer to Repurchase Notice, the Company or such Subsidiary, as applicable, shall promptly make an additional Offer
to Repurchase of the Series A-1 Preferred Shares in an amount equal to such excess, and the Company or such Subsidiary shall concurrently
therewith (1) deliver to each Holder a certificate of the Chief Financial Officer demonstrating the derivation of such excess and
(2) publicly disclose (as part of a Report of Foreign Private Issuer on Form 6-K, or otherwise) the making of such additional
Offer to Repurchase, including, without limitation, the additional amount of Series A-1 Preferred Shares that may be repurchased.
If one or more Holders does not elect to require the Company or its Subsidiary, as applicable, to redeem its Series A-1 Preferred
Shares with its full Repurchase Amount, the Company or the applicable Subsidiary shall promptly make additional Offers to Repurchase for
Series A-1 Preferred Shares held by the Holders that previously elected to require the Company or applicable Subsidiary to redeem
its Series A-1 Preferred Shares for its full Repurchase Amount. Such additional Offers to Repurchase shall be repeated pursuant to
the terms of this Section 10 until all Available Cash have been used to redeem Series A-1 Preferred Shares or all Holders have
failed to elect to have their Series A-1 Preferred Shares redeemed for their maximum amount hereunder. On the Offer to Repurchase
Date the Company shall deliver or shall cause to be delivered the Offer to Repurchase Price in cash by wire transfer of immediately available
funds pursuant to wire instructions provided by such Holder in writing to the Company. Notwithstanding the foregoing, if a Holder is participating
in a Subsequent Placement giving rise to an Offer to Repurchase pursuant to this Section 10, upon the written request of such Holder,
the Company shall apply all, or any part, as set forth in such written request, of any amounts that would otherwise be payable to such
Holder in such Offer to Repurchase, on a dollar-for-dollar basis, against the purchase price of the securities to be purchased by such
Holder in such Subsequent Placement. To the extent redemptions required by this Section 10 are deemed or determined by a court of
competent jurisdiction to be prepayments of the Series A-1 Preferred Shares by the Company, such redemptions shall be deemed to be
voluntary prepayments. All Conversion Amounts converted by a Holder after the Offer to Repurchase Notice Date shall reduce such Holder
Repurchase Amount of the Series A-1 Preferred Shares required to be redeemed on the Offer to Repurchase Date, unless such Holder
otherwise indicates in the applicable Conversion Notice. The parties hereto agree that in the event of the Company’s redemption of the
Series A-1 Preferred Shares under this Section 10, the Holders’ 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 Holders.
(11) NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Memorandum and Articles of Association 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 Certificate of Designations,
and will at all times in good faith carry out all of the provisions of this Certificate of Designations and take all action as may be
required to protect the rights of the Holders.
(12) RESERVATION
OF AUTHORIZED SHARES.
(a) Reservation.
The Company shall at all times Series A-1 Preferred Shares remain issued and outstanding have sufficient authorized and unissued
Class A Ordinary Shares for each of the Series A-1 Preferred Shares equal to not less than 175% of the maximum number of Class A
Ordinary Shares underlying the ADSs necessary to effect the conversion at the Alternate Conversion Rate as of any applicable date of determination
(without regard to any limitations herein on any such conversion) with respect to the Conversion Amount of each such Series A-1 Preferred
Share assuming that all of the Series A-1 Preferred Shares issuable pursuant to the Securities Purchase Agreement have been issued
(the “Required Reserve Amount”). The Company shall, so long as any of the Series A-1 Preferred Shares are issued
and outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Class A Ordinary Shares,
solely for the purpose of effecting the conversions of the Series A-1 Preferred Shares, such number of Class A Ordinary Shares
as shall from time to time be necessary to effect the conversion of all of the Series A-1 Preferred Shares then outstanding; provided
that at no time shall the number of Class A Ordinary Shares so reserved shall at no time be less than the Required Reserve Amount.
The initial number of Class A Ordinary Shares reserved for conversions of the Series A-1 Preferred Shares and each increase
in the number of shares so reserved shall be allocated pro rata among the Holders based on the number of Series A-1 Preferred Shares
held by each Holder at the time of issuance of the Series A-1 Preferred Shares or increase in the number of reserved shares, as the
case may be (the “Authorized Share Allocation”). In the event a Holder shall sell or otherwise transfer any of such Holder’s
Series A-1 Preferred Shares, each transferee shall be allocated a pro rata portion of the number of reserved Class A Ordinary
Shares reserved for such transferor. Any Class A Ordinary Shares reserved and allocated to any Person which ceases to hold any Series A-1
Preferred Shares (other than pursuant to a transfer of Series A-1 Preferred Shares in accordance with the immediately preceding sentence)
shall be allocated to the remaining Holders of Series A-1 Preferred Shares, pro rata based on the number of Series A-1 Preferred
Shares then held by such Holders.
(b) Insufficient
Authorized Shares. If at any time while any of the Series A-1 Preferred Shares remain issued and outstanding the Company does
not have a sufficient number of authorized and unreserved Class A Ordinary Shares to satisfy its obligation to reserve for
issuance upon conversion of the Series A-1 Preferred Shares at least a number of Class A Ordinary Shares 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 Class A Ordinary Shares to an amount sufficient to allow the Company to reserve the Required Reserve Amount
for the Series A-1 Preferred Shares then issued and 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, the Company shall hold a meeting of its shareholders for the approval of an increase in the number of
authorized Class A Ordinary Shares. In connection with such 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 Class A Ordinary Shares and to
cause its Board to recommend to the shareholders that they approve such proposal. Notwithstanding the foregoing, if during any such time
of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of its issued and outstanding Class A
Ordinary Shares to approve the increase in the number of authorized Class A Ordinary Shares, the Company may satisfy this obligation
by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. If, upon any conversion of
Series A-1 Preferred Shares, the Company does not have sufficient authorized shares to deliver in satisfaction of such conversion,
then unless a Holder elects to rescind such attempted conversion, such Holder may require the Company to pay to such Holder within two
(2) Trading Days of the applicable attempted conversion, cash in an amount equal to the product of (i) the number of ADSs that
the Company is unable to deliver pursuant to this Section 12, and (ii) the highest Closing Sale Price of the ADSs during the
period beginning on the date of the applicable Conversion Date and ending on the date the Company makes the applicable cash payment.
