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 February 2025
Commission file number: 001-39109
Fangdd Network Group Ltd.
Room 1501, Shangmei Technology
Building
No. 15 Dachong Road
Nanshan District, Shenzhen, 518072
People’s Republic of China
Phone: +86 755 2699 8968
(Address and Telephone Number of Principal Executive
Offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
EXHIBIT INDEX
INCORPORATION BY REFERENCE
Exhibits 1.1, 5.1, 8.1, 10.1, 10.2 and 23.2 to this report on Form
6-K are hereby incorporated by reference into the registration statement of Fangdd Network Group Ltd. on Form F-3 (No. 333-267397) to
the extent not superseded by documents or reports subsequently filed.
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.
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Fangdd Network Group Ltd. |
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By: |
/s/ Xi Zeng |
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Name: |
Xi Zeng |
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Title: |
Chief Executive Officer and Chairman of the Board of Directors |
Date: February 11, 2025
2
Exhibit 1.1
February 10, 2025
Fangdd Network Group Ltd.
Xi Zeng
Room 1501, Shangmei Technology Building
15 Dachong Road
Nanshan District, Shenzhen, 518072
People’s Republic of China
| Re: | Exclusive Placement Agent Agreement |
Dear Mr. Zeng,
The purpose of this letter agreement
(this “Engagement Letter” or this “Agreement”) is to set forth the terms and conditions pursuant
to which MM Global Securities, Inc. (“MM”), as the “Placement Agent”, shall serve as the Exclusive
Placement Agent during the Term (as defined below) for Fangdd Network Group Ltd., NASDAQ: [DUO] (the “Company”), on
a “best efforts” basis, in connection with any public or private offering or other financing or capital-raising transaction
of any kind (each, a “Placement”) of unregistered or registered securities (the “Securities”) of
the Company, which may include ordinary shares (the “Shares”) of the Company or securities convertible into Shares,
pursuant to a private placement or, if registered, pursuant to a registration statement.
This Agreement shall
become effective as of the date first written above (the “Effective Date”). The terms of such Placement(s) and
the Securities shall be mutually agreed upon by the Company and the investors (each, an “Investor” and
collectively, the “Investors”) and nothing herein enables the Placement Agent to bind the Company or any
Investor. This Agreement and the documents executed and delivered by the Company and the Investors in connection with the
Placement(s) shall be collectively referred to herein as the “Transaction Documents.” The date of each of the
closings of the Placement(s) shall be referred to herein as the “Closing Date.” The Company expressly
acknowledges and agrees that the Placement Agent’s obligations hereunder are on a reasonable “best efforts” basis
only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase or to sell any
Securities and does not ensure the successful placement of any Securities or any portion thereof. The identities of the investors to
which the Placement Agent introduces the Company shall be proprietary information of the Placement Agent and shall not be divulged
to third parties by the Company, nor used by the Company outside the scope of the Placement Agent’s engagement as described
herein, other than as required by applicable law.
SECTION 1. COMPENSATION AND
OTHER FEES.
As compensation for the Placement
Agent’s services hereunder, the Company shall pay to the Placement Agent a cash placement fee upon each Closing, in an amount equal
to eight and a half percent (8.5%) of the total amount of cash proceeds received by the Company from the sale of its Securities from such
Closing during the term of this Agreement (the “Placement Agent Fee”) to Investor(s) procured by the Placement Agent.
Notwithstanding anything to the contrary in this Agreement, the compensation provided for in this Agreement shall be subject to such reduction
as may be necessary for the compensation to comply with Financial Industry Regulatory Authority (“FINRA”) Rule 5110.
The Company agrees to reimburse the Placement Agent for its legal expense in an amount of $15,000.
SECTION 2. COMPANY REPRESENTATIONS
AND WARRANTIES.
The Company represents and warrants
to, and agrees with, the Placement Agent on the Effective Date and on each date on which any Securities are offered that (Sections (A)-(D)
shall only be applicable to any Placement completed on a registered basis pursuant to the Securities Act (as defined below)):
(A) The Company will
file with the Securities and Exchange Commission (the “Commission”) a registration statement on Form F-3 under
the Securities Act of 1933, as amended (the “Securities Act”), which will become effective on prior to the
Placement, for the registration under the Securities Act of the Securities. At the time of such filing and on the Effective Date, or
if the Company has an existing useable F-3 shelf registration, the Company will have met the requirements of Form F-3 under the
Securities Act. Such registration statement meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and
complies with said Rule. The Company will file with the Commission pursuant to Rule 424(b) under the Securities Act, and the rules
and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a supplement to the form
of prospectus included in such registration statement relating to the placement of the Securities and the plan of distribution
thereof and has advised the Placement Agent of all further information (financial and other) with respect to the Company required to
be set forth therein. Such registration statement, including the exhibits thereto, as amended from time to time, is hereinafter
called the “Registration Statement”; such prospectus in the form in which it appears in the Registration
Statement is hereinafter called the “Base Prospectus”; and the supplemented form of prospectus, in the form in
which it will be filed with the Commission pursuant to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter
called the “Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the Base
Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein (the
“Incorporated Documents”) pursuant to Item 12 of Form F-3 which were filed under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), on or before the Effective Date, or the issue date of the Base Prospectus
or the Prospectus Supplement, as the case may be; and any reference in this Agreement to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective
Date, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be, deemed to be incorporated therein
by reference. All references in this Agreement to financial statements and schedules and other information that is
“contained,” “included,” “described,” “referenced,” “set forth” or
“stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement (and all other references of
like import) shall be deemed to mean and include all such financial statements and schedules and other information that is or is
deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, as the case
may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus
Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company’s knowledge,
is threatened by the Commission. For purposes of this Agreement, “free writing prospectus” has the meaning set
forth in Rule 405 under the Securities Act and the “Time of Sale Prospectus” means the preliminary prospectus, if
any, together with the free writing prospectuses, if any, used in connection with the Placement, including any documents
incorporated by reference therein.
(B) The Registration
Statement (and any further documents to be filed with the Commission) will contain all exhibits and schedules as required by the
Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at the time it becomes effective, will
comply in all material respects with the Securities Act and the Exchange Act and the applicable Rules and Regulations and did not
and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading. The Base Prospectus, the
Time of Sale Prospectus, if any, and the Prospectus Supplement, each as of its respective date, will comply in all material respects
with the Securities Act and the Exchange Act and the applicable Rules and Regulations. Each of the Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement, as amended or supplemented, will not contain as of the date thereof any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Incorporated Documents, when they are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, and none of such
documents, when they were filed with the Commission, will contain any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference in the Base
Prospectus or Prospectus Supplement), in light of the circumstances under which they were made not misleading; and any further
documents so filed and incorporated by reference in the Base Prospectus, the Time of Sale Prospectus, if any, or Prospectus
Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date
thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein will be
required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with the
transaction contemplated hereby that will not be filed pursuant to the Securities Act within the requisite time period. There are no
contracts or other documents required to be described in the Base Prospectus, the Time of Sale Prospectus, if any, or Prospectus
Supplement, or to be filed as exhibits or schedules to the Registration Statement, that will not be described or filed as
required.
(C) The Company is currently eligible
to use free writing prospectuses in connection with the Placement pursuant to Rules 164 and 433 under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the
Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder.
Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that
was prepared by or behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities
Act and the applicable rules and regulations of the Commission thereunder. The Company will not, without the prior consent of the Placement
Agent, prepare, use or refer to, any free writing prospectus.
(D) The Company will as promptly
as practicable deliver to the Placement Agent complete conformed copies of the Registration Statement and of each consent and certificate
of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places
as the Placement Agent reasonably request. Neither the Company nor any of its directors and officers has distributed and none of them
will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Securities other than
the Base Prospectus, the Time of Sale Prospectus, if any, the Prospectus Supplement, the Registration Statement, copies of the documents
incorporated by reference therein and any other materials permitted by the Securities Act.
(E) There are no affiliations with
any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or greater
stockholder of the Company.
(F) The Placement
Agent shall have received on each Closing Date a comfort letter dated the Closing Date and addressed to the Placement Agent in form and
substance satisfactory to the Placement Agent; and a written opinion of counsel for the Company, dated the Closing Date and addressed
to the Placement Agent in form and substance satisfactory to the Placement Agent, which shall include, without limitation, opinions related
to (i) the corporate existence of the Company and power to operate its business; (ii) the corporate power and authority of the Company
to execute all agreements and perform its obligations related to the Placement; (iii) the ability of the Company to enter into all agreements
and perform its obligations related to the Placement without contravening or violating (or causing the triggering of any anti-dilution
or similar provisions in) its charter documents, any other agreements or any applicable law, regulation or rule; (iv) that any Securities
(and any Shares underlying such Securities) will be duly authorized, fully paid, validly issued and non-assessable, as applicable; (v)
that no approval, consent, order, filing or notice is required to complete the Placement and for the Company to perform its obligations
in the Placement; and (vi) if the Placement is being completed pursuant to a Registration Statement, the effectiveness of the Registration
Statement and that all filings required by the Securities Act of 1933, as amended, have been made.
(G) The Placement Agent shall be
entitled to rely upon any and all representations and warranties of the Company included in the purchase agreements entered into by the
Company and the Investors in connection with the Placement, subject to the qualifications and limitations therein, including, but not
limited to, any disclosure set forth on an applicable schedule.
SECTION 3. REPRESENTATIONS AND
WARRANTIES OF PLACEMENT AGENT.
The Placement Agent represents
and warrants to the Company that: (i) it will comply with all applicable federal laws regarding trading in securities of the Company,
(ii) it will not disclose any non-public material information of the Company without the prior written consent of the Company during the
Term for a period of one (1) year from the termination date of this Agreement, and (iii) that it is a registered broker-dealer in good
standing with the relevant regulatory agencies.
SECTION 4. ENGAGEMENT TERM &
SURVIVAL.
The term of this Agreement shall
be for a period of the earlier of one (1) month from the Effective Date or the completion of the Placement (the “Term”).
The Placement Agent shall be entitled to a Placement Agent Fee, calculated in the manner provided in Section 1, with respect to any Closing
during the Term to the extent that such financing or capital is provided to the Company by investors whom the Placement Agent had contacted
on behalf of the Company, or investors “wall-crossed” by the Placement Agent in connection with the Placement during the Term.
The provisions of Sections 1, 2, 3, 4, 5, 6, 7, 9, 10 and 11 of this Agreement and Appendix A shall survive this Agreement’s expiration
or termination.
SECTION 5. PLACEMENT AGENT INFORMATION.
The Company agrees that any information
or advice rendered by the Placement Agent in connection with this engagement is for the confidential use of the Company only in its evaluation
of the Placement and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information
in any manner without prior written consent of the Placement Agent.
SECTION 6. NO FIDUCIARY RELATIONSHIP;
THIRD PARTY BENEFICIARIES.
This Agreement does not create,
and shall not be construed as creating rights enforceable by any person or entity that is not a party hereto, except those entitled hereto
by virtue of the indemnification provisions hereof. The Company acknowledges and agrees that the Placement Agent is not and shall not
be construed as a fiduciary of the Company and that the Placement Agent shall not have any duties or liabilities to the equity holders
or the creditors of the Company or to any other person by virtue of this Agreement or the retention of the Placement Agent hereunder,
all of which are hereby expressly waived.
SECTION 7. INDEMNIFICATION.
The parties agree to the terms
of the Placement Agent’s standard indemnification agreement, which is attached hereto as Appendix A and incorporated herein by reference.
SECTION 8 ANNOUNCEMENTS.
The Company grants to the Placement
Agent the right to place customary announcement(s) of the Placement in certain newspapers and to mail announcement(s) to persons and firms
selected by Placement Agent, at the Placement Agent’s expense, subject to the Company’s prior approval, which shall not be
unreasonably withheld.
SECTION 9. GOVERNING LAW.
This Agreement will be
governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed
entirely in such State. This Agreement may not be assigned by either party without the prior written consent of the other party.
This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted
assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in
connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the State of New York
located in New York County or into the Federal Court located in New York, New York and, by execution and delivery of this Agreement,
the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid
courts. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the
address in effect for 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. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the
prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
SECTION 10. ENTIRE AGREEMENT/MISC.
This Agreement embodies the entire
agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject
matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will
not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This
Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by each of the Placement Agent
and the Company. The representations, warranties, agreements and covenants contained herein shall survive the closing of the Placement
and delivery and/or exercise of the Securities, as applicable. This Agreement may be executed in two or more counterparts, all of which
when taken together 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, it being understood that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature
page were an original thereof.
SECTION 11. NOTICES.
Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest
of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified on the signature
pages attached hereto prior to 6:30 p.m. (New York, New York time) on a business day, (b) the next business day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number on the signature pages attached hereto on a day that
is not a business day or later than 6:30 p.m. (New York, New York time) on any business day, (c) the business day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.
Please confirm that the foregoing
correctly sets forth our agreement by signing and returning an executed copy of this Agreement to us.
| MM Global Securities, Inc. |
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| By: |
/s/ Peng Zhang |
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| Name: |
Peng Zhang |
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| Title: |
Principal/CCO |
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Address for notice:
575 Lexington Ave, Unit 12-111
New York, NY 10022
USA
Accepted and Agreed to as of
the Effective Date:
February 10, 2025
| Fangdd Network Group Ltd. |
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| By: |
/s/ Xi Zeng |
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| Name: |
Xi Zeng |
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| Title: |
CEO |
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Address for notice:
Room 1501, Shangmei Technology Building
15 Dachong Road
Nanshan District, Shenzhen, 518072
People’s Republic of China
Accepted and Agreed to as of
the Effective Date:
February 10, 2025
APPENDIX A - - INDEMNIFICATION PROVISIONS
(A) The Company agrees to indemnify and hold harmless
the Placement Agent and its affiliates and their respective officers, directors, employees, agents, counsel, advisers and consultants,
and any persons controlling the Placement Agent or any of its affiliates within the meaning of Section 15 of the Securities Act of 1933
or Section 20 of the Securities Exchange Act of 1934 (the Placement Agent and each such other person or entity being referred to herein
as an “Indemnified Person”), from and against all claims, liabilities, losses or damages (or actions in respect thereof)
or other expenses (and further agrees to advance all expenses) which (A) are related to or arise out of (i) actions taken or omitted to
be taken (including any untrue statements made or any statements omitted to be made) by the Company or its respective affiliates in connection
with this Agreement, the Placement or which affect the Placement or (ii) actions taken or omitted to be taken by an Indemnified Person
with the consent or in conformity with the actions or omissions of the Company or their respective affiliates in connection with this
Agreement, the Placement or which affect the Placement or (iii) any investigation, litigation, or inquiry by a regulatory or self-regulatory
agency or authority involving the Company or any transaction arising under any agreements between the Company and the Placement Agent
or (B) are otherwise related to or arise out of the Placement Agents’ activities on behalf of the Company or its respective affiliates
pursuant to this Agreement or (C) in any way involving or alleged to involve the Company, any Placement or any Securities. The Company
will not be responsible, however, for any losses, claims, damages, liabilities or expenses pursuant to clause (B) of the preceding sentence
which are finally judicially determined to have resulted solely from such Indemnified Person’s gross negligence or willful misconduct.
In addition, the Company agrees to advance (and in the absence of advancement required hereunder) to promptly reimburse each Indemnified
Person for all reasonable out-of-pocket expenses (including fees and expenses of counsel) as they are incurred by such Indemnified Person
in connection with investigating, preparing, conducting or defending any such action or claim, whether or not in connection with litigation
in which any Indemnified Person is a named party, or in connection with enforcing the rights of such Indemnified Person under this Agreement,
including the costs of any claims asserted by an Indemnified Person against any indispensable party or by way of a counterclaim in any
litigation within the scope of this provision. The Company agrees to advance such expenses incurred by an Indemnified Person pursuant
to which indemnity may be sought hereunder within thirty (30) days after receipt by the Company of a statement requesting such advances
from time to time, whether prior to or after final disposition of any proceeding. Such advances shall be unsecured and interest free and
without regard to the Indemnified Person’s ultimate entitlement to indemnification under the other provisions of this Agreement.
Indemnified Persons shall be entitled to continue to receive advancement of expenses pursuant to this section unless and until the matter
of an Indemnified Person’s entitlement to indemnification hereunder has been finally adjudicated by court order or judgment from
which no further right of appeal exists. Each Indemnified Person undertakes to repay such amounts advanced only if and to the extent that,
it ultimately is determined that the Indemnified Person is not entitled to be indemnified by the Company under the provisions of this
Agreement.
(B) Promptly after receipt by the Placement Agent of
notice of any claim or the commencement of any action or proceeding with respect to which the Placement Agent is entitled to indemnity
hereunder, the Placement Agent will notify the Company in writing of such claim or of the commencement of such action or proceeding, and
the Company will assume the defense of such action or proceeding and will employ counsel reasonably satisfactory to the Placement Agent
and will pay the reasonable fees and expenses of such counsel. Notwithstanding the preceding sentence, the Placement Agent will be entitled
to employ counsel separate from counsel for the Company and from any other party in such action if counsel for the Placement Agent determines
that to do so would be in the best interests of the Placement Agent. In such event, the reasonable fees and disbursements of no more than
one such separate counsel will be paid by the Company. The Company will have the exclusive right to settle the claim or proceeding at
its sole expense provided that the Company obtains a full and unconditional release of any claims against the Placement Agent and the
Indemnified Persons from all liability on claims that are the subject matter of such proceeding and does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of Placement Agent or any Indemnified Person.
(C) The Company and the Placement Agent and any Indemnified
Persons agree to notify each other promptly of the assertion of any claim or the commencement of any action or proceeding relating to
a transaction contemplated by this engagement letter.
(D) If for any reason the foregoing indemnity is unavailable
to the Placement Agent or insufficient to hold the Placement Agent harmless, then the Company shall contribute to the amount paid or payable
by the Placement Agent as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not
only the relative benefits received by the Company on the one hand and the Placement Agent on the other, but also the relative fault of
the Company on the one hand and the Placement Agent on the other that resulted in such losses, claims, damages or liabilities, as well
as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees and expenses reasonably incurred in defending any litigation, proceeding
or other action or claim. Notwithstanding the provisions hereof, the Placement Agent’s share of the liability hereunder shall not
be in excess of the amount of fees actually received by Placement Agent under this engagement letter (excluding any amounts received as
reimbursement of expenses incurred by Placement Agent).
(E) These indemnification provisions shall remain in
full force and effect whether or not the transaction contemplated by this Agreement is completed and shall survive the termination of
this Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under this engagement
letter or otherwise.
10
Exhibit 5.1
Our ref MCR/747458-000003/31478137v3
Fangdd Network Group Ltd.
Room 1501, Shangmei Technology Building
No. 15 Dachong Road
Nanshan District, Shenzhen, 518072
People’s Republic of China
11 February 2025
Dear Sirs
Fangdd Network Group Ltd.
We have acted as Cayman Islands legal advisers
to Fangdd Network Group Ltd. (the “Company”) in connection with the Company’s registration statement on Form F-3
(Registration No. 333-267397), including all amendments or supplements thereto (the “Registration Statement”), filed
with the Securities and Exchange Commission (the “Commission”) under the U.S. Securities Act of 1933, as amended to date,
relating to securities to be issued and sold by the Company from time to time, and the prospectus supplement to the Registration Statement
dated 11 February 2025 (the “Prospectus Supplement”), relating to (a) issue of US$5,000,000 senior 5% original issue
discount convertible promissory notes (the “Convertible Notes”); (b) the issue of Class A ordinary shares of the Company
of a par value of US$0.0005625 each (the “Conversion Shares”) upon the exercise of the Convertible Notes; and (c) the
offering of an additional 164,610 Class A ordinary shares of the Company of a par value of US$0.0005625 each as commitment shares for
the issuance of the Convertible Notes (the “Commitment Shares”, and together with the Conversion Shares, the “Shares”)
in accordance with the Securities Purchase Agreement dated 10 February 2025 entered into between the Company and the relevant Investor
named therein (the “Securities Purchase Agreement”) and the Placement Agent Agreement dated 10 February 2025 entered
into between the Company and MM Global Securities, Inc. (the “Placement Agent Agreement”).
We are furnishing this opinion as Exhibit 5.1, 8.1 and 23.2 to the
Registration Statement.
