UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2024
Commission File Number: 001-42154
ESHALLGO INC
No. 37, Haiyi Villa, Lane 97, Songlin Road
Pudong New District
Shanghai, China 200120
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form
20-F x Form 40-F ¨
On
November 29, 2024, ESHALLGO INC (the “Company”) entered into a securities purchase agreement (the “Securities
Purchase Agreement”) with an accredited investor (the “Debenture Holder”) to place Convertible Debentures (the “Debentures,”
each, a “Debenture”) with a maturity date (the “Maturity Date”) of November 28, 2025, which is 364 days after
the issuance of the first Debenture, in the aggregate principal amount of up to $5,000,000 at a purchase price equal to 95% of the principal
amount (the “Transaction”), provided that in case of an event of default, the Debentures may become, at the Debenture Holder’s
election, immediately due and payable. The Debentures bear an interest rate of 5% per annum which shall be increased to 18% per annum
in the event of default. Pursuant to the securities purchase agreement, the Debentures will be issued in a private placement pursuant
to an exemption from the registration requirements pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation
D thereunder.
The
Company also entered into a registration rights agrement (the “Registration Rights Agrement”), date November 29, 2024,
pursuant to which the Company agreed to register for resale the Class A ordinary shares issuable pursuant to the Debentures with the U.S.
Securities and Exchange Commission (the “SEC”) within 21 days from the date of the Registration Rights Agrement.
The
initial closing of the Transaction occurred on November 29, 2024 when we issued a first Debenture for $1,500,000. The second closing
of a Debenture in the amount of $2,000,000 shall occur upon the filing of an initial registration statement (the “Registration Statement”)
with the SEC registering the resale of the Class A ordinary shares upon conversion of the Debentures by the Debenture Holder. The third
closing of a Debenture in the amount of $1,500,000 shall occur upon effectiveness of the Registration Statement as declared by the SEC.
In
addition, the Company agreed to pay to the Debenture Holder (i) a commitment fee equal to 1% of the principal amount upon the effectiveness
of the Registration Statement, either in cash or by the issuance to the Debenture Holder of such number of Class A ordinary shares that
is equal to the commitment fee divided by the closing bid price of the Class A ordinary shares as of the date of the Securities Purchase
Agreement, and (ii) a one-time due diligence and structuring fee of $25,000 at the first closing.
During
the period from the issuance date of each Debenture and ending on the 50th calendar day after such issuance date, the Debenture Holder
may convert the Debenture in its sole discretion to Company’s Class A ordinary shares at $4.756. After 50 calendar days form the
issuance date and ending on the Maturity Date, the Debenture Holder may convert the Debenture in its sole discretion to Company’s
Class A ordinary shares at any time at the lower of $4.756 or 93% of the lowest daily VWAP for the Ordinary Shares during the 5 consecutive
trading days immediately preceding the conversion date, provided that the conversion price may not be less than $0.78954 (the “Floor
Price”). The Debenture Holder may not convert any portion of a Debenture if such conversion would result in the Debenture Holder
beneficially owning more than 4.99% of Company’s then issued and outstanding shares, provided that such limitation may be waived
by the Debenture Holder with 65 days’ prior written notice. Any time after the issuance of a Debenture that the daily VWAP is less
than the Floor Price for a period of 5 consecutive trading days in a period of 7 consecutive trading days or that a Registration
Default (as defined in the Debenture) occurs (the last such day of each such occurrence, an “Amortization Event”),
the Company shall make monthly payments beginning on the 10th trading day after the Amortization Event date and continuing on the same
day of each successive calendar month. Each monthly payment shall be in an amount equal to the sum of (i) $1,000,000 of the principal
or the outstanding principal if the principal is less than such amount plus, (ii) the payment premium of 10% in respect of such amount
in (i), and (iii) accrued and unpaid interest hereunder as of each payment date.
The
foregoing description of the Debentures, the Securities Purchase Agreement, and the Registration Rights Agrement is only a brief
description of the material terms of the transaction documents and does not purport to be a complete description of the rights and obligations
of the parties thereunder and such agreements are qualified in their entirety by reference to the full text of such documents, which are
attached as Exhibits 2.1, 10.1 and 10.2, respectively, to this report on Form 6-K.
This report shall not constitute an offer to sell
or a solicitation of an offer to purchase any securities, nor shall there be a sale of the securities in any state or jurisdiction in
which such an offer, solicitation or sale would be unlawful.
EXHIBIT INDEX
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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ESHALLGO INC |
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| Date: November 29, 2024 |
By: |
/s/ Qiwei Miao |
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Name: |
Qiwei Miao |
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Title: |
Chief Financial Officer |
Exhibit 2.1
NEITHER
THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.
ESHALLGO
INC
Convertible
Debenture
Principal
Amount: $[_________]
Debenture Issuance Date: [_________]
Debenture Number: EHGO – [1][2][3] -
[1][2][3]
FOR
VALUE RECEIVED, Eshallgo Inc, an exempted company incorporated under the laws of Cayman Islands (the "Company"),
hereby promises to pay to the order of [ ], or its registered assigns (the "Holder") the amount set out above as the
principal amount (as reduced or increased pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the "Principal")
when due, whether upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the
terms hereof) and to pay interest ("Interest") on any outstanding Principal at the applicable Interest Rate from the
date set out above as the Debenture Issuance Date (the "Issuance Date") until the same becomes due and payable, whether
upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This Convertible
Debenture (including all debentures issued in exchange, transfer or replacement hereof, this "Debenture") was originally
issued pursuant to the Securities Purchase Agreement dated as of November 29, 2024, as it may be amended from time to time (the “Securities
Purchase Agreement”) between the Company and the Buyers listed on the Schedule of Buyers attached thereto. Certain capitalized
terms used herein are defined in Section (14).
(1) GENERAL
TERMS
(a) Maturity
Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued
and unpaid Interest, and any other amounts outstanding pursuant to the terms of this Debenture. The "Maturity Date" shall
be November 28, 2025, as may be extended at the option of the Holder. Other than as specifically permitted by this Debenture, the
Company may not prepay or redeem any portion of the outstanding Principal and accrued and unpaid Interest.
(b) Interest
Rate and Payment of Interest. Interest shall accrue on the outstanding Principal balance hereof at an annual rate equal to 5.00% (“Interest
Rate”), which Interest Rate shall increase to an annual rate of 18.0% upon the occurrence of an Event of Default (for so long
as such event remains uncured). Interest shall be calculated based on a 365-day year and the actual number of days elapsed, to the extent
permitted by applicable law.
(c) Payment
Dates. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day.
(2) PAYMENTS
(a) Monthly
Payments. If, any time after the Issuance Date set forth above, and from time to time thereafter, an Amortization Event occurs, then
the Company shall make monthly payments beginning on the 10th Trading Day after the Amortization Event Date, and in the case of a Floor
Price Event (as defined in Section 14(a)) the 30th calendar days after the Floor Price Event, and continuing on
the same day of each successive Calendar Month. Each monthly payment shall be in an amount equal to the sum of (i) $1,000,000 of
Principal (in the aggregate among this Debenture and all Other Debentures), or the outstanding Principal, if the Principal (in the aggregate
among this Debenture and all Other Debentures) is less than such amount (the “Amortization Principal Amount”), plus
(ii) the Payment Premium (as defined below) in respect of such Amortization Principal Amount, and (iii) accrued and unpaid interest
hereunder as of each payment date. The obligation of the Company to make monthly prepayments related to a Amortization Event shall cease
(with respect to any payment that has not yet come due) if any time after the Amortization Event Date (A) in the event of a Floor
Price Event, on the date that is the 5th consecutive Trading Day that the daily VWAP is greater than 110% of the Floor Price
then in effect, or (B) in the event of a Registration Event, the condition or event causing the Registration Event has been cured
or the Holder is able to resell the Ordinary Shares issuable upon conversion of this Note in accordance with Rule 144 under the Securities
Act, unless a subsequent Amortization Event occurs. If this Debenture and any Other Debentures are held by more than one holder, then
the Amortization Principal Amount and Payment Premium in respect of such Amortization Principal Amount shall be allocated to each holder
based on each holder’s pro-rata portion of the total outstanding Principal amount outstanding on this Debenture and all Other Debentures.
If this Debenture and all Other Debentures are held by one holder, then such holder shall decide the allocation of payments between this
Debenture and all Other Debentures in its sole discretion.
(b) The
Company shall have the right, but not the obligation, to redeem (“Optional Redemption”) early in cash a portion or
all amounts outstanding under this Debenture at the Redemption Amount (as defined below) as described in this Section; provided
that the Company provides the Holder with at least 10 Trading Days’ prior written notice (each, a “Redemption Notice”)
of its desire to exercise an Optional Redemption, which Redemption Notice (i) shall be delivered to the Holder after the closing
of regular trading hours on a Trading Day, and (ii) may only be given if the VWAP on the date such Redemption Notice is delivered
is less than the Fixed Price. Each Redemption Notice shall be irrevocable and shall specify the outstanding balance of the Debentures
to be redeemed and the Redemption Amount. The “Redemption Amount” shall be an amount equal to the outstanding Principal
balance being redeemed by the Company, plus the Payment Premium in respect of such Principal amount, plus all accrued and unpaid interest
hereunder as of such redemption date. After receipt of a Redemption Notice, the Holder shall have ten (10) Trading Days (beginning
with the Trading Day immediately following the date of such Redemption Notice) to elect to convert all or any portion of the outstanding
Principal of the Debenture plus all accrued and unpaid Interest, if any, plus the Payment Premium, if any, in respect of such Principal.
On the eleventh (11th) Trading Day after the applicable Redemption Notice, the Company shall deliver to the Holder the Redemption
Amount with respect to the Principal amount redeemed to the extent not converted and otherwise after giving effect to conversions or other
payments made during the ten (10) Trading Day period.
(c) Other
than as specifically set forth in this Debenture, the Company shall not have the ability to make any early repayments without the consent
or at the request of the Holder.
(3) EVENTS
OF DEFAULT.
(a) An
“Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it
shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order,
rule or regulation of any administrative or governmental body):
(i) The
Company's failure to pay to the Holder any amount of Principal after such payment is due, or any Redemption Amount. Payment Premium, Interest,
or other amounts when and as due under this Debenture or any other Transaction Document and such failure continues for a period of five
(5) Business Days;
(ii) The
Company or any Significant Subsidiary of the Company shall commence, or there shall be commenced against the Company or any Significant
Subsidiary of the Company, any proceeding under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor
thereto, or the Company or any Significant Subsidiary of the Company commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter
in effect relating to the Company or any Significant Subsidiary of the Company any such bankruptcy, insolvency or other proceeding which
remains undismissed for a period of sixty one (61) days; or the Company or any Significant Subsidiary of the Company is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company or any Significant
Subsidiary of the Company suffers any appointment of any custodian, private or court appointed receiver or the like for it or all or substantially
all of its property which continues undischarged or unstayed for a period of sixty one (61) days; or the Company or any Significant Subsidiary
of the Company makes a general assignment of all or substantially all of its assets for the benefit of creditors; or the Company or any
Significant Subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or the Company or any Significant Subsidiary of the Company shall call a meeting of its creditors with a
view to arranging a composition, adjustment or restructuring of its debts; or the Company or any Significant Subsidiary of the Company
shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate
or other action is taken by the Company or any Significant Subsidiary of the Company for the purpose of effecting any of the foregoing;
(iii) The
Company or any Significant Subsidiary of the Company shall default in any of its obligations under any note, debenture, or any mortgage,
credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by
which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement
of the Company or any Significant Subsidiary of the Company in an amount exceeding $2,500,000, whether such indebtedness now exists or
shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable and such default
is not thereafter cured within five (5) Business Days;
(iv) a
final judgment or judgments for the payment of money aggregating in excess of $2,500,000 are rendered against the Company and/or any of
its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending
appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which is covered
by insurance or an indemnity from a credit worthy party shall not be included in calculating the $2,500,000 amount set forth above so
long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be
reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such
Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such
judgment;
(v) The
Ordinary Shares shall cease to be quoted or listed for trading, as applicable, on any Principal Market for a period of ten (10) consecutive
Trading Days;
(vi) The
Company or any Subsidiary of the Company shall be a party to any Change of Control Transaction (as defined in Section (14)) unless
in connection with such Change of Control Transaction this Debenture is redeemed under Section (2)(b);
(vii) The
Company's (A) failure to deliver the required number of Ordinary Shares to the Holder within one (1) Trading Days after the
applicable Share Delivery Date or (B) notice, written or oral, to any holder of the Debenture, including by way of public announcement,
at any time, of its intention not to comply with a request for conversion of any Debenture into Ordinary Shares that is tendered in accordance
with the provisions of the Debenture, other than pursuant to Section (4)(c);
(viii) The
Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined herein) within five (5) Business
Days after such payment is due;
(ix) The
Company’s failure to timely file with the Commission any Periodic Report on or before the due date of such filing as established
by the Commission, it being understood, for the avoidance of doubt, that due date includes any permitted filing deadline extension under
Rule 12b-25 under the Exchange Act, if such failure is not cured within five (5) Business Days;
(x) Any
representation or warranty made or deemed to be made by or on behalf of the Company in or in connection with any Transaction Document,
or any waiver hereunder or thereunder, shall prove to have been incorrect in any material respect (or, in the case of any such representation
or warranty already qualified by materiality, such representation or warranty shall prove to have been incorrect) when made or deemed
made;
(xi) Any
material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder, ceases to be in full force and effect; or the Company or any other Person contests in writing the validity
or enforceability of any provision of any Transaction Document; or the Company denies in writing that it has any or further liability
or obligation under any Transaction Document, or purports in writing to revoke, terminate (other than in line with the relevant termination
provisions) or rescind any Transaction Document;
(xii) The
Company uses the proceeds of the issuance of this Debenture, whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulations T, U and X of the Federal Reserve Board,
as in effect from time to time and all official rulings and interpretations thereunder or thereof), or to extend credit to others for
the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose;
(xiii) Any
Event of Default (as defined in the Other Debentures or in any Transaction Document other than this Debenture) occurs with respect to
any Other Debentures, or any breach of any material term of any other debenture, note, or instrument held by the Holder in the
Company or any agreement between or among the Company and the Holder;
(xiv) A
Registration Default occurs; or
(xv) The
Company shall fail to observe or perform any material covenant, agreement or warranty contained in, or otherwise commit any material breach
or default of any provision of this Debenture (except as may be covered by Section (3)(a)(i) through (3)(a)(xiii) hereof)
or any other Transaction Document) which is not cured or remedied within the time prescribed or if no time is prescribed within ten (10) Business
Days.