(13) REDEMPTIONS.
(a) Mechanics.
The Company shall deliver the applicable Triggering Event Redemption Price to each Holder within three (3) Business Days after the
Company’s receipt of such Holder’s Triggering Event Redemption Notice; provided that upon a Bankruptcy Triggering Event, the Company shall
deliver the applicable Bankruptcy Triggering Event Redemption Price in accordance with Section 4(c) (as applicable, the “Triggering
Event Redemption Date”). If a Holder has submitted a Change of Control Redemption Notice in accordance with Section 7(c),
the Company shall deliver the applicable Change of Control Redemption Price to such Holder (i) concurrently with the consummation
of such Change of Control if such notice is received prior to the consummation of such Change of Control and (ii) within three (3) Business
Days after the Company’s receipt of such notice otherwise (such date, the “Change of Control Redemption Date”). The Company
shall deliver the applicable Holder DTM Redemption Price to each Holder in cash on the applicable Holder DTM Redemption Date. The Company
shall deliver the applicable Offer to Repurchase Redemption Price to each Holder in cash on the applicable Offer to Repurchase Redemption
Date. The Company shall pay the applicable Redemption Price to the Holders in cash by wire transfer of immediately available funds pursuant
to wire instructions provided by each of the Holders in writing to the Company on the applicable due date. In the event that the Company
does not pay a Redemption Price to a Holder within the time period required, at any time thereafter and until the Company pays such unpaid
Redemption Price in full, a Holder shall have the option, in lieu of redemption, to require the Company to promptly return to such Holder
any or all of the Series A-1 Preferred Shares that were submitted for redemption by such Holder and for which the applicable Redemption
Price has not been paid. Upon the Company’s receipt of such notice, (i) the applicable Redemption Notice of such Holder shall be
null and void with respect to such Series A-1 Preferred Shares, (ii) the Company shall immediately return any Series A-1
Preferred Shares, or issue new Series A-1 Preferred Share Certificates to such Holder representing such Conversion Amount to be redeemed
and (iii) the Conversion Price of such returned or new Series A-1 Preferred Shares shall be adjusted to the lesser of (A) the
Conversion Price as in effect on the date on which the applicable Redemption Notice is voided and (B) 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. A 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 Holder for redemption or repayment as a result of an event or occurrence
substantially similar to the events or occurrences described in Section 6(b) or Section 7(c) or Section 9 or
Section 10 (each, an “Other Redemption Notice”), the Company shall immediately, but no later than one (1) Business
Day of its receipt thereof, forward to each Holder 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 three (3) Business
Days prior to the Company’s receipt of such Holder’s Redemption Notice and ending on and including the date which is three (3) Business
Days after the Company’s receipt of a Holder’s Redemption Notice and the Company is unable to redeem all Stated Value, dividends, Late
Charges 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 based on the Stated Value of the Series A-1 Preferred
Shares submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received by the Company during such
seven (7) Business Day period.
(c) Insufficient
Assets. If upon a Redemption Date, the assets of the Company are insufficient to pay the applicable Redemption Price, the Company
shall (i) take all appropriate action reasonably within its means to maximize the assets available for paying the applicable Redemption
Price, (ii) redeem out of all such assets available therefor on the applicable Redemption Date the maximum possible number of Series A-1
Preferred Shares that it can redeem on such date pro rata among the Holders to be redeemed in proportion to the aggregate number of Series A-1
Preferred Shares outstanding on the applicable Redemption Date and (iii) following the applicable Redemption Date, at any time and
from time to time when additional assets of the Company become available to pay the balance of the applicable Redemption Price of the
Series A-1 Preferred Shares, the Company shall use such assets, at the end of the then current fiscal quarter, to pay the balance
of such Redemption Price of the Series A-1 Preferred Shares, or such portion thereof for which assets are then available, on the
basis set forth above at the applicable Redemption Price, and such assets will not be used prior to the end of such fiscal quarter for
any other purpose. Dividends on the Stated Value of the Series A-1 Preferred Shares that have not been redeemed shall continue to
accrue until such time as the Company redeems the Series A-1 Preferred Shares. The Company shall pay to each Holder the applicable
Redemption Price for each Series A-1 Preferred Share without regard to the legal availability of funds unless expressly prohibited
by applicable law or unless the payment of the applicable Redemption Price could reasonably be expected to result in personal liability
to the directors of the Company.
(14) NO
VOTING RIGHTS. Except as otherwise provided herein (including, but not limited to Sections 15, 16 and 17) or otherwise required by
law, no voting rights are carried by the Series A-1 Preferred Shares.
(15) NEGATIVE
COVENANTS. Until all of the Series A-1 Preferred Shares have been converted, redeemed or otherwise satisfied in full in accordance
with their terms, the Company shall not, and shall not permit any of its Subsidiaries, without the prior written consent of the Required
Holders, to directly or indirectly:
(a) incur
any Indebtedness, other than Permitted Indebtedness;
(b) allow
or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance (collectively, “Liens”)
upon any property or assets owned by the Company or any of its Subsidiaries to secure Indebtedness, other than Permitted Liens;
(c) other
than with respect to the Series A-1 Preferred Shares in accordance with the terms of the Certificate of Designations, redeem or repurchase
its Equity Interest (except (i) on a pro rata basis among all holders thereof, (ii) and redemptions or repurchases of Equity
Interests held by any current or former officer, director, employee or consultant (or permitted transferees, estates or heirs of any of
the foregoing) pursuant to any Approved Share Plan );
(d) issue
Series A-1 Preferred Shares (other than as contemplated by the Securities Purchase Agreement), or issue any
other securities that would cause a breach or default under this Certificate of Designations;
(e) in
the case of the Company, create (by reclassification or otherwise), or authorize the creation of, or issue or obligate itself to issue
additional or other share capital of the Company or securities exchangeable for or convertible or exercisable into share capital of the
Company whether such share capital is Pari Passu Shares or ranks senior to the Series A-1 Preferred Shares prior and in preference
to the Series A-1 Preferred Shares in respect of the preferences as to distributions, the payment of dividends and payments upon
a Liquidation Event;
(f) 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 the terms and conditions set forth in this Certificate of Designations
or resort to any such law, to hinder, delay or impede the execution of any power granted to any Holder pursuant to this Certificate of
Designations, but will suffer and permit the execution of every such power as though no such law has been enacted;
(g) effect
or enter into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction without the prior written consent
of the Required Holders and
the Holders 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; or
(h) guarantee
or secure the indebtedness of any of its Significant Subsidiaries.