For the purposes of this opinion, we have reviewed
only originals, copies or final drafts of the following documents:
| 1.1 | The certificate of incorporation of the Company dated 19 September 2013 and the certificate of incorporation
on change of name of the Company dated 11 October 2019. |
| 1.2 | The sixth amended and restated memorandum and articles of association adopted by special resolutions dated
11 July 2024 and effective on 12 August 2024 (the “Memorandum and Articles”). |
| 1.3 | The written resolutions of the board of directors of the Company dated 10 February 2025 (the “Board
Resolutions”). |
| 1.4 | A certificate of good standing with respect to the Company issued by the Registrar of Companies dated
5 February 2025 (the “Certificate of Good Standing”). |
| 1.5 | A certificate from a director of the Company a copy of which is attached to this opinion letter (the “Director’s
Certificate”). |
| 1.6 | The Registration Statement. |
| 1.7 | The Prospectus Supplement. |
| 1.8 | The Securities Purchase Agreement, the Convertible Notes and the Placement Agent Agreement (collectively,
the Transaction Documents”). |
The following opinions are given only as to, and
based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to
the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving these opinions we have relied (without
further verification) upon the completeness and accuracy, as of the date of this opinion letter, of the Director’s Certificate and the
Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:
| 2.1 | Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies
of, or in the final forms of, the originals. |
| 2.2 | All signatures, initials and seals are genuine. |
| 2.3 | The Placement Agent Agreement has been or will be authorised and duly executed and unconditionally delivered
by or on behalf of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of the
Cayman Islands). |
| 2.4 | The Placement Agent Agreement is, or will be, legal, valid, binding and enforceable against all relevant
parties in accordance with their terms under the laws of the State of New York and all other relevant laws (other than, with respect to
the Company, the laws of the Cayman Islands). |
| 2.5 | The Company has, or will have, sufficient authorized but unissued Shares in its authorized share capital
to enable the Company to issue the Conversion Shares upon exercise of the Convertible Notes and the Commitment Shares. |
| 2.6 | The Company will receive money or money’s worth in consideration for the issue of the Shares, and none
of such Shares will be issued for less than their par value. |
| 2.7 | The capacity, power, authority and legal right of all parties under all relevant laws and regulations
(other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally deliver
and perform their respective obligations under the Transaction Documents. |
| 2.8 | There is no contractual or other prohibition or restriction (other than as arising under Cayman Islands
law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Transaction Documents. |
| 2.9 | No monies paid to or for the account of any party under the Transaction Documents or any property received
or disposed of by any party to the Transaction Documents in each case in connection with the Transaction Documents or the consummation
of the transactions contemplated thereby represent or will represent proceeds of criminal conduct or criminal property or terrorist property
(as defined in the Proceeds of Crime Act (As Revised) and the Terrorism Act (As Revised), respectively). |
| 2.10 | At the time of the conversion of the Convertible Notes into the Conversion Shares and the issue of the
Commitment Shares in accordance with the terms and provisions of the Transaction Documents (the “Exercise”): |
| (a) | the laws of the Cayman Islands (including the Companies Act (As
Revised) of the Cayman Islands (the “Companies Act”) will not have changed in such way as to materially impact the issue
of the Shares; |
| (b) | the Company will have sufficient authorised but unallotted and unissued
Class A ordinary shares of the Company of a par value of US$0.0005625 each, in each case
to effect the Exercise in accordance with the terms and provisions of the Transaction Documents, then then effective memorandum and articles
of association of the Company and the Companies Act; |
| (c) | the Company will not have been struck off or placed in liquidation;
|
| (d) | the terms and provisions of the Convertible Notes relating to the
Exercise will not have been altered, amended or restated; and |
| (e) | the then effective memorandum and articles of association of the
Company will not contain anything which would or might affect the opinions set out below. |
| 2.11 | There is nothing under any law (other than the laws of the Cayman Islands) which would or might affect
the opinions set out below. |
| 2.12 | There is nothing contained in the minute book or corporate records of the Company (which we have not inspected)
which would or might affect the opinions set out below. |
| 2.13 | The issue of the Shares under the Transaction Documents will be of commercial benefit to the Company. |
| 2.14 | No invitation has been or will be made by or on behalf of the Company to the public in the Cayman Islands
to subscribe for any of the Shares. |
Based upon the foregoing and subject to the qualifications set out
below and having regard to such legal considerations as we deem relevant, we are of the opinion that:
| 3.1 | The Company has been duly incorporated as an exempted company with limited liability and is validly existing
and in good standing with the Registrar of Companies under the laws of the Cayman Islands. |
| 3.2 | The authorised share capital of the Company, is US$5,625,000 divided into 10,000,000,000 shares comprising
of (i) 5,000,000,000 Class A Ordinary Shares of a par value of US$0.0005625 each, (ii) 100,000 Class B Ordinary Shares of a par value
of US$0.0005625 each, (iii) 200,000 Class C Ordinary Shares of a par value of US$0.0005625 each, and (iv) 4,999,700,000 shares of a par
value of US$0.0005625 each of such class or classes (however designated) as the board of directors may determine in accordance with the
Memorandum and Articles. |
| 3.3 | The execution, issue, delivery and performance of the Transaction Documents, including the issue of the
(i) Conversion Shares and (ii) the Commitment Shares, as contemplated by the Registration Statement, have been authorised by and on behalf
of the Company and, upon the execution and unconditional delivery of the Transaction Documents by any director of the Company or Officer
(as defined in the Board Resolutions) for and on behalf of the Company, the Transaction Documents will have been duly executed, issued
and delivered on behalf of the Company and will constitute the legal, valid and binding obligations of the Company enforceable in accordance
with their terms. |
| 3.4 | The issue and allotment of the (i) Conversion Shares upon conversion of the Convertible Notes and (ii)
the Commitment Shares, have been duly authorised and when allotted, issued and paid for as contemplated in the Registration Statement
and the Transaction Documents, such Shares will be legally issued and allotted, fully paid and non-assessable. As a matter of Cayman law,
a share is only issued when it has been entered in the register of members (shareholders). |
| 3.5 | The statements under the caption “Taxation” in the prospectus forming part of the Registration
Statement and the Prospectus Supplement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material
respects and that such statements constitute our opinion. |
The opinions expressed above are subject to the
following qualifications:
| 4.1 | To maintain the Company in good standing under the laws of the Cayman Islands, annual filing fees must
be paid and returns made to the Registrar of Companies within the time frame prescribed by law. |
| 4.2 | The obligations assumed by the Company under the Transaction Documents will not necessarily be enforceable
in all circumstances in accordance with their terms. In particular: |
| (a) | enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts
or moratorium or other laws of general application relating to, protecting or affecting the rights of creditors and/or contributories; |
| (b) | enforcement may be limited by general principles of equity. For example, equitable remedies such as specific
performance may not be available, inter alia, where damages are considered to be an adequate remedy; |
| (c) | some claims may become barred under relevant statutes of limitation or may be or become subject to defences
of set off, counterclaim, estoppel and similar defences; |
| (d) | where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable
in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; |
| (e) | the courts of the Cayman Islands have jurisdiction to give judgment in the currency of the relevant obligation
and statutory rates of interest payable upon judgments will vary according to the currency of the judgment. If the Company becomes insolvent
and is made subject to a liquidation proceeding, the courts of the Cayman Islands will require all debts to be proved in a common currency,
which is likely to be the “functional currency” of the Company determined in accordance with applicable accounting principles.
Currency indemnity provisions have not been tested, so far as we are aware, in the courts of the Cayman Islands; |
| (f) | arrangements that constitute penalties will not be enforceable; |
| (g) | enforcement may be prevented by reason of fraud, coercion, duress, undue influence, misrepresentation,
public policy or mistake or limited by the doctrine of frustration of contracts; |
| (h) | provisions imposing confidentiality obligations may be overridden by compulsion of applicable law or the
requirements of legal and/or regulatory process; |
| (i) | the courts of the Cayman Islands may decline to exercise jurisdiction in relation to substantive proceedings
brought under or in relation to the Transaction Documents in matters where they determine that such proceedings may be tried in a more
appropriate forum; |
| (j) | we reserve our opinion as to the enforceability of the relevant provisions of the Transaction Documents
to the extent that they purport to grant exclusive jurisdiction as there may be circumstances in which the courts of the Cayman Islands
would accept jurisdiction notwithstanding such provisions; |
| (k) | a company cannot, by agreement or in its articles of association, restrict the exercise of a statutory
power and there is doubt as to the enforceability of any provision in the Transaction Documents whereby the Company covenants to restrict
the exercise of powers specifically given to it under the Companies Act, including, without limitation, the power to increase its authorised
share capital, amend its memorandum and articles of association or present a petition to a Cayman Islands court for an order to wind up
the Company; and |
| (l) | enforcement or performance of any provision in the Transaction Documents which relates, directly or indirectly,
to an interest in the Company constituting shares, voting rights or ultimate effective control over management in the Company may be prohibited
or restricted if any such relevant interest is or becomes subject to a restrictions notice issued under the Beneficial Ownership Transparency
Act (As Revised) (the “BOT Act”). |
| 4.3 | Applicable court fees will be payable in respect of the enforcement of the Transaction Documents. |
| 4.4 | We express no opinion as to the meaning, validity or effect of any references to foreign (i.e. non-Cayman
Islands) statutes, rules, regulations, codes, judicial authority or any other promulgations and any references to them in the Transaction
Documents. |
| 4.5 | In this opinion the phrase “non-assessable” means, with respect to ordinary shares of the Company,
that a shareholder shall not, solely by virtue of its status as a shareholder and in absence of a contractual arrangement, or an obligation
pursuant to the memorandum and articles of association, to the contrary, be liable for additional assessments or calls on the ordinary
shares by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship
or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). |
Except as specifically stated herein, we make
no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents
or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions, which are the subject of this
opinion.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the reference to our name under the headings “Enforceability of Civil Liabilities”
and “Legal Matters” and elsewhere in the prospectus included in the Registration Statement and the Prospectus Supplement. In
giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of
the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission thereunder.
Yours faithfully
/s/ Maples and Calder (Hong Kong) LLP
Maples and Calder (Hong Kong) LLP
Director’s Certificate
Exhibit 10.1
SECURITIES PURCHASE
AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of [__], 2025, between Fangdd
Network Group Ltd., a Cayman Islands exempted company with limited liability (the “Company”), and
the purchasers identified on the signature pages hereto (together with its successors and assigns, each, an “Investor”
and collectively the “Investors”).
Whereas,
subject to the terms and conditions set forth in this Agreement and pursuant to an effective Registration Statement under the Securities
Act (as such terms are defined below), the Company desires to issue and sell to each Investor, and each Investor desires to purchase
from the Company, securities of the Company as more fully described in this Agreement.
Now,
Therefore, In Consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and each Investor agrees as follows:
Article
I
DEFINITIONS
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not descriptive
and are otherwise defined herein have the meanings given to such terms in the Notes (as defined herein), and (b) the following terms
have the meanings set forth in this Section 1.1:
“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.7.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Alternative
Conversion Price” shall have the meaning defined in the Notes.
“Board of Directors”
means the board of directors of the Company.
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in New York, N.Y. are authorized or required by Laws
to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by Law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any Governmental Authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the New York, N.Y. are generally
are open for use by customers on such day.
“Memorandum and
Articles” means the Memorandum and Articles of Association of the Company, as amended.
“Closing”
means the Closing of the sale of Securities pursuant to this Agreement.
“Closing Date”
means the date on which the Closing occurs, which shall be the Trading Day on which all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all conditions precedent to (i) each Investor’s obligations to pay the Subscription
Amount as to the Closing and (ii) the Company’s obligations to deliver the Securities to be issued and sold, in each case, have
been satisfied or waived.
“Common Stock”
means the Class A ordinary shares of the Company, par value $0.0005625 per share.
“Common Stock
Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company Counsel”
means Cooley LLP and Maples and Calder (Hong Kong) LLP respectively.
“Company Intellectual
Property” means all Intellectual Property that is owned or purported to be owned or held for use by the Company.
“Company IP Agreements”
means all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to sue, permissions and
other contracts (including any right to receive or obligation to pay royalties or any other consideration), whether written or oral,
relating to Intellectual Property to which the Company is a party, beneficiary or otherwise bound.
“Company IP Registrations”
means all Company Intellectual Property that is subject to any issuance registration, application or other filing by, to or with any
Governmental Authority or authorized private registrar in any jurisdiction, including registered trademarks, domain names and copyrights,
issued and reissued patents and pending applications for any of the foregoing.
“Company Privacy
Policy” means each external or internal, past or present privacy policy or privacy or data security-related policy of Company,
as well as any representation, obligation or promise of Company under any contract, relating to: (i) the privacy of customers or users
of any Company Products, website, products or services operated by or on behalf of Company; and (ii) the collection, storage, hosting,
disclosure, transmission, transfer, disposal, other processing or security of any Customer Data or Personal Information, each as defined.
“Company Products”
means all proprietary products and services of the Company that are currently being, or at any time since the Company’s inception
have been, offered, licensed, sold, distributed, hosted, maintained, supported or otherwise provided or made available by or on behalf
of Company.
“Company Systems”
means all Software, and computer hardware, servers, networks, platforms, peripherals, data communication lines and other information
technology equipment and related systems, including any outsourced systems and processes, that are owned or used by Company in the conduct
of its business as currently conducted.
“Conversion Price”
shall have the meaning ascribed to such term in the Notes.
“Conversion Shares”
means the shares of Common Stock issuable upon conversion pursuant to the Notes.
“Customer Data”
means all data, text, content, information or other material uploaded or otherwise transmitted by Company’s customers to, or stored
by Company’s customers on or in Company Products or any service of Company.
“Disclosure Schedules”
refer to the Schedules attached to this Agreement.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York, N.Y. time) and before midnight
(New York, N.Y. time) on any Trading Day, 9:01 a.m. (New York, N.Y. time) on the Trading Day immediately following the date hereof, and
(ii) if this Agreement is signed between midnight (New York, N.Y. time) and 9:00 a.m. (New York, N.Y. time) on any Trading Day, no later
than 9:01 a.m. (New York, N.Y. time) on the date hereof.
“Equity Conditions”
has the meaning set forth in the Notes.
“Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(y).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options not to exceed 15% of the shares of Common Stock outstanding at any given
time to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority
of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services
rendered to the Company, (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued hereunder, (ii) any
warrants issued to the Placement Agent in connection with the transactions pursuant to this Agreement and any securities upon exercise
of such warrants so issued to the Placement Agent, (iii) other securities exercisable or exchangeable for or convertible into shares
of Common Stock issued and outstanding on the date of this Agreement (without regard to any vesting requirements), provided that
such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations or the contemplated
holding company merger) or to extend the term of such securities, (c) issuance of Class C ordinary shares of the Company, and/or (d)
securities issued pursuant to acquisitions or strategic transactions approved by a majority of the directors of the Company, provided
that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and which shall reasonably be
expected to provide to the Company additional benefits, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Governmental
Authority” means any federal, state, county, local, municipal or other government or political subdivision thereof, whether
domestic or foreign, and any agency, authority, commission, ministry, instrumentality, regulatory body, court, tribunal, arbitrator,
central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of
or pertaining to any such government.
“Indebtedness”
means (a) any liabilities of the Company including all Subsidiaries for borrowed money or amounts (other than trade accounts payable
incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations of the Company including
all Subsidiaries in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the footnotes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; (c) the present value of any lease payments of the Company including all Subsidiaries
due under leases required to be capitalized in accordance with GAAP; and (d) transactions relating to the sale of any existing or future
sales of accounts receivables including merchant cash advances or sales of future accounts receivable of the Company including all Subsidiaries;
“Intellectual
Property” means all intellectual property and industrial property rights and assets, and all rights, interests and
protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, pursuant
to the Laws of any jurisdiction throughout the world, whether registered or unregistered, including any and all: (a) trademarks,
service marks, trade names, brand names, logos, trade dress, design rights and other similar designations of source, sponsorship,
association or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications
and renewals for, any of the foregoing; (b) internet domain names, whether or not trademarks, registered in any top-level domain by
any authorized private registrar or Governmental Authority, web addresses, web pages, websites and related content, social media
accounts, including but not limited to X (formerly Twitter) and Facebook and the content found thereon and related thereto, and
URLs; (c) works of authorship, expressions, designs and design registrations, whether or not copyrightable, including copyrights,
author, performer, moral and neighboring rights, and all registrations, applications for registration and renewals of such
copyrights; (d) inventions, discoveries, trade secrets, business and technical information and know-how, data, databases, and data
collections, and confidential and proprietary information and all rights therein; (e) patents (including all reissues, divisionals,
provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions thereof), patent
applications, and other patent rights and any other Governmental Authority-issued indicia of invention ownership (including
inventor’s certificates, petty patents and patent utility models); and (f ) Software.
“Investor Party”
shall have the meaning ascribed to such term in Section 4.10.
“Key Executives”
means all of the Company’s officers and directors as of the date hereof.
“Laws”
with respect to a Person means any federal, state, local, municipal, or other laws, common law, statutes, constitutions, ordinances,
rules, regulations, codes, orders, or legally enforceable requirements enacted, issued, adopted, promulgated, enforced, ordered, or applied
by any Governmental Authority applicable to such Person or any of its Subsidiaries, including its respective business and operations.
“Lead Investor”
means the Investor indicated as “Lead Investor” on its respective signature page hereto.
“Legend Removal
Date” shall have the meaning ascribed to such term in Section 4.1(b).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material Adverse
Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material Permits”
shall have the meaning ascribed to such term in Section 3.1(n).
“Maximum Rate”
shall have the meaning ascribed to such term in Section 5.17.
“Nason Yeager”
means Nason Yeager Gerson Harris & Fumero, P.A., with offices located at 3001 PGA Boulevard, Suite 305, Palm Beach Gardens, Florida
33410.
“Note”
and “Notes” means the Senior Convertible Notes due, subject to the terms therein, nine months from the date
of issuance, issued by the Company to each Investor hereunder, in the form of Exhibit A attached hereto.
“Open Source
Software” means any Software or Intellectual Property that is distributed as “free” or “open source”
or pursuant to any license identified as an “open source license” by the Open Source Initiative (www.opensource.org/licenses)
or other license that substantially conforms to the Open Source Definition (http://opensource.org/osd) including but not limited to the
GNU General Public License (GPL), GNU Lesser General Public License (LGPL), GNU Affero General Public License (AGPL), MIT License (MIT),
Apache License, Artistic License and BSD Licenses.
“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, exempted company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Personal Information”
means: (i) a natural person’s name, street address, telephone number, email address, photograph, social security number or tax
identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number,
biometric identifiers or any other piece of information that allows the identification of or contact with a natural person and for greater
certainty includes all such information with respect to employees, (ii) data collected from an IP address, unique device identifier or
MAC address, web beacon, pixel tag, ad tag, cookie, local storage object, software, or by any other means, or from a particular computer,
web browser, mobile device, or other device or application, where such data (a) is collected from a particular computer or device regarding
online activities; or (b) is or may be used to identify or contact an individual or device or application, to predict or infer the preferences,
interests, or other characteristics of the device or application or of a user of such device or application, or to target advertisements
or other content to a device or application, or to a user of such device or application, and (iii) any information that is associated,
directly or indirectly (by, for example, records linked via unique keys), to any of the foregoing. Personal Information also includes
any information not listed in (i), (ii) or (iii) above if such information is defined as “personal data”, “personally
identifiable information”, “individually identifiable health information,” “protected health information,”
or “personal information” under any Law.
“Placement Agent”
means MM Global Securities, Inc.
“PRC”
means the People’s Republic of China.
“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.12(b).
“Principal Amount”
means, as to each Investor, the amounts set forth below such Investor’s signature block on the signature pages hereto next to the
heading “Principal Amount,” in United States Dollars.
“Principal Market”
means The Nasdaq Capital Market.
“Principal Market
Rules” means the rules and regulations of the Principal Market.
“Pro Rata Portion”
has the meaning set forth in Section 4.12.
“Prospectus”
means the final base prospectus filed for the Registration Statement.
“Prospectus Supplement”
means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the SEC and delivered by the
Company to each Investor at the Closing.
“Public Information
Failure” shall have the meaning ascribed to such term in Section 4.3(b).
“Public Information
Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).
“Registration
Statement” means the effective registration statement on Form F-3 (File No. 333-267397) covering the offer, sale and issuance
of the Shares and Underlying Shares.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).
“Required Holders”
means (i) prior to the Closing Date, each Investor and (ii) on or after the Closing Date, holders of at least 66.0% of the aggregate
Principal Amount of Notes then outstanding.
“Required
Minimum” means, as of any date, the 225% of the maximum aggregate number of shares of Common Stock then issued or
potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon conversion
in full of all Notes (including Underlying Shares issuable as payment of interest on the Notes), ignoring any conversion or exercise
limits set forth therein (including, without limitation, the Floor Price or the Event Market Price (each as defined in the Notes)),
and assuming that the Conversion Price is at all times on and after the date of determination equal to the Floor Price.
“Rule 144”
means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
“Schedule”
refers to the Disclosure Schedules.
“SEC”
means the United States Securities and Exchange Commission.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Notes, the Shares and the Underlying Shares.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shareholder
Approval” means such approval as may be required by the Principal Market Rules and/or applicable Law from the shareholders
of the Company with respect to the transactions contemplated by the Transaction Documents, including the issuance of all of the Shares
and Underlying Shares underlying the Securities in excess of 19.99% of the issued and outstanding Common Stock on the Closing Date.
“Shares”
means shares of Common Stock issuable to the Investors at the Closing in accordance with Section 2.2(a)(v) of this Agreement; provided,
however, that each Investor may, at its discretion, elect to receive pre-funded warrants in lieu of some or all of the applicable
Shares in form and substance acceptable to the Investor, in which event references to “Shares” hereunder shall be deemed
to include such pre-funded warrants and the shares of Common Stock issuable thereunder.
“Software”
means any and all computer software and code, including all new versions, updates, revisions, improvements and modifications thereof,
whether in source code, object code, or executable code format, including systems software, application software (including mobile apps),
firmware, middleware, programming tools, scripts, routines, interfaces, architecture, schematics, records, libraries, and data, databases
and data collections, and all related specifications and documentation, including developer notes, comments and annotations, user manuals
and training materials relating to any of the foregoing.
“Subscription
Amount” means, as to each Investor, the aggregate amount to be paid for each Note and Shares purchased hereunder as specified
below the Investor’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds, which Subscription Amount shall be 95% of the Principal Amount.
