UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of December 2024
Commission File Number 001-41425
Golden Sun Health Technology Group Limited
(Translation of registrant’s name into English)
Golden Sun Health Technology Group Limited
Room503, Building C2, No. 1599
Xinjinqiao Road, Pudong New Area
Shanghai, China
(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 ☐ 40-F ☐
Entry into a Material Definitive Agreement.
On October 28, 2024, Golden Sun Health Technology
Group Limited (the “Company”) entered into a Securities Purchase Agreement (the “SPA”) with two accredited investors
(the “Buyer”), to issue and sell to the Buyer the senior secured convertible notes of the Company, in the aggregate original
principal amount of $5,000,000 (the “Notes”). At the closing held on December 3, 2024 (the “Closing”), the Company
has issued and sold to the Buyer a Note in the aggregate principal amount of $5,000,000 (the “Note”).
The Note is convertible, in whole and in part,
from time to time at the option of the Buyer to convert any portion of the outstanding and unpaid Conversion Amount (as defined in the
Note) into validly issued, fully paid and non-assessable Common Shares in accordance with Section 3(b) of the Note, at the Conversion
Rate (as defined in the Note). The Conversion Price is 70% of the lowest closing market trading price of the Company’s common stock
during the fifteen (15) trading days leading up to either (i) the date the very first conversion notice for either the Convertible Note
or the Warrants is delivered or (ii) the date each conversion notice is delivered, at the Holder’s sole discretion. After the initial
date of any event of default, as applicable, the Note may initially be sold, exercised, converted, exchanged into the Company’s
common shares at a conversion price equal to the lower of (i) 70% of the lowest closing market trading price of the Company’s common
stock during the fifteen (15) trading days leading up to the date the conversion notice is delivered, and (ii) the greater of (x) the
floor price then in effect and (y) 85% of the lowest trading price of our Common Shares during the 15 consecutive trading day period preceding
the delivery of the conversion notice. The Note may not be converted to the extent that the number of common shares owned by the Buyer
and its affiliates will exceed 9.99% of the issued and outstanding shares of the Company at the time of conversion.
The Note matures on November 2, 2025, or earlier
under certain conditions set forth in the SPA. The Note accrues interest at two point seventy-five percent (2.75%) per annum.
The Notes ranks senior to all present and future
indebtedness of the Company and its subsidiaries, subject to certain permitted senior indebtedness (including real estate mortgages).
The Company has the right to redeem all, but not less than all, of the outstanding balance under the Note, with the Investor’s prior
written consent, at a 20% premium to the greater of the balance of the Note and the equity value of our common shares underlying the Note.
The equity value of our common shares underlying the Note is calculated using the greatest closing sale price of our common shares during
the period from the date immediately preceding the date of the applicable redemption notice to the trading day immediately prior to the
date the redemption payment is made.
The Company’s obligations under the Note,
the SPA and other transaction documents are secured by (i) the grant of a first priority security interest upon substantially all of the
personal and real property of the Company and its subsidiaries pursuant to a security agreement between the Company and the Buyer (the
“Security Agreement”) and (ii) by a pledge of 403,000 Common Shares held by our principal shareholder, Xueyuan Weng
(the “Pledge Agreement”). The Company’s obligations under the Note may become subject to a guaranty by the Company
(the “Guaranty”).
The Company is required to use its best efforts
to file, within 90 calendar days of the Closing, a registration statement on the appropriate form providing for the resale by the Buyer
of the common shares issuable upon conversion of the Notes, including interest on the Notes through the first anniversary of the Closing.
The Company is also required to use its best efforts to cause such registration statement to become effective and to always maintain the
effectiveness of such registration statement until the Buyer no longer owns any Notes or common shares issuable upon exercise or conversion
thereof.
The foregoing description of the SPA, Note, Shareholder
Pledge Agreement, Registration Rights Agreement, Security Agreement and Guaranty, is a summary and is qualified in its entirety
by reference to the full text of these documents, forms of which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, respectively,
to this Current Report on Form 6-K and incorporated herein by reference.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereto duly authorized.
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GOLDEN SUN HEALTH TECHNOLOGY GROUP LIMITED |
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/s/ Xueyuan Weng |
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Xueyuan Weng |
| Date: December 6, 2024 |
Chief Executive Officer |
EXHIBIT INDEX
3
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of October 28, 2024, by and among Golden Sun Health Technology Group Limited,
a Cayman Islands corporation, with its principal office located at Room 503, Building C2, No. 1599, Xinjinqiao Road, Pudong New Area,
Shanghai, China (the “Company”), and the investors listed on the Schedule of Buyers attached hereto (individually,
a “Buyer” and collectively, the “Buyers”).
WHEREAS:
A. The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemptions from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”) and Rule 506 of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.
B. The Buyers,
severally, and not jointly, wish to purchase, and the Company wishes to sell, upon the terms and conditions stated in this
Agreement, (i) secured convertible notes, in the form attached hereto as Exhibit A, in an aggregate original
Principal Amount of $5,000,000 (as amended, restated, supplemented and/or modified from time to time in accordance with the
provisions thereof, collectively, the “Notes”) and (ii) warrants, in substantially the form attached hereto
as Exhibit B (as amended, restated, supplemented and/or modified from time to time in accordance with the provisions
thereof, the “Warrants”), to acquire up to that number of shares of Common Stock, par value $0.005 per share, of
the Company (“Conversion Shares”) equal to 180% of the quotient obtained by dividing (a) the original aggregate
Principal Amount of the Notes purchased by the Buyers at Closing, by (b) the Conversion Price (as defined in the Note) (the Shares
issuable upon exercise of the Warrants, the “Warrant Shares”).
C. The
Notes, the Conversion Shares, the Warrants and the Warrant Shares collectively are referred to herein as the “Securities”.
D. The
Note (i) will rank (A) pari passu with all Other Notes (as defined in the Note), (B) senior to all Indebtedness (as defined in
the Note) not constituting Permitted Indebtedness (as defined in the Note) and all Permitted Indebtedness expressly designated as ranking
junior to the Notes, and (C) pari passu with all other Permitted Indebtedness and (ii) will be secured by the limited guaranty
of Mr. Xueyuan Weng (the “Guarantors”) and a pledge by the Guarantor of an aggregate of 403,000 Common Shares. At the
closing, such limited guaranty shall be evidenced by a limited guaranty by Mr. Xueyuan Weng with his 403,000 Common Shares in the form
attached hereto as Exhibit C and a pledge agreement in the form attached hereto as Exhibit D (as the same may
be amended, restated, supplemented and/or modified from time to time in accordance with the provisions thereof, such limited guaranty
and pledge agreement, taken together, herein referred to as the “Security Documents”).
E. Contemporaneously
with the Closing, the Buyers and the Company will execute and deliver a Registration Rights Agreement in the form attached hereto as Exhibit E (as
amended, restated, supplemented and/or modified from time to time in accordance with the provisions thereof, the
“Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights
in respect of the Conversion Shares and the Warrant Shares under the 1933 Act and the rules and regulations promulgated thereunder,
and applicable state securities laws.