(b) During
the time that any portion of this Debenture is outstanding, if any Event of Default has occurred (other than an event with respect to
the Company described in Section (3)(a)(ii)), the full unpaid Principal amount of this Debenture, together with interest and other
amounts owing in respect thereof, to the date of acceleration shall become at the Holder's election given by notice pursuant to Section (7),
immediately due and payable in cash; provided that, in the case of any event with respect to the Company described in Section (3)(a)(ii),
the full unpaid Principal amount of this Debenture, together with accrued and unpaid interest and other amounts owing in respect thereof
to the date of acceleration, shall automatically become due and payable, in each case without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company. Furthermore, in addition to any other remedies, the Holder shall have
the right (but not the obligation) to convert, at the Conversion Price, on one or more occasions all or part of the Conversion Amount
in accordance with Section (4) and subject to the limitations in Section (4)(c) at any time after (x) an Event
of Default or (y) the Maturity Date, provided that this Debenture remains outstanding, at the Conversion Price. The Holder need not
provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, (other than required notice of conversion)
and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable
law. Such declaration may be rescinded and annulled by the Holder in writing at any time prior to payment hereunder. No such rescission
or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
(4) CONVERSION
OF DEBENTURE. This Debenture shall be convertible into Ordinary Shares, on the terms and conditions
set forth in this Section (4).
(a) Conversion
Right. Subject to the limitations of Section (4)(c), commencing 50 calendar days after the Issuance Date of Debenture, the Holder
shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable
Ordinary Shares in accordance with Section (4)(b), at the Conversion Price (as defined below) provided however notwithstanding the
forgoing, subject to the limitations of Section (4)(c), at any time or times on or after the Issuance Date and ending on the 50 calendar
days after the Issuance Date the Holder shall only be entitled to convert any portion of the outstanding and unpaid Conversion Amount
(as defined below) into fully paid and nonassessable Ordinary Shares in accordance with Section (4)(b), at the Fixed Price (as defined
below). The number of Ordinary Shares issuable upon conversion of any Conversion Amount pursuant to this Section (4)(a) shall
be determined by dividing (x) such Conversion Amount by (y) the Conversion Price. The Company shall not issue any fraction of
an Ordinary Share upon any conversion. All calculations under this Section (4) shall be rounded to the nearest $0.0001. If the
issuance would result in the issuance of a fraction of an Ordinary Share, the Company shall round such fraction of an Ordinary Share up
to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the
issuance and delivery of Ordinary Shares upon conversion of any Conversion Amount.
(i) "Conversion
Amount" means the portion of the Principal and accrued Interest to be converted, redeemed or otherwise with respect to which
this determination is being made.
(ii) "Conversion
Price" means, as of any Conversion Date (as defined below) or other date of determination the lower of (i) $4.756
per Ordinary Shares (the “Fixed Price”), or (ii) 93% of the lowest daily VWAP for the Ordinary Shares during the
5 consecutive Trading Days immediately preceding the Conversion Date or other date of determination (the “Market Price”),
but which Market Price shall not be lower than the Floor Price then in effect. The Conversion Price shall be adjusted from time to time
pursuant to the other terms and conditions of this Debenture.
(b) Mechanics
of Conversion.
(i) Optional
Conversion. To convert any Conversion Amount into Ordinary Shares on any date (a "Conversion Date"), the Holder
shall (A) transmit by email (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of
an executed notice of conversion in the form attached hereto as Exhibit I (the "Conversion Notice") to the
Company and (B) if required by Section (4)(b)(iii), surrender this Debenture to a nationally recognized overnight delivery service
for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Debenture in
the case of its loss, theft or destruction). On or before the first (1st) Trading Day following the date of receipt of a Conversion
Notice (or such earlier date as required pursuant to the Exchange Act or other applicable law, rule or regulation for the settlement
of a trade initiated on the applicable Conversion Date of such Ordinary Shares issuable pursuant to such Conversion Notice) (the "Share
Delivery Date"), the Company shall (X) if legends are not required to be placed on certificates or the book-entry position
of the Ordinary Shares and provided that the Company’s transfer agent is participating in the Depository Trust Company's ("DTC")
Fast Automated Securities Transfer Program, instruct such transfer agent to credit such aggregate number of Ordinary Shares to which the
Holder shall be entitled to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system
or (Y) if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, or if restrictive
legends are required to be placed on certificates or book-entry positions of the Ordinary Shares, issue and deliver to the address as
specified in the Conversion Notice, a certificate or book-entry position, registered in the name of the Holder or its designee, for the
number of Ordinary Shares to which the Holder shall be entitled. If this Debenture is physically surrendered for conversion and the outstanding
Principal of this Debenture is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as
soon as practicable and in no event later than three (3) Business Days after receipt of this Debenture and at its own expense, issue
and deliver to the holder a new Debenture representing the outstanding Principal not converted. The Person or Persons entitled to receive
the Ordinary Shares issuable upon a conversion of this Debenture shall be treated for all purposes as the record holder or holders of
such Ordinary Shares upon the transmission of a Conversion Notice.
(ii) Company's
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery
Date to issue and deliver a certificate to the Holder or credit the Holder's balance account with DTC for the number of Ordinary Shares
to which the Holder is entitled upon such Holder's conversion of any Conversion Amount (a "Conversion Failure"),
and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Ordinary Shares to deliver in satisfaction
of a sale by the Holder of Ordinary Shares issuable upon such conversion that the Holder anticipated receiving from the Company (a "Buy-In"),
then the Company shall, within three (3) Business Days after 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 other out of pocket expenses,
if any) for the Ordinary Shares so purchased (the “Buy-In Price”), at which point the Company's obligation to deliver
such certificate (and to issue such Ordinary Shares) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder
a certificate or certificates representing such Ordinary Shares and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of Ordinary Shares, times (B) the Closing Price on the Conversion Date.
(iii) Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Debenture in accordance with the terms
hereof, the Holder shall not be required to physically surrender this Debenture to the Company unless (A) the full Conversion Amount
represented by this Debenture is being converted or (B) the Holder has provided the Company with prior written notice (which notice
may be included in a Conversion Notice) requesting reissuance of this Debenture upon physical surrender of this Debenture. The Holder
and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall use such
other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon any
partial conversion.
(c) Limitations
on Conversions.
(i) Beneficial
Ownership. The Holder shall not have the right to convert any portion of this Debenture to the extent that after giving effect to
such conversion, the Holder, together with any affiliate thereof, would beneficially own (as determined in accordance with Section 13(d) of
the Exchange Act and the rules promulgated thereunder) in excess of 4.99% of the number of Ordinary Shares outstanding immediately
after giving effect to such conversion. The Holder shall have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained
in this Section applies, the determination of which portion of the Principal amount of this Debenture is convertible shall be the
responsibility and obligation of the Holder. The provisions of this Section may be waived by a holder (but only as to itself and
not to any other holder) upon not less than 65 days’ prior notice to the Company. Other holders shall be unaffected by any such
waiver.
(ii) Principal
Market Limitation.
(d) Other
Provisions.
(i) All
calculations under this Section (4) shall be rounded to the nearest $0.0001 or whole share.
(ii) The
Company covenants that it will at all times reserve and keep available out of its authorized and unissued Ordinary Shares such number
of Ordinary Shares not less than the maximum number of Ordinary Shares issuable upon conversion of this Debenture and the Other Debentures
(assuming for purposes hereof that (x) this Debenture and such Other Debentures are convertible at the Floor Price as of the date
of determination, (y) any such conversion shall not take into account any limitations on the conversion of the Debenture or Other
Debentures set forth herein or therein (the “Required Reserve Amount”), provided that at no time shall the number of
Ordinary Shares reserved pursuant to this Section (4)(d)(ii) be reduced other than proportionally with respect to all Ordinary
Shares in connection with any conversion (other than pursuant to the conversion of this Debenture and the Other Debentures in accordance
with their terms) and/or cancellation, or reverse share split. If at any time the number of Ordinary Shares reserved pursuant to this
Section (4)(d)(ii) becomes less than the Required Reserve Amount, the Company will promptly take all corporate action necessary
to propose to its general meeting of shareholders an increase of its authorized share capital necessary to meet the Company's obligations
pursuant to this Debenture, recommending that shareholders vote in favor of such an increase. The Company covenants that, upon issuance
in accordance with conversion of this Debenture in accordance with its terms, the Ordinary Shares, when issued, will be validly issued,
fully paid and nonassessable.
(iii) Nothing
herein shall limit a Holder's right to pursue actual damages or declare an Event of Default pursuant to Section (3) herein for
the Company’s failure to deliver certificates representing Ordinary Shares upon conversion within the period specified herein and
such Holder 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, in each case without the need to post a bond or provide other security. The exercise of
any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable
law.
(iv) Legal
Opinions. The Company is obligated to cause its legal counsel to deliver legal opinions to the Company’s transfer agent in connection
with any legend removal upon the expiration of any holding period or other requirement for which the Underlying Shares may bear legends
restricting the transfer thereof. To the extent such opinions are not provided (either timely or at all), then, in addition to being an
Event of Default in accordance with Section (3)(a)(xv), the Company agrees to reimburse the Holder for all reasonable costs incurred
by the Holder in connection with any legal opinions paid for by the Holder in connection with sale or transfer of Underlying Shares. The
Holder shall notify the Company of any such costs and expenses it incurs that are referred to in this section from time to time and all
amounts owed hereunder shall be paid by the Company with reasonable promptness.
(5) Adjustments
to Conversion Price
(a) Adjustment
of Conversion Price upon Subdivision or Combination of Ordinary Shares. If the Company, at any time while this Debenture is outstanding,
shall (a) pay a share dividend or otherwise make a distribution or distributions on its Ordinary Shares or any other equity or equity
equivalent securities payable in Ordinary Shares, (b) subdivide outstanding Ordinary Shares into a larger number of shares, (c) combine
(including by way of reverse share split) outstanding Ordinary Shares into a smaller number of shares, or (d) issue by reclassification
of the Ordinary Shares any shares of the Company, then each of the Fixed Price and the Floor Price shall be multiplied by a fraction of
which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding before such event and of which
the denominator shall be the number of Ordinary Shares outstanding after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
(b) Adjustment
of Conversion Price upon Issuance of Ordinary Shares. If the Company, at any time while this Debenture is outstanding, issues or sells
any Ordinary Shares or Convertible Securities (other than shares issued or sold by the Company in connection with any Excluded Securities),
for a consideration per share (the “New Issuance Price”) less than a price equal to the Fixed Price in effect immediately
prior to such issue or sale (such price the "Applicable Price") (the foregoing a "Dilutive Issuance"),
then immediately after such Dilutive Issuance the Fixed Price then in effect shall be reduced to an amount equal to the New Issuance Price.
For the purposes hereof, if the Company in any manner issues or sells any Convertible Securities (other than shares issued or sold by
the Company in connection with any Excluded Securities) and the lowest price per share for which one Ordinary Shares is issuable upon
such conversion or exchange or exercise thereof is less than the Applicable Price, then such Ordinary Shares 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. No further adjustment of the Conversion Price shall be made upon the actual issuance of such Ordinary Shares upon conversion or
exchange or exercise of such Convertible Securities.
(c) Other
Events. If any event occurs of the type contemplated by the provisions of this Section (5) but not expressly provided for
by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with
equity features, or issuing Convertible Securities with a variable conversion formula that is more favorable than this Debenture), then
the Company's board of directors will make an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder
under this Debenture; provided that no such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section (5).
If the Company issues any Convertible Securities with a variable conversion formula that is more favorable than this Debenture, then at
the option of the Holder, the Market Price formula shall be changed to match that of the new Convertible Securities.
(d) 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 Ordinary Shares are entitled to receive securities or other assets with respect to or in exchange
for Ordinary Shares (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 Debenture, at the Holder's option, (i) in addition to the Ordinary
Shares receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such
Ordinary Shares had such Ordinary Shares 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 Debenture) or (ii) in lieu of the Ordinary Shares otherwise receivable
upon such conversion, such securities or other assets received by the holders of Ordinary Shares in connection with the consummation of
such Corporate Event in such amounts as the Holder would have been entitled to receive had this Debenture initially been issued with conversion
rights for the form of such consideration (as opposed to Ordinary Shares) at a conversion rate 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 Required
Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without
regard to any limitations on the conversion or redemption of this Debenture.
(e) Whenever
the Conversion Price is adjusted pursuant to Section (5) hereof, the Company shall promptly provide the Holder with a written
notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
(f) In
case of any (1) merger or consolidation of the Company or any Subsidiary of the Company with or into another Person, or (2) sale
by the Company or any Subsidiary of the Company of more than one-half of the assets of the Company in one or a series of related transactions,
a Holder shall have the right to (A) exercise any rights under Section (5)(b), (B) convert the aggregate amount of this
Debenture then outstanding into the shares and other securities, cash and property receivable upon or deemed to be held by holders of
Ordinary Shares following such merger, consolidation or sale, and such Holder shall be entitled upon such event or series of related events
to receive such amount of securities, cash and property as the Ordinary Shares into which such aggregate Principal amount of this Debenture
could have been converted immediately prior to such merger, consolidation or sales would have been entitled, or (C) in the case of
a merger or consolidation, require the surviving entity to issue to the Holder a convertible debenture with a Principal amount equal to
the aggregate Principal amount of this Debenture then held by such Holder, plus all accrued and unpaid Interest and other amounts owing
thereon, which such newly issued convertible debenture shall have terms identical (including with respect to conversion) to the terms
of this Debenture, and shall be entitled to all of the rights and privileges of the Holder of this Debenture set forth herein and the
agreements pursuant to which this Debenture was issued. In the case of clause (C), the conversion price applicable for the newly issued
convertible debentures shall be based upon the amount of securities, cash and property that each Ordinary Shares would receive in such
transaction and the Conversion Price in effect immediately prior to the effectiveness or closing date for such transaction. The terms
of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder the right to receive the securities,
cash and property set forth in this Section upon any conversion or redemption following such event. This provision shall similarly
apply to successive such events.
(6) REISSUANCE
OF THIS DEBENTURE.
(a) Transfer.
If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Debenture (in accordance with Section (6)(d)), registered in the name of the
registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued and
unpaid Interest thereof) and, if less than the entire outstanding Principal is being transferred, a new Debenture (in accordance with
Section (6)(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance
of this Debenture, acknowledge and agree that, by reason of the provisions of Section (4)(b)(iii) following conversion or redemption
of any portion of this Debenture, the outstanding Principal represented by this Debenture may be less than the Principal stated on the
face of this Debenture.
(b) Lost,
Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Debenture, the Company
shall execute and deliver to the Holder a new Debenture (in accordance with Section (6)(d)) representing the outstanding Principal.
(c) Debenture
Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Debenture or Debentures (in accordance with Section (6)(d)) representing in the aggregate the outstanding
Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal as is designated by
the Holder at the time of such surrender.
(d) Issuance
of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture, such new Debenture
(i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture, the Principal
remaining outstanding (or in the case of a new Debenture being issued pursuant to Section (6)(a) or Section (6)(c), the
Principal designated by the Holder which, when added to the Principal represented by the other new Debentures issued in connection with
such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance of new Debentures),
(iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the Issuance Date of this
Debenture, (iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued and unpaid Interest
from the Issuance Date.