“Subsequent Financing”
shall have the meaning ascribed to such term in Section 4.12(a).
“Subsequent Financing
Notice” shall have the meaning ascribed to such term in Section 4.12(b).
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“to the Knowledge of
the Company,” “to the Company’s Knowledge” and similar words and phrases relating to the Company’s “Knowledge”
means the actual knowledge of any of the Key Executives of the Company upon reasonable investigation.
“Trading Day”
means a day on which the principal Trading Market is open for trading.
“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the NYSE American, the New York Stock Exchange the
OTCQX, the OTCQB or the Pink Open Market (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Notes, all exhibits and schedules thereto and hereto and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
“Transfer Agent”
means VStock Transfer LLC, the current transfer agent of the Company, and any successor transfer agent of the Company.
“Underlying Shares”
means the Conversion Shares and shares of Common Stock otherwise issued and issuable pursuant to the terms of the Notes, including without
limitation, shares of Common Stock issued and issuable in lieu of the cash payment of interest on each of the Notes in accordance with
the terms of each of the Notes, in each case without respect to any limitation or restriction on the conversion of the Notes.
“Variable Rate
Transaction” shall have the meaning ascribed to such term in Section 4.13(a).
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York, N.Y. time) to 4:02 p.m. (New York, N.Y. time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Investors and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the
Company.
Article
II
PURCHASE AND SALE
2.1
Closing.
(a) Closing. On the
Closing Date, provided that the Equity Conditions shall be satisfied as of such date, and upon the terms and subject to the
conditions set forth herein, substantially concurrent with or within one Trading Day after the execution and delivery of this
Agreement by the parties hereto, the Company agrees to sell, and each Investor, severally and not jointly, agrees to purchase, an
aggregate of $5,000,000 of Principal Amount of the Notes and the Shares. Each Investor shall deliver to the Company, via wire
transfer, immediately available funds equal to such Investor’s Subscription Amount as to the Closing as set forth on the
signature page hereto executed by the Investor, and the Company shall deliver to the Investor the Investor’s Note and Shares,
as determined pursuant to Section 2.2(a)(v), and the Company and each Investor shall deliver the other items set forth in Section
2.2 deliverable at the Closing. Within two days of the satisfaction of the covenants and conditions set forth in Sections 2.2 and
2.3 and subject to the Equity Conditions, the Closing shall occur at the offices of Nason Yeager or such other location as the
parties shall mutually agree, or shall take place remotely by electronic transfer of applicable Transaction Documents.
(b) With respect to
the Closing, the obligation of each Investor to purchase the Securities shall be subject to an effective Registration Statement registering
the offer, sale and issuance of the Shares and Underlying Shares to be issued or underlying the Notes issuable in connection with the
Closing.
2.2
Deliveries.
(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Investor the following:
(i) this Agreement duly executed by the Company;
(ii) a legal
opinion of Company Counsel each dated as of the applicable Closing Date, in a form reasonably acceptable to the Investor;
(iii)
the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act);
(iv)
a Note registered in the name of the Investor with the Principal Amount reflected on to the Investor’s signature page;
(v) a number of Shares determined by dividing 2% of the Principal Amount of the applicable Note issued in the Closing by the last
sale price of the Common Stock on the Trading Day immediately prior to the Closing Date, registered in the name of the Investor, together
with a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver the Shares free of any restrictive
legend on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”),
or at the Company’s election, an amount in cash equal to 2% of the Principal Amount of the applicable Note;
(vi)
the Company shall have provided the Investor with the Company’s wire instructions, on Company letterhead and executed
by the Chief Executive Officer or Chief Financial Officer;
(vii)
a letter executed by the Company and the Transfer Agent reserving the Required Minimum for the benefit of the Investor;
(viii)
an officer’s certificate certifying that the representations and warranties of the Company in this Agreement are true
and correct as of the applicable Closing Date as though originally made at that time (except for representations and warranties that
speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied
and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the
Company at or prior to the applicable Closing Date under any Transaction Documents and no Event of Default has occurred;
(ix)
a certificate of good standing of the Company issued by the Registrar of Companies of the Cayman Islands, as of a date not
less than 10 days prior to each applicable Closing Date;
(x)
a copy of the Memorandum and Articles (or such equivalent organizational document) of the Company;
(xi) an
officer’s certificate, in the form acceptable to the Investor, executed by an officer of the Company and dated as of the
applicable Closing Date, as to the resolutions adopted by the Company’s Board of Directors authorizing the transactions
contemplated hereby in a form reasonably acceptable to the Investor;
(xii)
a letter from the Transfer Agent certifying the number of Common Stock outstanding on the applicable Closing Date immediately
prior to the applicable Closing;
(xiii)
a copy of the application for the listing of the Shares and Underlying Shares on the Principal Market; and
(xiv)
a copy of the letter from the Company’s Cayman Islands counsel to the Principal Market confirming that the Company is
not required to obtain Shareholder Approval with respect to this Agreement and the transactions contemplated hereby pursuant to the laws
of the Cayman Islands and the Rules of the Principal Market.
(b) On
or prior to the applicable Closing Date, each Investor shall deliver or cause to be delivered to the Company, the following:
(i)
this Agreement duly executed by the Investor; and
(ii) the
Investor’s Subscription Amount by wire transfer to the account specified in writing by the Company.
2.3
Closing Conditions.
(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Investor contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);
(ii) all obligations,
covenants and agreements of the Investor is required to be performed at or prior to the Closing Date shall have been performed; and
(iii)
the delivery by the Investor of the items set forth in Section 2.2(b) of this Agreement.
(b) The obligations
of each Investor hereunder in connection with the Closing are subject to the following conditions being met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been
performed;
(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) from the date hereof to the Closing Date, as applicable, the SEC has not instituted a preliminary inquiry or issued an Order
of Investigation, trading in the Common Stock shall not have been suspended by the SEC or the Company’s principal Trading Market
and, at any time prior to the applicable Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been
suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on
any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Investor,
makes it impracticable or inadvisable to purchase the Securities at each applicable Closing.
(vi)
the Company shall have filed with the Principal Market an application for the listing of the Shares and Underlying Shares
on the Principal Market, a copy of which shall have been provided to the Investor, and the Principal Market shall have raised no objection
with respect thereto;
(vii)
no Laws been enacted, entered, promulgated or endorsed by any court of competent jurisdiction or Governmental Authority that
prohibits the consummation of any of the transactions contemplated hereby; and
(viii)
the Equity Conditions (as defined in the Note) shall have been met.
Article
III
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each
Investor which representations shall be true and correct on each respective Closing Date and shall apply to the Company and its Subsidiaries
except where apparent from the context. Any reference to the Company and its Subsidiaries shall not be construed to modify the prior
sentence:
(a)
Subsidiaries. All of the direct and indirect significant subsidiaries of the Company are set forth on Schedule 3.1(a). The
Company owns, directly or indirectly, all of the capital stock, shares or other equity interests of each Subsidiary, except as disclosed
in Schedule 3.1(a), free and clear of any Liens, except for Liens created under the Transaction Documents, and all of the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries
or any of them in the Transaction Documents shall be disregarded. The contractual arrangements pursuant to which the Company operates
its business through variable interest entities (as such term is described in the Company’s SEC Reports, as defined below) (“VIEs”)
in the PRC and any other applicable jurisdiction are valid and binding obligations on the parties thereto, and sufficient to operate
the Company’s business as presently conducted and contemplated in accordance with applicable Laws, and to the Company’s Knowledge,
there has been no breach or threatened breach of any such contractual arrangement. For purposes of this Agreement, the term “Subsidiaries”
shall be deemed to include VIEs.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity incorporated, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation, registration or organization, with the requisite power and authority to own
and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in
violation nor default of any of the provisions of its respective certificate or articles of incorporation, memorandum and articles
of association, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in
good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations,
assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a
material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under
any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Action has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders in
connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other Laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable Laws.
(d) No
Conflicts.
(i)
The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is
a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not
and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation
of any Law to which the Company or a Subsidiary is subject (including federal and state securities Laws), or by which any property or
asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have
or reasonably be expected to result in a Material Adverse Effect.
(ii) Neither the
Company nor any of its Subsidiaries is engaged in, directly or indirectly, and none of the Company’s nor any
Subsidiary’s operations, activities or assets entail or involve, directly or indirectly, a “covered activity”
within the meaning of that certain Final Rule adopted by the United Stated Department of Treasury pursuant to Executive Order 14105
of August 9, 2023 “Addressing United States Investments in Certain National Security Technologies and Products in Countries of
Concern,” (31 CFR Part 850) (the “Final Rule”), such that the transactions contemplated by this
Agreement and the other Transaction Documents do not and will not constitute a “prohibited transaction” or a
“notifiable transaction” within the meaning of the Final Rule. Neither the Company nor any Subsidiary has any present
intention or plan to engage in any such covered activity, and the Company covenants and agrees not to, and to cause its Subsidiaries
not to, engage in any such covered activity.
(e) Filings, Consents
and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make
any filing or registration with, any court or other federal, state, local or other Governmental Authority or other Person in
connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings
required pursuant to Section 4.6 of this Agreement, (ii) the filings with the SEC pursuant to or in connection with this Agreement
and the other Transaction Documents, and (iii) the notice and/or application(s) to each applicable Trading Market for the issuance
and sale of the Securities and the listing of the Conversion Shares and the Shares for trading thereon in the time and manner
required thereby (collectively, the “Required Approvals”). The Company is not and will not be required to
obtain Shareholder Approval in connection with this Agreement and the other Transaction Documents and the transactions contemplated
hereby and thereby.
(f)
Issuance of the Securities; Registration.
(i)
The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents or by Laws. The Shares and Underlying Shares, when issued in accordance with the
terms of the Transaction Documents, will be validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the
Company other than, with respect to the Notes, restrictions on transfer provided for in the Transaction Documents or by Laws. The Company
has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least
equal to the Required Minimum on the date hereof.
(ii) The
Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which
Registration Statement became effective on September 29, 2022, including the Prospectus, and such amendments and supplements thereto
as may have been required to the date of this Agreement. The Company was at the time of the filing of the Registration Statement
eligible to use Form F-3. The Company is eligible to use Form F-3 under the Securities Act and it meets the transaction requirements
with respect to the aggregate market value of securities being sold pursuant to this offering and during the 12 calendar months
prior to this offering, as set forth in all applicable General Instructions to Form F-3. The Registration Statement is effective
under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus and Prospectus Supplement has been issued by the SEC and no proceedings for that purpose have
been instituted or, to the Knowledge of the Company, are threatened by the SEC. The Registration Statement registers the offer, sale
and issuance of all Shares and Underlying Shares contemplated hereby and by the Notes. The Registration Statement has a sufficient
quantity of registered and unsold securities available under it to cover the offer, sale and issuance of all Shares and Underlying
Shares contemplated hereby and by the Notes. The Company, if required by the rules and regulations of the SEC, shall file the
Prospectus Supplement with the SEC pursuant to Rule 424(b) in connection with the transactions contemplated by this Agreement and
the other Transaction Documents. At the time the Registration Statement and any amendments thereto became effective, at the date of
this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all
material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the
Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued
and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not
and will not contain an untrue statement of a material fact or 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. All references to amendments or
supplements in this Section 3.1(f) include the Prospectus Supplement.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include
the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. The
Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than as
disclosed in Schedule 3.1(g) or pursuant to the exercise of employee stock options under the Company’s stock option plans, the
issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the
conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under
the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the
Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares
of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary, other than as disclosed in the Schedule 3.1(g). The
issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other
securities to any Person (other than the Investors). There are no outstanding securities or instruments of the Company or any
Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an
issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any
Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary.
The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or
agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and
non-assessable, have been issued in compliance with all federal and state securities Laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There
are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to
which the Company is a party or, to the Knowledge of the Company, between or among any of the Company’s shareholders other
than as disclosed in Schedule 3.1(g).
(h) SEC Reports;
Financial Statements. Except as set forth on Schedule 3.1(h), the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by Law or
regulation to file such material) together with the Prospectus and Prospectus Supplement (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC
Reports”) on a timely basis or has received or obtained a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The
Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC
with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or the footnotes thereto and
except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.
(i) Material Changes;
Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the
SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed
in filings made with the SEC, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made
any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the SEC any request for
confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth on
Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected
to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations,
assets or financial condition, that would be required to be disclosed by the Company under applicable securities Laws at the time
this representation is made or deemed made that has not been publicly disclosed at least one Trading Day prior to the date that this
representation is made.
(j)
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the Knowledge
of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any Governmental
Authority (collectively, an “Action”) that could be reasonably expected to have a Material Adverse Effect.
None of the Actions set forth on Schedule 3.1(j), (i) adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or liability under federal or state securities Laws or a claim of breach of fiduciary
duty. There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving
the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(k) Labor
Relations. No 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. None of the Company’s or its
Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such
Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and
its Subsidiaries believe that their relationships with their employees are good. To the Knowledge of the Company, no executive
officer of the Company or any 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 non-competition 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 Subsidiaries to any liability with respect to any of the foregoing matters. The Company and
its Subsidiaries are in compliance with all U.S. federal, state, local and foreign Laws 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. To the Company’s Knowledge:
(i)
no allegations of sexual harassment, sexual misconduct or discrimination, whether such discrimination arises from race, ethnic
background, sex, gender status, age or otherwise (“Misconduct”) have been made involving any current or former
director, officer, employee or independent contractor of the Company or any of its Subsidiaries; and
(ii) neither
the Company nor any of its Subsidiaries have entered into any settlement agreements related to allegations of Misconduct by any
current or former director, officer, employee, or independent contractor of the Company or any of its Subsidiaries.
(l)
Compliance.
(i)
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not
been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether
or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or
other Governmental Authority or (iii) is or has been in violation of any Law of any Governmental Authority, including without limitation
all foreign, federal, state and local Laws relating to taxes, insurance, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.
(ii) Without
limiting the generality of the foregoing, the Company has maintained, and has implemented reasonable policies, measures and
infrastructure to maintain, compliance with Laws related to the administration or involvement in the provision of Company Products
and the Company’s operations and activities generally, and the Company and its Subsidiaries are in compliance with all Laws
applicable thereto and have not otherwise experienced and have no Knowledge of any pending, threatened or potential development with
respect to such Laws or the Governmental Authorities that enact, promulgate and enforce them, that has resulted in or could be
reasonably be expected to result in any Material Adverse Effect, including without limitation: (A) the Telecommunications
Regulations of the PRC, the Internet Information Services Administrative Measures, the Administrative Provisions on Mobile Internet
Application Information Services, the Several Provisions on Regulating the Market Order of Internet Information Services, the
Decisions on Preserving Internet Security, the Law of the PRC on Administration of Urban Real Estate, the Management Methods on the
Sale of Commercial Houses, the Administrative Measures for Real Estate Brokerage, and all other PRC Laws relating or incident to the
conduct of business in the telecommunications and real estate industries in China and other jurisdictions in which the Company
operates or is present (including through the Internet), (B) the Laws promulgated or enforced by the PRC’s National Financial
Regulatory Administration, China Securities Regulatory Commission, Cybersecurity Review Office, State Administration of Foreign
Exchange, any and all predecessor Governmental Authorities of any of the foregoing and all other Governmental Authorities of the
PRC, (C) the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors and the Anti-Monopoly Law of the
PRC, the PRC Foreign Investment Law and the Holding Foreign Companies Accountable Act, and (D) the PRC Labor Law and the Labor
Contract Law of the PRC. This Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby do
not and will not result in any violation or non-compliance of any Laws applicable to the Company or any Subsidiary. The
Company’s corporate structure is not outlawed, disallowed, or otherwise regulated in the PRC or any other jurisdiction in
which the Company operates or is present in a manner which could be reasonably expected to have a Material Adverse Effect.
(m) Environmental
Laws. The Company and its 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.
(n)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in
the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse
Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of Actions
relating to the revocation or modification of any Material Permit.
(o) Title to
Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and
good and marketable title in all personal property owned by them that is material to the business of the Company and the
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 Subsidiaries and
(ii) Liens for the payment of federal, state 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 Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and
the Subsidiaries are in compliance. The Company’s assets are and will be sufficient to conduct its operations as presently
conducted and as proposed to be conducted as of the date hereof and as of each appliable Closing Date.
(p) Intellectual
Property. Schedule 3.1(p) lists all (i) Company IP Registrations and (ii) Company Intellectual Property, including Software,
that is not registered but that is material to the Company’s business or operations. All required filings and fees related to
the Company IP Registrations have been timely filed with and paid to the relevant Governmental Authorities and authorized
registrars, and all Company IP Registrations are otherwise in good standing. The Company has made available to each Investor true
and complete copies of file histories, documents, certificates, office actions, correspondence and other materials related to all
Company IP Registrations. There are no actions that must be taken by the Company (or any third party on the Company’s behalf)
prior to the Closing Date, including the payment of any registration, maintenance or renewal fees or the filing of any responses to
office actions, documents, applications or certificates for the purposes of obtaining, maintaining, perfecting, preserving or
renewing any Company IP Registrations. To the Company’s Knowledge, there are no facts or circumstances that would render any
Company IP Registrations invalid or unenforceable. To the Company’s Knowledge, there has been no misrepresentation or failure
to disclose, any fact or circumstances in any application for any Company IP Registrations that would constitute fraud or a
misrepresentation with respect to such application or that would otherwise affect the validity or enforceability of any Company IP
Registrations. The Company has not claimed a particular status, including “small entity status,” in the application for
any Company IP Registrations, which claim of status was not at the time made, or which has since become, inaccurate or false or that
will no longer be true and accurate as a result of the Closing.
(i)
Schedule 3.1(p)(i) lists all Company IP Agreements that are material to the Company’s business as it presently is being
conducted. The Company has made available to each Investor true and complete copies of all such Company IP Agreements, including all
modifications, amendments and supplements thereto and waivers thereunder. Each Company IP Agreement is valid and binding on the Company
in accordance with its terms and is in full force and effect. Neither the Company, nor to the Company’s Knowledge any other party
thereto, is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice
of breach or default of or any intention to terminate, any Company IP Agreement.
(ii) The Company
is the sole and exclusive legal and beneficial, and with respect to the Company IP Registrations, record owner of all right, title
and interest in and to the Company Intellectual Property, or has the valid right to use all other Intellectual Property used in or
necessary for the conduct of the Company’s current business or operations, in each case, free and clear of Liens.
(iii) The Company
has entered into binding, written agreements with every current and former employees since its inception, and with every current and
former independent contractor since its inception, whereby such employees and independent contractors (i) assign to the Company any
ownership interest and right they may have in the Company Intellectual Property; and (ii) acknowledge the Company’s exclusive
ownership of all Company Intellectual Property. The Company has provided each Investor with true and complete copies of all such
agreements. For the purposes of this Section 3.1(p)(iii), current employee or independent contractor includes any Person who or
which has performed services as an employee or independent contractor for the Company or any Subsidiaries during the 24 months prior
to the Closing Date.
(iv)
The consummation of the transactions contemplated hereunder will not result in the loss or impairment of or payment of any
additional amounts with respect to, nor require the consent of any other Person in respect of, the Company’s right to own, use
or hold for use any Intellectual Property as owned, used or held for use in the conduct of the Company’s business or operations
as currently conducted.
(v) The
Company’s rights in the Company Intellectual Property are, and, since inception, have been, valid, subsisting and enforceable.
The Company has taken all reasonable steps to maintain the Company Intellectual Property and to protect and preserve the
confidentiality of all confidential information and trade secrets included in the Company Intellectual Property, including requiring
all Persons having access thereto to execute written non-disclosure agreements.
(vi)
The conduct of the Company’s business as currently and formerly conducted, and the Company Products and related processes
and infrastructure, have not infringed, misappropriated, diluted or otherwise violated, and do not and will not infringe, dilute, misappropriate
or otherwise violate the Intellectual Property or other rights of any Person. To the Company’s Knowledge, no Person has infringed,
misappropriated, diluted or otherwise violated, or is currently infringing, misappropriating, diluting or otherwise violating, any Company
Intellectual Property.
(vii)
There are no Actions (including any oppositions, interferences or re-examinations) settled, pending or threatened (including
in the form of offers to obtain a license or inquiries regarding the need to obtain a license): (i) alleging any infringement, misappropriation,
dilution or violation of the Intellectual Property of any Person by the Company; (ii) challenging the validity, enforceability, registrability
or ownership of any Company Intellectual Property or the Company’s rights with respect to any Company Intellectual Property; or
(iii) by the Company or any other Person alleging any infringement, misappropriation, dilution or violation by any Person of the Company
Intellectual Property. The Company is not subject to any outstanding or prospective governmental order (including any motion or petition
therefor) that does or would restrict or impair the use of any Company Intellectual Property.
(q) Company Products;
Proprietary Software.
(i)
Schedule 3.1(q)(i) contains a correct, current and complete list of all currently distributed Company Products, identifying
for each item all previous major releases. Since inception, as used in this Agreement, the term “major release” means any
change embodied by the phrase “Version 1 to Version 2” etc. in contrast to changes labeled “Version
1.1 to Version 1.2” or “8.3.29” etc.