(16) AFFIRMATIVE
COVENANTS. Until all of the Series A-1 Preferred Shares have been converted, redeemed or otherwise satisfied in full in accordance
with their terms, the Company shall, and shall cause each Significant Subsidiary to, unless otherwise agreed to by the Required Holders:
(a) maintain
and preserve its existence, rights and privileges, and become or remain duly qualified and in good standing (where such concept is applicable)
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, except in the case that any such failure to so maintain, preserve
or comply has not had and is not reasonably likely to have, a Material Adverse Effect;
(b) 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 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, except in the case that any such failure to so maintain,
preserve or comply has not had, and is not reasonably likely to have, a Material Adverse Effect;
(c) take
all action necessary or advisable to maintain all of the Intellectual Property Rights that are necessary or material to the conduct of
its business in full force and effect;
(d) carry,
or be covered by, insurance by insurers of recognized financial responsibility in such amounts and covering such losses and risks, including,
but not limited to, directors and officers insurance coverage, as is adequate for the conduct of their respective businesses and the value
of their respective properties and as is customary for companies engaged in similar businesses;
(e) in
the case of the Company, engage an independent auditor to audit its financial statements that is registered with (and in compliance with
the rules and regulations of) the Public Company Accounting Oversight Board;
(f) (x) 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 Adverse Effect) and (y) 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 Adverse Effect); provided, however
that 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;
(g) expressly
waive all benefits or advantages of any stay, extension or usury law (wherever or whenever enacted or in force);
(h) in
the case of the Company, (x) on or prior to the date that is ninety (90) days immediately following the end of each Calendar Quarter
following the first Issuance Date occurring hereunder, report in the Company’s Annual Report on Form 20-F or Report of Foreign Private
Issuer on Form 6-K, the Company’s quarterly “cash operating expenses” (or other similar term) for the immediately preceding
Calendar Quarter and (y) maintain (on a consolidated basis) at all times on deposit unrestricted cash in an aggregate amount equal
to not less than such quarterly “cash operating expenses” (or other similar term) (the “Minimum Cash Reserve Requirement”);
(i) in
the case of the Company, notify the Holders in writing whenever a Triggering Event or DTM Failure occurs or whenever the Company fails
to meet the Minimum Cash Reserve Requirement; and
(j) in
the case of the Company, elect to follow home country practice in lieu of any rules and regulations of the Principal Market (or other
then applicable Eligible Market) that would limit the Company’s ability to effect the provisions of this Certificate of designations,
including but not limited to shareholder approval rules related to the issuance of securities or adjustment of terms of this Certificate
of Designations for the benefit of the Holders.
(17) VOTE
TO CHANGE THE TERMS OF OR ISSUE SERIES A-1 PREFERRED SHARES. In addition to any other rights provided by law, except where the vote
or written consent of the holders of a greater number of shares is required by law or by another provision of the Memorandum and Articles
of Association, the affirmative vote at a general meeting duly called for such purpose or the written consent without a meeting of the
Required Holders, voting together as a single class, and without requiring the vote of any other class, including without limitation,
without requiring the vote of any class of Ordinary Shares, shall be required before the Company may: (a) amend or repeal any provision
of, or add any provision to, the Memorandum and Articles of Association or bylaws, or file any articles of amendment, certificate of designations,
preferences, limitations and relative rights of any series of preferred shares, if such action would adversely alter or change the preferences,
rights, privileges or powers of, or restrictions provided for the benefit of the Series A-1 Preferred Shares, regardless of whether
any such action shall be by means of amendment to the Memorandum and Articles of Association or by merger, consolidation or otherwise;
(b) increase or decrease (other than by conversion) the authorized number of Series A-1 Preferred Shares; or (c) amend
or waive any provision of the Certificate of Designations with respect to the Series A-1 Preferred Shares. Any amendment or waiver
to this Certificate of Designations made in conformity with the provisions of this Section 17 shall be binding on all Holders. No
such amendment or waiver shall be effective to the extent that it applies to less than all of the Holders.
(18) TRANSFER.
Series A-1 Preferred Shares and any ADSs (including any Class A Ordinary Shares underlying such ADSs) issued upon conversion
of the Series A-1 Preferred Shares may be offered, sold, assigned or transferred by a Holder without the consent of the Company.
Holders shall have the right to transfer and to exercise rights with respect to fractional Series A-1 Preferred Shares and any redemptions
of Series A-1 Preferred Shares by the Company shall be made calculating the number of applicable Series A-1 Preferred Shares
to one-ten thousandth of a Series A-1 Preferred Share.
(19) EQUAL
TREATMENT OF HOLDERS. No consideration shall be offered or paid to any of the Holders to amend or waive or modify any provision of
the Series A-1 Preferred Shares, unless the same consideration (other than the reimbursement of legal fees) is also offered to all
of the Holders. This provision constitutes a separate right granted to each of the Holders by the Company and shall not in any way be
construed as the Holders acting in concert or as a group with respect to the purchase, disposition or voting of securities or otherwise.
(20) PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Certificate of Designations is placed in the hands of an attorney for
collection or enforcement or is collected or enforced through any legal proceeding or a Holder otherwise takes action to collect amounts
due under this Certificate of Designations or to enforce the provisions of this Certificate of Designations or (b) there occurs any
bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim
under this Certificate of Designations, then the Company shall pay the costs incurred by such Holder for such collection, enforcement
or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, attorneys’
fees and disbursements.
(21) GENERAL
PROVISIONS.
(a) In
addition to the above provisions with respect to Series A-1 Preferred Shares, such Series A-1 Preferred Shares shall be subject
to and be entitled to the benefit of the provisions set forth in the Memorandum and Articles of Association of the Company with respect
to preferred shares of the Company generally.
(b) Any
Series A-1 Preferred Shares which are converted, repurchased or redeemed shall be automatically and immediately cancelled and shall
not be reissued, sold or transferred.
(c) Whenever
notice is required to be given under this Certificate of Designations, unless otherwise provided herein, such notice shall be given in
accordance with Section 9(f) of the Securities Purchase Agreement.