(7) NOTICES. Any
notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing by letter
and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered personally or
(ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly
addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and e-mail addresses for such
communications shall be:
| If to the Company, to: |
Eshallgo Inc |
| |
No. 37, Haiyi Villa, Lane 97, Songlin Road, Pudong New District,
People’s Republic of China 200120 |
| |
Attn: Qiwei Miao |
| |
Telephone: +86 400 100 7299 |
| |
Email: miaoqiwei@eshallgo.com |
| |
|
|
with a copy (which shall not constitute notice) to:
|
Ortoli Rosenstadt LLP
366 Madison Ave, 3rd Floor
New York, NY 10017
Attention:
Jason Ye |
|
|
|
| If to the Holder: |
[ ] |
or at such other address and/or email and/or to
the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Business
Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent,
waiver or other communication, (ii) electronically generated by the sender's email service provider containing the time, date, recipient
email address or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
(8) NO
IMPAIRMENT. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company,
which are absolute and unconditional, to pay the Principal of, Interest and other charges (if any) on, this Debenture at the time,
place, and rate, and in the currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this Debenture
is outstanding, the Company shall not and shall cause their subsidiaries not to, without the consent of the Holder, (i) amend its
certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder; (ii) repay, repurchase
or offer to repay, repurchase or otherwise acquire Ordinary Shares or other equity securities; (iii) enter into any agreement with
respect to any of the foregoing; or (iv) enter into any agreement, arrangement or transaction in or of which the terms thereof would
restrict, materially delay, conflict with or impair the ability of the Company to perform its obligations under the this Debenture, including,
without limitation, the obligation of the Company to make cash payments hereunder.
(9) This
Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the right to
vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other proceedings
of the Company, unless and to the extent converted into Ordinary Shares in accordance with the terms hereof.
(10) CHOICE
OF LAW; VENUE; WAIVER OF JURY TRIAL
(a) Governing
Law. This Debenture and the rights and obligations of the Parties hereunder shall, in all respects, be governed by, and construed
in accordance with, the laws (excluding the principles of conflict of laws) of the State of New York (the “Governing Jurisdiction”)
(including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), including all matters
of construction, validity and performance.
(b) Jurisdiction;
Venue; Service.
(i) The
Company hereby irrevocably consents to the non-exclusive personal jurisdiction of the state courts of the Governing Jurisdiction and,
if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States District Court for the Governing
Jurisdiction.
(ii) The
Company agrees that venue shall be proper in any court of the Governing Jurisdiction selected by the Holder or, if a basis for federal
jurisdiction exists, in any United States District Court in the Governing Jurisdiction. The Company waives any right to object to the
maintenance of any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract
or in tort or otherwise, in any of the state or federal courts of the Governing Jurisdiction on the basis of improper venue or inconvenience
of forum.
(iii) Any
suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise,
brought by the Company against the Holder arising out of or based upon this Debenture or any matter relating to this Debenture, or any
other Transaction Document, or any contemplated transaction, shall be brought in a court only in the Governing Jurisdiction. The Company
shall not file any counterclaim against the Holder in any suit, claim, action, litigation or proceeding brought by the Holder against
the Company in a jurisdiction outside of the Governing Jurisdiction unless under the rules of the court in which the Holder brought
such suit, claim, action, litigation or proceeding the counterclaim is mandatory, and not permissive, and would be considered waived unless
filed as a counterclaim in the suit, claim, action, litigation or proceeding instituted by the Holder against the Company. The Company
agrees that any forum outside the Governing Jurisdiction is an inconvenient forum and that any suit, claim, action, litigation or proceeding
brought by the Company against the Holder in any court outside the Governing Jurisdiction should be dismissed or transferred to a court
located in the Governing Jurisdiction. Furthermore, the Company irrevocably and unconditionally agrees that it will not bring or commence
any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort
or otherwise, against the Holder arising out of or based upon this Debenture or any matter relating to this Debenture, or any other Transaction
Document, or any contemplated transaction, in any forum other than the courts of the State of New York sitting in New York County, and
the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties
hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such suit,
claim, action, litigation or proceeding may be heard and determined in such New York State Court or, to the fullest extent permitted by
applicable law, in such federal court. The Company and the Holder agree that a final judgment in any such suit, claim, action, litigation
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law.
(iv) The
Company and the Holder irrevocably consent to the service of process out of any of the aforementioned courts in any such suit, claim,
action, litigation or proceeding by the mailing of copies thereof by registered or certified mail postage prepaid, to it at the address
provided for notices in this Debenture, such service to become effective thirty (30) days after the date of mailing.
(v) Nothing
herein shall affect the right of the Holder to serve process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against the Company or any other Person in the Governing Jurisdiction or in any other jurisdiction.
(c) THE
PARTIES MUTUALLY WAIVE ALL RIGHT TO TRIAL BY JURY OF ALL CLAIMS OF ANY KIND ARISING OUT OF OR BASED UPON THIS DEBENTURE OR ANY MATTER
RELATING TO THIS DEBENTURE, OR ANY OTHER TRANSACTION DOCUMENT, OR ANY CONTEMPLATED TRANSACTION. THE PARTIES ACKNOWLEDGE THAT THIS IS A
WAIVER OF A LEGAL RIGHT AND THAT THE PARTIES EACH MAKE THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER CONSULTATION WITH COUNSEL OF THEIR
RESPECTIVE CHOICE. THE PARTIES AGREE THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
(11) If
the Company fails to strictly comply with the terms of this Debenture, then the Company shall reimburse the Holder promptly for all fees,
costs and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action in connection
with this Debenture, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or in connection
with the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any sums which become
due to the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal; or (iv) the
protection, preservation or enforcement of any rights or remedies of the Holder.
(12) Any
waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach
of such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist upon strict adherence
to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this Debenture. Any waiver must be in writing.
(13) If
any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any Interest or other amount deemed Interest due hereunder shall violate applicable laws governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company
covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the Principal of or Interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so)
hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though
no such law has been enacted.
(14) CERTAIN
DEFINITIONS. For purposes of this Debenture, the following terms shall have the following meanings:
(a) “Amortization
Event” shall mean (i) the daily VWAP is less than the Floor Price then in effect for five (5) Trading Days during
a period of seven (7) consecutive Trading Days (a “Floor Price Event”), unless the Company has reduced the Floor
Price, then in effect to an amount mutually agreeable to the Company and the Holder or (ii) a Registration Default has occurred (the
last such day of each such occurrence, a “Amortization Event Date”).
(b) “Amortization
Principal Amount” shall have the meaning set forth in Section (2)(a).
(c) "Applicable
Price" shall have the meaning set forth in Section (5)(b).
(d) “Approved
Stock Plan” means any employee benefit plan or share incentive plan which has been approved by the board of directors of the
Company, pursuant to which the Company’s securities may be issued to any employee, officer, director or consultant for services
provided to the Company.
(e) "Bloomberg"
means Bloomberg Financial Markets (or if not available, a similar service provider of national recognized standing).
(f) “Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day
on which banking institutions in the State of New York are authorized or required by law or other government action to close.
(g) “Buy-In”
shall have the meaning set forth in (4)(b)(ii).
(h) “Buy-In
Price” shall have the meaning set forth in (4)(b)(ii).
(i) “Calendar
Month” means the period from the first day of a month to the last day of the same month.
(j) “Change
of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual or legal entity
or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through
legal or beneficial ownership of the share capital of the Company, by contract or otherwise) of in excess of fifty percent (50%) of the
voting power of the Company (except that the acquisition of voting securities by the Holder or any other current holder of convertible
securities of the Company shall not constitute a Change of Control Transaction for purposes hereof), (b) a replacement at one time
or over time of more than one-half of the members of the board of directors of the Company (other than as due to the death or disability
of a member of the board of directors) which is not approved by a majority of those individuals who are members of the board of directors
on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board
of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (c) the merger,
consolidation or sale of fifty percent (50%) or more of the assets of the Company or any Subsidiary of the Company in one or a series
of related transactions with or into another entity, or (d) the execution by the Company of an agreement to which the Company is
a party or by which it is bound, providing for any of the events set forth above in (a), (b) or (c). No transfer to a wholly-owned
Subsidiary shall be deemed a Change of Control Transaction under this provision.
(k) “Closing
Price” means the price per share in the last reported trade of the Ordinary Shares on a Principal Market or on the exchange
which the Ordinary Shares is then listed as quoted by Bloomberg.
(l) “Commission”
means the Securities and Exchange Commission.
(m) “Convertible
Securities” means any shares or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for Ordinary Shares.
(n) "Dilutive
Issuance" shall have the meaning set forth in Section (5)(b).
(o) “Excluded
Securities” means any Ordinary Shares issued or issuable or deemed to be issued by the Company: (i) under any Approved
Stock Plan, (ii) upon conversion of any of the Debentures issued pursuant to the Securities Purchase Agreement (including the Debentures
and Other Debentures and the Ordinary Shares issued in connection with this Debenture and any of the Other Debentures; (iii) upon
conversion, exercise or exchange of any Options or Convertible Securities which are outstanding on the day immediately preceding the date
of the Securities Purchase Agreement; provided, that such issuance of Ordinary Shares upon exercise of such Options or Convertible Securities
is made pursuant to the terms of such Options or Convertible Securities in effect on such date and such Options or Convertible Securities
are not amended, modified or changed on or after such date, or (iv) upon a share split, reverse share split, distribution of bonus
shares, combination or other recapitalization events.
(p) “Floor
Price” solely with respect to the Market Price, shall mean $0.78954 per Common Share.
(q) “Fundamental
Transaction” means any of the following: (1) the Company effects any merger or consolidation of the Company with
or into another Person and the Company is the non-surviving company (other than a merger or consolidation with a wholly owned Subsidiary
of the Company for the purpose of redomiciling the Company), (2) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person)
is completed pursuant to which holders of Ordinary Shares are permitted to tender or exchange their shares for other securities, cash
or property, or (4) the Company effects any reclassification of the Ordinary Shares or any compulsory share exchange pursuant to
which the Ordinary Shares is effectively converted into or exchanged for other securities, cash or property.
(r) “Material
Adverse Effect” has the meaning given such term in the Securities Purchase Agreement.
(s) "New
Issuance Price" shall have the meaning set forth in Section (5)(b).
(t) “Optional
Redemption” shall have the meaning set forth in (2)(b).
(u) “Options”
means any rights, warrants or options to subscribe for or purchase Ordinary Shares or Convertible Securities.
(v) “Ordinary
Shares” means the Class A ordinary shares of a par value of $0.0001 each of the Company and shares of any other
class into which such shares may hereafter be changed or reclassified.
(w) “Other
Debentures” means any other debentures issued pursuant to the Securities Purchase Agreement and any other debentures, notes,
or other instruments issued in exchange, replacement, or modification of the foregoing.
(x) “Payment
Premium” means 10%.
(y) “Periodic
Reports” shall mean all of the Company’s reports required to be filed by the Company with the Commission under applicable
laws and regulations (including, without limitation, Regulation S-K), including annual reports (on Form 20-F), and current reports
(on Form 6-K), for so long as any amounts are outstanding under this Debenture; provided that all such Periodic Reports shall
include, when filed, all information, financial statements, audit reports (when applicable) and other information required to be included
in such Periodic Reports in compliance with all applicable laws and regulations.
(z) “Person”
means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof
or a governmental agency.
(aa) “Principal
Market” means any of The New York Stock Exchange, the Nasdaq Global Market or the Nasdaq Global Select Market, and any successor
to any of the foregoing markets or exchanges.
(bb) “Redemption
Amount” shall have the meaning set forth in (2)(b).
(cc) “Redemption
Notice” shall have the meaning set forth in (2)(b).
(dd) “Registration
Default” means any of the following: (i) a Registration Statement (as defined in the Registration Rights Agreement) is
not filed on or prior to the date that is ten (10) Trading Days following its Filing Deadline (as defined in the Registration Rights
Agreement), or (ii) a Registration Statement is not declared effective on or prior to the date that is fifteen (15) Trading Days
following its Effectiveness Deadline (as defined in the Registration Rights Agreement), or (iii) on any day after the effectiveness
of a Registration Statement sales of all of the Registrable Securities (as defined in the Registration Rights Agreement) for such Registration
Statement cannot be made pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration
Statement effective, a failure to disclose such information as is necessary for sales to be made pursuant to such Registration Statement,
or by reason of a stop order) or the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”),
which Maintenance Failure is not cured within 10 Trading Days, or (iv) if after the date that is six months from the date hereof,
the Company does not have available adequate current public information as set forth in Rule 144(c) of the Securities Act.
(ee) “Registration
Rights Agreement” has the meaning given such term in the Securities Purchase Agreement.
(ff) “Required
Holders” has the meaning given such term in the Securities Purchase Agreement.
(gg) “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(hh) “Significant
Subsidiary” of any Person means any Subsidiary of that Person that constitutes a “significant subsidiary” (as defined
in Rule 1-02(w) of Regulation S-X under the Exchange Act) of that Person.
(ii) “Subsidiary”
means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total
voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one
or more Subsidiaries of such Person.
(jj) “Trading
Day” means a day on which the Ordinary Shares are quoted or traded on a Principal Market on which the Ordinary Shares are then
quoted or listed; provided, that in the event that the Ordinary Shares are not listed or quoted, then Trading Day shall mean a Business
Day.
(kk) “Transaction
Document” has the meaning given such term in the Securities Purchase Agreement.
(ll) “Underlying
Shares” means the Ordinary Shares issuable upon conversion of this Debenture in accordance with the terms hereof.
(mm) "VWAP"
means, for any security as of any date, the daily dollar volume-weighted average price for such security on the Principal Market during
regular trading hours as reported by Bloomberg through its “Historical Prices – Px Table with Average Daily Volume”
functions.
[Signature Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Convertible Debenture to be duly executed by a duly authorized officer as of the
date set forth above.
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COMPANY: |
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Eshallgo Inc |
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By: |
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Name: |
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Title: |
EXHIBIT I
CONVERSION NOTICE
(To be executed by the Holder in order to Convert
the Debenture)
TO: Eshallgo
Inc
Via Email:
The
undersigned hereby irrevocably elects to convert a portion of the outstanding and unpaid Conversion Amount of Debenture No. EHGO-[1][2][3]
- [1][2][3] into Ordinary Shares of Eshallgo Inc, according to the conditions stated
therein, as of the Conversion Date written below.
| Conversion Date: |
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| Principal Amount to be Converted: |
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| Accrued Interest to be Converted: |
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| Total Conversion Amount to be converted: |
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| Fixed Price: |
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| Market Price: |
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| Applicable Conversion Price: |
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| Number of Ordinary Shares to be issued: |
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| Please issue the Ordinary Shares in the following name and deliver them to the following account: |
| Issue to: |
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| Broker DTC Participant Code: |
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| Account Number: |
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| Authorized Signature: |
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| Name: |
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| Title: |
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Exhibit 10.1
Execution Version
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of November 29, 2024, is between Eshallgo Inc, an exempted company
incorporated under the laws of the Cayman Islands, with principal executive offices located at No. 37, Haiyi Villa, Lane 97, Songlin
Road，Pudong New District，Shanghai,
China 200120 (the “Company”), and each of the investors listed on the Schedule of Buyers attached as Schedule I hereto
(individually, a “Buyer” and collectively the “Buyers”).