F. Capitalized
terms used, but not otherwise defined, herein shall have the meanings ascribed to such terms in the Notes.
NOW, THEREFORE, the
Company and each Buyer hereby agree as follows:
1. PURCHASE
AND SALE OF NOTES AND WARRANTS.
(a) Purchase
of Notes and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company
shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date
(as defined below), (x) the Principal Amount of Note set forth opposite such Buyer’s name in column (3) on the Schedule of
Buyers and (y) the related Warrants to acquire up to that number of Warrant Shares equal to 180% of the quotient obtained by dividing
(1) the Principal Amount of the Note purchased by the Buyer at Closing, by (2) the Conversion Price (as defined in the Note) (the “Closing”).
(b) Closing.
The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York City time, on the first day other
than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed
(a “Business Day”) following the satisfaction (or waiver) and notification of the Company of satisfaction (or waiver)
of the conditions to the Closing set forth in Sections 6 and 7 below (or such later or earlier date as is mutually agreed to by the
Company and Buyers holding the right to purchase at least 50% of the aggregate Principal Amount of the Notes). The Closing shall occur
on the Closing Date at the offices of GH Law Firm LLC 757 Third Avenue, 20th Floor, New York, New York 10017, or such other
place as the Company and the Buyers holding the right to purchase at least 50% of the aggregate Principal Amount of the Notes shall mutually
agree.
(c) Purchase
Price. The aggregate purchase price for the Notes and the Warrants to be purchased by each such Buyer at the Closing (the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers.
(d) Form
of Payment. On or before the Closing Date, (i) each Buyer shall deposit its respective Purchase Price for the Notes and Warrants
to be issued and sold to such Buyer at the Closing to the escrow account by wire transfer of immediately available funds in accordance
with the provisions of the Escrow Agreement dated the date hereof, by and among the Buyers, the Company, and GH Law Firm LLC, as the Escrow
Agent (the “Escrow Agreement”), and (ii) the Company shall deliver to its counsel the Notes (allocated in the Principal
Amounts as such Buyer shall request) representing such Principal Amount of the Notes which such Buyer is then purchasing hereunder along
with warrants representing the Warrants (allocated in the amounts as such Buyer shall request) which such Buyer is purchasing, in each
case duly executed on behalf of the Company and registered in the name of such Buyer or, subject to compliance with applicable securities
laws, its designee (as to such Buyer, the “Buyer’s Notes and Warrants”).
(e) Release of Purchase
Price and Notes and Warrants. Subject to the satisfaction of the conditions set forth in Sections 6 and 7 of this Agreement, on
the Closing Date the Company shall (i) cause the Escrow Agent to release the Purchase Price to the Company or its designees in
accordance with the provisions of the Escrow Agreement, and (ii) cause the Company’s counsel to deliver to each Buyer the
Buyer’s Notes and Warrants registered in the name of such Buyer.
2. BUYER’S
REPRESENTATIONS AND WARRANTIES. Each Buyer represents and warrants, severally and not jointly, as of the date of this Agreement and
on the Closing Date, with respect to only itself that:
(a) No
Public Sale or Distribution. Such Buyer is acquiring the Note, and the Warrants, and upon conversion of the Note and exercise of the
Warrants will acquire the Conversion Shares issuable upon conversion of the Note and the Warrant Shares issuable upon exercise thereof,
for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant
to sales registered or exempted under the 1933 Act and such Buyer does not have a present arrangement to effect any distribution of the
Securities to or through any person or entity; provided, however, that by making the representations herein, such Buyer
does not agree 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 or an exemption under the 1933 Act and pursuant to the applicable
terms of the Transaction Documents (as defined in Section 3(b)). Such Buyer does not presently have any agreement or understanding,
directly or indirectly, with any Person (as defined in Section 3(p)) to distribute any of the Securities.
(b) Accredited
Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.
(c) Reliance
on Exemptions. Such 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 upon, among other things,
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.
Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company
and the Acquisition and materials relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. 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 herein. Such Buyer understands that its investment in the
Securities involves a high degree of risk and is able to afford a complete loss of such investment. Such Buyer has sought such accounting,
legal and tax advice as it has considered necessary to make an informed investment decision in respect of its acquisition of the Securities.
(e) No Governmental
Review. Such Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(f) Transfer
or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement: (i) the Securities have not been
and are not being registered under the 1933 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 form reasonably acceptable to the Company, 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, or (C) such Buyer provides the Company with assurance reasonably
acceptable to the Company that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”); (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 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules
and regulations of the SEC thereunder; and (iii) none of the Company or any other Person is under any obligation to register the
Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Notwithstanding
the foregoing, and subject to compliance with applicable securities laws, 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, unless required by law, 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(f).
(g) Legends.
Such Buyer understands that the certificates or other instruments representing the Notes and the Warrants and the stock certificates representing
the Conversion Shares and the Warrant Shares, except as set forth below, shall bear any legend as required by the “blue sky”
laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer
of such certificates):
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]] HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO, AND IN ACCORDANCE WITH, RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, SUBJECT TO COMPLIANCE WITH APPLICABLE SECURITIES LAWS, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
The legend set forth above shall be removed and
the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped or, in the case of
Conversion Shares or Warrant Shares, issue to such holder by electronic delivery at the applicable balance account, if, unless otherwise
required by state securities laws, (i) such Securities are registered for resale under the 1933 Act, provided that upon receipt of
notice from the Company that the applicable registration statement is not, or no longer is effective in respect of the resale of such
Securities, the Holder will not transfer such Securities (other than pursuant to clauses 2(g)(ii) or 2(g)(iii) below) until
the Company notifies the Holder that the applicable registration statement becomes effective (again), (ii) in connection with a sale,
assignment or other transfer, such holder provides the Company with an opinion of counsel reasonably satisfactory to the Company, in a
generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration under
the applicable requirements of the 1933 Act and that such legend is no longer required, or (iii) such holder provides the Company
with assurances reasonably acceptable to the Company that the Securities can be sold, assigned or transferred pursuant to Rule 144 or
Rule 144A, and such Holder delivers the legended Securities to the Company or the Company’s transfer agent.
(h) Validity;
Enforcement. This Agreement has been, and, when the other Transaction Documents (as defined below) to which such Buyer is a party
are executed and delivered in accordance with the terms and conditions contemplated hereby and thereby, such documents shall 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 respective terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, 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 other Transaction Documents to which such
Buyer is a party and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a
violation of any organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws) applicable to such Buyer or by which any property or asset of
the Buyer is bound or affected, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or
violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability
of such Buyer to perform its obligations hereunder or under any of the other Transaction Documents. Each Buyer agrees that it has independently,
based on such documents and information it deemed appropriate, made its decision to enter into this Agreement and purchase the Note and
Warrants.
(j) Residency.
Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.
3. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY. The Company represents and warrants to each of the Buyers on the date hereof and on the Closing Date that:
(a) Organization
and Qualification. Set forth on Schedule 3(a) is a true and correct list of the entities in which the Company or any Subsidiary,
directly or indirectly, owns capital stock or holds an equity or similar interest, together with their respective jurisdictions of organization
and the percentage of the outstanding capital stock or other equity interests of such entity that is held by the Company or such Subsidiary
or any of their respective Subsidiaries. Schedule 3(a) also sets forth a true and correct corporate structure of the Company
and its subsidiaries immediately following the Closing. Other than with respect to the entities listed on Schedule 3(a), the
Company does not, directly or indirectly, own any securities or beneficial ownership interests in any other Person (including through
joint ventures or partnership arrangements) or has any investment in any other Person. The Company and its “Subsidiaries”
(which for purposes of this Agreement means any entity in which the Company or any of its Subsidiaries, directly or indirectly, owns any
of the capital stock, equity or similar interests or voting power of such entity at the date of this Agreement) are entities duly organized
and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and
authority to own their properties and to carry on their business as now being conducted. If applicable, each of the Company and the Subsidiaries
is duly qualified as a foreign entity to do business and, to the extent legally applicable, 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 have a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on the business, properties, assets, prospects, operations, results of operations
or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or on the transactions contemplated hereby
and the other Transaction Documents or by the agreements and instruments to be entered into in connection herewith or therewith, or on
the authority or ability of the Company or any Subsidiary to perform its obligations under the Transaction Documents (as defined below).
Except as set forth in Schedule 3(a), the Company and each Subsidiary holds all right, title and interest in and to 100% of
the capital stock, equity or similar interests of each of its respective Subsidiaries, in each case, free and clear of any Liens (as defined
below) other than Permitted Liens (as defined in the Note) including any restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of free and clear ownership by a current holder, and no such Subsidiary owns capital stock or holds an
equity or similar interest in any other Person. As used in this Agreement, “Lien” means, with respect of any asset,
any mortgage, lien, pledge, hypothecation, charge, security interest, encumbrance or adverse claim of any kind and any restrictive covenant,
condition, restriction or exception of any kind that has the practical effect of creating a mortgage, lien, pledge, hypothecation, charge,
security interest, encumbrance or adverse claim of any kind (including any of the foregoing created by, arising under or evidenced by
any conditional sale or other title retention agreement, the interest of a lessor with respect to a “Capital Lease” (in accordance
with generally accepted accounting principles), or any financing lease having substantially the same economic effect as any of the foregoing).
(b) Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement, the Registration Rights Agreement, the Security Documents, the Escrow Agreement (as defined below), the
Warrants and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by
this Agreement to which it is a party (such documents, and together with the Notes, the Warrants, the Registration Rights Agreement,
the Security Documents, the Transfer Agent Instructions, and each of the other agreements to be entered into in connection with the
transactions contemplated by this Agreement, as amended, restated, supplemented and/or modified from time to time in accordance with
the provisions thereof, collectively, the “Transaction Documents”) and to consummate the transactions
contemplated herein and therein in accordance with the terms hereof and thereof. The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, have been duly
authorized by the board of directors of the Company (the “Board of Directors”) and other than as set forth in
Section 3(e) hereof, no further filing, consent or authorization is required by the Company, its stockholders or the Board of
Directors. To the extent that a Person that is a Subsidiary is a party to or bound by a Transaction Document, such Subsidiary has
the requisite power and authority to enter into and perform its obligations under such Transaction Document and the execution and
delivery of such Transaction Document by such Subsidiary and the consummation by such Subsidiary of the transactions contemplated
thereby have been duly authorized by the board of directors or equivalent body of such Subsidiary and no further consent or
authorization is required by such Subsidiary, its equity holders or its board of directors or equivalent body. This Agreement, the
other Transaction Documents have been duly executed and delivered by the Company or its Subsidiary, as applicable, and constitute
the legal, valid and binding obligations of such parties enforceable against such parties in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies. As of the Closing, the Transaction Documents dated after the date of this Agreement
and on or prior to the date of the Closing shall have been duly executed and delivered by the Company or its Subsidiary, if
applicable, and shall constitute the valid and binding obligations of such parties, enforceable against such parties in accordance
with their terms, except as enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies.
(c) Offer
of Securities; Issuance of Securities. Subject to the accuracy of Buyer’s representations and warranties hereunder, the offer
by the Company of the Securities is exempt from registration under the 1933 Act. The issuance of the Notes and the Warrants are duly authorized
and are free from all taxes, liens and charges in respect of the issue thereof other than Permitted Liens (as defined in the Note). As
of the Closing, 3,760,000 Shares (Class A) shall have been duly authorized and reserved for issuance upon the conversion of the Notes
and the exercise of the Warrants. Upon conversion of the Notes in accordance with the terms thereof the Conversion Shares, and upon exercise
in accordance with the Warrants, the Warrant Shares, will be validly issued, fully paid, nonassessable and free from all preemptive or
similar rights, taxes, liens and charges in respect of the issue thereof other than Permitted Liens, with the holders being entitled to
all rights accorded to a holder of Shares.
(d) No Conflicts.
The execution, delivery and performance of the Transaction Documents by the Company, and, if applicable, its Subsidiaries, and the
consummation by such parties of the transactions contemplated hereby and thereby and the granting of a security interest in the
Collateral will not (i) result in a violation of any articles of association, certificate of incorporation, certificate of
formation, any certificate of designations or other constituent documents of the Company or any of the Subsidiaries, any capital
stock of the Company or any of the Subsidiaries or bylaws of the Company or any of the Subsidiaries or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give
to others any rights of termination, amendment, acceleration or cancellation of, or other remedy in respect of, any agreement,
indenture or instrument to which the Company or any of the Subsidiaries is a party, or (iii) result in a violation of any
Requirements of Law, except (other than pursuant to clauses (i) and (iii) above) for such violations, conflicts, defaults or rights
which would not, individually or in the aggregate, have a Material Adverse Effect. As used in this Agreement, (A)
“Requirements of Law” means, as to any Person, any United States or foreign law, statute, treaty, rule,
regulation, right, privilege, qualification, license or franchise or determination of an arbitrator or a court or other Governmental
Entity, in each case applicable or binding upon such Person or any of its property or to which such Person or any of its property is
subject or pertaining to any or all of the transactions contemplated or referred to herein and (B) “Governmental
Entity” means the government of any nation, state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any
corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
(e) Consents.
Neither the Company nor any of the Subsidiaries is required to obtain any consent, authorization or order of, or make any filing or registration
with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its obligations under or contemplated by the Transaction Documents to which it is a party, in each case in accordance
with the terms hereof or thereof, except for the following consents, authorizations, orders, filings and registrations: (i) the filing
of appropriate UCC financing statements (or the equivalent) with the appropriate states and other authorities pursuant to the Security
Documents; (ii) filings required by applicable federal, state or foreign securities laws; (iii) the registration statement and
related state securities law filings required by the Registration Rights Agreement; and (iv) the declaration of effectiveness by the Securities
and Exchange Commission of any registration statement filed by the Company pursuant to the Registration Rights Agreement All consents,
authorizations, orders, filings and registrations which the Company is required to have obtained prior to the date hereof pursuant to
the preceding sentence have been obtained or effected.