(22) REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Certificate of Designations shall
be cumulative and in addition to all other remedies available under this Certificate of Designations 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
a Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Certificate
of Designations. The Company covenants to each 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 such 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 Holders 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 Holders shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
(23) CONSTRUCTION;
HEADINGS. This Certificate of Designations shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be
construed against any person as the drafter hereof. The headings of this Certificate of Designations are for convenience of reference
and shall not form part of, or affect the interpretation of, this Certificate of Designations.
(24) FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of a 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.
(25) DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Closing Bid Price or the Closing Sale Price or the arithmetic
calculation of the Conversion Rate, the Conversion Price or any Redemption Price, the Company shall instruct the Depositary to issue to
such Holder the number of ADSs that is not disputed and the Company shall submit the disputed determinations or arithmetic calculations
within one (1) Business Day of receipt, or deemed receipt, of the Conversion Notice or Redemption Notice or other event giving rise
to such dispute, as the case may be, to the applicable Holder. If a Holder and the Company are unable to agree upon such determination
or calculation within one (1) Business Day of such disputed determination or arithmetic calculation being submitted to such Holder,
then the Company shall, within one (1) Business Day submit (a) the disputed determination of the Closing Bid Price or the Closing
Sale Price to an independent, reputable investment bank selected by such Holder and approved by the Company, such approval not to be unreasonably
withheld, conditioned or delayed, or (b) the disputed arithmetic calculation of the Conversion Rate, Conversion Price or any Redemption
Price to an independent, outside accountant, selected by such Holder and approved by the Company, such approval not to be unreasonably
withheld, conditioned or delayed. The Company, at the Company’s expense, shall cause the investment bank or the accountant, as the case
may be, to perform the determinations or calculations and notify the Company and the applicable Holder of the results no later than five
(5) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination
or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
(26) NOTICES;
PAYMENTS.
(a) Notices.
Whenever notice is required to be given under this Certificate of Designations, 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 Holders with prompt
written notice of all actions taken pursuant to this Certificate of Designations, including in reasonable detail a description of such
action and the reason therefore. Without limiting the generality of the foregoing, the Company shall give written notice to the Holders
(i) immediately upon any adjustment of the Fixed Conversion Price, setting forth in reasonable detail, and certifying, the calculation
of such adjustment and (ii) at least ten (10) Business Days prior to the date on which the Company closes its books or takes
a record (I) with respect to any dividends or distribution upon the ADSs or Class A Ordinary Shares, (II) with respect
to any pro rata subscription offer to holders of ADSs or Class A Ordinary Shares or (III) for determining rights to vote with
respect to any Fundamental Transaction or Liquidation Event, provided that such information shall be made known to the public prior to
or in conjunction with such notice being provided to such Holder.
(b) Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Certificate of Designations, such payment shall
be made in lawful money of the United States of America via wire transfer of immediately available funds by providing the Company with
prior written notice setting out such request and such Holder’s wire transfer instructions; provided, that a Holder may elect to
receive a payment of cash by a 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). Whenever any amount expressed to be due by the terms of
this Certificate of Designations 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 Stated Value 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 (15.0%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).
(27) GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Certificate of Designations shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Certificate of Designations shall be governed by, the internal
laws of the Cayman Islands, without giving effect to any choice of law or conflict of law provision or rule (whether of the Cayman
Islands or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the Cayman Islands. The
Company hereby irrevocably submits to the exclusive jurisdiction of the courts of the Cayman Islands 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.
The Company 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 set forth in Section 9(f) of the Securities Purchase Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. 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 the Holders from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s
obligations to the Holders, 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 Holders. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS CERTIFICATE OF DESIGNATIONS OR
ANY TRANSACTION CONTEMPLATED HEREBY.
(28) LOST
OR STOLEN CERTIFICATES. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Series A-1 Preferred Share Certificates representing the Series A-1 Preferred Shares, and, in the case
of loss, theft or destruction, of any indemnification undertaking by such Holder to the Company in customary form (but without any obligation
to post a surety or other bond) and, in the case of mutilation, upon surrender and cancellation of the Series A-1 Preferred Share
Certificate(s), the Company shall execute and deliver new Series A-1 Preferred Share Certificate(s) representing the outstanding
Stated Value; provided, however, the Company shall not be obligated to re-issue Series A-1 Preferred Share Certificate(s) if
such Holder contemporaneously requests the Company to convert such Series A-1 Preferred Shares into ADSs.
(29) DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Certificate of Designations, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its Subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic
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, nonpublic information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holders contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holders shall be allowed to presume that all matters relating
to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.
(30) SERIES
A-1 PREFERRED SHARE 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 the Holders), a register for the Series A-1 Preferred Shares, in which the Company shall
record the name and address of the persons in whose name the Series A-1 Preferred Shares have been issued, as well as the name and
address of each transferee. The Company may treat the Person in whose name any Series A-1 Preferred Share is registered on the register
as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any properly
made transfers.
(31) SHAREHOLDER
MATTERS. Any shareholder action, approval or consent required, desired or otherwise sought by the Company pursuant to the rules and
regulations of the Principal Market, the Companies Act, this Certificate of Designations or otherwise with respect to the issuance of
the Series A-1 Preferred Shares or the ADSs issuable upon conversion thereof may be effected by written consent of the Company’s
shareholders or at a duly called general meeting of the Company’s shareholders, all in accordance with the applicable rules and regulations
of the Principal Market and the Companies Act. This provision is intended to comply with the applicable sections of the Companies Act
permitting shareholder action, approval and consent affected by written consent in lieu of a meeting.
(32) INDEPENDENT
NATURE OF HOLDERS’ OBLIGATIONS AND RIGHTS. The rights and obligations of each Holder under any Transaction Document are several and
not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations
of any other Holder under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken
by any Holder pursuant hereto or thereto, shall be deemed to constitute such Holder as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each Holder shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of this Certificate of Designations or out of any other Transaction
Documents, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
(33) CURRENCY;
TAXES; JUDGMENT CURRENCY.
(a) Currency.
All Stated Value, dividends, Late Charges, redemption Price and other amounts owing under this Certificate of Designations or any Transaction
Document that, in accordance with their terms, are paid in cash shall be paid in United States dollars. All amounts denominated in other
currencies shall be converted in the United States dollar equivalent amount in accordance with the Exchange Rate on the date of calculation.