(ii) For
all of the Company Products identified in Schedule 3.1(q)(ii), Schedule 3.1(q)(ii) identifies all Company Intellectual Property and
all Intellectual Property licensed to the Company under a Company IP Agreement and that are (A) used in the development,
maintenance, use or support of such Company Product, (B) incorporated in or distributed or licensed with such Company Product in any
manner for use in connection with such Company Product, or (C) used to deliver, host or otherwise provide services with respect to
such Company Product, and in each case (except for non-customized, off-the-shelf Software that is commercially available pursuant to
shrink-wrap, click-through or other standard form agreements or with an annual license fee or replacement value of less than
$10,000), the Company IP Agreement relating to Company’s use of such item.
(iii) All Company
Products are fully transferable, alienable or licensable by the Company without restriction and without payment of any kind to any
third party. The Company has not transferred ownership of, or granted any exclusive license of (or exclusive right to use), or
authorized the retention of any exclusive rights to use or joint ownership of, any Company Product or any related Software or other
Intellectual Property to any other Person. The Company is not subject to any Company IP Agreement (other than with respect to
current customers pursuant to the Company’s standard form of customer agreement entered into in the ordinary course of
business) that includes any unperformed obligations that require the Company to develop any Software or other Intellectual Property,
including any enhancements or customizations that are part of or used in connection with the Company Products (collectively,
“Customizations”), and the Company owns and will continue to own all right, title and interest in and to
all such Customizations developed by the Company.
(iv)
Schedule 3.1(q)(iv) identifies all Company Intellectual Property that was developed under a contract with a Governmental Authority
using any government or university funding, resources or staff, and identifies all Company Intellectual Property to which any government
entity or university has any rights (other than non-exclusive license rights granted to current customers to use Company Products pursuant
to the Company’s form of customer agreement entered into and as modified in the ordinary course of business).
(r)
Source Code.
(i)
The Company is in actual possession of and has exclusive control over a complete and correct copy of the source code for all
Software included in the Company Intellectual Property.
(ii) Except for
application programming interfaces and other interface code that is generally available to customers, the Company has not disclosed,
delivered, licensed or otherwise made available, and does not have a duty or obligation (whether present, contingent or otherwise)
to disclose, deliver, license or otherwise make available, any source code for any Company Product to any escrow agent or any other
Person, other than an independent contractor or consultant of the Company pursuant to a valid and enforceable written agreement
prohibiting use or disclosure except in the performance of services for the Company. Without limiting the foregoing, neither the
execution of this Agreement nor the consummation of any of the transactions contemplated by this Agreement will, or would reasonably
be expected to, result in the release from escrow or other delivery to any Person of any source code for any Company Product.
(iii)
As of the date hereof, there has been no unauthorized theft, reverse engineering, decompiling, disassembling or other unauthorized
disclosure of or access to any source code for any Company Product.
(s) Open Source
Software.
(i)
Schedule 3.1(s)(i) sets forth a true and complete list of each item of open source software that is or has been used by or
on behalf Company, in the development of or that is incorporated into, combined with, linked with, distributed with, provided to any
Person as a service, provided via a network as a service or application, or otherwise made available with, any Company Product, and for
each such item of Open Source Software, (A) the applicable Company Product, and (B) the name and version number of the applicable license
agreement.
(ii) The Company
has complied in all material respects with all notice, attribution and other requirements of each license applicable to the Open
Source Software required to be disclosed in Schedule 3.1(s)(ii).
(iii) The Company
has not used any Open Source Software in a manner that does, will or would reasonably be expected to, require the Company or any
other Person to (A) disclose or distribute the source code of the Software of any Company Product, (B) license or otherwise offer or
distribute any Company Product on a royalty-free basis, or (C) grant any patent license, non-assertion covenant or, rights to
modify, make derivative works based on, decompile, disassemble or reverse engineer or any other rights to any Company Product or
Company Intellectual Property.
(t)
Conformance with Specifications; Defects; Malicious Code.
(i)
All Company Products conform in all material respects to all applicable warranties in all contracts with customers.
(ii) To
the Company’s Knowledge, none of the Company Products contain any bug, defect or error that materially adversely affects the
functionality or performance of such Company Product against its applicable specifications.
(iii)
To the Company’s Knowledge, none of the Company Products, and no other Software used in the provision of any Company
Product or otherwise in the operation of its business, contains any “time bomb,” “Trojan horse,”
“back door,” “worm,” virus, malware, spyware, or other device or code (“Malicious Code”)
designed or intended to, or that could reasonably be expected to, (A) disrupt, disable, harm or otherwise impair the normal and authorized
operation of, or provide unauthorized access to, any computer system, hardware, firmware, network or device on which any Company Product
or such other Software is installed, stored or used, or (B) damage, destroy or prevent the access to or use of any data or file without
the user’s consent. The Company has taken reasonable steps designed to prevent the introduction of Malicious Code into the Company
Products.
(u) IT Systems.
(i)
To the Company’s Knowledge, the Company Systems are reasonably sufficient for the needs of the Company’s business
as currently conducted, including as to capacity, scalability, and ability to process current and anticipated peak volumes in a timely
manner. The Company Systems are in sufficiently good working condition to perform all information technology operations and include sufficient
licensed capacity (whether in terms of authorized sites, units, users, seats or otherwise) for all Software, in each case as necessary
for the conduct of the Company’s business as currently conducted.
(ii) Since
its inception, there has been no unauthorized access, use, intrusion or breach of security, or material failure, breakdown,
performance reduction or other adverse event affecting any Company Systems, that has resulted in or could reasonably be expected to
result in any: (A) substantial disruption of or interruption in or to the use of such Company Systems or the conduct of the
Company’s business; (B) material loss, destruction, damage or harm of or to Company or its operations, personnel, property or
other assets; or (C) material liability of any kind to the Company. The Company has taken reasonable actions, consistent with
applicable industry best practices in the Company’s industry, to protect the integrity and security of the Company Systems and
the data and other information stored thereon.
(iii)
The Company maintains commercially reasonable back-up and data recovery, disaster recovery and business continuity plans,
procedures and facilities, has acted in material compliance therewith, and has tested such plans and procedures on a regular basis, and
such plans and procedures have been proven effective in all material respects upon such testing.
(v) Data Privacy and
Protection; Cybersecurity.
(i) The Company
has complied with all Company Privacy Policies and with all applicable Laws and contracts to which it is a party relating to: (A)
the privacy of customers or users of the Company Products, any website, product or service operated by or on behalf of the Company;
and (B) the collection, storage, hosting, disclosure, transmission, transfer, disposal, other processing or security of any Customer
Data or Personal Information by the Company or by third parties having authorized access to the records of the Company, with respect
to each of (A) and (B) in all material respects. No claims have been asserted or, are threatened against the Company alleging a
violation of any person’s privacy, confidentiality or other rights under any Company Privacy Policy, under any contract, or
under any Law relating to any Customer Data or Personal Information. With respect to any Customer Data and Personal Information, the
Company has taken commercially reasonable measures (including implementing and monitoring compliance with respect to technical and
physical security) designed to safeguard such data against loss and against unauthorized access, use, modification, disclosure or
other misuse. There has been no unauthorized access to or other misuse of any Customer Data and Personal Information. The Company
has not received any complaint from any Person (including any action letter or other inquiry from any Governmental Authority)
regarding the Company’s collection, storage, hosting, disclosure, transmission, transfer, disposal, other processing or
security of Customer Data or Personal Information. There have been no facts or circumstances that would require Company to give
notice to any customers, suppliers, consumers or other similarly situated Persons of any actual or perceived data security breaches
pursuant to an applicable Laws requiring notice of such a breach.
(ii) Without
limiting the generality of the foregoing, the Company is compliant with all Laws relating to data privacy and data protection, and
the collection, storage, maintenance and transmission of personal data and health information, including, without limitation, the
(A) the PRC’s Cybersecurity Review Measures, Cybersecurity Law, Data Security Law and Personal Information Protection Law and
the Outbound Data Transfer Security Assessment Measures of the Cyberspace Administration of China, (B) the European General Data
Protection Regulation, and (C) all other applicable Laws relating to cybersecurity, data privacy and protection and/or Customer Data
or Personal Information. The Company is compliant with the agreements, terms and policies of, and has not reason to believe that it
will not continue to have access to, the third party data hosting and transmission services and infrastructure it utilizes or
anticipates utilizing in its operations as presently conducted or planned, including without limitation, Amazon Web Services, Google
Cloud and Microsoft Azure Cloud.
(iii)
The Company has complied with the SEC’s rules related to cybersecurity risks and related disclosures.
(w)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company
nor any 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 as may be necessary to continue its business without a significant increase
in cost.
(x) Transactions with
Affiliates and Employees. Except as set forth on Schedule 3.1(x), none of the officers, directors, or 5% beneficial owners of
the Company or any Subsidiary and, to the Knowledge of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any 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, 5% beneficial owner or any such employee has a substantial interest or is an officer, director, trustee,
shareholder, member or partner of (“Related Party Transactions”). Any Related Party Transactions reflect
market terms and rates which would reasonably be expected to be obtained in an equivalent arms-length transaction with a third
party, and were negotiated in good faith and on an arms-length basis.
(y) Sarbanes-Oxley; Internal
Accounting Controls. Except as disclosed in the SEC Reports and Schedule 3.1(y), the Company and the Subsidiaries are in compliance
with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all
applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof and as of the Closing Date.
The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (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 the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required
to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC’s rules and forms. The Company’s certifying officers have evaluated the effectiveness
of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its
most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no
changes in the internal control over financial reporting (as such term is defined in the Exchange Act) that have materially affected,
or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries. All
material weaknesses in the Company’s prior internal control over financial reporting have been remedied as of the date of this
Agreement.
(z) Certain Fees.
No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents other than the fee payable to the Placement Agent. The Investors shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this
Section 3.1(z) that may be due in connection with the transactions contemplated by the Transaction Documents.
(aa)
Trading Market Compliance. The issuance and sale of the Securities hereunder does not contravene the rules and regulations
of the Trading Market.
(bb)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(cc)
Registration Rights. Other than the Investors, no Person has any right to cause the Company or any Subsidiary to effect the
registration under the Securities Act of any securities of the Company or any Subsidiaries.
(dd)
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act,
and the Company has taken no action designed to, or which to the Company’s Knowledge is likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating
terminating such registration. Except as set forth on Schedule 3.1(dd), the Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not
in compliance with the listing or maintenance requirements of such Trading Market. The Company is and has no reason to believe that it
will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock
is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the
Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection
with such electronic transfer.
(ee) Application of
Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Memorandum and Articles (or similar charter documents) or the
Laws of the Cayman Islands that is or could become applicable to the Investors as a result of the Investors and the Company
fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of
the Company’s issuance of the Securities and the Investors’ ownership of the Securities.
(ff)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company confirms that neither it nor any other Person acting on its behalf has provided any Investor or its agents or counsel with
any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms
that the Investor will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure
furnished by or on behalf of the Company to the Investors regarding the Company and its Subsidiaries, their respective businesses and
the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct in all material respects
and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company
during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Investor makes
or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set
forth in Section 3.2 hereof.
(gg)
No Integrated Offering. Assuming the accuracy of each Investor’s representations and warranties set forth in Section
3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration
of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated.
(hh)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of
its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has
no Knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy
or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(hh) sets forth as of the date hereof all
outstanding secured and unsecured Indebtedness in excess of 50% of the Company’s net assets in the aggregate of the Company or
any Subsidiary, or for which the Company or any Subsidiary has commitments. None of the Indebtedness is secured by any Lien or similar
restrictions under applicable Laws. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(ii) Tax Status. 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 Subsidiaries each (i) has made or filed all 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, (ii) has paid all taxes and
other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations
and (iii) 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. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.
(jj) No General
Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by
any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Investors and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(kk)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the Knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf
of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA or any applicable
PRC or other foreign Laws which relate to bribery or political contributions.
(ll) Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(ll) of the Disclosure Schedules. Such accounting firm (i) is a
public accounting firm registered with the Public Company Accounting Oversight Board (the “PCAOB”) as
required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the
Company’s annual report on Form 20-F for the fiscal year ending December 31, 2024. To the Company’s Knowledge, such
accounting firm has not been subject to any disciplinary actions or other adverse Actions from the PCAOB or any Governmental
Authority adversely impacting the ability of such accounting firm to conduct its audit and review and related accounting services
for which it was engaged by the Company, nor does the Company have any Knowledge that the PCAOB or any Governmental Authority is
conducting any investigation or inquiry, however termed, which may lead to disciplinary action against such accounting firm or which
would otherwise limit or preclude the Company’s ability to continue to use such accounting firm in the future.
(mm)
Seniority. As of the Closing Date, no Indebtedness or other claim against the Company is or will be senior to any of the Notes
in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise. As of the Closing Date, neither
the Company nor any Subsidiary has outstanding any secured Indebtedness or has otherwise granted any security interests on its assets
in any jurisdiction, including without limitation the PRC, except as disclosed in Schedule 3.1(mm).
(nn)
No Disagreements with Accountants and Lawyers. There are no 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.
(oo) Acknowledgment
Regarding Investor’s Purchase of Securities. The Company acknowledges and agrees that each Investor is acting solely in
the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that each Investor is not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the
Investor or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Investor’s purchase of the Securities. The Company further represents to each Investor
that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(pp)
Acknowledgment Regarding each Investor’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding, it is understood and acknowledged by the Company that: (i) each Investor has not been asked by the Company to agree,
nor has the Investor agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market
or other transactions by each Investor, specifically including, “derivative” transactions, before or after the closing of
this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities,
(iii) each Investor, and counter-parties in “derivative” transactions to which the Investor is a party, directly or indirectly,
may presently have a “short” position in the Common Stock and (iv) each Investor shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) each Investor may engage in hedging activities at various times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value of the Shares and Underlying Shares deliverable with respect to Securities
are being determined, and (z) such hedging activities (if any) could reduce the value of the existing shareholders’ equity interests
in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned
hedging activities do not constitute a breach of any of the Transaction Documents. The Company further (A) represents and warrants and
acknowledges and agrees that (i) to the Company’s Knowledge, each Investor is participating in the offering of Securities contemplated
hereby separately and independently of the other Investor(s), (ii) to the Company’s Knowledge, none of the Investors have communicated
directly with one another, and all communications by the Investors concerning the Transaction Documents and the transactions contemplated
thereby and any matters related thereto were solely conducted separately and independently with the Placement Agent without the involvement
or inclusion of any other Investor, and (iii) to the Company’s Knowledge, the Investors do not constitute a “group”
as that term is used under Section 13(d) of the Exchange Act, and (B) covenants and agrees not to take a position to the contrary to
the foregoing.
(qq)
Regulation M Compliance. The Company has not, and to the Company’s Knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to 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, (ii) sold, bid for, purchased, or paid any compensation for soliciting
purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement
agent in connection with the placement of the Securities.
(rr)
Stock Plans. Each stock option granted by the Company under the Company’s stock option plan or equity incentive plan
was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal
to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable Law.
No stock option granted under the Company’s stock option plan or equity incentive 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, stock options or other equity securities
or rights to equity securities including restricted stock units prior to, or otherwise knowingly coordinate the grant of stock options
with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results
or prospects.
(ss)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
(tt)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within
the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Investor’s
request.
(uu)
Bank Holding Company Act. Neither the Company nor any of its 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 Subsidiaries or Affiliates owns or controls, directly
or indirectly, 5% 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 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.
(vv)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules and regulations thereunder and all other applicable money laundering
Laws including in the PRC and the Cayman Islands (collectively, the “Money Laundering Laws”), and no Action
by or before any court, arbitrator or other Governmental Authority any involving the Company or any Subsidiary with respect to the Money
Laundering Laws is pending or, to the Knowledge of the Company or any Subsidiary, threatened.
(ww) Other Covered
Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has
been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any
Securities.
(xx)
Notice of Disqualification Events. The Company will notify each Investor and the Placement Agent in writing, prior to the
Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage
of time, become a Disqualification Event relating to any Issuer Covered Person.
3.2
Representations and Warranties of the Investor. Each Investor, severally and not jointly, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall
be accurate as of such date):
(a) Organization;
Authority. The Investor is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability
company, exempted company or similar power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the
Transaction Documents and performance by the Investor of the transactions contemplated by the Transaction Documents have been duly
authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the
Investor. Each Transaction Document to which it is a party has been duly executed by the Investor, and when delivered by the
Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Investor, enforceable
against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other Laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable Law.
(b) Experience of the
Investor. The Investor, either alone or together with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment. The Investor is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(c)
General Solicitation. The Investor is not, to the Investor’s knowledge, purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or, to the knowledge of the Investor, any other general
solicitation or general advertisement.
(d) Access to
Information. The Investor acknowledges that it has had the opportunity to review the Transaction Documents (including all
exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision with respect to the investment. The Investor
acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided the Investor with any
information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Placement
Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement
Agent and any Affiliate may have acquired non-public information with respect to the Company which the Investor agrees need not be
provided to it. In connection with the issuance of the Securities to the Investor, neither the Placement Agent nor any of its
Affiliates has acted as a financial advisor or fiduciary to the Investor.
The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Investor’s right to rely
on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in
any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the
consummation of the transactions contemplated hereby.
Article
IV
OTHER AGREEMENTS OF THE PARTIES
4.1
Transfer Restrictions.
(a) Free Trading.
The Shares and Underlying Shares shall be issued pursuant to the Registration Statement, and a Prospectus Supplement thereto and
free of all restrictive legends. The Company shall pay all costs associated with any legal opinions or other documents requested or
required by the Transfer Agent in connection with the preceding sentence.
(b) Without
limiting the generality of the foregoing or any other provisions of the Transaction Documents, certificates evidencing the
Underlying Shares (or other documentation or evidence of the Underlying Shares, including for issuances in book-entry form) shall
not contain any legend: (i) while a Registration Statement covering the sale and issuance of such Underlying Shares is effective
under the Securities Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144, when available, or (iii) if such
legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the SEC). For the avoidance of doubt the Company shall pay all costs associated with such opinions. If all or
any portion of a Note is converted at a time when there is an effective Registration Statement to cover the sale and issuance of the
Underlying Shares or an exemption from such registration is available, or if such Underlying Shares may be sold under Rule 144
without the requirement for the Company to be in compliance with the current public information requirements of Rule 144(c) and
without volume or manner of sale restrictions or if such legend is not otherwise required under applicable requirements of the
Securities Act (including Sections 4(a)(1) or 4(a)(7), judicial interpretations and pronouncements issued by the staff of the SEC
including what is known as Section 4(a)(1½)) then such Underlying Shares shall be issued free of all legends. For avoidance
of doubt, the Company agrees that after the requisite holding period to comply with Rule 144, the legend may be removed under Rule
144 of the Securities Act, assuming the holder satisfies the requirements of Rule 144. The Company agrees that at such time as such
legend is not required, it will, no later than the earlier of (i) two Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined below) following the delivery by any Investor to the Company or the Transfer Agent of a
certificate (or stock power if issued in book entry form) representing Underlying Shares, as applicable, issued without a
restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to the
Investor a certificate representing such shares that is free from all restrictive and other legends (or provide evidence of such
issuance in book entry form). The Company may not make any notation on its records or give instructions to the Transfer Agent that
enlarge the restrictions on transfer set forth in this Section 4. Certificates for Underlying Shares subject to legend removal
hereunder shall be transmitted by the Transfer Agent to the Investor by crediting the account of the Investor’s prime broker
with the Depository Trust Company System as directed by the Investor. As used herein, “Standard Settlement
Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s Principal
Market with respect to the Common Stock as in effect on the date of delivery of a certificate representing Underlying Shares, as
applicable, issued with a restrictive legend. Certificates for the Underlying Shares subject to legend removal hereunder shall be
transmitted by the transfer agent to the Investor by crediting the account of the Investor’s prime broker with the Depository
Trust Company System as directed by the Investor. For avoidance of doubt, as of the date of this Agreement the Standard Settlement
Period is one Trading Day.
(c) The Company
acknowledges and agrees that any Investor may from time-to-time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Shares and Underlying Shares to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such
arrangement, the Investor may transfer pledged or secured Shares and Underlying Shares to the pledgees or secured parties. Such a
pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured
party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the
Investor’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of the
Shares and Underlying Shares may reasonably request, including, if the Shares and Underlying Shares have been registered for sale
and issuance pursuant to a Registration Statement, the preparation and filing of any required prospectus supplement under Rule
424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling
shareholders thereunder.
(d) The Company
acknowledges that if any Investor converts any Notes, Section 3(a)(9) of the Securities Act shall apply and the holding period of
the Conversion Shares issued as a result shall be the Closing Date on which the Notes were issued. The Company covenants and agrees
that it shall not challenge or take a position contrary to the preceding sentence.
4.2
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and Underlying Shares
pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the Company may have against an Investor and regardless of the
dilutive effect that such issuance may have on the ownership of the other shareholders of the Company.
4.3
Furnishing of Information; Public Information.
(a) Registration Requirements.