(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 in respect of the Transaction Documents and the transactions contemplated hereby and thereby and that,
except as set forth on Schedule 3(f), no Buyer is (i) an officer or director of the Company, (ii) an “affiliate”
of the Company (as defined in Rule 144) or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10%
of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934
Act”)). The Company further acknowledges that, except as set forth on Schedule 3(f), to the knowledge of the Company,
no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiary (or in any similar capacity) in respect
of 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 decision of the Company and each of the
Subsidiaries to enter into the Transaction Documents to which such Person is a party has been based solely on the independent evaluation
by the Company, such Subsidiaries and their respective representatives.
(g) No
General Solicitation; No Placement Agent. None of the Company, any of its Subsidiaries, any of their respective 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) in connection with the offer or sale of the Securities. The Company has not retained a placement agent in connection with the offer
and sale of the Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees,
or brokers’ commissions (other than for persons engaged by any Buyer or its investment advisor) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any such claim.
(h) No
Integrated Offering. None of the Company, any of its Subsidiaries and any of their respective Affiliates, nor any Person acting on
its or their behalf has made, directly or indirectly, any offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of any of the Securities under the 1933 Act or cause this offering of the Securities
to be integrated with prior or concurrent offerings by the Company for purposes of the 1933 Act. None of the Company, any of its Subsidiaries
and their respective Affiliates or any Person acting on their behalf will take any action or steps referred to in the preceding sentence
that would require registration of any of the Securities under the 1933 Act or cause the offering of the Securities to be integrated with
other offerings. Except as otherwise stated, as used in this Agreement, “Affiliate” means any Person who is an “affiliate”
as defined in Rule 12b-2 of the General Rules and Regulations under the 1934 Act.
(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, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s articles of association and memorandum of association (as amended and
in effect on the date hereof) or the laws of the jurisdiction of its formation or otherwise which is or could become applicable to any
Buyer as a result of the transactions contemplated by the Securities Purchase Agreement, including, without limitation, the Company’s
issuance of the Securities and any Buyer’s ownership of the Securities. The Company has not adopted a stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of Shares or a change in control of the Company.
(j) Financial
Statements. The consolidated financial statements of the Company and its Subsidiaries have been prepared in accordance with the
generally accepted accounting principles of the jurisdiction of its organization (“GAAP”), 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 that, to
the Company’s knowledge, are not material, individually or in the aggregate. Except for liabilities and obligations incurred in the
ordinary course of business and consistent with past practice, liabilities and obligations reflected on or reserved against in the
March 31, 2024 consolidated balance sheet of the Company, prepared in accordance with GAAP (the “Balance Sheet”)
and as otherwise contemplated hereby or disclosed herein or in the disclosure schedules to this Agreement (the “Disclosure
Schedules”), since March 31, 2024, inclusive of such date, none of the Company nor any Subsidiary has incurred any
liabilities or obligations that would be required to be reflected or reserved against in a balance sheet of the Company or such
Subsidiary, as applicable, prepared in accordance with the principles used in the preparation of the Balance Sheets. None of the
Company or, to the Company’s knowledge, any stockholder, officer or director of the Company has issued any press release or made any
other public statement or communication on behalf of the Company or otherwise relating to the Company or any of its Subsidiaries
that contains any untrue statement of a material fact or omits any statement of material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
(k) Absence
of Certain Changes. Since March 31, 2024, there has been no change or development in the business, properties, operations, condition
(financial or otherwise), results of operations of the Company or any Subsidiary that has had or would reasonably be expected to have
a Material Adverse Effect. Except as set forth on Schedule 3(k), since March 31, 2024 (and before giving effect to the transactions
contemplated under the Transaction Documents) none of the Company or any of its Subsidiaries has (i) declared or paid any dividends,
(ii) sold any assets, individually or in the aggregate, in excess of $10,000 outside of the ordinary course of business, (iii) had
capital expenditures, individually or in the aggregate, in excess of $10,000 or (iv) waived any material rights in respect of any
Indebtedness or other rights in excess of $1,000 owed to it. None of the Company or any of its Subsidiaries has taken any steps to seek
protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors or the creditors
of any Subsidiary intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead
a creditor to do so. Neither the Company nor any Subsidiary of the Company is as of the date hereof, and after giving effect to the transactions
contemplated hereby to occur at the Closing will be, Insolvent (as defined below). For purposes of this Section 3(k), “Insolvent”
means, in respect of any Person, (i) the present fair saleable value of such Person’s assets (and including as assets for this
purpose at a fair valuation all rights of subrogation, contribution or indemnification arising pursuant to any guarantees given by such
Person) is less than the amount required to pay such Person’s total Indebtedness (as defined in Section 3(p)), (ii) such
Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute
and matured, (iii) such Person intends at any time to incur or believes that it will at any time incur debts that would be beyond
its ability to pay as such debts mature or (iv) such Person has unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is proposed to be conducted.
(l) Conduct of
Business; Regulatory Permits. None of the Company or any Subsidiary is in violation of any term of or in default under its
articles of association, certificate of incorporation, certificate of formation, any certificate of designations of any outstanding
series of preferred stock of such company or Bylaws or their organizational charter or other constituent documents or bylaws,
respectively except for such violations or defaults which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. None of the Company or any Subsidiary is in violation of any judgment, decree or order or any
statute, ordinance, rule or regulation applicable to such entity, and none of the Company or any Subsidiary will conduct its
respective business in violation of any of the foregoing, except for such violations and/or possible violations which would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company and each Subsidiary possess
all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the
aggregate, a Material Adverse Effect, and none of the Company or any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or permit except where such proceedings, revocation or
modification would not have a Material Adverse Effect.
(m) Foreign
Corrupt Practices. None of the Company or any Subsidiary, nor, any director, officer, agent, employee or other Person acting on behalf
of any of them has, in the course of its actions for, or on behalf of, such entity (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
(n) Transactions
With Affiliates. Except as set forth in Schedule 3(n) hereto, other than the arrangements disclosed on Schedule 3(n),
none of the officers, directors or employees of any of the Company or any Subsidiary is presently a party to any transaction with any
of the Company or any Subsidiary (other than for ordinary course services as employees, officers or directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to
or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director,
trustee or partner.
(o) Equity
Capitalization. As of the date hereof the authorized capital stock of the Company consists of 9,000,000 shares of Common Stock
for Class A and 1,000,000 for Class B, both at par value $0.005 per share, of which as of the date hereof 1,577,944 (Class A) and
403,000 (Class B) shares are issued and outstanding. All of the outstanding Common Shares have been validly issued and are fully
paid and nonassessable. Except as disclosed in Schedule 3(o): (i) none of the Company’s capital stock is
subject to preemptive rights or any other similar rights or any Liens suffered or permitted by the Company; (ii) 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 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 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 capital stock of the Company or any of its Subsidiaries; (iii) there are no 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, except for such
Indebtedness which (x) will be paid or satisfied in full substantially concurrently with the Closing with the proceeds of the
purchase of securities hereunder, or (y) constitutes Permitted Indebtedness (as defined in the Note); (iv) there are no
financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with the
Company or any of its Subsidiaries other than financing statements evidencing Permitted Liens or filed pursuant to the Security
Documents; (v) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act (except pursuant to the Registration Rights Agreement;
(vi) 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 such Subsidiaries; (vii) there are no
securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the
Securities; (viii) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement; (ix) the Company does not have any outstanding options, warrants or other securities which are
exercisable for or convertible into its Common Shares; and (x) no securities of the Company or any Subsidiary are listed or
quoted on any stock exchange or automated quotation system. The Company has made available to the Buyers true, correct and complete
copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof, and all agreements
relating to securities convertible into, or exercisable or exchangeable for, Shares and the material rights of the holders thereof
in respect thereof.