(b) Taxes.
(i) Any
and all payments by the Company hereunder, including any amounts received in cash on a repayment or redemption of the Series A-1
Preferred Shares and any amounts on account of dividends, interest or deemed interest, shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts, deductions, withholdings or similar charges, and all liabilities (including
additions to tax, penalties and interest) with respect thereto, imposed under applicable law (collectively referred to as “Taxes”)
unless the Company is required to withhold or deduct any amounts for, or on account of Taxes pursuant to any applicable law. If
the Company shall be required to deduct any Taxes from or in respect of any sum payable hereunder to such Holder, (i) the sum payable
shall be increased by the amount necessary to ensure that after making all required deductions (including deductions applicable to additional
sums payable under this Section 33(b)) such Holder would receive an amount equal to the sum it would have received had no such deductions
been made, (ii) the Company shall make such deductions and (iii) the Company shall pay the full amount withheld or deducted
to the relevant governmental authority within the time required by applicable laws.
(ii) In
addition, the Company agrees to pay to the relevant governmental authority in accordance with applicable law any present or future stamp,
court or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder
or in connection with the execution, delivery, registration, enforcement or performance of, or otherwise with respect to, this Certificate
of Designations (“Other Taxes”).
(iii) The
Company shall deliver to the Holders official receipts, if any, in respect of any Taxes and Other Taxes payable hereunder promptly after
payment of such Taxes and Other Taxes, or such other evidence of payment reasonably acceptable to such Holder.
(iv) The
Company shall indemnify such Holder within ten (10) calendar days after written demand therefor, for the full amount of any Taxes
or Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 33(b)),
plus any related additions to tax, interest or penalties, that are paid by such Holder to, or imposed on such Holder by, the relevant
governmental authority, whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant governmental
authority.
(v) The
obligations of the Company under this Section 33(b) shall survive the termination of this Certificate of Designations and the
payment of the Series A-1 Preferred Shares and all other amounts payable hereunder.
(c) Judgment
Currency. 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 33(c) referred to as the “Judgment
Currency”) an amount due in United States dollars under this Certificate of Designations, the conversion shall be made at the
Exchange Rate prevailing on the Business Day immediately preceding:
(i) the
date actual payment of the amount due, in the case of any proceeding in the courts of the Cayman Islands 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 33(c)(ii) being hereinafter referred to as the “Judgment Conversion
Date”).
(iii) If
in the case of any proceeding in the court of any jurisdiction referred to in Section 33(c)(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 United States 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. 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 Certificate of Designations.
(34) CERTAIN
DEFINITIONS. For purposes of this Certificate of Designations, Preferences and Rights of Series A-1 Preferred Shares of the Company
(this “Certificate of Designations”) the following terms shall have the following meanings:
(a) “ADSs”
means American Depositary Shares, each representing fifteen (15) Class A Ordinary Shares.
(b) “Affiliate”
shall have the meaning ascribed to such term in Rule 405 of the Securities Act.
(c) “Alternate
Conversion Price” means, with respect to any Alternate Conversion, that price which shall be the lowest of (i) the applicable
Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, (ii) 80% of the arithmetic
average of the three (3) lowest daily Weighted Average Prices of the ADSs during the twenty (20) consecutive Trading Days immediately
preceding the applicable Alternate Conversion Date, (iii) 80% of the Weighted Average Price of the ADSs on the applicable Alternate
Conversion Date, (iv) 80% of the Weighted Average Price of the ADSs on the Trading Day immediately preceding the applicable Alternate
Conversion Date and (v) 80% of the lowest daily Weighted Average Price of the ADSs during the twenty (20) consecutive Trading Days
ending on the date of the first occurrence of the Triggering Event giving rise to the applicable Alternate Conversion, inclusive, less
the Issuance Fee. All such determinations shall be appropriately adjusted for any share dividend, share split, share combination, reclassification
or similar transaction that proportionately decreases or increases the ADSs or Class A Ordinary Shares during such period.
(d) “Approved
Share Plan” means any employee benefit plan which has been approved by the Board, pursuant to which the Company’s securities
may be issued to any employee, officer, director or consultant for services provided to the Company.
(e) “ATM
Offering” means any at-the-market offering of ADSs, including any at-the-market offering made pursuant to (i) the Company’s
currently effective Form F-3 Registration Statement (Reg No. 333-278762) or (ii) any other registration statement filed
by the Company that may be declared effective in the future.
(f) “Attribution
Parties” means, collectively, the following Persons: (i) any investment vehicle, including, any funds, feeder funds or managed
accounts, currently, or from time to time after the applicable Issuance Date, directly or indirectly managed or advised by such Holder’s
investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of such Holder or any of the foregoing,
(iii) any Person acting or who could be deemed to be acting as a Group together with such Holder or any of the foregoing and (iv) any
other Persons whose beneficial ownership of the Class A Ordinary Shares would or could be aggregated with such Holder’s and
the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is
to subject collectively such Holder and all other Attribution Parties to the Maximum Percentage.
(g) “Available
Cash” means (i) with respect to an Offer to Repurchase Event described in clause (i) of such definition, 30% of the
gross cash proceeds generated by such event and (ii) with respect to an Offer to Repurchase Event described in clause (ii) of
such definition, 100% of the gross amount of cash paid to the Permitted Secured Lenders with respect to the Permitted Secured Indebtedness.
(h) “Bloomberg”
means Bloomberg Financial Markets.
(i) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York, Hong Kong,
the Cayman Islands and Singapore are authorized or required by law to remain closed.
(j) “Buyers”
has the meaning ascribed to such term in the Securities Purchase Agreement.
(k) “Calendar
Quarter” means each three-month quarter in a calendar year (i.e., January through March, April through June, July through
September and October through December).
(l) “Change
of Control” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification
of the ADSs or Class A Ordinary Shares 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 respect, 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 (ii) pursuant to a migratory merger effected solely for the purpose
of changing the jurisdiction of incorporation of the Company.
(m) “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 (f/k/a OTC Pink) published by OTC Markets Group, Inc.