Until no Investor holds any Securities, the Company covenants and agrees to (A) if for any reason the Registration Statement does not
result in the issuance to the Investors of Shares and Underlying Shares (including upon conversions of the Notes) which are registered
and freely tradable in accordance with the Securities Act, maintain the effectiveness of the Registration Statement and take all action
necessary, including without limitation filing and causing to be declared effective with the SEC an amendment thereto or a replacement
Registration Statement on Form F-3, or on Form F-1 if not then eligible for use of Form F-3, to register and maintain sufficient capacity
thereon for purposes of enabling the Investors to sell all Shares and Underlying Shares; (B) refrain from conducting or registering any
sales of securities under the Registration Statement or any other registration statement in a manner which reduces, limits or precludes,
or which could have the effect of reducing, limiting or precluding, the Investors’ ability to sell all Shares and Underlying Shares
issuable or potentially issuable pursuant to the Transaction Documents thereon, and (C) maintain the registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by an issuer required to file reports under Section 12(g) of the Exchange Act after the
date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
(b) At any time
during the period commencing from the six-month anniversary of the date hereof, and ending at such time that all of the Securities
may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or
limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement
under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and the
Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to any Investor’s other available remedies, the Company shall pay to the Investor, in cash, as partial
liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an
amount in cash equal to 2% of the aggregate Subscription Amount of the Investor’s Securities on the day of a Public
Information Failure and on every 30th day (pro-rated for periods totaling less than 30 days) thereafter until the earlier of (a) the
date such Public Information Failure is cured and (b) such time that such public information is no longer required for the Investor
to transfer the Shares and Underlying Shares pursuant to Rule 144. The payments to which the Investor shall be entitled pursuant to
this Section 4.3(b) are referred to herein as “Public Information Failure Payments.” Public Information
Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure
Payments are incurred and (ii) the third Business Day after the event or failure giving rise to the Public Information Failure
Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public
Information Failure Payments shall bear interest at the rate of one and one-half percent per month (prorated for partial months)
until paid in full. Nothing herein shall limit the Investor’s right to pursue actual damages for the Public Information
Failure, and the Investor shall have the right to pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.
4.4
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner
that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval
prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.5
Conversion and Exercise Procedures. The form of Notice of Conversion included in the Notes set forth the totality of the procedures
required of an Investor in order to convert any of the Notes. Without limiting the preceding sentences, no ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be
required in order to convert any of the Notes. No additional legal opinion, other information or instructions shall be required of the
Investor to convert its Notes. The Company shall honor conversions of the Notes and shall deliver Underlying Shares in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.
4.6 Securities Laws
Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms (which
shall include the name of the Placement Agent) of the transactions contemplated hereby, (b) file a Current Report on Form 6-K,
including the Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange Act and the
Securities Act, and (c) file a Prospectus Supplement with the SEC within the time required under the Securities Act and comply with
all other requirements of the Securities Act in connection therewith and the transactions contemplated by the Transaction Documents.
From and after the issuance of such press release, the Company represents and warrants to each Investor that it shall have publicly
disclosed all material, non-public information delivered to the Investor by the Company or any of its Subsidiaries, or any of their
respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.
In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Investor or any of their Affiliates
on the other hand, shall terminate. The Company and each Investor shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company nor the Investor shall issue any such press release
nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of the
Investor, or without the prior consent of the Investor, with respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by Law, in which case the disclosing party shall promptly
provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company
shall not publicly disclose the name of the Investor, or include the name of the Investor in any filing with the SEC or any
regulatory agency or Trading Market, without the prior written consent of the Investor, except (a) as required by federal securities
Law in connection with (i) the Registration Statement contemplated by this Agreement and any replacement or supplemental
registration statement or other documents in connection herewith, and (ii) the filing of final Transaction Documents with the SEC
and (b) to the extent such disclosure is required by Law or Principal Market Rules, in which case the Company shall provide the
Investor with prior notice of such disclosure permitted under this clause (b).
4.7
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person,
that an Investor is an “Acquiring Person” under any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted
by the Company, or that the Investor could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between the Company and the Investor.
4.8
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.6, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide each Investor or its agents or counsel with any information that constitutes, or the Company reasonably believes
constitutes, material non-public information, unless prior thereto the Investor shall have consented to the receipt of such information
and agreed with the Company to keep such information confidential. The Company understands and confirms that each Investor shall be relying
on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company, any of its Subsidiaries,
or any of their respective officers, director, agents, employees or Affiliates delivers any material, non-public information to an Investor
without the Investor’s consent, the Company hereby covenants and agrees that the Investor shall not have any duty of confidentiality
to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to
the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on
the basis of, such material, non-public information, provided that the Investor shall remain subject to applicable Law. To the
extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding
the Company or any Subsidiaries, the Company shall simultaneously file such notice with the SEC pursuant to a Current Report on Form
6-K. The Company understands and confirms that each Investor shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.
4.9
Use of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale
of the Securities hereunder for working capital and general corporate purposes and shall not use such proceeds for any other purpose.
4.10 Indemnification
of Investor. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Investor and its
directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Investor
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Investor
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Investor Party may suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or
(b) any action instituted by the Company or its affiliates or representatives or agents against the Investor Parties in any
capacity, or any of them or their respective Affiliates, with respect to any of the transactions contemplated by the Transaction
Documents (unless such action is solely based upon a material breach of such Investor Party’s representations, warranties or
covenants under the Transaction Documents or any agreements or understandings such Investor Party may have with any such stockholder
or any violations by such Investor Party of state or federal securities Laws or any conduct by such Investor Party which is finally
judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any
Investor Party in respect of which indemnity may be sought pursuant to this Agreement, such Investor Party shall promptly notify the
Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Investor Party. Any Investor Party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Investor Party except
to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has
failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of
such Investor Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Investor Party under this Agreement (y) for any settlement by the Investor
Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the
extent, but only to the extent that a loss, claim, damage or liability is attributable to any Investor Party’s breach of any
of the representations, warranties, covenants or agreements made by such Investor Party in this Agreement or in the other
Transaction Documents. The indemnification required by this Section 4.10 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 are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Investor Party against the Company or others
and any liabilities the Company may be subject to pursuant to Law.
4.11
Reservation and Listing of Securities.
(a) The Company
shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant to the
Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.
(b) If, on any
date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on
such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or
articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum
at such time, as soon as possible and in any event not later than the 75th day after such date.
(c) The
Company shall, if applicable: (i) in the time and manner required by the Principal Market, prepare and file with such Principal
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum
on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or
quotation on such Principal Market as soon as possible thereafter, (iii) provide to each Investor evidence of such listing or
quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such
date on such Principal Market.
4.12
Participation in Future Financing.
(a) From the date
hereof until the 9-month anniversary of the date of this Agreement, upon any issuance by the Company or any of its Subsidiaries of
Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a combination of units thereof (a
“Subsequent Financing”), the Investors shall have the right to participate in aggregate up to an amount of
the Subsequent Financing equal to 25% of the Subsequent Financing (the “Participation Maximum”) on the
same terms, conditions and price provided for in the Subsequent Financing.
(b) At least five
Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Investor a written notice of its
intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the Investor if it
wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of an Investor, and only upon a request by an Investor, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one Trading Day after such request, deliver a Subsequent Financing Notice to such Investor. The
Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of
proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be
effected and shall include a term sheet or similar document relating thereto as an attachment.
(c) Each Investor
desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New
York, N.Y. time) on the fifth Trading Day after all of the Investor have received the Pre-Notice that the Investor is willing to
participate in the Subsequent Financing, the amount of the Investor’s participation, and representing and warranting that such
Investor has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If
the Company receives no such notice from any Investor as of such fifth Trading Day, the Investors shall be deemed to have notified
the Company that it does not elect to participate.
(d) If
by 5:30 p.m. (New York, N.Y. time) on the fifth Trading Day after each Investor has received the Pre-Notice, notification by an
Investor of its willingness to participate in the Subsequent Financing (or to cause its designees to participate) has been provided,
then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice.
(e) If by 5:30 p.m.
(New York, N.Y. time) on the fifth Trading Day after the Investors have received the Pre-Notice, the Company receives responses to a
Subsequent Financing Notice from one or more Investors seeking to purchase more than the aggregate amount of the Participation
Maximum, each such Investor shall have the right to purchase up to its Pro Rata Portion of the Participation Maximum.
“Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing
Date by an Investor participating under this Section 4.12 and (y) the sum of the aggregate Subscription Amounts of Securities
purchased on the Closing Date by all Investors participating under this Section 4.12.
(f)
The Company must provide each Investor with a second Subsequent Financing Notice, and each Investor will again have the right
of participation set forth above in this Section 4.12, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 30 Trading Days after the date of
the initial Subsequent Financing Notice.
(g) The Company and
each Investor agree that if any Investor elects to participate in the Subsequent Financing, the transaction documents related to the
Subsequent Financing shall not include any term or provision that, directly or indirectly, will, or is intended to, exclude one or
more of the Investors from participating in a Subsequent Financing, including, but not limited to, provisions whereby any Investor
shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any
amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the
prior written consent of each such Investor.
(h) Notwithstanding
anything to the contrary in this Section 4.12 and unless otherwise agreed to by each Investor, the Company shall either confirm in
writing to each Investor that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose
its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that each Investor will not
be in possession of any material, non-public information, by the 10th Business Day following delivery of the Subsequent Financing
Notice. If by such 10th Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been
made, and no notice regarding the abandonment of such transaction has been received by each Investor, such transaction shall be
deemed to have been abandoned and each Investor shall not be deemed to be in possession of any material, non-public information with
respect to the Company or any of its Subsidiaries.
(i)
This Section 4.12 shall not apply in respect of an Exempt Issuance.
4.13
Subsequent Equity Sales.
(a) From the date
hereof until the earlier of (i) the five-month anniversary of the Closing Date (which shall be extended to such time as no Investor
holds any Notes if an Event of Default (as defined in the Notes) has occurred and is continuing) and (ii) such time as no Investor
holds any Notes, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company
or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate
Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any
debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional
shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or
varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt
or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after
the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any
agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined
price. Each Investor shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy
shall be in addition to any right to collect damages. Notwithstanding the foregoing, no Exempt Issuance shall be deemed to be a
Variable Rate Transaction.
(b) While
any Note is outstanding, if the Company issues any equity option, warrant or similar instrument which contains an “alternative
cashless exercise” provision that provides for the exercise of such security without payment of the exercise price in cash and
does not require the security to be “in the money,” each Investor shall be entitled to obtain injunctive relief against
the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
4.14
Blue Sky Filings. The Company 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 Investor at the Closing under applicable securities or “blue sky”
Laws of the states of the United States and shall provide evidence of such actions promptly upon request of any Investor.
4.15
Capital Changes. From the date hereof until such time as no Investor holds any of the Notes, the Company shall not undertake
a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Required Holders.
4.16 Maintenance of
DTC Eligibility. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the
Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to
the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.17
Compliance With Negative Covenants. The Company agrees that it shall not take any action to or cause any of its Subsidiaries
to breach the negative covenants contained in the Notes, and any other Transaction Documents.
Article
V
MISCELLANEOUS
5.1
Termination. This Agreement may be terminated by the Company or an Investor, as to such Investor’s obligations hereunder
only and without any effect whatsoever on the obligations between the Company and any other Investor, by written notice to the other
parties, if the Closing has not been consummated on or before the fifth Trading Day following the date hereof, provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2
Fees and Expenses. At the Closing, the Company has agreed to reimburse the Lead Investor up to $40,000 for its legal fees
and expenses, $15,000 of which has been paid prior to the Closing. The Company shall deliver to each Investor, prior to the First Closing,
a completed and executed copy of the Closing Statement, attached hereto as Annex A. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any conversion or exercise notice delivered by any Investor), stamp taxes and other taxes and duties
levied in connection with the delivery of any Securities to the Investor and costs necessary to provide the Investor with a lien on all
of the assets of the Company.
5.3
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be
in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York, N.Y. time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York, N.Y. time) on any Trading Day, (c) the second Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages
attached hereto.
5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and each Investor or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Investor and holder of Securities
and the Company. Such amendment provision shall not be construed to mean that the Beneficial Ownership Limitation of the Notes may be
amended.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Investor (other than by merger). Any Investor may assign any or all of its rights under this Agreement to any Person to whom
the Investor assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to
the transferred Securities, by the provisions of the Transaction Documents that apply to the Investor.
5.8
No Third-Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties
of the Company in Section 3.1 and the representations and warranties of each Investor in Section 3.2. This Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in Section 4.10 and this Section 5.8.
5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the Laws of the Cayman Islands without regard to the principles of
conflicts of Law thereof, except where expressly provided otherwise in a Transaction Document. Each party agrees that all legal Actions
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction
Documents (except where expressly provided otherwise in a Transaction Document) (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the courts located
in George Town, Cayman Islands. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts located in George Town,
Cayman Islands for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any Action, any claim that it is not personally subject to the jurisdiction of any such court, that such Action
is improper or is an inconvenient venue for such Action. Each party hereby irrevocably waives personal service of process and consents
to process being served in any such Action by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for 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 other manner permitted by Law. If any party shall commence an Action to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing party in such Action shall be reimbursed
by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such Action.
5.10
Survival. The representations and warranties contained herein shall survive for twelve (12) months after the Closing and the
delivery of the Securities solely as to the Notes issued in the Closing.
5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.
5.12
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such
that may be hereafter declared invalid, illegal, void or unenforceable.
5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever any Investor 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 the Investor 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; provided, however, that, in the case of a rescission of
a conversion of a Note, the Investor shall be required to return any shares of Common Stock subject to any such rescinded conversion
notice concurrently with the return to the Investor of the aggregate Conversion Price converted for such shares to the Principal Amount
of the Note and the restoration of the Investor’s right to acquire such shares pursuant to the Investor’s Note (including,
issuance of a replacement warrant certificate evidencing such restored right).
5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also
pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by Law, including recovery of damages,
each of the Company and each Investor will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that
a remedy at Law would be adequate.
5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction
Document or the Investor enforces or exercises its rights 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, 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.
5.17 Usury. To
the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury Laws wherever enacted, now or at any time
hereafter in force, in connection with any Action that may be brought by an Investor in order to enforce any right or remedy under
any Transaction Document. In furtherance of this agreement and covenant, the Company shall not take any position that any Laws of
any state of the United States relating to usury are applicable. Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction
Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable Law (the
“Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default
interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay
under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by Law
and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to
the date hereof, the new maximum contract rate of interest allowed by Law will be the Maximum Rate applicable to the Transaction
Documents from the effective date thereof forward, unless such application is precluded by applicable Law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to an Investor with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by the Investor to the unpaid principal balance of any such
indebtedness or be refunded to the Company, the manner of handling such excess to be at the Investor’s election.
5.18
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the
Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and
other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.
5.19
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken, or such right may be exercised on the next succeeding
Business Day.
5.20
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to
revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition,
each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the
date of this Agreement.
5.21
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
In
Witness Whereof, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.
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Fangdd Network Group Ltd. |
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By: |
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Name: |
Zeng Xi |
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Title: |
Chief Executive Officer |
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Address for Notice: |
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With a copy to (which shall not constitute notice): |
[Remainder
of Page Intentionally Left Blank
Signature Page for Investor Follows]
Signature
Page to Securities Purchase Agreement
In
Witness Whereof, the undersigned has caused this Securities Purchase Agreement to be duly executed by its authorized signatory
as of the date first indicated above.
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LEAD INVESTOR: |
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Name of Investor: |
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Signature of Authorized Signatory of Investor: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Email Address of Authorized Signatory: |
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Address for Notice to Investor: |
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Address for Delivery of Securities to Investor |
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(if not same as address for notice): |
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Principal Amount for the Closing: $ ___________ |
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Subscription Amount for the Closing: $ _________ |
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Shares: _________________________________ |
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EIN Number: ____________________________ |
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Wire Instructions to Investor for Interest Payments or Note Repayment: |
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Bank Name: ______________________________ |
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Routing No.: _____________________________ |
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Account No: _____________________________ |
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SWIFT |
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Bank Address: ____________________________ |
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Phone Number: ___________________________ |
[Investor
Signature Page to Securities Purchase Agreement]
In
Witness Whereof, the undersigned has caused this Securities Purchase Agreement to be duly executed by its authorized signatory
as of the date first indicated above.
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Name of Investor: |
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Signature of Authorized Signatory of Investor: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Email Address of Authorized Signatory: |
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Address for Notice to Investor: |
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Address for Delivery of Securities to Investor |
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(if not same as address for notice): |
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Principal Amount for the Closing: $ ____________ |
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Subscription Amount for the Closing: $ _________ |
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Shares: __________________________________ |
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EIN Number: _____________________________ |
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Wire Instructions to Investor for Interest Payments or Note Repayment: |
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Bank Name: ______________________________ |
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Routing No.: _____________________________ |
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Account No: _____________________________ |
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SWIFT |
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Bank Address: ____________________________ |
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Phone Number: ___________________________ |
[Investor
Signature Page to Securities Purchase Agreement]
Exhibit 10.2
Fangdd Network
Group Ltd.
Senior 5% Original Issue Discount Convertible Promissory Note
| Original Issuance Date: [__], 2025 |
Principal: $[__] |
| Maturity Date: [__], 20251 |
Loan Amount: $[__] |
For
Value Received, Fangdd Network Group Ltd., a Cayman Islands exempted
company with limited liability (the “Maker” or the “Company”), hereby promises to
pay to the order of [__], a Cayman Islands exempted company, or its assigns (the “Holder”) the principal sum
of $[__] (the “Principal”) pursuant to the terms of this Senior Original Issue 5% Discount Convertible Promissory
Note (this “Note”). In exchange for delivery of this Note on the Original Issuance Date referred to above,
the Holder shall lend the Maker $[__] in United States dollars net of an original issuance discount of $[__].
Unless earlier converted
pursuant to the terms of Article 3, the Maturity Date1 of this Note shall be 9 months from the Original Issuance Date of this
Note, which is specified above, unless the Holder has given notice to the Maker that it elects to accelerate the Maturity Date to the
extent explicitly permitted by this Note (the “Maturity Date”). The Maturity Date is the date upon which the
Principal and other amounts shall be due and payable unless earlier due or prepaid or converted. This Note may not be repaid in whole
or in part except as otherwise explicitly set forth herein.
Article
1
1.1 Purchase
Agreement. This Note has been executed and delivered pursuant to, and is issued pursuant to, the Securities Purchase Agreement entered
into by and between the Company and the Holder on [__], 2025 (the “Purchase Agreement”), and is subject to,
and incorporates, the provisions of the Purchase Agreement.
1.2 Interest.
This Note has been issued with an original issue discount and no interest shall accrue hereunder prior to the occurrence of an Event of
Default. From and after the occurrence and during the continuance of any Event of Default, interest shall accrue hereunder at a rate equal
to 15% per annum or, if less, the highest amount permitted by law (such interest upon an Event of Default shall be referred to as “Interest”
or “Default Interest”), shall compound monthly based upon a 360-day year, and shall be due and payable on the
first Trading Day of each month during the continuance of such Event of Default (a “Default Interest Payment Date”).
In the event that such Event of Default is subsequently cured and no other Event of Default then exists (including, without limitation,
for the Company’s failure to pay such Default Interest on the applicable Default Interest Payment Date), the Default Interest shall
cease to accrue hereunder as of the day immediately following the date of such cure; provided that the Interest as calculated and
unpaid at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days
after the occurrence of such Event of Default through and including the date of such cure of such Event of Default.
1.3 Company’s
Prepayment Election. Provided that no Event of Default shall have occurred and all Equity Conditions are satisfied, the Maker may
elect to prepay all, but not less than all, of the Principal and accrued and unpaid Interest and other fees, as applicable, then outstanding
under this Note at the Voluntary Prepayment Premium by giving the Holder 30 Trading Days’ prior written notice of such election.
During such 30 Trading Day period, the Holder may, in its sole discretion, convert up to 40% of the outstanding Principal and accrued
and unpaid Interest and other fees, as applicable, then outstanding under this Note. After the expiration of such 30 Trading Day period,
the Company shall prepay the remaining balance of the Note by paying to the Holder the Voluntary Prepayment Premium in cash. For purposes
of this Note, the “Voluntary Prepayment Premium” is 105%.
1.4 Replacement.
Upon receipt of a duly executed Affidavit of Loss and Indemnity Agreement in customary form from the Holder with respect to the loss,
theft or destruction of this Note (or any replacement hereof), or, in the case of a mutilation of this Note, upon surrender and cancellation
of such Note, the Maker shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. The
Holder shall not be required to post a bond or other security.
| 1 | Maturity date is nine months after issuance date. |
1.5 Status of Note.
The obligations of the Maker under this Note shall rank senior to all other existing Indebtedness and equity of the Company, other than
any Other Notes and Additional Note(s) including Additional Notes held by any holder of Other Notes issued pursuant to the Purchase Agreement
with which the obligations under this Note shall rank pari passu pursuant to the terms of the Transaction Documents. Upon any
Liquidation Event (as hereinafter defined), but subject in all cases to the Purchase Agreement, the Holder will be entitled to receive,
before any distribution or payment is made upon, or set apart with respect to, any Indebtedness of the Maker ranking junior to this Note
in right of payment, an amount equal to the outstanding Principal, Interest and any other sums due. For purposes of this Note, “Liquidation
Event” means merger or consolidation of the Company with another entity in which the Company is not the surviving entity
(except where the sole purpose is to change the domicile of the Company), the sale of all or substantially all of the assets of the Company
in one or more related transactions, a liquidation pursuant to a filing of a petition for bankruptcy under applicable law or any other
insolvency or debtor’s relief, an assignment for the benefit of creditors, a determination by a Governmental Authority that the
Company (which includes its Subsidiaries) cannot carry on its business substantially consistent with the prior ordinary course
of its business, or a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Maker.