WITNESSETH
WHEREAS, the Company
and each Buyer desire to enter into this transaction for the Company to sell and the Buyers to purchase the Convertible Debentures (as
defined below) pursuant to an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”) and/or Rule 506 of Regulation D (“Regulation D”) promulgated by the
U.S. Securities and Exchange Commission (the “SEC”) thereunder;
WHEREAS, the parties
desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Buyer(s), as provided
herein, and the Buyer(s) shall purchase convertible debentures in the form attached hereto as “Exhibit A”
(the “Convertible Debentures”) in the aggregate principal amount of up to $5,000,000 (the “Subscription Amount”),
which shall be convertible into the Company’s class A ordinary shares of a par value of $0.0001 each (the “Class A
Ordinary Shares”) (as converted, the “Conversion Shares”), of which $1,500,000 shall be purchased upon the
signing this Agreement (the “First Closing”), $2,000,000 shall be purchased upon the filing of the initial Registration
Statement (as defined in the Registration Rights Agreement (as defined below)) with the SEC registering the resale of the Conversion Shares
(the “Second Closing”), and $1,500,000 shall be purchased on or about the date a Registration Statement has first been
declared effective by the SEC (the “Third Closing”) (individually referred to as a “Closing” and
collectively referred to as the “Closings”), at a purchase price equal to 95% of the Subscription Amount (the “Purchase
Price”) in the respective amounts set forth opposite each Buyer(s) name on Schedule I to this Agreement;
WHEREAS, on or before
the First Closing Date (as defined in Section 1(c) below), the parties hereto are executing and delivering a Registration Rights
Agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration
rights under the Securities Act and the rules and regulations promulgated thereunder, and applicable state securities laws;
WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the Company is delivering Irrevocable Transfer Agent Instructions (the “Irrevocable
Transfer Agent Instructions”) to its transfer agent in the form attached hereto as “Exhibit B;” and
WHEREAS, the Convertible
Debentures and the Conversion Shares are collectively referred to herein as the “Securities.”
AGREEMENT
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
| 1. | PURCHASE AND SALE OF CONVERTIBLE DEBENTURES. |
(a) Purchase
of Convertible Debentures. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company
shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company at each Closing, Convertible
Debentures with principal amount corresponding to the Subscription Amount set forth opposite each Buyer’s name on Schedule I attached
hereto.
(b) Closing
Dates. Each Closing shall occur remotely by conference call and electronic delivery of documentation. The date and time of each Closing
shall be as follows: (i) the First Closing shall be 10:00 a.m., New York time, on the first Business Day on which the conditions
to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company
and each Buyer) (the “First Closing Date”), (ii) the Second Closing shall be 10:00 a.m., New York time, on the first
Business Day after the date on which the Registration Statement is filed by the Company with the SEC as set forth in the Registration
Rights Agreement, provided the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date
as is mutually agreed to by the Company and each Buyer) (the “Second Closing Date”), and (iii) the Third Closing shall
be 10:00 a.m., New York time, on the first Business Day after the Registration Statement is first declared effective by the SEC, provided
the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to
by the Company and each Buyer) (the “Third Closing Date” and collectively with the First Closing Date and the Second Closing
Date, the “Closing Dates”). As used herein “Business Day” means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required by law to remain closed.
(c) Form of
Payment; Deliveries. Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, on each Closing Date,
(i) the Buyers shall deliver to the Company, in immediately available funds to a bank account designated in writing by the Company,
the Purchase Price for the Convertible Debentures to be issued and sold to such Buyer at such Closing, minus any fees or expenses to be
paid directly from the proceeds of such Closing as set forth herein, and (ii) the Company shall deliver to each Buyer, Convertible
Debentures which such Buyer is purchasing at such Closing with a principal amount corresponding with the Subscription Amount set forth
opposite each Buyer’s name on Schedule of Buyers attached as Schedule I hereto, duly executed on behalf of the Company.
(d) The
Company will use commercially reasonable efforts to continue the listing and trading of its Class A Ordinary Shares on the Nasdaq
Capital Market and, in accordance, therewith, will use commercially reasonable efforts to comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable.
(e) Home
Country Practice. Prior to the date hereof, the Company has taken all actions required pursuant to Nasdaq Rule 5615(a)(3) to
duly and validly rely on the exemption for foreign private issuers from applicable rules and regulations of the Nasdaq by adopting
the home country practice (the “Home Country Practice”) in connection with the transactions contemplated hereunder
(including an exemption from any Nasdaq rules that would otherwise require seeking shareholder approval in respect of such transactions).
The Company may issue the relevant Conversion Shares upon conversion of any outstanding Convertible Debentures without regard to the limitations
imposed by Nasdaq Rule 5635(d). So long as any Convertible Debentures are outstanding, the Company shall comply with the Home Country
Practice rules and shall not take any action to change its Home Country Practice or become subject to Nasdaq Rule 5635(d) with
respect to transactions contemplated herein. The Company’s practices in connection with the transactions contemplated hereunder
are not prohibited by its home country’s laws.
| 2. | BUYER’S REPRESENTATIONS AND WARRANTIES. |
Each Buyer, severally and
not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of each Closing Date:
(a) Investment
Purpose. The Buyer is acquiring the Securities for its own account for investment purposes and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the registration
requirements of the Securities Act; provided, however, that by making the representations herein, such Buyer does not agree, or make any
representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of
the Securities at any time in accordance with, or pursuant to, a registration statement covering such Securities or an available exemption
under the Securities Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person (as
defined below) to distribute any of the Securities in violation of applicable securities laws. As used herein, “Person” means
a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental
or political subdivision thereof or a governmental agency
(b) Accredited
Investor Status. The Buyer is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation
D.
(c) Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth
and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire
the Securities.
(d) Information.
The Buyer and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations
of the Company and information the Buyer deemed material to making an informed investment decision regarding its purchase of the Securities,
which have been requested by such Buyer. The Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the
Company and its management. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors,
if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a high degree of risk.
The Buyer has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.
(e) Transfer
or Resale. The Buyer understands that: (i) the Securities have not been registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such
Buyer shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to
be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements, or
(C) such Buyer provides the Company with reasonable assurances (in the form of seller and broker representation letters) that such
Securities can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities Act, as amended (or a successor
rule thereto) (collectively, “Rule 144”), in each case following the applicable holding period set forth therein;
and (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144
and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person
through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance
with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder. Notwithstanding the foregoing,
the Securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Securities
and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer effecting
a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Document, including, without limitation, this Section 2(e).
(f) Legends.
The Buyer agrees to the imprinting, so long as it is required by this Section 2(f), of a restrictive legend on the Securities in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
AND THOSE SECURITIES INTO WHICH THEY ARE CONVERTIBLE] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES [AND THOSE SECURITIES INTO WHICH THEY ARE CONVERTIBLE] HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.
Certificates evidencing the Conversion Shares
shall not contain any legend (including the legend set forth above), (i) while a registration statement covering the resale of such
security is effective under the Securities Act, (ii) following any sale of such Conversion Shares pursuant to Rule 144, (iii) if
such Conversion Shares are eligible for sale under Rule 144, or (iv) 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). If a legend is not required
pursuant to the foregoing, the Company shall no later than two (2) Trading Days (or such earlier date as required pursuant to the
Exchange Act (as defined below) or other applicable law, rule or regulation for the settlement of a trade initiated on the date such
Buyer delivers such legended certificate representing such securities to the Company) following the delivery by a Buyer to the Company
or the transfer agent (with notice to the Company) of a legended certificate representing such securities (endorsed or with stock powers
attached, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with any other deliveries
from such Buyer as may be required above in this Section 2(f), as directed by such Buyer, either: (A) provided that the Company’s
transfer agent is participating in the DTC Fast Automated Securities Transfer Program, credit the aggregate number of Class A Ordinary
Shares to which such Buyer shall be entitled to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system or (B) if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer
Program, issue and deliver (via reputable overnight courier) to such Buyer, a certificate representing such securities that is free from
all restrictive and other legends, registered in the name of such Buyer or its designee. The Company shall be responsible for any transfer
agent fees or DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities in accordance
herewith. The Buyer agrees that the removal of a restrictive legend from certificates representing Securities as set forth in this Section 2(f) is
predicated upon the Company’s reliance that the Buyer will sell any Securities pursuant to either the registration requirements
of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are
sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein.
(g) Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization
with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents to which
it is a party and otherwise to carry out its obligations hereunder and thereunder.
(h) Authorization,
Enforcement. The Transaction Documents to which each such Buyer is a party have been duly and validly authorized, executed and delivered
on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in
accordance with their terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(i) No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the transactions
contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such
Buyer, except, in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not,
individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its
obligations hereunder.
(j) Certain
Trading Activities. The Buyer has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding
with the Buyer, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as defined
below) involving the Company's securities) during the period commencing as of the time that the Buyer first contacted the Company or the
Company's agents regarding the specific investment in the Company contemplated by this Agreement and ending immediately prior to the execution
of this Agreement by such Buyer.
(k) No
General Solicitation. The Buyer is not purchasing or acquiring the Securities as a result of any general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of the Securities.
(l) Not
an Affiliate. The Buyer is not (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) a “beneficial owner” of more than 10%
of the Class A Ordinary Shares (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)).
| 3. | REPRESENTATIONS AND WARRANTIES OF THE COMPANY. |
Except as set forth (i) under
the corresponding section of the disclosure schedule (dated as of the date of this Agreement) delivered to the Buyer by the Company on
the date of this Agreement (the “Disclosure Schedule”) which Disclosure Schedule shall be deemed a part hereof and
to qualify any representation or warranty otherwise made herein to the extent of such disclosure, or (ii) in the SEC Documents (as
defined below) that are available on the SEC’s website through the EDGAR system at least one (1) Business Day prior to the
date of this Agreement (unless the context provides otherwise), the Company hereby makes the representations and warranties set forth
below to each Buyer:
(a) Organization
and Qualification. The Company and each of its Subsidiaries are entities duly formed, validly existing and in good standing under
the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their properties and to carry
on their business as now being conducted and as presently proposed to be conducted. The Company and each of its Subsidiaries is duly qualified
as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing
would not reasonably be expected to have a Material Adverse Effect (as defined below). As used in this Agreement, “Material Adverse
Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results
thereof), condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, (ii) the transactions
contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments to be entered into by the Company
in connection herewith or therewith or (iii) the authority or ability of the Company to perform any of its obligations under any
of the Transaction Documents. “Subsidiaries” means any Person in which the Company, directly or indirectly, owns a majority
of the outstanding capital stock having voting power or holds a majority of the equity or similar interest of such Person, and each of
the foregoing, is individually referred to herein as a “Subsidiary.”
(b) Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures, the reservation
for issuance and issuance of the Conversion Shares issuable upon conversion of the Convertible Debentures, have been duly authorized by
the Company's board of directors and no further filing, consent or authorization is required by the Company, its board of directors or
its shareholders or other governmental body. This Agreement has been, and the other Transaction Documents to which the Company is a party
will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to
contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively, this Agreement,
the Registration Rights Agreement, the Convertible Debentures, the Irrevocable Transfer Agent Instructions, and each of the other agreements
and instruments entered into by the Company or delivered by the Company in connection with the transactions contemplated hereby and thereby,
as may be amended from time to time.
(c) Issuance
of Securities. The issuance of the Securities has been duly authorized and, upon issuance and payment in accordance with the terms
of the Transaction Documents the Securities shall be validly issued, fully paid and non-assessable and free from all preemptive or similar
rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other
encumbrances (collectively “Liens”) with respect to the issuance thereof. As of each Closing Date, the Company shall have
reserved from its duly authorized share capital not less than the Required Reserve Amount (as defined herein). Upon issuance or conversion
in accordance with the Convertible Debentures, the Conversion Shares, when issued, will be validly issued, fully paid and nonassessable
and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Class A Ordinary Shares.
(d) No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures, the Conversion
Shares, and the reservation for issuance of the Conversion Shares) will not (i) result in a violation of the M&A (as defined
below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of the
Company or any of its Subsidiaries, (ii) conflict with, or constitute a default under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is
a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, U.S.
federal and state securities laws and regulations, the securities laws of the jurisdictions of the Company's incorporation or in which
it or its subsidiaries operate and the rules and regulations of the Nasdaq Capital Market (the “Principal Market,” provided
however, that in the event the Company’s Class A Ordinary Shares is ever listed or traded on any of the New York Stock Exchange,
the NYSE American, the Nasdaq Global Select Market or the Nasdaq Global Market, the “Principal Market” shall mean that market
on which the Class A Ordinary Shares is then listed or traded) and including all applicable laws, rules and regulations of the
jurisdiction of incorporation of the Company) applicable to the Company or any of its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries is bound or affected.
(e) Consents.
The Company is not required to obtain any consent from, authorization or order of, or make any filing or registration with (other than
any filings as may be required by any federal or state securities agencies and any filings as may be required by the Principal Market),
any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute,
deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case, in accordance with the terms
hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to
obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to each Closing Date, and neither the
Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or any of its Subsidiaries
from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents. The Company is
not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances which could reasonably
lead to delisting or suspension of the Class A Ordinary Shares in the foreseeable future. The Company has notified the Principal
Market of the issuance of all of the Securities hereunder, which does not require obtaining the approval of the shareholders of the Company
or any other Person or Governmental Entity, and the Principal Market has completed its review of the related Listing of Additional Shares
form. “Governmental Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction
of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization
or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or
taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled
by a government or a public international organization or any of the foregoing.
(f) Acknowledgment
Regarding Buyer's Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the capacity of
an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer
is (i) an officer or director of the Company or any of its Subsidiaries, (ii) to its knowledge, an "affiliate" (as
defined in Rule 144 promulgated under the Securities Act (or a successor rule thereto) (collectively, “Rule 144”))
of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the Class A
Ordinary Shares (as defined for purposes of Rule 13d-3 of the Exchange Act). The Company further acknowledges that no Buyer (nor
any affiliate of any Buyer) is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer
or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby
is merely incidental to such Buyer's purchase of the Securities. The Company further represents to each Buyer that the Company's decision
to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company and
its representatives.
(g) No
Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf has,
directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to require approval of shareholders of the Company under any applicable shareholders approval
provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which
any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates nor
any Person acting on their behalf will take any action or steps that would cause the offering of any of the Securities to be integrated
with other offerings of securities of the Company.
(h) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares will increase in certain circumstances. The
Company further acknowledges its obligation to issue the Conversion Shares upon conversion of the Convertible Debentures in accordance
with the terms thereof is, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests
of other shareholders of the Company.
(i) Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, interested shareholders, business combination, poison pill (including, without
limitation, any distribution under a rights agreement), shareholders rights plan or other similar anti-takeover provision under the M&A
or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is or could become applicable
to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance of
the Securities and any Buyer's ownership of the Securities.