(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 applicable
Holder. If the Company and such Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved
pursuant to Section 25. All such determinations shall be appropriately adjusted for any share dividend, share split, share combination,
reclassification or other similar transaction during the applicable calculation period that proportionately decreases or increases the
ADSs or Class A Ordinary Shares during such period.
(n) “Class A
Ordinary Shares” means (i) the Company’s Class A Ordinary Shares, par value US$0.00000005 per share, and (ii) any
share capital into which such Class A Ordinary Shares shall have been changed or any share capital resulting from a reorganization,
recapitalization or reclassification of such Class A Ordinary Shares.
(o) “Class B
Ordinary Shares” means (i) the Company’s Class B Ordinary Shares, par value US$0.00000005 per share, and (ii) any
share capital into which such Class B Ordinary Shares shall have been changed or any share capital resulting from a reorganization,
recapitalization or reclassification of such Class B Ordinary Shares.
(p) “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.
(q) “Convertible
Securities” means any shares or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable
for ADSs or Class A Ordinary Shares.
(r) “Depositary”
means The Bank of New York Mellon (or any successor thereto) acting as Depositary under that certain Deposit Agreement dated as of November 20,
2019 by and between the Company and The Bank of New York Mellon and owners and holder of ADSs, as may be amended, amended and restated,
supplemented or otherwise modified from time to time.
(s) “Disqualified
Equity Interests” means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interest into
which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof, in whole or
in part, (c) provides for the scheduled payments of dividends or distributions in cash, or (d) is convertible into or exchangeable
for (i) Indebtedness or (ii) any other Equity Interests that would constitute Disqualified Equity Interests, in each case of
clauses (a) through (d), prior to the date that is ninety-one (91) days after the Maturity Date.
(t) “DTM
Trigger Date” means the date that is ninety (90) days immediately following the occurrence of a DTM Failure, provided that no
Triggering Event (or event that with the passage of time and the failure to cure would result in a Triggering Event) or DTM Failure then
exists.
(u) “Eligible
Market” means the Principal Market, The New York Stock Exchange, The Nasdaq Capital Market, The Nasdaq Global Select Market,
or the NYSE American.
(v) “Equity
Interests” means (a) all shares of capital (whether denominated as common capital or preferred capital), equity interests,
beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or
equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting and (b) all
securities convertible into or exchangeable for any of the foregoing and all warrants, Options or other rights to purchase, subscribe
for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable.
(w) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
(x) “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. dollars pursuant to this Certificate of Designations,
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).
(y) “Excluded
Securities” means any ADSs or Class A Ordinary Shares issued or issuable or deemed to be issued in accordance with Section 5(e) hereof
by the Company: (A) under any Approved Share Plan; (B) under an ATM Offering; (C) with respect to the Series A Preferred
Shares; (D) with respect to the Series A-1 Preferred Shares pursuant to the terms of this Certificate of Designations; and (E) upon
conversion, exercise or exchange of any Options or Convertible Securities which are outstanding on the day immediately preceding the Subscription
Date, provided that such issuance of ADSs or Class A Ordinary Shares upon exercise of such Options or Convertible Securities is made
pursuant to the terms of such Options or Convertible Securities in effect on the date immediately preceding the Subscription Date and
such Options or Convertible Securities are not amended, modified or changed on or after the Subscription Date.
(z) “Fundamental
Transaction” means (i) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, (a) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (b) 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 (c) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have
its Class A Ordinary Shares 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 (1) 50% of the issued and outstanding Class A Ordinary Shares (2) 50% of
the issued and outstanding Class A Ordinary Shares calculated as if any Class A Ordinary Shares 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 (3) such number of Class A Ordinary Shares 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 Exchange Act) of at least 50% of the issued and outstanding Class A Ordinary Shares, or (d) consummate a 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 such Subject Entities, individually or in the aggregate, acquire, either (1) at least 50%
of the issued and outstanding Class A Ordinary Shares, (2) at least 50% of the issued and outstanding Class A Ordinary
Shares calculated as if any Class A Ordinary Shares held by all the Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such share purchase agreement or other business combination were not outstanding; or (3) such number of
Class A Ordinary Shares such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under
the Exchange Act) of at least 50% of the issued and outstanding Class A Ordinary Shares, or (e) reorganize, recapitalize or
reclassify its Class A Ordinary Shares, (ii) 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 Exchange Act), directly or indirectly,
whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in issued and outstanding Class A
Ordinary Shares, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization,
recapitalization or reclassification or otherwise in any manner whatsoever, of either (a) at least 50% of the aggregate ordinary
voting power represented by issued and outstanding Class A Ordinary Shares, (b) at least 50% of the aggregate ordinary voting
power represented by issued and outstanding Class A Ordinary Shares not held by all such Subject Entities as of the Subscription
Date calculated as if any Class A Ordinary Shares held by all such Subject Entities were not outstanding, or (c) a percentage
of the aggregate ordinary voting power represented by issued and outstanding Class A Ordinary Shares 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 Class A Ordinary Shares without approval of the shareholders of the Company or (iii) that
the Company shall 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. For the avoidance of doubt, any references herein to Class A
Ordinary Shares shall include the Class A Ordinary Shares underlying ADSs.
(aa) “GAAP”
means United States generally accepted accounting principles, consistently applied.
(bb) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(cc) “Indebtedness”
of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services, including (without limitation) “finance leases” in accordance
with GAAP (other than trade payables entered into in the ordinary course of business consistent with past practice), (iii) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) 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, (v) 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), (vi) 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 finance lease, (vii) all Disqualified Equity Interests, (viii) all
indebtedness referred to in clauses (i) through (vii) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any mortgage, deed of trust, lien, pledge, charge, security interest or other
encumbrance of any nature whatsoever in or upon any property or assets (including accounts and contract rights) with respect to any asset
or property 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 (ix) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred
to in clauses (i) through (vii) above.
(dd) “Intellectual
Property Rights” has the meaning ascribed to such term in the Securities Purchase Agreement.
(ee) “Issuance
Date” means the date of issuance of the applicable Series A-1 Preferred Shares.
(ff) “Lead
Investor” means .
(gg) “Liquidation
Event” means the voluntary or involuntary liquidation, dissolution or winding up of the Company or such Subsidiaries the assets
of which constitute all or substantially all of the assets of the business of the Company and its Subsidiaries taken as a whole, in a
single transaction or series of transactions, or adoption of any plan for the same.