(p) Indebtedness and
Other Contracts. Except as disclosed in Schedule 3(p), none of the Company or any Subsidiary (i) has any outstanding
Indebtedness (as defined below) except for Permitted Indebtedness and such Indebtedness which will be paid or satisfied in full
substantially concurrently with Closing with the proceeds of the purchase of securities hereunder, (ii) is a party to any contract,
agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or
instrument would reasonably be expected to result in a Material Adverse Effect, (iii) is in violation of any term of or in default
under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not
result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, would be reasonably
expected to have a Material Adverse Effect. After giving effect to the issuance of the Notes and Warrants as contemplated by this
Agreement, none of the Company or any Subsidiary will have any outstanding Indebtedness, except for Permitted Indebtedness. 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 generally accepted accounting principles (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations in respect of 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 in respect of 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 generally accepted accounting
principles, 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 mortgage, lien, pledge, charge, security interest or other encumbrance 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; (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person in respect of 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 in respect thereof; and (z) “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency
thereof.
(q) Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation that if adversely determined, individually or in the
aggregate, would have a Material Adverse Effect before or by, any court, public board, government agency, self-regulatory organization
or body pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary, any of their respective
officers or directors, or the Shares.
(r) Insurance.
The Company and each Subsidiary is 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 such entities are engaged. None of
the Company or any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.
(s) Employee
Relations.
(i) None
of the Company or any Subsidiary is a party to any collective bargaining agreement or employs any member of a union. The Company and its
Subsidiaries believe that the Company’s relations with its employees and the relations of its Subsidiaries with their respective
Subsidiaries are good. No executive officer (as defined in Rule 3b-7 promulgated under the 1934 Act) of the Company or any Subsidiary
has notified the Company or such Subsidiary that such officer intends to leave the Company or Subsidiary, as applicable, or otherwise
intends to terminate such officer’s employment with the Company or Subsidiary. To the knowledge of the Company, no executive officer
of the Company or any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive
covenant and the continued employment of each such executive officer does not subject the Company or any Subsidiary to any liability in
respect of any of the foregoing matters except such violations and/or liabilities that would not individually or in the aggregate be reasonably
expected to have a Material Adverse Effect.
(ii) The
Company and the Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment
and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance
therewith would not result, either individually or in the aggregate, in a Material Adverse Effect.
(t) Title.
The Company and the Subsidiaries have good and marketable title in fee simple to all real property and good and valid title to all personal
property owned by them which is material to the business of the Company or Subsidiary, as applicable, in each case free and clear of all
Liens, except for Permitted Liens (as defined in the Note), except where failure to have good and valid title, individually or in the
aggregate, would not be reasonably expected to have a Material Adverse Effect. Except as set forth on Schedule 3(t), any real property
and facilities held under lease by the Company or any of the Subsidiaries are held by the applicable entity under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property
and buildings by the Company and such Subsidiaries. Where failures to have such valid, subsisting and enforceable lease(s) exist, such
failures, in the aggregate, would not have a Material Adverse Effect.
(u) Intellectual
Property Rights. The Company and the Subsidiaries own or possess, adequate rights or licenses to use all trademarks, trade names,
service marks and all applications and registrations therefor, patents, patent rights, copyrights, original works of authorship, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights (“Intellectual Property
Rights”) necessary to conduct their respective businesses as now conducted. Except as set forth on Schedule 3(u), none
of the Company’s or any Subsidiary’s registered, or applied for, Intellectual Property Rights have expired or terminated or
have been abandoned, or are expected to expire or terminate or expected to be abandoned, within three years from the date of this Agreement.
The terminations, expirations or abandonments of such registered, or applied for, Intellectual Property Rights would not, in the aggregate,
have a Material Adverse Effect. The Company does not have any knowledge of any infringement by the Company or any of the Subsidiaries
of Intellectual Property Rights of others except of such infringement that would not have a Material Adverse Effect. Except as set forth
on Schedule 3(u), there is no claim, action or proceeding being made or brought, or to the knowledge of the Company, being threatened,
against the Company or any Subsidiary regarding their respective Intellectual Property Rights and any such claims, actions and proceedings
being made, brought or threatened would not in the aggregate, have a Material Adverse Effect. The Company is unaware of any facts or circumstances
which might give rise to any of the foregoing infringements or claims, actions or proceedings which would, individually or in the aggregate,
have a Material Adverse Effect. The Company and the Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their Intellectual Property Rights.
(v) Environmental
Laws. The Company and the Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter defined),
(ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses, (iii) are in compliance with all terms and conditions of any such permit, license or approval and
(iv) to the Company’s knowledge, there are no events, conditions or circumstances reasonably likely to result in
liability of the Company or any Subsidiary pursuant to Environmental Laws, except where, in the foregoing clauses (i) through (iv)
the failure to so comply with such Environmental Laws, permits, licenses or other approvals or to obtain such permits, licenses or
approvals would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term
“Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into
the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(w) Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of the Subsidiaries owned by the Company or such Subsidiary, respectively,
subject to the Transaction Documents.
(x) Tax
Status. Except as set forth on Schedule 3(x), each of the Company and Subsidiaries (i) has made or filed all foreign,
federal, state and local income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations, except those being contested in good faith and for which the Company has made appropriate reserves
on its books 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. Except as set forth on Schedule 3(x), there are no material
unpaid taxes claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such
claim. Each of the claims set forth on Schedule 3(x) is being contested in good faith or would not be expected, individually or
in the aggregate, to have a Material Adverse Effect. Except as set forth on Schedule 3(x), no liens have been filed securing
taxes and other governmental assessments and charges and no claims are being asserted by or against the Company or any of the Subsidiaries
in respect of any taxes (other than liens for taxes not yet due and payable) or other governmental assessments or charges. Except as set
forth on Schedule 3(x), none of the Company or any of the Subsidiaries has received notice of assessment or proposed assessment
of any taxes claimed to be owed by it or any other Person on its behalf. Except as disclosed on Schedule 3(x), none of the
Company or any of the Subsidiaries is a party to any tax sharing or tax indemnity agreement or any other agreement of a similar nature
that remains in effect. None of the items set forth on Schedule 3(x) would, individually or in the aggregate, have a Material
Adverse Effect. Each of the Company and the Subsidiaries has complied in all material respects with all applicable legal requirements
relating to the payment and withholding of taxes and, within the time and in the manner prescribed by law, has withheld from wages, fees
and other payments and paid over to the proper governmental or regulatory authorities all amounts required.