(j) SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports,
schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial
statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC
Documents”). The Company has delivered or has made available to the Buyers or their respective representatives true, correct and
complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable and none of the SEC Documents,
at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect
as of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”),
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results
of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of
reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss
contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting
Standards Board which are not provided for by the Company in its financial statements or otherwise. No other information provided by or
on behalf of the Company to any of the Buyers which is not included in the SEC Documents (including, without limitation, information referred
to in Section 2(d) or in the Disclosure Schedule to this Agreement) contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which
they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements (including, without
limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents
(the “Financial Statements”), nor is the Company currently aware of facts or circumstances which would require the Company
to amend or restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with
GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend
that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any of
the Financial Statements.
(k) Absence
of Certain Changes. Since the date of the Company's most recent audited financial statements contained in a Form 20-F, there
has been no Material Adverse Effect, nor any event or occurrence specifically affecting the Company or its Subsidiaries that would be
reasonably expected to result in a Material Adverse Effect. Since the date of the Company's most recent audited financial statements contained
in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any material
assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any material capital expenditures,
individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its Subsidiaries has taken
any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation
or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend
to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The
Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the
transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(k),
“Insolvent” means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present
fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s
and its Subsidiaries’ total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company
and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature;
or (ii) with respect to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s
or such Subsidiary’s (as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the
Company or such Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur
or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor
any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction,
for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is proposed to be conducted.
(l) No
Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists,
or is reasonably expected to exist or occur specific to the Company, any of its Subsidiaries or any of their respective businesses, properties,
liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i) would be required
to be disclosed by the Company under applicable securities laws on a registration statement filed with the SEC relating to an issuance
and sale by the Company of its Class A Ordinary Shares and which has not been publicly announced, (ii) could have a material
adverse effect on any Buyer’s investment hereunder or (iii) would reasonably be expected to have a Material Adverse Effect.
(m) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term under its articles
of incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of the Company
or any of its Subsidiaries or bylaws or their organizational charter, certificate of formation, memorandum of association, articles of
association, articles of incorporation or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries
is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of
its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing,
except in all cases for violations which would not reasonably be expected to have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no
knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of trading of the Class A Ordinary
Shares by the Principal Market in the foreseeable future. During the one year prior to the date hereof, (i) the Class A Ordinary
Shares have been listed or designated for quotation on the Principal Market, (ii) trading in the Class A Ordinary Shares has
not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from
the SEC or the Principal Market regarding the suspension or delisting of the Class A Ordinary Shares from the Principal Market, which
has not been publicly disclosed. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued
by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates,
authorizations or permits would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and neither
the Company nor any of its Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company
or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to
have the effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition
of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently
conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a
Material Adverse Effect on the Company or any of its Subsidiaries.
(n) Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee, nor any other Person
acting for or on behalf of the Company or any of its Subsidiaries (individually and collectively, a “Company Affiliate”) have
violated the U.S. Foreign Corrupt Practices Act (the “FCPA) or any other applicable anti-bribery or anti- corruption laws, nor has
any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or
authorized the giving of anything of value, to any officer, employee or any other Person acting in an official capacity for any Governmental
Entity to any political party or official thereof or to any candidate for political office (individually and collectively, a “Government
Official”) or to any Person under circumstances where such Company Affiliate knew or was aware of a high probability that all or
a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official, for
the purpose, in violation of applicable law, of: (i) (A) influencing any act or decision of such Government Official in his/her
official capacity, (B) inducing such Government Official to do or omit to do any act in violation of his/her lawful duty, (C) securing
any improper advantage, or (D) inducing such Government Official to influence or affect any act or decision of any Governmental Entity,
or (ii) assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company
or its Subsidiaries.
(o) Equity
Capitalization.
(i) Authorized
and Outstanding Share Capital. As of the date hereof, the authorized share capital of the Company is US$10,000 divided into 100,000,000
ordinary shares of a par value of US$0.0001 each comprising consists of (A) 90,000,000 class A ordinary shares of a par value of
US$0.0001 each, of which, 16,160,000 are issued and outstanding and (B) 10,000,000 class B ordinary shares of a par value of US$0.0001
each, of which 5,856,000 are issued and outstanding.
(ii) Valid
Issuance; Available Shares. All of such outstanding shares are duly authorized and have been validly issued and are fully paid
and nonassessable. Set forth in a Disclosure Schedule to this Agreement is the number of Class A Ordinary Shares that are (A) reserved
for issuance pursuant to Convertible Securities (as defined below) (other than the Convertible Debentures and the Warrants) and (B) that
are, as of the date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of the Securities Act and calculated
based on the assumption that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Class A
Ordinary Shares are “affiliates” without conceding that any such Persons are “affiliates” for purposes of federal
securities laws) of the Company or any of its Subsidiaries. To the Company’s knowledge, no Person owns 10% or more of the Company’s
issued and outstanding Class A Ordinary Shares (calculated based on the assumption that all Convertible Securities (as defined below),
whether or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking account
of any limitations on exercise or conversion (including “blockers”) contained therein without conceding that such identified
Person is a 10% shareholder for purposes of federal securities laws). “Convertible Securities” means any share capital or
other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible
into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any share capital or other security
of the Company (including, without limitation, Class A Ordinary Shares) or any of its Subsidiaries.
(iii) Existing
Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company's or any Subsidiary's shares,
interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company or
any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital
stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any
of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company or any of its Subsidiaries
or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries;
(C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale
of any of their securities under the Securities Act (except pursuant to this Agreement); (D) there are no outstanding securities
or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities; and (F) neither the Company nor any Subsidiary has entered into any
Variable Rate Transaction.
(iv) Organizational
Documents. The Company has furnished to the Buyers or filed on EDGAR true, correct and complete copies of the Company’s memorandum
and articles of association, as amended and as in effect on the date hereof (the “M&A”), and the terms of all convertible
securities and the material rights of the holders thereof in respect thereto.
(p) Indebtedness
and Other Contracts. Other than as set forth in a Disclosure Schedule to this Agreement, neither the Company nor any of its Subsidiaries,
(i) has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become
bound, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies)
to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) has any financing
statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries; (iv) is in violation
of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where such violations
and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (v) is a party to any contract,
agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or
is expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries have any liabilities or obligations required
to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than those incurred in the ordinary course
of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not
have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person means, without duplication
(A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of
property or services (including, without limitation, “capital leases” in accordance with GAAP) (other than trade payables
entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing,
in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies
of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered
thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by
(or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any
property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property
has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G) above; and (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with
respect thereto.
(q) Litigation.
Other than as set forth in a Disclosure Schedule to this Agreement, there is no action, suit, arbitration, proceeding, inquiry or investigation
before or by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or,
to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Class A Ordinary Shares
or any of the Company's or its Subsidiaries' officers or directors, whether of a civil or criminal nature or otherwise, in their capacities
as such, which would reasonably be expected to result in a Material Adverse Effect. After reasonable inquiry of its employees, the Company
is not aware of any event which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other
proceeding. Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the Company
or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is the subject of any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity that would reasonably be expected to result in a Material Adverse Effect.
(r) Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations therefor
(“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted and presently proposed
to be conducted. Each of the patents owned by the Company or any of its Subsidiaries is set forth in a Disclosure Schedule to this Agreement.
Except as set forth in such Disclosure Schedule, none of the Company’s Intellectual Property Rights have expired or terminated or
have been abandoned or are expected to expire or terminate or are expected to be abandoned, within three years from the date of this Agreement.
The Company does not have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights of others.
There is no claim, action or proceeding being made or brought, or to the knowledge of the Company or any of its Subsidiaries, being threatened,
against the Company or any of its Subsidiaries regarding its Intellectual Property Rights. Neither the Company nor any of its Subsidiaries
is aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings.
The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their
Intellectual Property Rights.
(s) Environmental
Laws. Except, in each case, as would not be reasonably anticipated to have a Material Adverse Effect, the Company and the Subsidiaries
(a) are in compliance with any and all applicable laws relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants, (b) have received and hold all material permits, licenses or
other approvals required of them under all such laws to conduct their respective businesses and (c) are in compliance with all material
terms and conditions of any such permit, license or approval.
(t) Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other
governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know
of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as
defined in Section 1297 of the Code. The net operating loss carryforwards (“NOLs”) for United States federal income tax
purposes of the consolidated group of which the Company is the common parent, if any, shall not be adversely effected by the transactions
contemplated hereby. The transactions contemplated hereby do not constitute an “ownership change” within the meaning of Section 382
of the Code, thereby preserving the Company’s ability to utilize such NOLs.
(u) Internal
Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial reporting (as
such term is defined in Rule 13a-15(f) under the Exchange Act) that is effective to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles, including that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that are effective in ensuring that
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls
and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under
the Exchange Act, as applicable, is accumulated and communicated to the Company’s management, including its principal executive
officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure.
Neither the Company nor any of its Subsidiaries has received any notice or correspondence from any accountant, Governmental Entity or
other Person relating to any potential material weakness or significant deficiency in any part of the internal controls over financial
reporting of the Company or any of its Subsidiaries.
(v) Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms
are defined in the Investment Company Act of 1940, as amended.
(w) Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries
are engaged. In accordance with the previous sentence, the Company currently maintains no insurance policies. Neither the Company nor
any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company nor any such Subsidiary has
any reason to believe that it will be unable to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
(x) Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their behalf
has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii) sold, bid
for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any
Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries.
(y) Registration
Eligibility. The Company is eligible to register the resale of the Conversion Shares by the Buyers using Form F-1 promulgated
under the Securities Act.
(z) Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).
(aa) Sanctions
Matters. Neither the Company nor any of its Subsidiaries or, to the knowledge of the Company, any director, officer or controlled
affiliate of the Company or any director or officer of any Subsidiary, is a Person that is, or is owned or controlled by a Person that
is (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Asset Control
(“OFAC”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions
authorities, including, without limitation, designation on OFAC’s Specially Designated Nationals and Blocked Persons List or OFAC’s
Foreign Sanctions Evaders List or other relevant sanctions authority (collectively, “Sanctions”), or (ii) located, organized
or resident in a country or territory that is the subject of Sanctions that broadly prohibit dealings with that country or territory (including,
without limitation, the Crimea, Zaporizhzhia and Kherson regions, the Donetsk People’s Republic and Luhansk People’s Republic
in Ukraine, Cuba, Iran, North Korea, Russia, Sudan and Syria (the “Sanctioned Countries”)). Neither the Company
nor any of its Subsidiaries nor any director, officer or controlled affiliate of the Company or any of its Subsidiaries, has ever had
funds blocked by a United States bank or financial institution, temporarily or otherwise, as a result of OFAC concerns.
(bb) Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel
with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company
or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other Transaction Documents.
The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities
of the Company. All disclosures provided to the Buyers regarding the Company and its Subsidiaries, their businesses and the transactions
contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries, taken
as a whole, are true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the
written information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to
or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects
as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made,
not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or
its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise),
which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company
but which has not been so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company
or any of its Subsidiaries and made available to the Buyers have been prepared in good faith based upon reasonable assumptions and represented,
at the time each such financial projection or forecast was delivered to each Buyer, the Company's best estimate of future financial performance
(it being recognized that such financial projections or forecasts are not to be viewed as facts and that the actual results during the
period or periods covered by any such financial projections or forecasts may differ from the projected or forecasted results). The Company
acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.
(cc) No General
Solicitation. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form
of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer
or sale of the Securities.
(dd) Private
Placement. Assuming the accuracy of the Buyers’ representations and warranties set forth in Section 2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Buyers as contemplated hereby. The
issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Principal Market.
(ee) No
Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the
Securities Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20%
or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that
term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine
whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its
disclosure obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.
(ff) Other
Covered Persons. The Company is not aware of any Person that has been or will be paid (directly or indirectly) remuneration for solicitation
of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.
(gg) No
Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company had discussions with
its accountants about its financial statements previously filed with the SEC. Based on those discussions, the Company has no reason to
believe that it will need to restate any such financial statements or any part thereof.
(hh) There
are no agreements, arrangements, outstanding securities or instruments which will prevent the Company from or give to others any rights
to prevent the Company from satisfying its obligations, including but not limited to the payment of Principal, Interest, Payment
Premium (as these terms are defined in the Convertible Debentures) or issuance of Class A Ordinary Shares under the Transaction Documents.
(a) Form D
and Blue Sky. The Company shall file
a Form D with respect to the Convertible Debentures as required under Regulation D and to provide a copy thereof to each Buyer promptly
after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. Without limiting any other obligation
of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities
required under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable
“Blue Sky” laws), and the Company shall comply with all applicable foreign, federal, state and local laws, statutes, rules,
regulations and the like relating to the offering and sale of the Securities to the Buyers.
(b) Reporting
Status. For the period beginning on the date hereof, and ending 6 months after the date on which all the Convertible Debentures are
no longer outstanding (the “Reporting Period”), the Company shall file on a timely basis all reports required to be
filed with the SEC pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would no longer require or otherwise permit
such termination.
(c) Use
of Proceeds. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated
herein to repay any loans to any executives or employees of the Company or to make any payments in respect of any related party debt.
Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds from the transactions contemplated herein,
or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person (a) for the
purpose of funding or facilitating any activities or business of or with any Person or in any country or territory that, at the time of
such funding or facilitation, is the subject of Sanctions or is a Sanctioned Country, or (b) in any other manner that will result
in a violation of Sanctions or Applicable Laws by any Person (including any Person participating in the transactions contemplated by this
Agreement, whether as underwriter, advisor, investor or otherwise). For the past five years, neither the Company nor any of its Subsidiaries
has engaged in, and is now not engaged in, any dealings or transactions with any Person, or in any country or territory, that at the time
of the dealing or transaction is or was the subject of Sanctions or was a Sanctioned Country. The Company shall not, without the prior
written consent of the Buyer, loan, invest, transfer or “downstream” any cash proceeds, or assets or property acquired with
cash proceeds from the issuance and sale of the Convertible Debentures to any Subsidiary.
(d) Listing.
To the extent applicable, the Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the
Underlying Securities (as defined below) on the Principal Market, subject to official notice of issuance, and shall use reasonable efforts
to maintain such listing or designation for quotation (as the case may be) of all Underlying Securities from time to time issuable under
the terms of the Transaction Documents on such Principal Market for the Reporting Period. Neither the Company nor any of its Subsidiaries
shall take any action which could be reasonably expected to result in the delisting or suspension of the Class A Ordinary Shares
on a Principal Market during the Reporting Period. The Company shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(d). “Underlying Securities” means the (i) the Conversion Shares, and (ii) any Class A
Ordinary Shares of the Company issued or issuable with respect to the Conversion Shares or, including, without limitation, (1) as
a result of any share split, share dividend, recapitalization, exchange or similar event or otherwise and (2) shares of the Company
into which the Class A Ordinary Shares are converted or exchanged without regard to any limitations on conversion of the Convertible
Debentures.
(e) Fees.