(hh) “Market
Capitalization” means an amount equal to (i) the total number of issued and outstanding ADSs on the Principal Market as
reported by the Company in its most recent Annual report on Form 20-F, Report of Foreign Private Issuer on Form 6-K or other
filing with the SEC, multiplied by (ii) the arithmetic average of the Closing Sale Prices of the ADSs for the ten (10) consecutive
Trading Days immediately preceding the applicable date of determination.
(ii) “Market
Price” means 92.50% of the lowest daily Weighted Average Price of the ADSs during the five (5) consecutive Trading Days
immediately preceding the applicable Conversion Date. All such determinations shall be appropriately adjusted for any share split,
share dividend, share combination, reclassification or other similar transaction during such period that proportionately decreases or
increases the ADSs or Class A Ordinary Shares during such period.
(jj) “Material
Adverse Effect” has the meaning ascribed to such term in the Securities Purchase Agreement.
(kk) “Offer
to Repurchase Event” means (i) the consummation by the Company or any Subsidiary of any Subsequent Placement or (ii) the
payment by the Company to the Permitted Secured Lenders of any cash with respect to the Permitted Secured Indebtedness.
(ll) “Offer
to Repurchase Event Redemption Premium” means (i) with respect to an Offer to Repurchase Event described in clause (i) of
such definition, 115% and (ii) with respect to an Offer to Repurchase Event described in clause (ii) of such definition, 100%.
(mm) "Options”
means any rights, warrants or options to subscribe for or purchase ADSs or Class A Ordinary Shares or Convertible Securities.
(nn) “Option
Value” means the value of an Option based on the Black and Scholes Option Pricing model obtained from the “OV” function
on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable Option if the
issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option
if the issuance of such Option is not publicly announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination,
(ii) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as
of (A) the Trading Day immediately following the public announcement of the applicable Option if the issuance of such Option is publicly
announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option is not
publicly announced, (iii) the underlying price per share used in such calculation shall be the highest Weighted Average Price of
the ADSs during the period beginning on the Trading Day prior to the execution of definitive documentation relating to the issuance of
the applicable Option and ending on (A) the Trading Day immediately following the public announcement of such issuance, if the issuance
of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance
of such Option is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
(oo) “Ordinary
Shares” means the Class A Ordinary Shares and the Class B Ordinary Shares, collectively.
(pp) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose
common capital or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Required Holders, any
other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity designated
by the Required Holders or in the absence of such designation, such Person or entity with the largest public market capitalization as
of the date of consummation of the Fundamental Transaction.
(qq) “Permitted
Indebtedness” means (i) trade payables incurred in the ordinary course of business consistent with past practice, (ii) Indebtedness
incurred solely for the purpose of financing the acquisition or lease of equipment, (iii) the Indebtedness disclosed in the Company
Disclosure Letter, (iv) 5-year unsecured convertible bonds that include a fixed conversion price issued pursuant to Rule 144A,
provided that the fixed conversion price for such bonds is not subject to being reset, and (v) Permitted Secured Indebtedness, provided,
however, that in order for Permitted Secured Indebtedness to constitute Permitted Indebtedness hereunder, (x) the Company
is required to comply with Section 10, (y) in the event any Holder does not elect to redeem such Holder’s Series A-1 Preferred
Shares in accordance with Section 10, such Holder’s Pro Rata Amount of any Available Cash described in clause (ii) of such definition
shall be delivered in trust to such Holder in accordance with such Holder’s wire instructions and may be used by such Holder in satisfaction
of any cash obligations of the Company pursuant to the terms and conditions of this Certificate of Designations (for the avoidance of
doubt, any such Available Cash delivered to such Holder in trust shall in no event limit any cash obligation of the Company to such Holder
pursuant to the terms and conditions of this Certificate of Designations) and such Holder shall repay any unused Available Cash to the
Company on or prior to the date that is thirty (30) days immediately following the earlier of (x) the first date no Series A-1
Preferred Shares remain outstanding and (y) no Series A-1 Preferred Shares remain issuable pursuant to the terms and conditions
set forth in the Securities Purchase Agreement and (z) prior to the incurrence of such Permitted Secured Indebtedness, the Company
shall enter into an agreement with the Holders and the Permitted Secured Lenders, in form and substance reasonably satisfactory to the
Required Holders, to (1) provide for the distribution, on a pari-passu basis between the Holders and the Permitted Secured Lenders,
of any cash proceeds resulting from the foreclosure of any collateral securing such Permitted Secured Indebtedness and (2) for the
Permitted Secured Lenders to waive all claims against the Available Cash held in trust by such Holder.
(rr) “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,
(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) leases or
subleases and licenses and sublicenses granted to others in the ordinary course of the Company’s business, not interfering in any material
respect with the business of the Company and its Subsidiaries taken as a whole, (vii) 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, (viii) Liens arising
from judgments, decrees or attachments in circumstances not constituting a Triggering Event under Section 6(a)(ix); and (ix) Liens
securing bitcoin mining machines that are subject to hosting agreements with third party vendors and (x) Liens securing Permitted
Secured Indebtedness.
(ss) “Permitted
Secured Indebtedness” means Indebtedness incurred by the Company and/or any of its Subsidiaries as borrower or guarantor under
one or more asset-based credit facilities in an aggregate principal amount not to exceed US$50,000,000 outstanding at any time.
(tt) “Permitted
Secured Lenders” means the lenders under the Permitted Secured Indebtedness.
(uu) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any governmental entity or any department or agency thereof.
(vv) “Principal
Market” means The Nasdaq Global Market.
(ww) “Pro
Rata Amount” means a fraction (i) the numerator of which is the number of Series A-1 Preferred Shares held by the applicable
Holder at the applicable time of determination and (ii) the denominator of which is the number of Series A-1 Preferred Shares
outstanding at the applicable time of determination.
(xx) “Redemption
Dates” means, collectively, the Triggering Event Redemption Dates, the Change of Control Redemption Dates, the Holder DTM Redemption
Dates and the Offer to Repurchase Dates, as applicable, each of the foregoing, individually, a Redemption Date.
(yy) “Redemption
Notices” means, collectively, Triggering Event Redemption Notices, the Change of Control Redemption Notices, the Holder DTM Redemption
Notices and the Offer to Repurchase Notices, each of the foregoing, individually, a Redemption Notice.