Article
2
2.1 Events
of Default. An “Event of Default” under this Note shall mean the following (unless the Event of Default
is waived in writing by the Holder):
(a) Any
default in the payment of the Principal, Interest or other sums due under this Note, any Other Note(s) or any Additional Note(s) when
due (whether on the Maturity Date or by acceleration or otherwise) or as the result of a non-monetary default;
(b) (i)
The issuance of any Indebtedness or the imposition of a Lien upon any of the assets of the Maker or any Subsidiary, except for Permitted
Indebtedness or Permitted Liens, respectively, (ii) any failure of the Registration Statement to adequately cover the offer, sale and
issuance of all Shares and Underlying Shares in accordance with the Purchase Agreement which failure remains uncured for a period of ten
(10) days from the date such failure commenced, or (iii) any other breach of any covenant or obligation set forth in Sections 3.2
and 4.1 of this Note or Sections 4.1, 4.3, 4.9, 4.11, 4.12, 4.13, 4.15 and 4.16 of the Purchase Agreement;
(c) the
Maker’s notice to the Holder, including by way of public announcement at any time of its inability to comply (including for any
of the reasons described in Section 3.2(c) hereof) or its intention not to comply with proper requests for conversion of this Note
into Common Stock;
(d) if
Shareholder Approval is required and is not received and effective (including in accordance with all SEC Rules) within 60 days of the
date on which it is determined that such Shareholder Approval is required in.
(e) the
Maker shall fail to timely deliver the Common Stock as and when required under this Note within the Standard Settlement Period, provided
that, if such failure results solely from an action or inaction of the Transfer Agent or a third party and not any action or inaction
by the Company, such failure shall not constitute an Event of Default. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s Trading Market with respect to the
Common Stock as in effect on the date of delivery of a Conversion Notice or other trigger event requiring the issuance of Underlying Shares,
as applicable. For avoidance of doubt, (i) as of the Original Issuance Date the Standard Settlement Period is one Trading Day, and (ii)
the Company shall undertake all efforts to cause the Transfer Agent or other third party to deliver Common Stock in accordance with this
Note within the Standard Settlement Period, and any failure to undertake such efforts shall be deemed to be an “action or inaction
by the Company”;
(f) at
any time the Maker shall fail to have the Required Minimum of Common Stock authorized, reserved and available for issuance to satisfy
the potential conversion in full (disregarding for this purpose any and all limitations of any kind including beneficial ownership limitations
on such conversion) of this Note and any Additional Notes;
(g) any
representation or warranty made by the Maker or any of its Subsidiaries in the Purchase Agreement, this Note or any other Transaction
Document shall prove to have been false or misleading or breached in a material respect on the date as of which made;
(h) the
Maker or any of its Subsidiaries shall: (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property or assets; (ii) make a general assignment for the benefit
of its creditors; (iii) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic); (iv) file a petition seeking to take advantage of any bankruptcy, insolvency,
moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally; (v) acquiesce in writing
to any petition filed against it in an involuntary case under United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic); (vi) issue a notice of bankruptcy or winding down of its operations or issue
a press release regarding same; or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any
of the foregoing;
(i) a
proceeding or case shall be commenced in respect of the Maker or any of its Subsidiaries, without its application or consent, in any court
of competent jurisdiction, seeking: (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment
of its debts; (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of
its assets in connection with the liquidation or dissolution of the Maker or any of its Subsidiaries; or (iii) similar relief in respect
of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue
undismissed, or unstayed and in effect, for a period of 30 days or any order for relief shall be entered in an involuntary case under
United States Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or domestic) against
the Maker or any of its Subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing
shall be taken with respect to the Maker or any of its Subsidiaries and shall continue undismissed, or unstayed and in effect for a period
of 30 days;
(j) the
Company fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming delinquent in the filing
of any report required to be filed under the Exchange Act including any extension permitted by Rule 12b-25 under the Exchange Act) or
ceases to be subject to the reporting requirements of the Exchange Act. For avoidance of doubt, a failure to timely file any Exchange
Act report shall be deemed to be an Event of Default hereunder;
(k) the
Company files a Form 6-K or other SEC Report with the SEC disclosing, or otherwise publicly announces, that it intends to restate any
financial statements it previously filed with the SEC or it restates any financial statements it previously filed with the SEC;
(l) the
Maker’s Common Stock ceases to be listed on the Principal Market, a delisting of the Common Stock by the Principal Market is otherwise
threatened or reasonably likely to occur as evidenced by a writing issued by the Principal Market, or the Maker fails to list the Shares
and Underlying Shares on the Principal Market;
(m) after
the six-month anniversary of the Original Issuance Date, any Common Stock including Underlying Shares may not be immediately resold under
Rule 144 without restriction on the number of shares to be sold or manner of sale, unless (i) the Holder is then deemed to be an “affiliate”
as such term is defined under the Securities Act; (ii) such restriction or prohibition is as a result of any actions or inactions on the
part of the Holder and not in any way on the part of the Company, or (iii) such Common Stock has been registered for resale under the
Securities Act and may be sold without restriction;
(n) the
Maker consummates a “going private” transaction and as a result its Common Stock is no longer registered under Sections 12(b)
of the Exchange Act;
(o) there
shall be any SEC stop order with respect to any Registration Statement, a trading suspension by the SEC or the Trading Market of the Common
Stock, or any restriction in place with the Transfer Agent for the Common Stock restricting the trading of such Common Stock;
(p) the
current Registration Statement on Form F-3 or any subsequent Registration Statement ceases to be effective or if the Shares and Underlying
Shares cannot be sold under any Registration Statement or pursuant to an exemption from registration without any restrictive or trading
legend;
(q) the
electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing corporation
is no longer available or is subject to a “chill”;
(r) the
Company replaces its Transfer Agent, and the Company fails to instruct the new Transfer Agent to provide prior to the effective date of
such replacement, a fully executed irrevocable transfer agent instructions (including but not limited to the provision to irrevocably
reserve the Required Minimum) signed by the successor Transfer Agent and the Company;
(s) the
Company or a Subsidiary enters into a Variable Rate Transaction at any time that this Note is outstanding;
(t) any
provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be
valid and binding on or enforceable against the Company or any of its Subsidiaries, or the validity or enforceability thereof shall be
contested by any party thereto and it is finally determined by a court of competent jurisdiction that any such Transaction Document is
not valid or enforceable against the Company or any of its Subsidiaries, or a proceeding shall be commenced by the Company or any Subsidiary
or any Governmental Authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof against
the Company or any of its Subsidiaries, or the Company or any Subsidiary shall deny in writing that it has any liability or obligation
purported to be created under any Transaction Document;
(u) any
strike, lockout, labor dispute, embargo, condemnation, act of god or public enemy, or other casualty which causes, for more than 15 consecutive
days, the cessation or substantial curtailment of the Company’s current operations or revenue producing activities at any facility
of the Company or any Subsidiary, if any such event or circumstance could reasonably expected to have a Material Adverse Effect; or
(v) The
Company loses any material license issued by the PRC or any agency or instrumentality of the PRC or any other jurisdiction in which the
Company conducts its business.
2.2 Remedies
Upon an Event of Default.
(a) Upon
the occurrence of any Event of Default that has not been remedied or waived within five (5) Trading Days, provided, however,
that there shall be no cure period for an Event of Default described in Section 2.1(h) or 2.1(i), the Maker shall be obligated to
pay to the Holder the Mandatory Default Amount, which Mandatory Default Amount shall be immediately due and payable to the Holder, except
as otherwise set forth in Section 3.2(c). In the event this Note shall be converted whenever an Event of Default has occurred and
is continuing without cure, the Holder shall have the option to convert the Mandatory Default Amount at the Conversion Price then in effect.
(b) Upon
the occurrence of any Event of Default, the Maker shall, as promptly as possible but in any event within five (5) Trading Days after the
occurrence of such Event of Default, notify the Holder of the occurrence of such Event of Default, describing the event or factual situation
giving rise to the Event of Default and specifying the relevant subsection or subsections of Section 2.1 hereof under which such
Event of Default has occurred.
(c) Subject
to Section 2.2(a), upon the occurrence of any Event of Default, the Holder may at any time at its option declare, by written notice
to the Maker, the Mandatory Default Amount due and payable, and thereupon, the same shall be accelerated and so due and payable within
ten (10) Trading Days of receipt of such notice. Upon the failure of the Maker to cure an Event of Default within the time permitted by
this Note, or if the Event of Default is not capable of being cured, the remedies provided in this Note shall continue and not be affected
by any cure.
(d) The
provisions of Section 3.2(b) shall also apply upon any Events of Default relating to Conversion Shares in addition to the remedies
under this Section 2.2.
(e) Any
Event of Default hereunder may be waived upon the mutual agreement of the Company and the Holder.
Article
3
3.1 Conversion.
(a) Conversion.
At any time after the Original Issuance Date, this Note shall be convertible (in whole or in part) at the option of the Holder into such
number of fully paid and non-assessable shares of Common Stock as is determined by dividing (x) that portion of the outstanding Principal
and any accrued and unpaid Interest thereon that the Holder elects to convert (the “Conversion Amount”) by (y)
the Applicable Conversion Price then in effect on the date on which the Holder delivers to the Maker a notice of conversion in substantially
the form attached hereto as Exhibit A (the “Conversion Notice”) in accordance with Section 5.1.
The Holder shall deliver this Note to the Maker at the address designated in the Purchase Agreement at such time that this Note is fully
converted. With respect to partial conversions of this Note, the Maker shall keep written records of the amount of this Note converted
as of the date of delivery of the Conversion Notice for, and giving effect to, each such conversion (each, a “Conversion Date”).
(b) Conversion Price.
The “Conversion Price” means the lower of (A) $[__]2 (the “Fixed Conversion Price”)
as such Fixed Conversion Price may be adjusted as provided herein, and (B) the Alternative Conversion Price provided, however,
that if any Conversion Price under the foregoing definition results in a fractional amount, the fractional amount shall be rounded down
to the nearest whole cent, and provided further that in no event shall the Conversion Price be lower than, or be reduced to lower than,
the Floor Price. For avoidance of doubt, all references in this Note to the Fixed Conversion Price or any other Conversion Price including
the Alternative Conversion Price shall be construed to include adjustments as provided in this Note.
(c) If
the Company receives a Conversion Notice at a time at which the Conversion Price then in effect (as applicable, the “Applicable
Conversion Price”) (without regard to the Floor Price) is less than the Floor Price then in effect (unless such Floor Price
is lowered with the written consent of the Company and the Holder, which may be by e-mail), the Company shall issue a number of shares
equal to the Conversion Amount divided by such Floor Price and by prompt written notice to the Holders elect to (i) pay in cash or (ii)
add to the Principal, in either case, the economic difference between the Applicable Conversion Price (without regard to the Floor Price)
and such Floor Price. For further clarification, the economic difference shall be equal to (A) the number of shares that would have been
delivered using the Applicable Conversion Price, minus (B) the number of shares delivered using the Floor Price, multiplied by (C) the
daily VWAP of the Common Stock on the Conversion Date ((A-B)*C). For the avoidance of doubt, the Company shall register any additional
shares of Common Stock underlying this Note resulting from the foregoing on the Registration Statement or otherwise pursuant to the Purchase
Agreement if and as necessary for any such additional shares to be free of any restrictive or trading legend when issued.
| 2 | The Fixed
Conversion Price will equal 130% of the lowest daily VWAP on the Trading Day immediately prior to the applicable Closing Date. |
(d) Voluntary
Adjustment of Fixed Conversion Price. Subject to the rules and regulations of the Trading Market, the Company may at any time during
the term of this Note, with the prior written consent of the Holder, reduce the then current Conversion Price of the Note to any amount
and for any period of time deemed appropriate by the Board of Directors of the Company.
3.2 Delivery
of Conversion Shares.
(a) As
soon as practicable after any conversion or payment of any amount due hereunder in the form of shares of Common Stock in accordance with
this Note, and in any event within the Standard Settlement Period thereafter (such date, the “Share Delivery Date”),
the Maker shall, at its expense, cause to be issued in the name of and delivered to the Holder, or as the Holder may direct, a certificate
or certificates evidencing the number of shares of fully paid and non-assessable Common Stock to which the Holder shall be entitled on
such conversion or payment (the “Conversion Shares”), in the applicable denominations based on the applicable
conversion or payment, which certificate or certificates shall be free of any restrictive or trading legend. In lieu of delivering physical
certificates for the Common Stock issuable upon any conversion of this Note, provided the Company’s transfer agent (the “Transfer
Agent”) is participating in the Depository Trust Company (“DTC”) DTC Fast Automated Securities
Transfer Program (“FAST”) or a similar program, upon request of the Holder, the Company shall cause the Transfer
Agent to electronically transmit such Conversion Shares issuable upon conversion of this Note to the Holder (or its designee), by crediting
the account of the Holder’s (or such designee’s) broker with DTC through its Deposit Withdrawal At Custodian system (provided
that the same time periods herein as for stock certificates shall apply) as instructed by the Holder (or its designee).
(b) Obligation
Absolute. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver
or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of
any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any
other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion
Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company
may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding Principal and any
accrued and unpaid Interest thereon (if any) hereof, the Company may not refuse conversion based on any claim that the Holder or anyone
associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction
from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained,
and the Company posts a surety bond for the benefit of the Holder in the amount of 120% of the outstanding Principal and any accrued and
unpaid Interest thereon (if any) of this Note, which is subject to the injunction, which bond shall remain in effect until the completion
of litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In
the absence of such injunction, the Company shall issue the Conversion Shares or, if applicable, cash, upon delivery of a Conversion Notice.
(c) The
Company’s Failure to Timely Convert.
(i) If
the Company shall fail, on or prior to the applicable Share Delivery Date, if the Transfer Agent is not participating in FAST, to issue
and deliver to the Holder (or its designee) a certificate for the number of Conversion Shares to which the Holder is entitled and register
such Conversion Shares on the Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance
account of the Holder or the Holder’s designee with DTC for such number of Conversion Shares to which the Holder is entitled upon
the Holder’s conversion of this Note (as the case may be) (a “Conversion Failure”), then the Holder may
by notice to the Company (in lieu of receiving such Conversion Shares subject to such Conversion Failure), require the Company to prepay,
in cash, the Conversion Amount in such Conversion Failure at a prepayment price equal to the higher of (i) Mandatory Default Amount with
respect to such Conversion Amount arising from such Conversion Failure and (ii) the number of shares of Common Stock that the Maker is
unable to issue multiplied by the higher of (A) the Fixed Conversion Price and (B) the VWAP as of the date of the Conversion Notice (the
“Mandatory Prepayment Price”), provided that, if such failure results solely from an action or inaction of the
Transfer Agent or another third party and not any action or inaction by the Company (a “Non-Company Failure,”
and together with a Conversion Failure, each, as applicable, a “Failure”), such Failure shall not constitute
a Conversion Failure as long as the Company has undertaken all efforts to cause the Transfer Agent or other third party to deliver Common
Stock in accordance with this Note within the Standard Settlement Period. Any failure to undertake such efforts shall be deemed to be
an “action or inaction by the Company,” shall not constitute a Non-Company Failure and shall constitute a Conversion Failure.
With respect to any Failure and consequences and remedies in favor of the Holder in connection therewith, the following shall apply:
(1) With
respect to a Non-Company Failure:
(a) if
within two Trading Days of such Non-Company Failure the Company issues the Conversion Shares (as applicable, an “Issuance
Event”) with respect to the applicable Non-Company Failure, then no remedies under this Note (including the Mandatory Prepayment
Price, Buy-In Price, Buy-In Payment Amount and Liquidated Damages) shall apply in connection with such Non-Company Failure;
(b) if
the Issuance Event does not occur within two Trading Days following such Non-Company Failure but the Buy-In Payment Amount (as defined
below) is not triggered, then the Company shall not be required to pay such Buy-In Payment Amount; and
(c) if
the Issuance Event does not occur within two Trading Days following such Non-Company Failure and the Buy-In Payment Amount (as defined
below) is triggered, then the Company shall be required to pay such Buy-In Payment Amount.
(2) With
respect to a Conversion Failure:
(a) if
within two Trading Days of the Conversion Failure the Company pays the Holder good funds equal to the Mandatory Prepayment Price (as applicable,
a “Payment Event”), then any Event of Default which would have otherwise resulted from such Conversion Failure
shall have been cured and the Default Interest and Mandatory Default Amount shall not apply, and the Liquidated Damages under this Section 3.2(c)
shall cease to accrue or apply effective at the time of such Payment Event, provided that the Company shall remain responsible for the
Liquidated Damages, as applicable, which accrued or became payable pursuant to this Section 3.2(c) through the occurrence of the
Payment Event; and provided further that:
(i) If
following the event described in Section 3.2(c)(i)(2)(a) above, an Issuance Event occurs within two Trading Days of the Conversion
Failure, then the Buy-In Payment Amount shall not apply; and
(ii) If
following the event described in Section 3.2(c)(i)(2)(a) above, an Issuance Event does not occur within two Trading Days of the Conversion
Failure, then the Buy-In Payment Amount shall apply.
(b) If
the Payment Event does not occur within two Trading Days of the Conversion Failure, then an Event of Default shall have occurred, and
all remedies and consequences provided for under this Note in connection therewith shall apply, accrue and continue, as applicable, including
the Mandatory Default Amount, Default Interest, Buy-In Payment Amount, Liquidated Damages, requirement to issue the Conversion Shares
and requirement to pay the Mandatory Prepayment Price.
(i) In
addition to the foregoing, if on or prior to the Share Delivery Date, if the Transfer Agent is not participating in FAST, the Company
shall fail to issue and deliver to the Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s
share register or, if the Transfer Agent is participating in FAST, the Transfer Agent shall fail to credit the balance account of the
Holder or the Holder’s designee with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s
conversion hereunder or pursuant to the Company’s obligation pursuant to clause (II) below, and if on or after such Share Delivery
Date the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion
of the number of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from the Company and has
not received from the Company in connection with such failure, as applicable (a “Buy-In”), then, in addition
to all other remedies available to the Holder, the Company shall, within two Trading Days after receipt of the Holder’s request
and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions and/or markups, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common Stock
so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit
the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to
which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) (and to issue such shares of Common Stock)
shall terminate, or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing
such shares of Common Stock or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for
the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be)
and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares
of Common Stock multiplied by (y) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing on
the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (II) (the “Buy-In
Payment Amount”). For the avoidance of doubt, subject to Section 3.2(c)(i), the Holder’s right to the Buy-In
Payment Amount shall apply regardless of whether the applicable failure constitutes a Conversion Failure.
(ii) In
the event of a Conversion Failure, the Maker shall pay to the Holder, in cash, (i) as partial liquidated damages and not as a penalty,
for each $1,000 of the Conversion Amount, $10 per Trading Day (increasing to $20 per Trading Day five Trading Days after such damages
have begun to accrue) for each Trading Day after the Share Delivery Date until the number of shares of Common Stock the Holder shall be
entitled on such conversion has been issued and delivered to the Holder. Nothing shall limit the Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically
deliver such shares of Common Stock) upon the conversion of this Note as required pursuant to the terms hereof. The liquidated damages
hereunder are referred to as the “Liquidated Damages.”
(iii) For
the avoidance of doubt, the Company is deemed to have satisfied its share delivery obligations if it has instructed the Transfer Agent
to issue Conversion Shares in accordance with this Note (including for purposes of this Section 3.2), and the Transfer Agent has
processed such instruction and such Conversion Shares are posted for delivery in accordance with applicable DWAC and DTC procedures and
within the timeframes provided for under this Note.
(iv) Notwithstanding
anything herein to the contrary, the Company shall in all cases use its best efforts to timely meet its share delivery obligations in
accordance with this Note as soon as possible and within the Standard Settlement Period, and to cause the Transfer Agent and other third
parties to deliver Common Stock in accordance with this Note as soon as possible and within the Standard Settlement Period.
(d) Conversion
Priority. In the event that the Company receives a Conversion Notice from the Holder and any holders of Other Notes and Additional
Notes held by such holder, Options or other Convertible Securities for the same Conversion Date and the Company can effect the conversion
and exercise of some, but not all, of such portions of the Note, Options or other Convertible Securities submitted for conversion and
exercise, the Company, subject to this Section 3.2(d), shall (i) first effect the conversion of the entire Conversion Amount submitted
for conversion on such date by the Holder and the Holder of Other Notes (including any Additional Notes), and (ii) shall thereafter effect
the exercise and conversion from each holder of Options or other Convertible Securities electing to have Options or other Convertible
Securities exercised or converted on such date (other than the Notes).
(e) Beneficial
Ownership Limitation. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right
to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void and
treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution Parties
collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock
outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of
shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common
Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion of this
Note with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable
upon (A) conversion of the remaining, non-converted portion of this Note beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or non-converted portion of any other securities of the Company (including,
without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by the Holder or any other Attribution
Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 3.2(e). For purposes
of this Section 3.2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes
of determining the number of outstanding shares of Common Stock the Holder may acquire upon the conversion of this Note without exceeding
the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent Annual Report on Form 20-F, Current Report 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, if any, setting forth
the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company
receives a Conversion Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported
Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding and,
to the extent that such Conversion Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this
Section 3.2(e), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common Stock
to be issued pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder, the
Company shall within one Trading Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Note, by the Holder and any other Attribution Party since the
date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to
the Holder upon conversion of this Note results in the Holder and the other Attribution Parties being deemed to beneficially own, in the
aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d)
of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial
ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled
ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Furthermore, the Company shall indemnify
the Holder in accordance with the Purchase Agreement, if the Holder suffers any damages or claims as a result of Excess Shares being issued.
Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the
61st day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as
specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the 61st
day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution
Parties. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum
Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or
Rule 16a-1(a)(1) of the Exchange Act. No prior inability to convert this Note pursuant to this Section 3.2(e) shall have any effect
on the applicability of the provisions of this Section 3.2(e) with respect to any subsequent determination of convertibility. The
provisions of this Section 3.2(e) shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 3.2(e) to the extent necessary to correct any provision which may be defective or inconsistent with the intended
beneficial ownership limitation contained in this Section 3.2(e) or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitation contained in this Section 3.2(e) may not be waived and shall apply to a successor
holder of this Note.
(f) If
shares of Common Stock are not delivered within the Standard Settlement Period in accordance with this Note as a result of any action
or inaction by the Company’s Transfer Agent, then the Holder shall have the right, by giving 30 days’ advance written notice,
to require the Company to terminate the Transfer Agent and hire a replacement Transfer Agent, and the Company shall use its best efforts
to effect such replacement as soon as possible and by the end of such 30-day period.
3.3 Adjustment
of Fixed Conversion Price.
(a) Until
this Note has been paid in full or converted in full, the Fixed Conversion Price shall be subject to adjustment from time-to-time, and
the Floor Price shall be subject to adjustment solely as to Section 3.3(a) (but in either case shall not be increased, other than
pursuant to a combination) as follows:
(i) Adjustments
for Stock Splits, Subdivision and Combinations. If the Maker shall at any time or from time-to-time after the Original Issuance Date
effect a forward stock split or subdivision of the outstanding Common Stock or pays a dividend in Common Stock to holders of its Common
Stock, the applicable Fixed Conversion Price in effect immediately prior to such event shall be proportionately decreased. If the Maker
shall at any time or from time-to-time after the Original Issuance Date, effect a combination or reverse stock split or subdivision of
the outstanding Common Stock, the applicable Fixed Conversion Price in effect immediately prior to such event shall be proportionately
increased. Any adjustments under this Section 3.3(a)(i) shall be effective at the close of business on the date the applicable event
occurs. If at any time or from time-to-time after the Original Issuance Date the Maker effects a forward stock split or subdivision, stock
dividend, stock combination, reverse stock split or subdivision, recapitalization or other similar transaction and the Event Market Price
(as defined below) is less than the Fixed Conversion Price then in effect (after giving effect to the adjustment in this Section 3.3(a)(i)
above), then on the fifth Trading Day immediately following such event, the Fixed Conversion Price then in effect on such fifth Trading
Day (after giving effect to the adjustment in this Section 3.3(a)(i) above) shall be reduced (but in no event increased) to the Event
Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase
in the Fixed Conversion Price hereunder, no adjustment shall be made. “Event Market Price” means, with respect
to any event described in this Section 3.3(a)(i), the quotient determined by dividing (x) the sum of the VWAP of the shares of Common
Stock for each of the five Trading Days following such event divided by (y) five. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination, reverse stock split, recapitalization or other similar transaction during such
period.
(ii) Adjustments
for Certain Dividends and Distributions. If the Maker shall at any time or from time to time after the Closing Date (but whether before
or after the Original Issuance Date) make or issue or set a record date for the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in Common Stock, then, and in each event, the applicable Fixed Conversion Price in effect immediately
prior to such event shall be decreased as of the time of such issuance or, in the event such record date shall have been fixed, as of
the close of business on such record date, by multiplying the applicable Fixed Conversion Price then in effect by a fraction:
(1) the
numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance
or the close of business on such record date; and
(2) the
denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or
distribution.
(iii) Adjustment
for Other Dividends and Distributions. If the Maker shall at any time or from time to time after the Closing Date (but whether before
or after the Original Issuance Date) make or issue or set a record date for the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in other Common Stock, then, and in each event, an appropriate revision to the applicable Fixed
Conversion Price shall be made and provision shall be made (by adjustments of the Fixed Conversion Price or otherwise) so that the Holder
of this Note shall receive upon conversions thereof, in addition to the number of shares of Common Stock receivable thereon, the number
of securities of the Maker or other issuer (as applicable) or other property that it would have received had this Note been converted
into Common Stock in full (without regard to any conversion limitations herein) on the date of such event and had thereafter, during the
period from the date of such event to and including the Conversion Date, retained such securities (together with any distributions payable
thereon during such period) or assets, giving application to all adjustments called for during such period under this Section 3.3(a)(iii)
with respect to the rights of the holders of this Note; provided, however, that if such record date shall have been fixed
and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Fixed Conversion Price shall
be adjusted pursuant to this Section 3.3(a)(iii) as of the time of actual payment of such dividends or distributions.
(iv) Adjustments
for Reclassification, Exchange or Substitution. If the Common Stock at any time or from time to time after the Closing Date (but whether
before or after the Original Issuance Date) shall be changed to the same or different number of shares or other securities of any class
or classes of stock or other property, whether by reclassification, exchange, substitution or otherwise (other than by way of a stock
split or combination of shares or stock dividends provided for in Sections 3.3(a)(i), (ii) and (iii) hereof), then, and in each event,
an appropriate revision to the Fixed Conversion Price shall be made and provisions shall be made (by adjustments of the Fixed Conversion
Price or otherwise) so that the Holder shall have the right thereafter to convert this Note into the kind and amount of shares of stock
or other securities or other property receivable upon reclassification, exchange, substitution or other change, by holders of the number
of shares of Common Stock into which such Note might have been converted immediately prior to such reclassification, exchange, substitution
or other change, all subject to further adjustment as provided herein.
(v) Rights
Upon Issuance of Other Securities.
(1) Adjustment
of Fixed Conversion Price upon Issuance of Common Stock. If and whenever on or after the Original Issuance Date the Company issues
or sells, or in accordance with this Section 3.3(a)(v) is deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Exempt Issuance (other
than clause (c) of the definition of Exempt Issuance in the Purchase Agreement which shall not be deemed to be an Exempt Issuance for
purposes of this Section 3.3(a)(v) issued or sold or deemed to have been issued or sold) for a consideration per share (the “Dilutive
Issuance Price”) less than a price equal to the Fixed Conversion Price in effect immediately prior to such issuance or sale
or deemed issuance or sale (such Fixed Conversion Price then in effect is referred to herein as the “Applicable Price”)
(the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Fixed Conversion
Price then in effect shall be reduced to an amount equal to the Dilutive Issuance Price. For all purposes of the foregoing (including,
without limitation, determining the adjusted Fixed Conversion Price and the Dilutive Issuance Price under this Section 3.3(a)(v)),
the following shall be applicable:
(2) Issuance
of Options. If the Company in any manner grants or sells any options or rights to acquire Common Stock or Convertible Securities (“Options”)
(other than pursuant to any Exempt Issuance) and the lowest price per share for which one share of Common Stock is at any time issuable
upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock 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, excluding any transactions involving an Exempt Issuance. For purposes of this Section 3.3(a)(v) the “lowest price
per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise
or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock 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 or otherwise pursuant to the terms thereof or (y) the lowest
exercise price set forth in such Option for which one share of Common Stock is issuable (or may become issuable assuming all possible
market conditions) upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option or otherwise pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder
of such Option (or any other Person) with respect to any one share of Common Stock (on a fully-diluted basis) 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 or otherwise pursuant to the terms thereof plus the value of any other consideration received or receivable by, or benefit
conferred on, the holder of such Option (or any other Person) with respect to any one share of Common Stock (on a fully-diluted basis).
Except as contemplated below, no further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such share
of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof or upon
the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(3) 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 share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to
the terms thereof is less than the Applicable Price, then such share of Common Stock 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 3.3(a)(v), the “lowest price per share for which one share of Common Stock is at any time issuable upon the
conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the
sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon
the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant
to the terms thereof and (y) the lowest conversion price set forth in such Convertible Security for which one share of Common Stock is
issuable (or may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant
to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person)
with respect to any one share of Common Stock (on a fully-diluted basis) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or any other
Person) with respect to any one share of Common Stock (on a fully-diluted basis). Except as contemplated below, no further adjustment
of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange
of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities
is made upon exercise of any Options for which adjustment of the Fixed Conversion Price has been or is to be made pursuant to other provisions
of this Section 3.3(a)(v), except as contemplated below, no further adjustment of the Fixed Conversion Price shall be made by reason
of such issuance or sale.
(4) 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 shares of Common Stock decreases at any time (other than proportional changes
in connection with an event referred to Section 3.3(a)(i) above), the Fixed Conversion Price in effect at the time of such 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 decreased purchase price, additional consideration or decreased conversion rate (as the case may be) at the time initially
granted, issued or sold. For purposes of this Section 3.3(a)(v), if the terms of any Option or Convertible Security that was outstanding
as of the Original Issuance Date are decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued
as of the date of such decrease. No adjustment pursuant to this Section 3.3(a)(v) shall be made if such adjustment would result in
an increase of the Fixed Conversion Price then in effect.
(5) Issuances
of Units. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance or sale or deemed
issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary Security”,
and such Option and/or Adjustment Right, the “Secondary Securities”), together comprising one integrated transaction
(or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the Company either (A) have at least
one investor or purchaser in common, (B) are consummated in reasonable proximity to each other and/or (C) are consummated under the same
plan of financing), the “lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof” with respect to such Primary Security shall be deemed to
be equal to (1) the lowest price per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to this
Section 3.3(a)(v), as applicable) in such integrated transaction solely with respect to such Primary Security, minus (2) with respect
to such Secondary Securities, the sum of (x) the VWAP of the number of shares of Common Stock underlying each such Secondary Security
which accompanies one share of Common Stock in respect of the Primary Security on a fully-diluted basis, if any, (y) the fair market value
(as mutually determined by the Holder and the Company in good faith), of such Adjustment Right which accompanies one share of Common Stock
in respect of the Primary Security on a fully-diluted basis, if any, and (z) the fair market value (as mutually determined by the Holder
and the Company) of such Convertible Security, if any, in each case, as determined on a per share basis in accordance with this Section 3.3(a)(v).
If any shares of Common Stock, Options (other than exempt issuances) or Convertible Securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor (for the purpose of determining the consideration paid for such Common Stock,
Option or Convertible Security) will be deemed to be the net amount of consideration received by the Company therefor. If any shares of
Common Stock, Options (other than exempt issuances) or Convertible Securities are issued or sold for a consideration other than cash,
the amount of such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock,
Option or Convertible Security) will be the fair value of such consideration, except where such consideration consists of publicly traded
securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average of the
VWAPs of such security for each of the five Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options
or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the
surviving entity, the amount of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option
) 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 shares of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration other than cash
or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement
within 10 days after the occurrence of an event requiring valuation (the “Valuation Event”) in this Section 3.3(a)(v)(5),
the fair value of such consideration will be determined within five Trading Days after the 10th day following such Valuation Event by
an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final
and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company. For the
avoidance of doubt, in the event of a transaction provided in this Section 3.3(a)(v)(5), the calculation of the consideration per
share for the Secondary Securities shall be as provided in Section 3.3(a)(v)(2) and/or (3), as applicable.
(6) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock 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); provided, however, that, if
the Company shall at any time set a record date for the determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in shares of Common Stock, Options or in Convertible Securities or to subscribe for or purchase shares of Common
Stock, Options or in Convertible Securities and (A) such dividend is not fully paid or if such distribution is not fully made, or the
subscription rights are not fully granted, on the date fixed therefor, the Fixed Conversion Price shall be adjusted pursuant to this Section 3.3(a)(v)
as of the time of actual payment of such dividends or distributions or the effectiveness of such subscription rights or (B) the Company
shall subsequently rescind or otherwise cancel or determine not to make such dividend or distribution or to grant such subscription rights,
then any adjustment to the Fixed Conversion Price made pursuant to this Section 3.3(a)(v) with respect to the fixing of such record
date shall be reversed and of no further force or effect as of the date of the Company’s public announcement that it is rescinding
or otherwise canceling or determining not making such dividend or distribution or the grant of such subscription rights.
(b) Fractional
Shares. The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the
issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest
whole share. If any adjustments to the Fixed Conversion Price under this Section 3.3 result in a fractional amount, the fractional
amount shall be rounded down to the nearest whole cent.
(c) No
Impairment. The Maker shall not, by amendment of its Memorandum and Articles or through any reorganization, transfer of assets, consolidation,
merger, 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 to be observed or performed hereunder by the Maker, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 3.3 and in the taking of all such action as may be necessary or appropriate in order to protect
the conversion rights of the Holder against impairment. In the event the Holder shall elect to convert this Note as provided herein, the
Maker cannot refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged
in any violation of law, violation of an agreement to which the Holder is a party or for any reason whatsoever, unless, an injunction
from a court on prior notice, enjoining conversion of this Note shall have issued and the Maker posts a surety bond for the benefit of
the Holder in an amount equal to 150% of the Principal of the Note which the Holder has elected to convert, which bond shall remain in
effect until the completion of litigation of the dispute and the proceeds of which shall be payable to the Holder (as liquidated damages)
in the event it obtains judgment.
(d) Certificates
as to Adjustments. Upon occurrence of each adjustment or readjustment of the Fixed Conversion Price or number of shares of Common
Stock issuable upon conversion of this Note pursuant to this Section 3.3, the Maker at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment and readjustment,
showing in detail the facts upon which such adjustment or readjustment is based. The Maker shall, upon written request of the Holder,
at any time, furnish or cause to be furnished to the Holder a like certificate setting forth such adjustments and readjustments, the applicable
Fixed Conversion Price in effect at the time, and the number of shares of Common Stock and the amount, if any, of other securities or
property which at the time would be received upon the conversion of this Note. Notwithstanding the foregoing, the Maker shall not be obligated
to deliver a certificate unless such certificate would reflect an increase or decrease of at least one percent of such adjusted amount.
(e) Issuance
Taxes. The Maker shall pay any and all issuance and other taxes, excluding federal, state or local income taxes, that may be payable
in respect of any issue or delivery of Common Stock on conversion of this Note pursuant thereto; provided, however, that
the Maker shall not be obligated to pay any transfer taxes resulting from any transfer requested by the Holder in connection with any
such conversion.
(f) Reservation
of Common Stock. The Maker shall at all times while this Note shall be outstanding, reserve and keep available out of its authorized
but unissued Common Stock the Required Minimum of Common Stock (disregarding for this purpose any and all limitations of any kind on such
conversion). The Maker shall, from time-to-time, increase the authorized number of shares of Common Stock or take other effective action
if at any time the unissued number of authorized shares shall not be sufficient to satisfy the Maker’s obligations under this Section 3.3(f).
(g) Regulatory
Compliance. If any Common Stock to be reserved for the purpose of conversion of this Note requires registration or listing with or
approval of any Governmental Authority, national securities exchange or other regulatory body under any federal or state law or regulation
or otherwise before such shares may be validly issued or delivered upon conversion, the Maker shall, at its sole cost and expense, in
good faith and as expeditiously as possible, secure such registration, listing or approval, as the case may be.
3.4 Rights
Upon Fundamental Transaction.
(a) Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Person (which may be the Company) formed
by, resulting from or surviving any Fundamental Transaction or the Person with which such Fundamental Transaction shall have been entered
into (the “Successor Entity”) assumes in writing all of the obligations of the Company under this Note and the
other Transaction Documents in accordance with the provisions of this Section 3.4(a) pursuant to written agreements in form and substance
satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder
in exchange for the Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to the Note, including, without limitation, having Principal and Interest equal to the Principal then outstanding and any accrued and
unpaid Interest thereon (if any) of the Note held by the Holder, having similar conversion rights as the Note and having similar ranking
and security to the Note, and satisfactory to the Holder and (ii) the Successor Entity (including its parent entity) is a publicly
traded corporation whose common stock is quoted on or listed for trading on any eligible market listed in the definition of Trading Market
in the Purchase Agreement. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents
referring to the “Company” or the “Maker” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other
Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of
a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion or
prepayment of this Note at any time after the consummation of such Fundamental Transaction, in lieu of the shares of Common Stock issuable
upon the conversion or prepayment of the Note prior to such Fundamental Transaction, such shares of the publicly traded common stock (or
their equivalent) of the Successor Entity (including its parent entity) which the Holder would have been entitled to receive upon the
happening of such Fundamental Transaction had this Note been converted immediately prior to such Fundamental Transaction (without regard
to any limitations on the conversion of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing,
the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 3.4(a) to permit the
Fundamental Transaction without the assumption of this Note. The provisions of this Section 3.4(a) shall apply similarly and
equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion of this Note.
(b) Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or
in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to
ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option, (i) in
addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have
been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation
of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu
of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares
of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to
receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common
Stock) at a conversion price for such consideration commensurate with the Conversion Price. Provision made pursuant to the preceding sentence
shall be in a form and substance satisfactory to the Holder. The provisions of this Section 3.4(b) shall apply similarly and
equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or prepayment of this
Note.
(c) Prepayment
Following a Change of Control. No later than 15 days following the entry by the Company into an agreement for a Change of Control
but in no event prior to the public announcement of such Change of Control, the Maker shall deliver written notice describing the entry
into such agreement (“Notice of Change of Control”) to the Holder. Within fifteen (15) days after receipt of
a Notice of Change of Control, the Holder may require the Maker to prepay, effective immediately prior to the consummation of such Change
of Control, an amount equal to 120% of the sum of (x) the outstanding Principal of this Note and (y) and any accrued and unpaid Interest
thereon (if any) (the “COC Repayment Price”), by delivering written notice thereof (“Notice of Prepayment
at Option of Holder Upon Change of Control”) to the Maker.
(d) Payment
of COC Repayment Price. Upon the Maker’s receipt of a Notice(s) of Prepayment at Option of Holder Upon Change of Control from
the Holder, the Maker shall deliver the COC Repayment Price to the Holder immediately prior to the consummation of the Change of Control;
provided, that the Holder’s original Note shall have been so delivered to the Maker.
3.5 Purchase
Rights. If at any time the Company grants, issues or sells any Options, other Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to all or substantially all of the record holders of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete
conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming for
such purpose that the Note was converted at the Applicable 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase
Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result
of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held
in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended
by such number of days held in abeyance, if applicable) for the benefit of the Holder until such time or times, if ever, as its right
thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the
Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent
Purchase Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision,
such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent as if there had been no such limitation).
3.6 No
Rights as Shareholder. Nothing contained in this Note shall be construed as conferring upon the Holder, prior to the conversion of
this Note, the right to vote or to receive dividends or to consent or to receive notice as a shareholder of the Company in respect of
any meeting of shareholders for the election of directors of the Maker or of any other matter, or any other rights as a shareholder of
the Maker.
Article
4
4.1 Covenants.
For so long as any Principal of this Note remains outstanding, unless Holder has otherwise given prior written consent, the Company shall
be bound by the following covenants:
(a) Rank.
All payments due under this Note shall rank senior to all other Indebtedness of the Company and its Subsidiaries, except for the Other
Notes, Additional Note(s) (including those held by the holder of Other Notes) upon issuance with which payments under this Note shall
rank pari passu.
(b) Incurrence
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, incur
or guarantee or assume any Indebtedness, other than Permitted Indebtedness.
(c) Existence
of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, allow or suffer
to exist any mortgage, lien, pledge, charge, security interest, deed of trust, or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”)
other than Permitted Liens.
(d) Restricted
Payments. Except as otherwise provided for in this Note or the other Transaction Documents, the Company shall not, and the Company
shall cause each of its Subsidiaries to not, directly or indirectly, prepay, defease, repurchase, repay or make any payments having a
total value of more than 50% of the Company’s net assets in respect of, by the payment of cash or cash equivalents (in whole or
in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness
(other than the Note and the Additional Note(s)) whether by way of payment in respect of principal of (or premium, if any) or Interest
on, such Indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event constituting
an Event of Default has occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute
an Event of Default has occurred and is continuing.
(e) Restriction
on Prepayment and Cash Dividends. At any time that an Event of Default exists and is continuing under this Note, the Company shall
not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, prepay, repurchase or declare or pay any cash
dividend or other distribution on any of its capital stock excluding any intercompany transfers.
(f) Restriction
on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
sell, lease, license, assign, transfer, spin-off, split-off, convey or otherwise dispose of any assets or rights which have a total value
of more than 50% of the Company’s net assets of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction
or a series of related transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions
of such assets or rights by the Company and its Subsidiaries in the ordinary course of business consistent with its past practice, (ii)
sales of inventory and products in the ordinary course of business, and (iii) sales of unwanted or obsolete assets.
(g) Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing
in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes
such qualification necessary.
(h) Maintenance
of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its
properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and
tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is
a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(i) Maintenance
of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable to
maintain all of the rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, original
works of authorship, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and
other intellectual property rights and all applications and registrations therefor of the Company and/or any of its Subsidiaries, in each
case that are necessary or material to the conduct of its business in full force and effect.
(j) Maintenance
of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption
insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering
such risks as is required by any Governmental Authority having jurisdiction with respect thereto or as is carried generally by companies
in similar businesses similarly situated.