(y) Internal
Accounting Controls. Each of the Company and the Subsidiaries maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of consolidated 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 in respect of any difference.
(z) Disclosure.
Each of this Agreement (including the Schedules hereto), the other Transaction Documents, and furnished by or on behalf of the
Company regarding the Company or the Subsidiaries, and their respective businesses and the transactions contemplated hereby (other
than any forward-looking statement or management opinion) is true and correct in all material respects and does not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. Each press release issued by the Company or its
Subsidiaries during the six (6) months preceding the date of this Agreement did not at the time of release contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. No event or circumstance has
occurred or information exists in respect of the Company or any of its Subsidiaries or its or their business, properties, operations
or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed, except where such failure would not reasonably be expected to have a
Material Adverse Effect.
(aa) Manipulation of Price.
The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause
or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any
of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii)
paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.
(bb) U.S. Real Property
Holding Corporation. The Company is not, nor has it ever been, a U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon any Buyer’s request.
(cc) No Other Agreements.
As of the Closing Date, the Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions
of the transactions contemplated by the Transaction Documents, except as set forth in the Transaction Documents.
(dd) Regulations T, U
and X. Neither the Company nor any other Subsidiary is and will be engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation T, U or X of the Board of Governors of the Federal Reserve System
as now and from time to time hereafter in effect), and no proceeds of any Note will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin stock.
(ee) ERISA.
(i) Except as
listed on Schedule 3(ff) hereto, none of the Company or any of its Subsidiaries or any of their ERISA Affiliates maintains or
contributes to, or within the preceding six (6) years has maintained or contributed to, any Employee Benefit Plan. Neither the
Company nor any of its Subsidiaries have any current labor problems or disputes that have resulted in, or which such Person
reasonably believes would be expected to have, a Material Adverse Effect. No Employee Benefit Plan has an accumulated or waived
funding deficiency or permitted decrease which would create a deficiency in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the Internal Revenue Code of 1986, as amended (or any
successor statute thereto) and the regulations thereunder (the “Code”) as of the date hereof, and no Lien imposed
under the Code or ERISA exists or is likely to arise on account of any Employee Benefit Plan within the meaning of Section 412 of
the Code.
(ii) Liabilities
under any Employee Benefit Plan of the Company or any of its Subsidiaries have been appropriately reflected on the financial statements
of the Company and its Subsidiaries in accordance with GAAP.
(iii) All
of the Employee Benefit Plans are and have been established and administered in all respects in accordance with all applicable laws, regulations
or orders with respect thereto, no such failure to comply therewith has, or would be reasonably expected to have, a Material Adverse Effect.
To the extent that any Employee Benefit Plan maintained by the Company or any of its Subsidiaries is intended to qualify for favorable
tax treatment under any applicable law, regulation or order, to the knowledge of the Company and the Subsidiaries, no fact or circumstance
exists that would reasonably be expected to adversely affect the tax-exempt status of such Employee Benefit Plan.
(iv) All
obligations regarding the Employee Benefit Plans have been satisfied to the extent due and owing on the date hereof, there are no outstanding
defaults or violations by any party to any Employee Benefit Plan and no taxes, penalties or fees are owing under any of the Employee Benefit
Plans where such obligations, defaults, violations, unpaid taxes, unpaid penalties or unpaid fees have or would reasonably be expected
to have a Material Adverse Effect. Except as set forth on Schedule3 (ff), neither the Company or any ERISA Affiliate has incurred
any withdrawal liability under ERISA with respect to any Multiemployer Plan, or is aware of any facts indicating that it or any of its
ERISA Affiliates may in the future incur any such withdrawal liability, that has, or would reasonably be expected to have, a Material
Adverse Effect.
(v) the
Company and each of its Subsidiaries have made available to the Buyers true, correct and complete copies of all material Employee Benefit
Plans as amended as of the date hereof, as requested by any Buyer.
(vi) Each
Employee Benefit Plan is fully funded to the extent required by any applicable law, regulation or order.
(vii) Except
as disclosed in Schedule3 (ff) or as required by any applicable law, including, without limitation, the Consolidated Omnibus Budget
Reconciliation Act of 1986 or any similar state law, regulation or order, none of the Employee Benefit Plans provides health and welfare
benefits to retired employees or to the beneficiaries or dependents of retired employees.
(viii) As
used in this Agreement, “Employee Benefit Plan” means an employee benefit plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained (or that was maintained at any time during the six (6) calendar years preceding the date
of this Agreement) for employees of the Company, any of its Subsidiaries or any of its ERISA Affiliates; “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections of ERISA shall be construed also to refer to any
successor sections; and “ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as
employed by the same employer as the employees of Parent or any of its Subsidiaries under Code Section 414(b), (b) any trade or
business subject to ERISA whose employees are treated as employed by the same employer as the employees of Parent or any of its
Subsidiaries under Code Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the Code, any
organization subject to ERISA that is a member of an affiliated service group of which Parent or any of its Subsidiaries is a member
under Code Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the Code, any Person subject to
ERISA that is a party to an arrangement with Parent or any of its Subsidiaries and whose employees are aggregated with the employees
of Parent or any of its Subsidiaries under Code Section 414(o).
(ff) Anti-Terrorism Laws
and Anti-Money Laundering Laws.
(i) None
of the Company or its Subsidiaries is, and to the knowledge of the Company, no Person who owns a controlling interest in or otherwise
controls the Company or any of its Subsidiaries is or is anticipated to be, listed on the Specially Designated Nationals and Blocked Persons
List maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or on any other similar
list (collectively, the “Lists”) maintained by the OFAC pursuant to any authorizing statute, Executive Order or regulation
(collectively, “OFAC Laws and Regulations”).
(ii) None
of the Company or its Subsidiaries (x) is a Person or entity with which any Buyer is prohibited from dealing or otherwise engaging in
any transaction by any OFAC Laws and Regulations and the Executive Orders (collectively, the “Anti-Terrorism Law”) or
(ii) is a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive
Orders or (y) is affiliated or associated with a Person or entity listed in the preceding clause (x) or clause (y). To the knowledge of
the Company, none of the Company or its Subsidiaries or Affiliates, nor any brokers or other agents acting in any capacity in connection
with the securities being offered in connection herewith (A) deals in, or otherwise engages in any transaction relating to, any property
or interests in property blocked pursuant to the Executive Orders or (B) engages in or conspires to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
(iii) To
the knowledge of the Company, none of the Company or its Subsidiaries nor any holder of a direct or indirect interest in the Company or
any of its Subsidiaries (x) is under investigation by any governmental authority for, or has been charged with, or convicted of, money
laundering under 18 U.S.C. §§ 1956 and 1957, drug trafficking, terrorist-related activities or other money laundering predicate
crimes, or any violation of the Bank Secrecy Act (31 U.S.C. Section 5311 et. seq.), and its implementing regulations, Title 31 Part 103
of the U.S. Code of Federal Regulations (the “BSA”), (y) has been assessed civil penalties under any all applicable laws,
regulations and government guidance on the prevention and detection of money laundering, including 18 U.S.C. Section 1956 and 1957, (the
“Anti-Money Laundering Laws”), or (z) has had any of its funds seized or forfeited in an action under any Anti-Money
Laundering Laws.