The Company shall pay to the Buyer, upon the effectiveness of the Registration Statement a commitment fee (the “Commitment Fee”)
equal to 1% of the Subscription Amount, either in cash or by the issuance to the Buyer of such number of Class A Ordinary Shares
that is equal to the Commitment Fee divided by the closing bid price of the Class A Ordinary Shares as of the date hereof (the “Commitment
Shares”) and a due diligence and structuring fee of $25,000 Any fee due and payable at each Closing shall be deducted from the
gross proceeds of such Closing (excluding the Commitment Fee if paid in Class A Ordinary Shares). The unpaid balance of due diligence
and structuring fee shall be deducted from the gross proceeds of the First Closing. The Company authorizes each Buyer to deduct any fees
due hereunder from the gross proceeds of the purchase of any Convertible Debentures.
(f) The
Commitment Fee and/or Commitment Fee Shares, as applicable, issuable hereunder shall be deemed earned as of the date hereof and such Commitment
Fee Shares, if applicable, shall be included on the initial Registration Statement.
(g) Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that, subject
to compliance with applicable federal and state securities laws, the Securities may be pledged by a Buyer in connection with a bona fide
margin agreement or other loan or financing arrangement that is secured by the Securities. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee
by a Buyer.
(h) Disclosure
of Transactions and Other Material Information.
(i) Disclosure
of Transactions. The Company shall, on or before the first Business Day after the date of this Agreement, file with the SEC a current
report on Form 6-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form required
by the Exchange Act and attaching all the material Transaction Documents (including, required exhibits, the “Current Report”).
From and after the filing of the Current Report, the Company shall have publicly disclosed all material, non-public information (if any)
provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the Current Report,
the Company acknowledges and agrees that any and all confidentiality or similar obligations with respect to the transactions contemplated
by the Transaction Documents under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on
the other hand.
(ii) Limitations
on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective officers,
directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the Company or any of its
Subsidiaries from and after the date hereof without first obtaining the express prior written consent of such Buyer (which may be granted
or withheld in such Buyer's sole discretion). In the event of a breach of any of the foregoing covenants or any of the covenants or agreements
contained in any other Transaction Document, by the Company, any of its Subsidiaries, or any of its or their respective officers, directors,
employees and agents (as determined in the reasonable good faith judgment of such Buyer), in addition to any other remedy provided herein
or in the Transaction Documents, such Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement
or otherwise, of such breach or such material, non-public information, as applicable, without the prior approval by the Company, any of
its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall have any liability to the
Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees, affiliates, shareholders or agents,
for any such disclosure. To the extent that the Company delivers any material, non-public information to a Buyer without such Buyer’s
consent, the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty
not to trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor
any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided,
however, the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure
with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as
is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company
in connection with any such press release or other public disclosure prior to its release). Without the prior written consent of the applicable
Buyer (which may be granted or withheld in such Buyer’s sole discretion), the Company shall not (and shall cause each of its Subsidiaries
and affiliates to not) disclose the name of such Buyer in any filing, announcement, release or otherwise. Notwithstanding anything contained
in this Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges
and agrees that no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and
binding agreement executed by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer
with respect thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public
information regarding the Company or any of its Subsidiaries.
(iii) Other
Confidential Information. Disclosure Failures. In addition to other remedies set forth in this Section 4(g), and without limiting
anything set forth in any other Transaction Document, at any time after the Closing Date if the Company, any of its Subsidiaries, or any
of their respective officers, directors, employees or agents, provides any Buyer with material non-public information relating to the
Company or any of its Subsidiaries (each, the “Confidential Information”), the Company shall, on or prior to the applicable
Required Disclosure Date (as defined below), publicly disclose such Confidential Information on a Current Report on Form 8-K or otherwise
(each, a “Disclosure”). From and after such Disclosure, the Company shall have disclosed all Confidential Information
provided to such Buyer by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents.
In addition, effective upon such Disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate.
“Required Disclosure Date” means (x) if such Buyer authorized the delivery of such Confidential Information, either
(I) if the Company and such Buyer have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of
such Confidential Information, such agreed upon date or (II) otherwise, the seventh (7th) calendar day after the date such Buyer
first received any Confidential Information or (y) if such Buyer did not authorize the delivery of such Confidential Information,
the first (1st) Business Day after such Buyer’s receipt of such Confidential Information.
(i) Reservation
of Shares. So long as any of the Convertible Debentures, remain outstanding, the Company shall have reserved from its duly authorized
share capital, and shall have instructed its transfer agent to irrevocably reserve, the maximum number of Class A Ordinary Shares
issuable upon (i) conversion of all Convertible Debentures (assuming for purposes hereof that (x) such Convertible Debentures
are convertible at the Floor Price (as defined therein) as of the date of determination and (y) any such conversion shall not take
into account any limitations on the conversion of the Convertible Debentures set forth therein) (the “Maximum Conversion Shares”)
(collectively, the “Required Reserve Amount”); provided that at no time shall the number of Class A Ordinary
Shares reserved pursuant to this Section be reduced other than proportionally in connection with any conversion and/or redemption,
or reverse share split. If at any time the number of Class A Ordinary Shares authorized to be issued is not sufficient to meet the
Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of
shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company's
obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, recommending that stockholders
vote in favor of an increase in such authorized number of shares sufficient to meet the Required Reserve Amount.
(j) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation
of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate,
in a Material Adverse Effect.
(k) (i) Except
as expressly set forth below, the Buyer covenants that from and after the date hereof through and ending when no Convertible Debentures
remain outstanding (the “Restricted Period”), no Buyer or any of its officers, or any entity managed or controlled
by the Buyer (collectively, the “Restricted Persons” and each of the foregoing is referred to herein as a “Restricted
Person”) shall, directly or indirectly, engage in any “short sale” (as such term is defined in Rule 200 of
Regulation SHO of the Exchange Act) of the Class A Ordinary Shares, either for its own principal account or for the principal account
of any other Restricted Person. Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained herein shall
(without implication that the contrary would otherwise be true) prohibit any Restricted Person during the Restricted Period from: (1) selling
“long” (as defined under Rule 200 promulgated under Regulation SHO) Class A Ordinary Shares; or (2) selling
a number of Class A Ordinary Shares equal to the number of Underlying Shares that such Restricted Person is entitled to receive,
but has not yet received from the Company or the transfer agent, (A) upon the completion of a pending conversion of the Convertible
Debentures for which a valid Conversion Notice (as defined in the Convertible Debentures) has been submitted to the Company pursuant to
Section 4(b) of the Convertible Debentures.
(l) Trading
Information. Upon the Company’s request, the Buyer agrees to provide the Company with trading reports setting forth the number
and average sales prices of Conversion Shares and Warrant Shares sold the Buyer during the prior trading week.
(m) Prohibited
Transactions. From the date hereof until all of the Convertible Debentures have been repaid or converted into Class A Ordinary
Shares, the Company agrees to not directly or indirectly enter into any contract, agreement or other item that would restrict or prohibit
any of the Company’s obligations to the Buyer(s) under the Transaction Documents, including, without limitation, any payments
required by the Company to the Buyer(s) upon a Trigger Event (as defined in the Convertible Debentures).
(n) From
the date hereof until all the Convertible Debentures have been repaid, without the prior written consent of the Buyer, the Company shall
not, and shall not permit any of its subsidiaries (whether or not a subsidiary on the date hereof) to, directly or indirectly (i) other
than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any Indebtedness, (ii) other than Permitted
Liens, enter into, create, incur, assume or suffer to exist any Lien on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom, or (iii) amend its charter documents, including,
without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights of the
holders of the Convertible Debentures, (iv) make any payments in respect of any related party debt, (v) enter into, agree to
enter into, or effect any agreement for the issuance or sale of Ordinary Shares of the Company, other than with the Buyer, below the
Floor Price, or (vi) enter into, agree to enter into or effect any Variable Rate Transaction other than with the Buyer, or enter
into, agree to enter into, or effect any Discounted Offering.
“Permitted
Indebtedness” shall mean: (i) indebtedness evidenced by the Convertible Debentures; (ii) indebtedness described on
a Disclosure Schedule attached hereto; (iii) indebtedness incurred solely for the purpose of financing the acquisition or lease
of any equipment, including capital lease obligations with no recourse other than to such equipment; (iv) indebtedness (A) the
repayment of which has been subordinated to the payment of the Convertible Debentures on terms and conditions reasonably acceptable to
the Buyers, including with regard to interest payments and repayment of principal, (B) which does not mature or otherwise require
or permit redemption or repayment prior to or on the 91st day after the maturity date of any Convertible Debentures then outstanding;
and (C) which is not secured by any assets of the Company or its subsidiaries; (v) indebtedness associated with acquiring new
intellectual property assets and licenses, so long as the proceeds are going to the party(ies) from which the Company is acquiring the
assets, licenses, and other properties and (vi) any indebtedness (other than the indebtedness set out in (i) – (v) above)
incurred after the date hereof, provided that such indebtedness does not exceed $5,000,000 at any given time.
“Permitted Liens”
shall mean (1) any security interest granted to the Buyers to secure the obligations under the Convertible Debentures, (2) any
prior security interest granted to the Buyers, (3) existing Liens disclosed by the Company on a Disclosure Schedule attached hereto;
(4) inchoate Liens for taxes, assessments or governmental charges or levies not yet due, as to which the grace period, if any, related
thereto has not yet expired, or being contested in good faith and by appropriate proceedings for which adequate reserves have been established
in accordance with GAAP; (5) Liens of carriers, materialmen, warehousemen, mechanics and landlords and other similar Liens which
secure amounts which are not yet overdue by more than 60 days or which are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP; (6) licenses, sublicenses, leases or subleases granted to
other persons not materially interfering with the conduct of the business of the Company; (7) Liens securing capitalized lease obligations
and purchase money indebtedness incurred solely for the purpose of financing an acquisition or lease; (8) easements, rights-of-way,
restrictions, encroachments, municipal zoning ordinances and other similar charges or encumbrances, and minor title deficiencies, in each
case not securing debt and not materially interfering with the conduct of the business of the Company and not materially detracting from
the value of the property subject thereto; (9) Liens arising out of the existence of judgments or awards which judgments or awards
do not constitute an Event of Default; (10) Liens incurred in the ordinary course of business in connection with workers compensation
claims, unemployment insurance, pension liabilities and social security benefits and Liens securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, statutory obligations, surety bonds, performance bonds and other obligations
of a like nature (other than appeal bonds) incurred in the ordinary course of business (exclusive of obligations in respect of the payment
for borrowed money); (11) Liens in favor of a banking institution arising by operation of law encumbering deposits (including the right
of set-off) and contractual set-off rights held by such banking institution and which are within the general parameters customary in the
banking industry and only burdening deposit accounts or other funds maintained with a creditor depository institution; (12) usual and
customary set-off rights in leases and other contracts; (13) escrows in connection with acquisitions and dispositions and (14) royalties
and other rights to revenue derived from the sale of the Company’s products that are granted in the ordinary course of business.
“Variable Rate Transaction”
shall mean a transaction in which the Company (i) issues or sells any equity, warrants, or debt securities that are convertible into,
exchangeable or exercisable for, or include the right to receive additional Class A Ordinary Shares either (A) at a conversion
price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the
Class A Ordinary Shares at any time after the initial issuance of such security, 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 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 Class A Ordinary Shares
(including, without limitation, any “full ratchet” or “weighted average” anti-dilution provisions, but not including
any standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, share split or other similar transaction),
(ii) enters into or effects any agreement, including but not limited to an “equity line of credit,” “ATM agreement”
or other continuous offering or similar offering of Class A Ordinary Shares, or (iii) enters into or effects any forward purchase
agreement, equity pre-paid forward transaction or other similar offering of securities where the purchaser of securities of the Company
receives an upfront or periodic payment of all, or a portion of, the value of the securities so purchased, and the Company receives proceeds
from such purchaser based on a price or value that varies with the trading prices of the Class A Ordinary Shares (a “Forward
Purchase Transaction”.
“Discounted Offering”
shall mean a transaction in which the Company issues or sells any equity, warrants, or debt securities at an implied discount (taking
into account all the securities issuable in such offering, including the right to receive additional Class A Ordinary Shares) to
the market price of the Class A Ordinary Shares at the time of the offering in excess of 30%.
| 5. | REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND. |
(a) Register.
The Company shall maintain at its principal executive offices or with the Transfer Agent (or at such other office or agency of the Company
as it may designate by notice to each holder of Securities), a register for the Convertible Debentures in which the Company shall record
the name and address of the Person in whose name the Convertible Debentures have been issued (including the name and address of each transferee),
the amount of Convertible Debentures held by such Person. The Company shall keep the register open and available at all times during business
hours for inspection of any Buyer or its legal representatives. The Company hereby irrevocably agrees that it shall not require medallion
guarantees in connection with any assignments or transfers of shares, by the Buyer to any third party. The Company hereby authorizes its
then-current transfer agent to rely on the foregoing and that the Company hereby indemnifies and agrees to hold its then-current transfer
agent harmless from any liability related to its complying with the foregoing. Upon request by the Buyer, the Company further agrees to
promptly provide its then-current transfer agent with additional authorizations or indemnifications as may so request.
(b) Transfer
Restrictions. The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any
transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate
of a Buyer or in connection with a pledge as contemplated herein, the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall
be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities
under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement
and shall have the rights and obligations of a Buyer under this Agreement.
(c) Conversion
and Exercise Procedures. The form of Conversion Notice included in the Convertible Debentures set forth the totality of the procedures
required of the Buyers in order to convert the Convertible Debentures. Except as provided in Section 2(f) and Section 5(b),
no additional legal opinion, other information or instructions shall be required of the Buyers to convert their Convertible Debentures.
The Company shall honor conversions of the Convertible Debentures and shall deliver the Conversion Shares in accordance with the terms,
conditions and time periods set forth in the Convertible Debentures.
| 6. | CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. |
The obligation of the Company
hereunder to issue and sell the Convertible Debentures to each Buyer at each Closing is subject to the satisfaction, at or before each
Closing Date, of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived
by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:
(a) Such
Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.
(b) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 4(d), if any) for the Convertible Debentures being purchased by such Buyer at the Closing by wire transfer of
immediately available funds in accordance with a letter, duly executed by an officer of the Company, setting forth the wire amounts of
each Buyer and the wire transfer instructions of the Company (the “Closing Statement”).
(c) The
representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of each
Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which
shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at
or prior to such Closing Date.
| 7. | CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE. |
The obligation of each Buyer hereunder to purchase
its Convertible Debentures at each Closing is subject to the satisfaction, at or before each Closing Date, of each of the following conditions,
provided that these conditions are for each Buyer's sole benefit and may be waived by such Buyer at any time in its sole discretion by
providing the Company with prior written notice thereof:
(a) The
Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company
shall have duly executed and delivered to such Buyer a Convertible Debenture with a principal amount corresponding to the Subscription
Amount set forth opposite such Buyer’s name on the Schedule of Buyers attached as Schedule I for the Closing.