(k) Transactions
with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to,
any transaction or series of related transactions having a total value of more than 50% of the Company’s net assets (including,
without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of
any kind) with any Affiliate, except in the ordinary course of business in a manner and to an extent consistent with past practice and
necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries
than would be obtainable in a comparable arm’s length transaction with a Person that is not an Affiliate thereof.
(l) Dividends.
The Company shall not, nor shall it permit any of its Subsidiaries to, pay dividends and other distributions.
(m) Use
of Proceeds. The Maker shall use the proceeds of this Note as set forth in the Purchase Agreement.
(n) Operation
of Business. The Company shall operate its business in the ordinary course consistent with past practices.
(o) Compliance
with Transaction Documents. The Maker shall, and shall cause its Subsidiaries to, comply with its obligations under this Note and
the other Transaction Documents.
(p) Payment
of Taxes, Etc. The Maker shall, and shall cause each of its Subsidiaries to, promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business
of the Maker and the Subsidiaries, except for such failures to pay that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect; provided, however, that any such tax, assessment, charge or levy need
not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Maker or such Subsidiaries
shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Maker and such Subsidiaries
will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may
have attached as security therefor.
(q) Variable
Rate Transactions. The Company shall not enter into any Variable Rate Transactions, except as otherwise expressly permitted under
the Purchase Agreement.
4.2 Option of the Holder. In
connection with the number of Trading Days referred to in Sections 3.13.1(b), 3.1(c) 3.3(a)(i), 5.11(e) and 5.11(ww) of this Note,
the Holder shall have the option to add the number of Trading Days for which a temporary “chill” has been in effect as specified
in the Purchase Agreement. This Section 4.2 and any election by the Holder shall not be deemed to modify the Events of Default.
Article
5
5.1 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email
at the email address specified in this Section 5.1 prior to 5:00 p.m. (New York, N.Y. time) on a Trading Day, (b) the next Trading
Day after the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section 5.1
on a day that is not a Trading Day or later than 5:00 p.m. (New York, N.Y. time) on any date and earlier than 11:59 p.m. (New York, N.Y.
time) on such date, (c) the Trading Day following the date of delivery to a carrier, if sent by U.S. nationally recognized overnight courier
service next Trading Day delivery, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses
for notice shall be as set forth in the Purchase Agreement.
5.2 Governing
Law. This Note shall be governed by and construed in accordance with the laws of the Cayman Islands. This Note shall not be interpreted
or construed with any presumption against the party causing this Note to be drafted.
5.3 Headings.
Article and Section headings in this Note are included herein for purposes of convenience of reference only and shall not constitute a
part of this Note for any other purpose.
5.4 Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance
and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to
such remedy and nothing herein shall limit the Holder’s right to pursue actual damages for any failure by the Maker to comply with
the terms of this Note. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other
obligation of the Maker (or the performance thereof). The Maker acknowledges that a breach by it of its obligations hereunder will cause
irreparable and material harm to the Holder and that the remedy at law for any such breach would be inadequate. Therefore, the Maker agrees
that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available rights and
remedies, at law or in equity, to seek equitable relief, including but not limited to an injunction restraining any such breach or threatened
breach, without the necessity of pleading and proving irreparable harm or lack of an adequate remedy at law and without any bond or other
security being required.
5.5 Binding
Effect. The obligations of the Maker set forth herein shall be binding upon its successors and assigns, whether or not such successors
or assigns are permitted by the terms herein.
5.6 Amendments;
Waivers. Except for Section 3.2(e), which may not be amended, modified or waived by the Company or the Holder except as expressly
set forth therein, no provision of this Note may be waived or amended except in a written instrument signed by the Company and the Holder.
No waiver of any default with respect to any provision, condition or requirement of this Note shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of the Holder to exercise any right hereunder in any manner impair the exercise of any such right.
5.7 Compliance
with Securities Laws. The Holder of this Note acknowledges that this Note is being acquired solely for the Holder’s own account
and not as a nominee for any other party, and for investment, and that the Holder shall not offer, sell or otherwise dispose of this Note
in violation of applicable securities laws.
5.8 Exclusive
Jurisdiction; Venue. Any action, proceeding or claim arising out of, or relating in any way to, this Agreement shall be brought and
enforced as provided in the Purchase Agreement.
5.9 Failure
or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
5.10 Maker
Waivers. Except as otherwise specifically provided herein, the Maker and all others that may become liable for all or any part of
the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands’ and
notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of
renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any
such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without
affecting the liability of the other persons, firms or Maker liable for the payment of this Note, and do hereby waive the right to
a trial by jury.
5.11 Definitions.
Capitalized words and phrases used herein and not defined and which are not descriptive shall have the meanings set forth in the Purchase
Agreement. For the purposes hereof, the following terms shall have the following meanings.
(a) “Additional
Note(s)” means the Note(s) that may be issued to the Holder and/or the holder(s) of Other Notes upon the Holder and such
holder(s) lending the Maker additional funds in, and subject to the other terms and conditions of, the Purchase Agreement.
(b) “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance
or sale (or deemed issuance or sale in accordance with Sections 3.3(a)) of Common Stock (other than rights of the type described in Section
3.4) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities
(including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(c) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly
or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct
or cause the direction of the management and policies of such Person whether by contract or otherwise.
(d) “Alternative
Conversion Price” means 90% of the lowest daily VWAP in the 10 Trading Days immediately preceding the applicable Conversion
Date, provided, however, that if any Alternative Conversion Price under this definition results in a fractional amount, the fractional
amount shall be rounded down to the nearest whole cent.
(e) “Applicable
Conversion Price” has the meaning contained in Section 3.1(c).
(f) “Applicable
Price” has he meaning contained in Section 3.3(a)(v).
(g) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds
or managed accounts, currently, or from time to time after the Original Issuance Date, directly or indirectly managed or advised by the
Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any
of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing
and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the 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 the Holder and all other Attribution Parties to the Maximum Percentage.
(h) “Buy-In”
has the meaning contained in Section 3.2(c).
(i) “Buy-In
Price” has the meaning contained in Section 3.2(c).
(j) “Buy-In
Payment Amount” has the meaning contained in Section 3.2(c).
(k) “Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect,
wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of
the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly
or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority
or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or
entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely for
the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(l) “COC
Repayment Price” has the meaning contained in Section 3.4(c).
(m) “Common
Stock” shall have the meaning as defined in the Purchase Agreement, and for the purposes of this Note, shall also refer
to Conversion Shares unless otherwise apparent from the context.
(n) “Company”
has the meaning contained on page 1 of this Note.
(o) “Conversion
Amount” has the meaning contained in Section 3.1(a).
(p) “Conversion
Date” has the meaning contained in Section 3.1(a).
(q) “Conversion
Failure” has the meaning contained in Section 3.2(c).
(r) “Conversion
Notice” has the meaning contained in Section 3.1(a).
(s) “Conversion
Price” has the meaning contained in Section 3.1(b).
(t) “Conversion
Shares” has the meaning contained in Section 3.2(a). In this Note, the use of Common Stock shall also refer to Conversion
Shares unless otherwise apparent from the context.
(u) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(v) “Corporate
Event” has the meaning contained in Section 3.4(b).
(w) “Default
Interest” has the meaning contained in Section 1.2.
(x) “Default
Interest Payment Date” has the meaning contained in Section 1.2.
(y) “Dilutive
Issuance” has the meaning contained in Section 3.3(a)(v).
(z) “Dilutive
Issuance Price” has the meaning contained in Section 3.3(a)(v).
(aa) “DTC”
has the meaning contained in Section 3.2(a).
(bb) “Equity
Conditions” means, as of any given date of determination, all of the following have been met: (a) the Company has complied
with all of the conversion and other provisions of the Notes and related Transaction Documents; (b) the Company shall be current in filing
required reports with the SEC and there is no pending extension under Rule 12b-25 of the Exchange Act; (c) the Notes shall not be in default
and an Event of Default shall not have otherwise occurred; (d) the Common Stock has not been subject to a trading suspension by the SEC
or the Trading Market or been delisted by the Trading Market nor shall delisting or suspension by the Trading Market have been threatened
or reasonably likely to occur or pending as evidenced by a writing issued by the Trading Market, nor shall the Company have received notice
from its Trading Market of delisting or non-compliance with the rules, regulations and continued listing standards thereof even if subject
to cure; (e) the Company’s Common Stock must be DWAC Eligible; (f) the Common Stock shall have not been subject to a “chill”
or similar event imposed by The Depository Trust Co.; (g) the Company has met each delivery deadline in connection with prior conversions
of the Notes; (h) the Company has complied with all Transaction Documents in all respects; (i) the Company shall not have engaged in the
sale of any securities under Section 3(a)(10) of the Securities Act; (j) no Investor shall be in possession of any material, non-public
information provided to any of them by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers,
representatives, agents or attorneys (except, with respect to a closing hereunder, where such material, non-public information that will
be disclosed to the public no later than 9:00 a.m. New York, N.Y. time on the Trading Day immediately following the date of such closing);
(k) the Registration Statement covering the Shares and Underlying Shares, has been filed and declared effective within the timeframe provided
for in the Agreement and the Prospectus contained in such Registration Statement complies with Sections 5(b) and 10 of the Securities
Act (and the Company shall have no knowledge of any fact that would reasonably be expected to cause such Prospectus thereunder to not
be true and correct or to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading); (l) any shares of Common Stock underlying the Notes to be issued in connection
with the event requiring determination may be issued in full without violating the rules or regulations of the Trading Market; (m) the
Company has available shares of Common Stock as necessary to issue all Shares and Underlying Shares; (n) no bona fide material dispute
shall exist by and between any of holder of the Notes and/or Other Notes and the Company, the Trading Market and/or the Financial Industry
Regulatory Authority with respect to any term or provision of any Note or any other Transaction Document; and (o) the Company shall be
in compliance with all SEC regulations and rules and all listing requirements of the Trading Market.
(cc) “Event
Market Price” has the meaning contained in Section 3.3(a)(i).
(dd) “Event
of Default” has the meaning contained in Section 2.1.
(ee) “Excess
Shares” has the meaning contained in Section 3.2(e).
(ff) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(gg) “FAST”
has the meaning contained in Section 3.2(a).
(hh) “Fixed
Conversion Price” has the meaning contained in Section 3.1(b).
(ii) “Floor
Price” means $0.11; provided that in any event where the Floor Price applies so as to limit or reduce the number of shares
of Common Stock issuable upon a conversion of this Note, the Maker shall pay the Holder the economic difference between the Applicable
Conversion Price and the Floor Price as to all such shares, as provided in Section 3.1(c); and provided further that for the avoidance
of doubt, the Company shall register any additional shares of Common Stock underlying this Note resulting from the foregoing on the Registration
Statement or otherwise pursuant to the Purchase Agreement if and as necessary for any such additional shares to be free of any restrictive
or trading legend when issued.
(jj) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company
or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Persons, or (iii) make,
or allow one or more Persons to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or
more Persons making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding
shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Persons
making or party to, or Affiliated with any Person or group of Persons making or party to, such purchase, tender or exchange offer were
not outstanding; or (z) such number of shares of Common Stock such that all Persons making or party to, or Affiliated with any Person
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 outstanding shares of Common Stock, or (iv) consummate a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with
one or more Persons whereby all such Persons, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares
of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the
Persons making or party to, or Affiliated with any Person making or party to, such stock purchase agreement or other business combination
were not outstanding; or (z) such number of shares of Common Stock such that the Persons become collectively the beneficial owners (as
defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize
or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, allow any Person individually or the Persons 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 outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in
any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Persons as of the date of this Note calculated as if any shares of Common Stock held by all such Persons were not outstanding, or (z)
a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities
of the Company sufficient to allow such Persons to effect a statutory short form merger or other transaction requiring other shareholders
of the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly,
including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any
other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case
this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to
the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended
treatment of such instrument or transaction.
(kk) “Governmental
Authority” means the government of the United States, or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to government.
(ll) “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.
(mm) “Holder”
has the meaning contained on page 1 of this Note.
(nn) “Indebtedness”
shall have the meaning contained in the Purchase Agreement.
(oo) “Interest”
has the meaning contained in Section 2.1.
(pp) “Liens”
has the meaning contained in Section 4.1(c).
(qq) “Liquidation
Event” has the meaning contained in Section 1.5.
(rr) “Maker”
has the meaning contained on page 1 of this Note.
(ss) “Mandatory
Default Amount” means an amount equal to 115% of the sum of (x) the outstanding Principal of this Note on the date on which
the first Event of Default has occurred hereunder and (y) any accrued and unpaid Interest thereon, if any.
(tt) “Mandatory
Prepayment Price” have the meaning contained in Section 3.2(c)(i).
(uu) “Maturity
Date” has the meaning contained on page 1 of this Note.
(vv) “Maximum
Percentage” has the meaning contained in Section 3.2(e).
(ww) “Note”
has the meaning contained on page 1 of this Note.
(xx) “Notes”
means this Note and the Additional Note(s) (if and when issued).
(yy) “Notice
of Change of Control” has the meaning contained in Section 3.4(c).
(zz) “Notice
of Prepayment at Option of Holder Upon Change of Control” has the meaning contained in Section 3.4(c).
(aaa) “Other
Note(s)” means any Note(s) issued to other Investors under the Purchase Agreement or their permitted assigns.
(bbb) “Permitted
Indebtedness” means the Indebtedness having a total value of no more than 50% of the Company’s net assets.
(ccc) “Permitted
Liens” means (i) Liens under the Transaction Documents, (ii) Liens incurred in connection with Permitted Indebtedness and
having a total value of no more than 50% of the Company’s net assets.
(ddd) “Primary
Security” has the meaning contained in Section 3.3(a)(v)(5).
(eee) “Principal”
has the meaning contained on page 1 of this Note.
(fff) “Purchase
Agreement” has the meaning contained in Section 1.1.
(ggg) “Purchase
Rights” has the meaning contained in Section 3.5.
(hhh) “Reported
Outstanding Share Number” has the meaning contained in Section 3.2(e).
(iii) “Required
Minimum” shall have the meaning contained in the Purchase Agreement.
(jjj) “SEC”
means the United States Securities and Exchange Commission or the successor thereto.
(kkk) “Secondary
Securities” has the meaning contained in Section 3.3(a)(v)(5).
(lll) “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(mmm) “Share
Delivery Date” has the meaning contained in Section 3.2(a).
(nnn) “Shareholder
Approval” shall have the meaning contained in the Purchase Agreement.
(ooo) “Shares”
has the meaning contained in the Purchase Agreement.
(ppp) “Standard
Settlement Period” has the meaning contained in Section 1.1(a).
(qqq) “Subsidiary”
shall have the meaning contained in the Purchase Agreement.
(rrr) “Successor
Entity” has the meaning contained in Section 3.4(a).
(sss) “Trading
Day” means a day on which the shares of Common Stock are traded on a Trading Market for at least 4.5 hours.
(ttt) “Trading
Market” has the meaning contained in the Purchase Agreement.
(uuu) “Transaction
Documents” has the meaning contained in the Purchase Agreement.
(vvv) “Transfer
Agent” has the meaning contained in Section 3.2(a).
(www) “Underlying
Shares” has the meaning contained in the Purchase Agreement.
(xxx) “Variable
Rate Transactions” has the meaning contained in the Purchase Agreement.
(yyy) “Voluntary
Prepayment Premium” has the meaning set forth in Section 1.3.
(zzz) “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on the Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York, N.Y. time) to 4:02 p.m. (New York, N.Y. time)), (b) if the Common Stock
is traded on OTCQB or OTCQX, the volume weighted average sales price of the Common Stock for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for
the Common Stock is then reported in the “Pink Open Market” or successor operated by OTC Markets Group, Inc.
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent broker-dealer
selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
(aaaa) “$”
means United States dollars.
[Signature
Page Follows]
In
Witness Whereof, the Maker has caused this Note to be duly executed by its duly authorized officer as of the date first above
indicated.
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Fangdd Network Group Ltd. |
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Name: |
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Title: |
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Exhibit
A
FORM OF CONVERSION NOTICE
(To be Executed by the Holder
in order to Convert the Note)
The undersigned hereby irrevocably
elects to convert $ ________________ of the Principal of Note No. ___ into shares of Common Stock of Fangdd Network Group Ltd. (the “Maker”)
according to the terms and conditions set forth in the aforementioned Note, as of the date written below.
Date of Conversion:
Conversion Amount:
Applicable Conversion Price:
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Exhibit 99.1
FANGDD ANNOUNCES US$5,000,000 SENIOR CONVERTIBLE
NOTES OFFERING
SHENZHEN, China, February 11,
2025 (GLOBE NEWSWIRE) -- Fangdd Network Group Ltd. (Nasdaq: DUO) (“FangDD” or the “Company”), a customer-oriented
property technology company in China, today announced that it has entered into a securities purchase agreement with certain investors
(the “Purchase Agreement”) for the offering by the Company of (i) senior 5% original issue discount convertible promissory
notes in an aggregate principal amount of US$5,000,000 (the “Notes”), (ii) Class A ordinary shares, par value US$0.0005625
per share, issuable from time to time upon conversion under the Notes, and (iii) additional 164,610
Class A ordinary shares in connection with the issuance of the Notes.
The Notes carry a 5% original issue discount,
and have a term of nine months from the original issuance date. No interest accrues during the term of the Notes unless an event of default
occurs, in which case interest will accrue at a rate of 15% per annum or, if less, the highest amount permitted by law. The Company’s
obligations under these Notes rank senior to all other existing indebtedness and equity, with the Notes issued under the Purchase Agreement
treated equally.
Holders can convert their Notes into Class A
ordinary shares by providing a conversion notice. The number of shares issuable upon conversion is calculated by dividing (i) the portion
of the principal and any accrued interest the holder chooses to convert by (ii) the conversion price on the date of the conversion notice.
The conversion price is the lower of (i) the fixed conversion price, set at 130% of the lowest daily VWAP on the trading day immediately
before the closing date of the Purchase Agreement, and (ii) the alternative conversion price, set at 90% of the lowest daily VWAP over
the ten trading days immediately before the date of the conversion notice. Any fractional amounts resulting from these calculations will
be rounded down to the nearest cent, and the conversion price cannot fall below the floor price, which is set at US$0.11 per share. If
the conversion price is lower than the floor price at the time a conversion notice is received, shares will be issued based on the floor
price, and the Company will need to compensate the holder for any economic difference. The difference is determined as (i) the number
of shares that would have been delivered using the conversion price, minus (ii) the number of shares delivered using the floor price,
multiplied by (iii) the daily VWAP of the Company’s Class A ordinary shares on the date of the conversion notice. VWAP for any
date is defined as the daily volume weighted average price of the Company’s Class A ordinary shares for such date or the nearest
preceding date as reported by Bloomberg L.P.
The Purchase Agreement and the Notes contain
representations, warranties and other provisions customary for transactions of this nature. The offering is expected to close on or
about February 11, 2025, subject to the satisfaction of customary closing conditions.
FangDD intends to use the net proceeds from this offering for general corporate purposes.
The Company has engaged MM Global Securities,
Inc. as its exclusive placement agent in connection with this offering.
The securities described above will be offered
by the Company pursuant to an effective “shelf” registration statement on Form F-3 (File No. 333-267397) previously filed
with the United States Securities and Exchange Commission (the “SEC”) on September 13, 2022 and declared effective by the
SEC on September 29, 2022. The securities may be offered only by means of a written prospectus and prospectus supplement that form a part
of the registration statement. The prospectus supplement and accompanying base prospectus contain important information relating to the
Class A ordinary shares to be sold in the offering. The prospectus supplement will be filed with the SEC and will be available on the
SEC’s website at http://www.sec.gov, or may be obtained, when available, by contacting us at Room 1501, Shangmei Technology Building,
No. 15 Dachong Road, Nanshan District, Shenzhen, the PRC, or by email at ir@fangdd.com. The foregoing
description of the Purchase Agreement and the Notes is qualified in its entirety by reference to the full text of such agreements furnished
as exhibits to a current report on Form 6-K to be furnished by the Company to the SEC.
This press release shall not constitute an offer
to sell nor the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state
or jurisdiction.
About FangDD
Fangdd Network Group Ltd. (Nasdaq: DUO) is a customer-oriented
property technology company in China, focusing on providing real estate transaction digitalization services. Through innovative use of
mobile internet, cloud, big data, artificial intelligence, among others, FangDD has fundamentally revolutionized the way real estate transaction
participants conduct their business through a suite of modular products and solutions powered by SaaS tools, products and technology.
For more information, please visit http://ir.fangdd.com.
Safe Harbor Statement
This announcement 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 “aim,” “anticipate,” “believe,”
“estimate,” “expect,” “hope,” “going forward,” “intend,” “ought to,”
“plan,” “project,” “potential,” “seek,” “may,” “might,” “can,”
“could,” “will,” “would,” “shall,” “should,” “is likely to” and
the negative form of these words and other similar expressions. Among other things, statements that are not historical facts, including
statements about the Company’s beliefs and expectations are or contain 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. All information provided in this press release is as of the date of this press release and is based on assumptions that the
Company believes to be reasonable as of this date, and the Company does not undertake any obligation to update any forward-looking statement,
except as required under applicable law.
Investor Relations Contact
Ms. Linda Li
Director, Capital Markets Department
Phone: +86-0755-2699-8968
E-mail: ir@fangdd.com
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