4. COVENANTS.
(a) Best
Efforts. Each party shall use its best efforts timely to satisfy each of the covenants and the conditions to be satisfied by it as
provided in Sections 5, 6 and 7 of this Agreement.
(b) Securities
Law Filings. Until none of the Buyers hold any Securities, the Company agrees to timely make any securities law filings in respect
of the Securities as required under any federal, state and foreign securities laws and to provide a copy thereof to each Buyer promptly
upon request 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 federal, state and foreign securities laws (or to obtain an exemption from such qualification), and shall upon request
provide evidence of any such action so taken to the Buyers on or prior to the Closing Date.
(c) Reporting
Status. Commencing at such time as it shall be required to file such reports, and until the later of the date on which (i) none
of the Buyers hold any Securities, (the “Reporting Period”), the Company shall timely file all reports required to
be filed with the SEC pursuant to the 1934 Act. Once so required to file reports, the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act, even if the 1934 Act or the rules and regulations thereunder would permit such termination.
(d) Use
of Proceeds. The Company will use the proceeds from the sale of the Securities for general corporate purposes, including general and
administrative expenses and for the purposes set forth on Schedule 4(d) (and not for the redemption or repurchase of any of
its or its Subsidiaries’ equity securities or to settle any outstanding litigation).
(e) Financial
Information. The Company agrees to send the following to each Buyer during the Reporting Period (i) unless the following are filed
with the SEC through EDGAR and are promptly (and in any event, within two business hours) available to the public through the EDGAR system,
within three (3) Business Days after the filing thereof with the SEC, a copy of any of the periodic report or any other interim reports
or any consolidated balance sheets, income statements, stockholders’ equity statements and/or cash flow statements filed with the
SEC, (ii) promptly and in any event, within one (1) Business Day after the release thereof (unless such press release is available on
PR Newswire or Business Wire), facsimile or e-mailed copies of all press releases issued by the Company or any of its Subsidiaries, and
(iii) copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously
with the making available or giving thereof to the stockholders.
(f) Pledge of
Securities. The Company acknowledges and agrees, subject to compliance with applicable securities laws, that 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. Except as otherwise required by applicable securities laws, the 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, Section 2(f); provided that a Buyer and its pledgee shall be required to
comply with the provisions of Section 2(f) in order to effect a sale, transfer or assignment of Securities to such pledgee. 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 at the expense of the Buyer or pledgee.
(g) [intentionally omitted.]
(h) Transactions
With Affiliates. From the date of this Agreement until the first date following the Closing Date on which no Notes or Warrants are
outstanding, the Company shall not, and shall cause each of its Subsidiaries not to, without the prior written consent of the holders
of Notes representing a majority of the aggregate amount of the Notes then outstanding (the “Required Holders”); provided,
however, that any Note that is held by an Affiliate of the Company shall not be deemed to be outstanding for the purposes of the
determination of Required Holders) enter into, amend, modify or supplement any material transaction, contract, agreement, instrument,
commitment, understanding or other arrangement with any of its or any Subsidiary’s officers, directors, Persons who were officers
or directors at any time during the previous two years, stockholders, or Affiliates of the Company or any of its Subsidiaries, or with
any individual related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual
owns a beneficial interest, unless such agreement, amendment, modification or supplement is (A) entered into pursuant to arm’s length
negotiation, (B) customary employment arrangements and benefit programs on reasonable terms, or (C) otherwise permitted under the terms
of the Notes.
(i) Corporate
Existence. So long as any Buyer beneficially owns any Notes or Warrants, as applicable, the Company shall not be party to any Fundamental
Transaction (as defined in the Note) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes and the Warrants.
(j) Reservation
of Shares. For as long as any Buyer owns any Notes or Warrants, the Company shall take all actions necessary to at all times after
the Closing Date have authorized, and reserved for the purpose of issuance, no less than the sum of (i) the number of Shares issuable
upon conversion of all of the Notes issued at Closing, and (ii) the number of Shares issuable upon exercise of the Warrants issued
at the Closing.
(k) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of Requirements of Law, except where
such violations would not result, either individually or in the aggregate, in a Material Adverse Effect.
(l) Compliance
with Notes Covenants. From the date of this Agreement until the first date following the Closing Date on which no Notes are outstanding,
the Company shall comply with and not violate or breach, and shall cause the Subsidiaries, as applicable, to comply with and not violate
or breach, the covenants and agreements set forth in Section 14 of the Notes as the same may hereafter be amended, being incorporated
herein and made a part hereof.
(m) No Additional
Registered Securities. From the Closing Date until the earlier of the date that is ninety (90) Trading Days following the
Effective Date (as defined in the Registration Rights Agreement) and the date the Buyers may sell pursuant to Rule 144(k) (as such
Rule is amended, supplemented or superseded) of the Rules and Regulations promulgated under the Securities Act of 1933, as amended,
all the Conversion Shares and Warrant Shares, the Company will not file a registration statement under the 1933 Act, or allow any
such registration statement to become effective, in respect of any securities other than the Registration Statement contemplated by
the Registration Rights Agreement, a registration statement on Form S-8 or a registration statement on Form F-4.
(n) Integration.
None of the Company, any of its Subsidiaries, any of its or their affiliates (as defined in Rule 501(b) under the 1933 Act) nor any person
acting on behalf the Company, its Subsidiaries or such affiliate will sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any security (as defined in the 1933 Act) which will be integrated with the sale of the Securities or the Conversion Shares
in a manner which would require the registration under the 1933 Act of the Securities or require stockholder approval under the rules
and regulations of the applicable Principal Market (as defined in the Note) and the Company will take all action that is appropriate or
necessary to assure that its offerings of other securities will not be integrated for purposes of the 1933 Act or the rules and regulations
of the applicable Principal Market (as defined in the Note) with the issuance of Securities contemplated hereby.
(o) No
Inconsistent Agreement or Actions. From the date of this Agreement until the first date following the Closing Date on which no Notes
are outstanding, the Company and its Subsidiaries shall not enter into any contract, agreement or understanding which limit or restrict
the Company’s or any of its Subsidiaries’ ability to perform under, or take any other voluntary action to avoid or seek to
avoid the observance or performance of any of the terms to be observed or performed by it under, this Agreement or any of the other Transaction
Documents.
(p) Collateral
Agent.
(i) Each
Buyer hereby (x) appoints GH Law Firm LLC, as the collateral agent for such Buyer hereunder (the “Collateral Agent”),
and (y) each Buyer hereby authorizes the Collateral Agent (and its officers, directors, employees and agents) in such capacity to
take any and all such actions on its behalf with respect to the Collateral (as defined in the Security Documents) and the Obligations
in accordance with the terms of this Agreement and the Security Documents. The Collateral Agent shall not have, by reason hereof or any
of the other Transaction Documents, a fiduciary relationship in respect of any Buyer. Neither the Collateral Agent nor any of its officers,
directors, employees and agents shall have any liability to any Buyer for any action taken or omitted to be taken in connection herewith
or therewith, except to the extent caused by its own gross negligence or willful misconduct, and each Buyer agrees to defend, protect,
indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees and agents (collectively, the “CA
Indemnitees”) from and against any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs
and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such CA Indemnitee, whether
direct, indirect or consequential, arising from or in connection with the performance by such CA Indemnitee of the duties and obligations
of Collateral Agent pursuant hereto and/or to the Security Documents.