(zz) “Redemption
Prices” means, collectively, the Triggering Event Redemption Prices, the Change of Control Redemption Prices, the Holder DTM
Redemption Prices and Offer to Repurchase Prices each of the foregoing, individually, a Redemption Price.
(aaa) “Required
Holders” means the Holders representing at least a majority of the aggregate Series A-1 Preferred Shares then issued and
outstanding and shall include the Lead Investor.
(bbb) “SEC”
means the United States Securities and Exchange Commission.
(ccc) “Securities
Act” means the Securities Act of 1933, as amended.
(ddd) “Securities
Purchase Agreement” means that certain securities purchase agreement dated as of the Subscription Date by and among the Company
and the investors listed on the signature pages attached thereto pursuant to which the Company issued the Series A-1 Preferred
Shares, as may be amended, amended and restated, supplemented or otherwise modified from time to time.
(eee) “Significant
Subsidiaries” has the meaning ascribed to such term in Regulation S-X.
(fff) “Stated
Value” means US$1,072.80 per Series A-1 Preferred Share.
(ggg) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(hhh) “Subscription
Date” means November 19, 2024.
(iii) “Subsequent
Placement” means any transaction (or series of related transactions) in which the Company or any Subsidiary offers, sells, grants
any option to purchase, or otherwise disposes of (or announces any offer, sale, grant or any option to purchase or other disposition of)
any of its or any Subsidiary’s debt, equity or equity equivalent securities, including without limitation any debt, preferred shares or
other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable
for ADSs, Class A Ordinary Shares, Options or Convertible Securities; provided, however, that the incurrence of Permitted
Secured Indebtedness shall not constitute a Subsequent Placement.
(jjj) “Subsidiary”
has the meaning ascribed to such term in the Securities Purchase Agreement.
(kkk) “Successor
Entity” means one or more Person or Persons (or, if so elected by the Required Holders, the Company or Parent Entity) formed
by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Required Holders,
the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(lll) “Total
Indebtedness” means the sum of (x) all Indebtedness of the Company and/or any of its Subsidiaries, as applicable, (y) the
Conversion Amount of all Series A Preferred Shares and all Series A-1 Preferred Shares and (y) all trade payables and cash
based obligations of the Company and/or any of its Subsidiaries, as applicable, in each case, outstanding as of the applicable date of
determination; provided, however, that solely for purpose of this definition, Total Indebtedness (1) shall only include
Indebtedness, trade payables and cash based obligations that bear interest or provide for an original issue discount or a redemption premium
and (2) shall not include any customer pre-payments.
(mmm) “Trading
Day” means any day on which the ADSs are traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the ADSs on such day, then on the principal securities exchange or securities market on which the ADSs are then traded.
(nnn) “Transaction
Documents” has the meaning ascribed to such term in the Securities Purchase Agreement.
(ooo) “Variable
Rate Transaction” means a transaction in which the Company or any of its Subsidiaries (i) issues or sells securities in
an at-the-market, equity line of credit facility or similar agreement, other than pursuant to an ATM Offering, (ii) issues or sells
any Convertible Securities or Options 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 or Class A Ordinary Shares at any time after the initial issuance of
such Convertible Securities or Options, 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 Options 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 or Class A Ordinary Shares, other than pursuant
to a customary “weighted average” anti-dilution provision or (iii) enters into any agreement whereby the Company or any
Subsidiary may sell securities at a future determined price (other than standard and customary “preemptive” or “participation”
rights); provided, however, that issuances of securities under an Approved Share Plan shall not be deemed a Variable Rate
Transaction.
(ppp)
“Weighted Average Price” means the volume weighted average price of the ADSs on the Principal Market for a
particular Trading Day as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00
p.m. (New York City time)).
* * * * *
IN WITNESS WHEREOF, the Company
has caused this Certificate of Designations to be signed by Nangeng Zhang, its Chairman and Chief Executive Officer, as of the 19 day
of November, 2024.
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CANAAN INC. |
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By: |
/s/ Nangeng Zhang |
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Name: |
Nangeng Zhang |
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Title: |
Chairman and Chief Executive Officer |
EXHIBIT I
CANAAN INC.
CONVERSION NOTICE
Reference is made to the Certificate
of Designations, Preferences and Rights of Series A-1 Convertible Preferred Shares of Canaan Inc. (the “Certificate of Designations”).
In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series A-1
Convertible Preferred Shares, par value $0.00000005 per share (the “Series A-1 Preferred Shares”), of Canaan Inc.,
a Cayman Islands exempted company (the “Company”), indicated below into American Depositary Shares, each representing
fifteen (15) Class A Ordinary Shares, par value $0.00000005 per share (the “ADSs”), of the Company, as of the date
specified below.
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Date of Conversion: |
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Number of Series A-1 Preferred Shares to
be converted: |
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Total Stated Value of Shares to be converted: |
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Tax ID Number (If applicable): |
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Conversion Price: |
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Alternate Conversion Price: |
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Number of Days Since Issuance: |
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Payment of dividends in cash, if any |
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If number of Series A-1 Preferred Shares
is provided above, number of ADSs to be issued : : |
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Please issue the ADSs into which the Series A-1 Preferred Shares
are being converted to the Holder, or for its benefit, as follows:
¨
Check here if requesting delivery as a certificate to the following name and to the following address:
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Issue to: |
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Address: |
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Telephone Number: |
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¨ Check
here if requesting delivery by DTC as follows:
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DTC Participant: |
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DTC Number: |
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Account Number: |
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Authorization: |
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Dated:
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Account Number (if electronic book
entry transfer): |
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Transaction Code Number (if electronic
book entry transfer): |
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[NOTE
TO HOLDER -- THIS FORM MUST BE SENT CONCURRENTLY TO TRANSFER AGENT AND THE DEPOSITARY]
ACKNOWLEDGMENT
The Company hereby acknowledges
this Conversion Notice and hereby directs the Depositary to issue the above indicated number of ADSs in accordance with the Irrevocable
Depositary Instructions dated [•] from the Company and acknowledged and agreed to by the Depositary.
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CANAAN INC. |
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By: |
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Name: |
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Title: |
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Canaan (NASDAQ:CAN)
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