(b) Such
Buyer shall have received the opinion of counsel to the Company, dated as of the First Closing Date, in the form reasonably acceptable
to such Buyer.
(c) The
Company shall have delivered to each Buyer certified copies of its M&A and each Subsidiaries’ charter, as well as any shareholder
or operating agreements by or among the shareholders or members of any of the Company’s Subsidiaries.
(d) The
Company shall have delivered to such Buyer a certificate evidencing the good standing of the Company as of a date within ten (10) days
of the Closing Date.
(e) Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations and
warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of each 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 set forth in each Transaction Document required to be performed, satisfied or complied with by the Company at
or prior to each Closing Date.
(f) The
Class A Ordinary Shares (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall
not have been suspended, as of each Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of each Closing Date, either (I) in writing by the SEC or the Principal
Market or (II) by receiving a notification from the Principal Market of falling below the minimum maintenance requirements of the
Principal Market that is not subject to a cure period.
(g) The
Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale of the
Securities, including without limitation, those required by the Principal Market, if any.
(h) No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by
any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by
the Transaction Documents.
(i) Since
the date of execution of this Agreement, no event or series of events shall have occurred that has resulted in or would reasonably be
expected to result in a Material Adverse Effect, or an Event of Default (as defined in the Convertible Debentures).
(j) The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the maximum number
of Conversion Shares issuable pursuant to the Convertible Debentures to be issued at the Closing.
(k) Such
Buyer shall have received the Closing Statement.
(l) (i) From
the date hereof to the applicable Closing Date, trading in the Class A Ordinary Shares shall not have been suspended by the SEC or
the Principal Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated
prior to the Closing), and (ii) at any time from the date hereof 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 the Principal Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other
national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which,
in each case, in the reasonable judgment of each Buyer, makes it impracticable or inadvisable to purchase the Securities at the Closing.
(m) The
board of directors of the Company has approved the transactions contemplated by the Transaction Documents; said approval has not been
amended, rescinded or materially modified and remains in full force and effect as of such Closing, and a true, correct and complete copy
of such resolutions duly adopted by the board of directors of the Company shall have been provided to the Buyers.
(n) The
Company shall have delivered to the Buyer a compliance certificate executed by an executive officer of the Company certifying that Company
has complied with all of the conditions precedent to the applicable Closing set forth herein and which may be relied upon by the Buyer
as evidence of satisfaction of such conditions without any obligation to independently verify.
(o) The
Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as such Buyer or its counsel may reasonably request.
(p) Solely
with respect to the Second Closing, the Company shall have filed the Registration Statement with the SEC in accordance with the provisions
set forth in the Registration Rights Agreement, including the filing deadline set forth therein.
(q) Solely
with respect to the Third Closing, the Registration Statement shall be effective in accordance with the provisions set forth in the Registration
Rights Agreement, including the effectiveness deadline set forth therein.
In the event that the First
Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the right
to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on such date without
liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this Section 8
shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by such
date is the result of such Buyer's breach of this Agreement and (ii) the abandonment of the sale and purchase of the Convertible
Debentures shall be applicable only to such Buyer providing such written notice, provided further that no such termination shall affect
any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described herein. Nothing contained in this
Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this
Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of
its obligations under this Agreement or the other Transaction Documents.
(a) Governing
Law. This Agreement and the rights and obligations of the parties hereunder shall, in all respects, be governed by, and construed
in accordance with, the laws (excluding the principles of conflict of laws) of the State of New York (including Section 5-1401 and
Section 5-1402 of the General Obligations Law of the State of New York), including all matters of construction, validity and performance.
(b) Jurisdiction;
Venue; Service.
(i) The
Company hereby irrevocably consents to the non-exclusive personal jurisdiction of the state courts of the State of New York (the “Governing
Jurisdiction”) and, if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States
District Court for the Governing Jurisdiction.
(ii) The
Company agrees that venue shall be proper in any court of the Governing Jurisdiction selected by the Buyer or, if a basis for federal
jurisdiction exists, in any United States District Court in the Governing Jurisdiction. The Company waives any right to object to the
maintenance of any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract
or in tort or otherwise, in any of the state or federal courts of the Governing Jurisdiction on the basis of improper venue or inconvenience
of forum.
(iii) Any
suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise,
brought by the Company against the Buyer arising out of or based upon this Agreement or any matter relating to this Agreement, or any
other Transaction Document, or any contemplated transaction, shall be brought in a court only in the Governing Jurisdiction. The Company
shall not file any counterclaim against the Buyer in any suit, claim, action, litigation or proceeding brought by the Buyer against the
Company in a jurisdiction outside of the Governing Jurisdiction unless under the rules of the court in which the Buyer brought such
suit, claim, action, litigation or proceeding the counterclaim is mandatory, and not permissive, and would be considered waived unless
filed as a counterclaim in the suit, claim, action, litigation or proceeding instituted by the Buyer against the Company. The Company
agrees that any forum outside the Governing Jurisdiction is an inconvenient forum and that any suit, claim, action, litigation or proceeding
brought by the Company against the Buyer in any court outside the Governing Jurisdiction should be dismissed or transferred to a court
located in the Governing Jurisdiction. Furthermore, the Company irrevocably and unconditionally agrees that it will not bring or commence
any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort
or otherwise, against the Buyer arising out of or based upon this Agreement or any matter relating to this Agreement, or any other Transaction
Document, or any contemplated transaction, in any forum other than the courts of the State of New York sitting in New York County, and
the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties
hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such suit,
claim, action, litigation or proceeding may be heard and determined in such New York State Court or, to the fullest extent permitted by
applicable law, in such federal court. The Company and the Buyer agree that a final judgment in any such suit, claim, action, litigation
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law.
(iv) The
Company and the Buyer irrevocably consent to the service of process out of any of the aforementioned courts in any such suit, claim, action,
litigation or proceeding by the mailing of copies thereof by registered or certified mail postage prepaid, to it at the address provided
for notices in this Agreement, such service to become effective thirty (30) days after the date of mailing.
(v) Nothing
herein shall affect the right of the Buyer to serve process in any other manner permitted by law or to commence legal proceedings or to
otherwise proceed against the Company or any other Person in the Governing Jurisdiction or in any other jurisdiction.
(c) THE
PARTIES MUTUALLY WAIVE ALL RIGHT TO TRIAL BY JURY OF ALL CLAIMS OF ANY KIND ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY MATTER
RELATING TO THIS AGREEMENT, OR ANY OTHER TRANSACTION DOCUMENT, OR ANY CONTEMPLATED TRANSACTION. THE PARTIES ACKNOWLEDGE THAT THIS IS A
WAIVER OF A LEGAL RIGHT AND THAT THE PARTIES EACH MAKE THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER CONSULTATION WITH COUNSEL OF THEIR
RESPECTIVE CHOICE. THE PARTIES AGREE THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
(d) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature
is delivered by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall
create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such signature page were an original thereof.
(e) Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of,
this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms "including," "includes," "include" and words of like
import shall be construed broadly as if followed by the words "without limitation." The terms "herein," "hereunder,"
"hereof" and words of like import refer to this entire Agreement instead of just the provision in which they are found.
(f) Entire
Agreement, Amendments. This Agreement supersedes all other prior oral or written agreements between the Buyer, the Company, their
affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the party to be charged
with enforcement. As a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees
that (x) no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its representatives
shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any other Transaction Document and (y) unless a provision of this Agreement
or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the SEC Documents,” nothing
contained in any of the SEC Documents shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be
an exception to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document.
(g) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing by letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered
personally or (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in
each case, properly addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and e-mail
addresses for such communications shall be:
| If to the Company, to: |
Eshallgo Inc. |
| |
No. 37, Haiyi Villa, Lane 97, Songlin RoadPudong New District,
Shanghai, China 200120
Telephone: +86 400 100 7299
Attention: Qiwei Miao
E-Mail: miaoqiwei@eshallgo.com |
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| With Copy to: |
Ortoli Rosenstadt LLP
366 Madison Ave, 3rd Floor
New York, NY 10017
Telephone: 212 588-0022
Attention: Jason Ye
E-Mail: jye@orllp.legal |
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| If to a Buyer, to its address and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer's representatives as set forth on the Schedule of Buyers, |
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| With copy to: |
[ ] |
or to such other address, e-mail address and/or
to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days
prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver
or other communication, (B) electronically generated by the sender's e-mail service provider containing the time, date, recipient
e-mail address or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively
(h) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of any of the Convertible Debentures (but excluding any purchasers of Underlying Securities, unless pursuant
to a written assignment by such Buyer). The Company shall not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Buyers. In connection with any transfer of any or all of its Securities, a Buyer may assign all, or a portion,
of its rights and obligations hereunder in connection with such Securities without the consent of the Company, in which event such assignee
shall be deemed to be a Buyer hereunder with respect to such transferred Securities.
(i) Indemnification.
(i) In
consideration of each Buyer's execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition
to all of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless
each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers, directors, employees and direct
or indirect investors and any of the foregoing Persons' agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result
of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by the Company in
any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the Company or any Subsidiary contained
in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary) or which otherwise
involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the
Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds
of the issuance of the Securities, or (C) any disclosure properly made to such Buyer pursuant to Section 4(g), or (D) the
status of such Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by the
Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any action
or proceeding for injunctive or other equitable relief). To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.
(ii) Promptly
after receipt by an Indemnitee under this Section 9(i) of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to
be made against the Company under this Section 9(i), deliver to the Company a written notice of the commencement thereof, and the
Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with
counsel mutually reasonably satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the
right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the Company has agreed
in writing to pay such fees and expenses; (B) the Company shall have failed promptly to assume the defense of such Indemnified
Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the named
parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and the Company, and such Indemnitee
shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnitee
and the Company (in which case, if such Indemnitee notifies the Company in writing that it elects to employ separate counsel at the expense
of the Company, then the Company shall not have the right to assume the defense thereof and such counsel shall be at the expense of the
Company), provided further, that in the case of clause (C) above the Company shall not be responsible for the reasonable fees and
expenses of more than one (1) separate legal counsel for the Indemnitees. The Indemnitee shall reasonably cooperate with the Company
in connection with any negotiation or defense of any such action or Indemnified Liability by the Company and shall furnish to the Company
all information reasonably available to the Indemnitee which relates to such action or Indemnified Liability. The Company shall keep the
Indemnitee reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company
shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however,
that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent
of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified
Liability or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification
as provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the Company within
a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnitee under this Section 9(i),
except to the extent that the Company is materially and adversely prejudiced in its ability to defend such action.
(iii) The
indemnification required by this Section 9(i) shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, within ten (10) days after bills supporting the Indemnified Liabilities are received by the Company.
(iv) The
indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the
Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.
(j) No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any party.
[REMAINDER PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.
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COMPANY: |
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Eshallgo Inc |
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By: |
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Name: |
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Title: |
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.
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BUYER: |
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[ ] |
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By: |
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Name: |
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Title: |
Exhibit 10.2
Execution Version
REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of November 29, 2024, is made by and between
[ ] (the “Investor”), and Eshallgo Inc, an exempted company incorporated under the laws of the Cayman Islands (the “Company”).
The Investor and the Company may be referred to herein individually as a “Party” and collectively as the “Parties.”
WITNESSETH
WHEREAS:
A. In
connection with the Securities Purchase Agreement by and among the parties hereto of even date herewith (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement,
to issue and sell to the Investor up to $5,000,000 in aggregate principal amount of convertible debentures (the “Convertible
Debentures”), which shall be convertible into the Company’s class A ordinary shares of a par value of $0.0001 each
(the “Ordinary Shares”) (as converted, the “Conversion Shares”). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Securities Purchase Agreement.
B. Pursuant
to the terms of, and in consideration for the Investor entering into, and to induce the Investor to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”),
and applicable state securities laws and other rights as provided for herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
1. DEFINITIONS.
Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
(a) “Effective
Date” means the date that the applicable Registration Statement has been declared effective by the SEC.
(b) “Effectiveness
Deadline” means, (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(b),
the earlier of the earlier of (A) the 45th calendar day following the filing date thereof and (B) the fifth
Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement
will not be reviewed or will not be subject to further review and (ii) with respect to any additional Registration Statements that
may be required to be filed by the Company pursuant to this Agreement, the earlier of the (A) 45th calendar day following
the date on which the Company was required to file such additional Registration Statement; provided that if the date on which the Company
was is required to file such additional registration statement falls within twenty (20) days of the three-month anniversary of its fiscal
year end, such deadline shall be the 45th calendar day following the three-month anniversary of its fiscal year end and (B) no
later than the fifth Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that
such Registration Statement will not be reviewed or will not be subject to further review.
(c) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(d) “Filing
Deadline” means, (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a),
the 21st calendar day following the date hereof and (ii) with respect to any additional Registration Statements
that may be required to be filed by the Company pursuant to this Agreement, the date on which the Company was required to file such additional
Registration Statement pursuant to the terms of this Agreement.
(e) “Person”
means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental
or political subdivision thereof or a governmental agency.
(f) “Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
(g) “Registrable
Securities” means all of (i) the Ordinary Shares issuable upon conversion of the Convertible Debentures, (ii) Commitment
Fee Shares, if applicable, (iii) the additional shares issuable in connection with any anti-dilution provisions of the Convertible
Debentures (without giving effect to any limitations on exercise set forth in the Convertible Debentures) and (iv) any Ordinary Shares
issued or issuable with respect to any shares described in subsections (i) and (ii) above by way of any share split, share dividend
or other distribution, recapitalization or similar event or otherwise (in each case without giving effect to any limitations on exercise
set forth in the Convertible Debentures).
(h) “Registration
Statement” means any registration statement of the Company filed pursuant to this Agreement, including the Prospectus, amendments
and supplements to such registration statement or Prospectus, including post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such registration statement.
(i) “Required
Registration Amount” means (i) with respect to the initial Registration Statement at least 3,899,041 Ordinary Shares issued
or to be issued upon conversion of the Convertible Debentures and (ii) with respect to subsequent Registration Statements (a) such
number of Ordinary Shares as requested by the Investor not to exceed the lesser of (I) 300% of the maximum number of Ordinary
Shares issuable upon conversion of all Convertible Debentures then outstanding (assuming for purposes hereof that (x) such Convertible
Debentures are convertible at the Conversion Price (as defined therein) in effect as of the date of determination, and (y) any such
conversion shall not take into account any limitations on the conversion of the Convertible Debentures set forth therein), and (II) 100%
of the number of Ordinary Shares issuable upon conversion of all Convertible Debenture then outstanding at the Floor Price, in each case
subject to any cutback set forth in Section 2(d).
(j) “Rule 144”
means Rule 144 under the Securities Act or any successor rule thereto.
(k) “Rule 415”
means Rule 415 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 purpose and effect as such Rule.
(l) “SEC”
means the U.S. Securities and Exchange Commission or any other federal agency administering the Securities Act and the Exchange Act at
the time.
(m) “Securities
Act” shall have the meaning set forth in the Recitals above.
(n) “SEC
Guidance” means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or
requests of the SEC staff and (ii) the Securities Act.
2. REGISTRATION.
(a) Registration
Period. The Company’s registration obligations set forth in this Section 2 including its obligations to file Registration
Statements, obtain effectiveness of Registration Statements, and maintain the continuous effectiveness of any Registration Statement that
has been declared effective shall begin on the date hereof and continue until all the Registrable Securities have been sold or may be
sold without any restrictions pursuant to Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter
to such effect, addressed and reasonably acceptable to the Company’s transfer agent (the “Registration Period”).
(b) Mandatory
Registration. Subject to the terms and conditions of this Agreement, the Company shall (i) on or prior to the Filing Deadline,
prepare and file with the SEC an initial Registration Statement on Form F-1 (or any successor form thereto covering the resale by
the Investor of Registrable Securities, and (ii) on or prior to the 30th calendar day following receipt of each written notice by
the Investor (a “Demand Notice”) delivered pursuant to the terms hereof, prepare and file an additional Registration
Statement covering the resale by the Investor of Registrable Securities not covered by the initial Registration Statement. Each Registration
Statement prepared pursuant hereto shall register for resale at least the number of Ordinary Shares equal to the Required Registration
Amount as of date the Registration Statement is initially filed with the SEC. Each Registration Statement shall contain “Selling
Stockholders” and “Plan of Distribution” sections. The Company shall use its best efforts to have each Registration
Statement declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness Deadline. By 9:30 am, New
York time on the Business Day following the date of effectiveness, the Company shall file with the SEC in accordance with Rule 424
under the Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement. Prior to the
filing of the Registration Statement with the SEC, the Company shall furnish a draft of the Registration Statement to the Investor for
their review and comment. The Investor shall furnish comments from the SEC on the Registration Statement to the Company within 24 hours
of the receipt thereof from the Company. For the purposes hereof, the Investor shall be entitled to deliver a Demand Notice to the Company
at any time during the Registration Period if at such time (i) no Registration Statement is then in effect which the Investor may
use to resell Registrable Securities, or (ii) a Registration Statement is effective, but the holder has resold substantially all
of the Ordinary Shares registered on such Registration Statement. In addition, the Investor may deliver a Demand Notice to the Company
at any time during the Registration Period during which (i) the Company does not have a class of securities listed, or approved for
listing, on a national securities exchange registered pursuant to Section 6 of the Exchange Act, or (ii) Rule 144, as amended,
would not allow the “tacking” of the holding period of the Convertible Debenture onto the holding period of the Conversion
Shares issuable upon conversion thereof.
(c) Amendments
and Supplements. During the Registration Period, the Company shall (i) promptly prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the Prospectus used in connection with a Registration Statement,
which Prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, (ii) prepare and file with the SEC additional Registration Statements
in order to register for resale under the Securities Act all of the Registrable Securities in accordance with the terms of this Agreement;
(iii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this
Agreement), and as so supplemented or amended to be filed pursuant to Rule 424; (iv) respond as promptly as reasonably possible
to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and as promptly as reasonably
possible provide the Investor true and complete copies of all correspondence from and to the SEC relating to a Registration Statement
(provided that the Company may excise any information contained therein which would constitute material non-public information as to any
Investor which has not executed a confidentiality agreement with the Company); and (v) comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time
as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to this Section 2(c)) by reason of the Company’s
filing a report on Form 20-F or Form 6-K or any analogous report under the Securities Exchange Act, the Company shall incorporate
such report by reference into the Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on
the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement the Registration
Statement.
(d) Reduction
of Registrable Securities Included in a Registration Statement. Notwithstanding anything contained herein, in the event that the SEC
requires the Company to reduce the number of Registrable Securities to be included in a Registration Statement in order to allow the Company
to rely on Rule 415 with respect to a Registration Statement, then the Company shall be obligated to include in such Registration
Statement (which may be a subsequent Registration Statement if the Company needs to withdraw a Registration Statement and refile a new
Registration Statement in order to rely on Rule 415) only such limited portion of the Registrable Securities as the SEC shall permit.
Any Registrable Securities that are excluded in accordance with the foregoing terms are hereinafter referred to as “Cut Back
Securities.” To the extent Cut Back Securities exist, promptly following such time as may be permitted by the SEC, the Company
shall be required to file a Registration Statement covering the resale of the Cut Back Securities (subject also to the terms of this Section)
and shall use its best efforts to cause such Registration Statement to be declared effective as promptly as practicable thereafter, but
in no event later than the Effectiveness Deadline. Notwithstanding the foregoing to the contrary, the Company shall be obligated to use
diligent efforts to advocate with the SEC for the registration of all of the Registrable Securities in accordance with the SEC Guidance,
including without limitation, Compliance and Disclosure Interpretation 612.09. Unless otherwise directed in writing by a holder as to
its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:
(i) first, the Company shall reduce or eliminate any securities to be included other than Registrable Securities; and (ii) second,
the Company shall reduce Registrable Securities on a pro rata basis based on the total number of Registrable Securities held by such holders
(or as otherwise expressly directed by the SEC).
(e) Piggy-Back
Registrations. If at any time there is not an effective Registration Statement covering all of the Registrable Securities and the
Company proposes to register the offer and sale of any shares of its Ordinary Shares under the Securities Act (other than a registration
(i) pursuant to a Registration Statement on Form S-8 ((or other registration solely relating to an offering or sale to employees
or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a Registration
Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor
rule thereto), or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account
or for the account of one or more stockholders of the Company and the form of Registration Statement to be used may be used for any registration
of Registrable Securities, the Company shall give prompt written notice (in any event no later than five days prior to the filing of such
Registration Statement) to the holders of Registrable Securities of its intention to effect such a registration and, shall include in
such registration all Registrable Securities with respect to which the Company has received written requests for inclusion from the holders
of Registrable Securities; provided, however, that, the Company shall not be required to register any Registrable Securities
pursuant to this Section 2(f) that have been sold or may be sold without any restrictions pursuant to Rule 144, as determined
by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer
agent.
3. RELATED
OBLIGATIONS.
(a) The
Company shall, not less than three Business Days prior to the filing of each Registration Statement and not less than one Business Day
prior to the filing of any related amendments and supplements to all Registration Statements (except for annual reports on Form 20-F,
supplements and amendments to update the Registration Statement solely for information reflected in the Company’s annual reports
on Form 20-F, interim financial reports or current reports on Form 6-K), furnish to each Investor copies of all such documents
proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the
reasonable and prompt review of such Investor. The Company shall not file a Registration Statement or any such Prospectus or any amendments
or supplements thereto to which the Investor shall reasonably object in good faith; provided that, the Company is notified of such
objection in writing no later than two (2) Trading Days after the Investors have been so furnished copies of a Registration Statement.
(b) The
Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) an
electronic copy of such Registration Statement as declared effective by the SEC and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) an
electronic of the final prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number
of copies as such Investor may reasonably request) and (iii) such other documents, which are not publicly available through EDGAR,
as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by
such Investor.
(c) The
Company shall use its best efforts to (i) register and qualify the Registrable Securities covered by a Registration Statement under
such other securities or “blue sky” laws of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare
and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications
as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take
all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith or as a condition thereto to (w) make any change to its memorandum
and articles of association, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but
for this Section 3(c), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities
for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice
of the initiation or threat of any proceeding for such purpose.
(d) At
any time prior to the end of the Registration Period, as promptly as practicable after becoming aware of such event or development, the
Company shall notify each Investor in writing of the happening of any event as a result of which the Prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (provided
that in no event shall such notice contain any material, nonpublic information), and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission. The Company shall also promptly notify each Investor in writing (i) when
a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness shall be delivered to the Investor by facsimile on the same day of
such effectiveness), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus
or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration
Statement would be appropriate. The Company shall respond as promptly as reasonably practicable to any comments received from the SEC
with respect to a Registration Statement or any amendment thereto.
(e) The
Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction within the United States of America
and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and
to notify each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt
of actual notice of the initiation or threat of any proceeding for such purpose.
(f) The
Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant
to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information
has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
(g) The
Company shall use its best efforts to cause all the Registrable Securities to be listed on each securities exchange on which the Ordinary
Shares is then listed. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(g).
(h) The
Company shall cooperate with the holders of the Registrable Securities to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold pursuant to such Registration Statement or Rule 144 free of any restrictive legends
and representing such number of Ordinary Shares and registered in such names as the holders of the Registrable Securities may reasonably
request a reasonable period of time prior to sales of Registrable Securities pursuant to such Registration Statement or Rule; provided,
that the Company may satisfy its obligations hereunder without issuing physical share certificates through the use of The Depository Trust
Company's Direct Registration System.
(i) The
Company shall use its best efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies
or authorities as may be necessary to consummate the disposition of such Registrable Securities.
(j) The
Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
(k) Within
one Business Day after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies
to the Investor whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement
has been declared effective by the SEC.
(l) The
Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investor of Registrable Securities
pursuant to a Registration Statement.
4. OBLIGATIONS
OF THE INVESTOR.
(a) The
Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d) the
Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable
Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(d) or
receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary, subject to compliance with the
securities laws, the Company shall cause its transfer agent to deliver unlegended certificates for Ordinary Shares to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with
respect to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(d) and for which the Investor has not yet settled.
(b) The
Investor covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it
or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.
5. EXPENSES
OF REGISTRATION.
Each party shall bear its
own fees and expenses related to the transactions contemplated by this Agreements. For the avoidance of doubt, all expenses incurred by
the Company in complying with its obligations pursuant to this Agreement and in connection with the registration and disposition of Registrable
Securities shall be paid by the Company, including, without limitation, all registration, listing and qualifications fees, printers expenses,
and fees and expenses of the Company’s counsel and accountants (except legal fees of Investor’s counsel associated with the
review of the Registration Statement). The Investor shall pay any sales or brokerage commissions and fees and expenses of counsel for,
and other expenses of, the Investor incurred in connection with registration of Registrable Securities.
6. INDEMNIFICATION.
With respect to Registrable
Securities which are included in a Registration Statement under this Agreement:
(a) To
the fullest extent permitted by law, the Company shall, and hereby does, indemnify, hold harmless and defend the Investor, the directors,
officers, partners, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the
Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several
(collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body
or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the
securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky
Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any final
prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under
which the statements therein were made, not misleading; or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation there under
relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses
(i) through (iii) being, collectively, “Violations”). The Company shall reimburse the Investor and each such
controlling person promptly as such expenses are incurred and are due and payable, for any legal fees or disbursements or other reasonable
expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (x) shall not apply to a Claim by an Indemnified Person
arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment
thereof or supplement thereto; (y) shall not be available to the extent such Claim is based on a failure of the Investor to deliver
or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made available by the Company
pursuant to Section 3(c); and (z) shall not apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the Indemnified Person.
(b) In
connection with a Registration Statement, the Investor agrees to indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers, employees, representatives, or
agents and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each an “Indemnified
Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange
Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or is based upon any Violation, in each case to the extent,
and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company
by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(d), such Investor will
reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained
in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld; provided, further, however, that the Investor shall be liable
under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor
as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Indemnified Party. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with respect to any prospectus shall not inure to the benefit
of any Indemnified Party if the untrue statement or omission of material fact contained in the prospectus was corrected and such new prospectus
was delivered to each Investor prior to such Investor’s use of the prospectus to which the Claim relates.
(c) Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually
satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that
an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than
one (1) counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion
of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate
fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party
and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times
as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement
of any action, claim or proceeding effected without its prior written consent; provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified
Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release
from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party
shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.
(d) The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
(e) The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant
to the law.
7. CONTRIBUTION.
To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however,
that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation;
and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.
8. REPORTS
UNDER THE EXCHANGE ACT.
With a view to making available
to the Investor the benefits of Rule 144 promulgated under the Securities Act or any similar rule or regulation of the SEC that
may at any time permit the Investor to sell securities of the Company to the public without registration, and as a material inducement
to the Investor’s purchase of the Convertible Debentures, the Company represents, warrants, and covenants to the following:
(a) The
Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and has filed all required reports
under Section 13 or 15(d) of the Exchange Act during the 12 months prior to the date hereof (or for such shorter period that
the issuer was required to file such reports), other than Form 8-K reports.
(b) During
the Registration Period, the Company shall file with the SEC in a timely manner all required reports under Section 13 or 15(d) of
the Exchange Act (it being understood that nothing herein shall limit the Company’s obligations under the Securities Purchase Agreement)
and such reports shall conform to the requirement of the Exchange Act and the SEC for filing thereunder.
(c) The
Company shall furnish to the Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements of Rule 144, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration.
9. AMENDMENT
OF REGISTRATION RIGHTS.
Provisions of this Agreement
may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of the Company and Investor. Any amendment or waiver effected in accordance with this Section 9 shall
be binding upon the Investor and the Company. Without the express written consent of a holder of Registrable Securities, no such amendment
shall be effective to the extent that it applies to fewer than all of the holders of the Registrable Securities. No consideration shall
be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the
same consideration also is offered to all of the parties to this Agreement.
10. MISCELLANEOUS.
(a) A
Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities
or owns the right to receive the Registrable Securities. If the Company receives conflicting instructions, notices or elections from two
or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election
received from the registered owner of such Registrable Securities.
(b) The
Company shall not file any other registration statements on Form F-3, Form F-1, or otherwise until the initial Registration
Statement required hereunder is declared effective by the SEC, provided that this Section 10(b) shall not prohibit the Company
from filing amendments to registration statements already filed. The Company shall not include any other securities on a Registration
Statement unless otherwise agreed by the Investor.
(c) Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered pursuant to the notice provisions of the Securities Purchase Agreement or to such other address
and/or electronic mail address and/or to the attention of such other person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B) electronically generated by the sender’s email service
provider containing the time, date, and recipient email or (C) provided by a courier or overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
this section.
(d) Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(e) The
laws of the State of New York shall govern all issues concerning the relative rights of the Company and the Investors as its stockholders
under this Agreement. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the Supreme Court of the
State of New York, sitting in New York County, New York and federal courts for the Southern District of New York sitting New York, New
York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(f) This
Agreement and the rights, duties and obligations of the Investor hereunder may only be assigned upon the transfer of a Convertible Debenture
or the Conversion Shares issued pursuant to a Convertible Debenture pursuant to the terms and restrictions on transfer set forth in the
Securities Purchase Agreement and the applicable Convertible Debenture. This Agreement and the provisions hereof shall be binding upon
and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the parties. No assignment by any
party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until
the Company shall have received (A) written notice of such assignment and (B) the written agreement of the assignee, in a form
reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum
or certificate of joinder to this Agreement).
(g) The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(h) This
Agreement may be executed in identical counterparts, both which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party. Facsimile or other electronically scanned and delivered
signatures (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the
Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), including by e-mail attachment, shall be deemed
to have been duly and validly delivered and be valid and effective for all purposes of this Agreement.
(i) Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such
other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(j) The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
(k) This
Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the Investor and the Company have caused their signature page to this Registration Rights Agreement to
be duly executed as of the date first above written.
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Eshallgo (NASDAQ:EHGO)
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