(ii) The
Collateral Agent may resign from the performance of all its functions and duties hereunder at any time by giving at least five (5)
Business Days’ prior written notice to the Company and each holder of the Notes. Such resignation shall take effect upon the
acceptance by a successor Collateral Agent of appointment as provided below. Upon any such notice of resignation, the holders of a
majority of the outstanding principal under the Notes shall appoint a successor Collateral Agent. Upon the acceptance of the
appointment as Collateral Agent, such successor Collateral Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall be discharged from its duties and
obligations under this Agreement. After any Collateral Agent’s resignation hereunder, the provisions of this Section 4(p)
shall inure to its benefit. If a successor Collateral Agent shall not have been so appointed within said five (5) Business Day
period, the retiring Collateral Agent shall then appoint a successor Collateral Agent who shall serve until such time, if any, as
the holders of a majority of the outstanding principal under the Notes appoint a successor Collateral Agent as provided above.
(iii) Without
limiting the generality of the foregoing, each Buyer hereby irrevocably appoints and authorizes Collateral Agent to execute and deliver
the Security Documents (on substantially the terms set forth in the forms of such documents attached as exhibits hereto) for and on behalf
of such Buyer and to perform all of the obligations and duties of Collateral Agent provided for therein, and each Buyer shall be bound
by the terms of the Security Documents as if such Buyer were an original signatory thereto. As to (x) any matters not expressly provided
for by this Agreement and the other Transaction Documents (including, without limitation, enforcement of any security interests) and (y)
any amendments, consents or waivers of any Transaction Document, the Collateral Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Holders, and such instructions of the Required Holders shall be binding upon all holders.
(iv) The
Collateral Agent shall have no duties or responsibilities except those expressly set forth in this Agreement or in the other Transaction
Documents. The duties of the Collateral Agent shall be mechanical and administrative in nature. The Collateral Agent shall not have by
reason of this Agreement or any other Transaction Document a fiduciary relationship in respect of any holder. Nothing in this Agreement
or any other Transaction Document, express or implied, is intended to or shall be construed to impose upon the Collateral Agent any obligations
in respect of this Agreement or any other Transaction Document, except as expressly set forth herein or therein.
(v) If
the Company seeks the consent or approval of the Required Holders to the taking or refraining from taking any action hereunder, the Company
shall send notice thereof to each holder. Any such consents shall be solicited and tabulated by the Company, or a solicitation and/or
tabulation agent engaged by the Company, subject to the Collateral Agent’s right to receive all such consents and satisfy itself
as to (x) the authenticity of such consents (y) receipt of such consents from holders representing a sufficient Principal Amount
of Notes, and (z) any other matters that the Collateral Agent, in its sole discretion deems necessary or advisable. It shall not
be necessary for such Holders to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if the written
consents of the Required Holders reflect the approval of the substance thereof. The Company shall provide the Collateral Agent with copies
of any such written consent(s).
(vi) The
Collateral Agent shall promptly notify each holder any time that the Required Holders have instructed the Collateral Agent to act or
refrain from acting pursuant hereto. the Company or the
Collateral Agent may at any time request instructions from the holders in respect of any actions or approvals which by the terms of
this Agreement or of any of the other Transaction Documents the Collateral Agent is permitted or required to take or to grant, and
if such instructions are promptly requested, the Collateral Agent shall be absolutely entitled to refrain from taking any action or
to withhold any approval under any of the Transaction Documents until it shall have received such instructions from the Required
Holders. Without limiting the foregoing, no holder shall have any right of action whatsoever against the Collateral Agent as a
result of the Collateral Agent acting or refraining from acting under this Agreement or any of the other Transaction Documents in
accordance with the instructions of the Required Holders unless consent of all holders is required by the terms of such
document.
(q) General
Solicitation. None of the Company, any of its Affiliates or any person acting within the scope of their delegated authority on behalf
of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation
or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(r) [intentionally
omitted.]
(s) Nonpublic Information.
The Company shall not, and shall cause each of its Subsidiaries and each of their respective officers, directors, employees and agents,
not to, provide any Buyer with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the
filing of the Registration Statement (as such term is defined in the Registration Rights Agreement) without the express written consent
of such Buyer.
5. REGISTERS; TRANSFER AGENT INSTRUCTIONS.
(a) Registers.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company), a register for the Notes
and a register for the Warrants, in which the Company shall record the name and address of the Person in whose name the Notes or the Warrants,
respectively, have been issued (including the name and address of each transferee), the Principal Amount of Notes held by such Person,
the number of Conversion Shares issuable upon conversion of the Notes, and Warrant Shares issuable upon exercise of the Warrants held
by such Person. The Company shall keep the registers open and available at all times during business hours for inspection of any Buyer
or its legal representatives.
(b) Transfer Agent
Instructions. Until none of the Buyers hold any Securities, the Company shall cause its Shares to be eligible for transfer with
its transfer agent pursuant to the Depository Trust Company Automated Securities Transfer Program. The Company shall issue
instructions to its transfer agent in the form attached hereto as Exhibit F, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at DTC, registered in the name of each Buyer or its respective
nominee(s), for the Conversion Shares and the Warrant Shares issued at the Closing or upon conversion of the Notes or exercise of
the Warrants in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or exercise of
the Warrants in the form of E attached hereto (the “Transfer Agent Instructions”). The Company
warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop
transfer instructions to give effect to Section 2(g) including in the event that the Registration Statement ceases to be
effective under the Securities Act of 1933, will be given by the Company to its transfer agent, and that the Securities shall
otherwise be freely transferable on the books and records of the Company, subject to compliance with applicable securities law, as
and to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer
of the Securities in accordance with Section 2(f), the Company shall permit the transfer and shall promptly instruct its
transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such
denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or
transfer involves Conversion Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration statement
or pursuant to Rule 144, and Buyer provides evidence of compliance with Rule 144 reasonably acceptable to the Company, the transfer
agent shall, subject to compliance with applicable securities laws, issue such Securities to the Buyer, assignee or transferee, as
the case may be, without any restrictive legend. The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to affected Buyers. Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach by the Company of the provisions of
this Section 5(b), that any affected Buyers shall be entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.
6. CONDITIONS TO THE COMPANY’S
OBLIGATION TO SELL. The obligation of the Company hereunder to issue and sell the Notes and the related Warrants to each Buyer at
the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, reasonably satisfactory
to the Company, provided that these conditions are for the Company’s benefit and may be waived by the Company at any time in their
sole discretion by providing each Buyer with prior written notice thereof:
(a) Each
Buyer and Collateral Agent shall have executed each of the Transaction Documents to which it is a party and delivered the same to the
Company.
(b) Each
Buyer shall have delivered to the Escrow Agent the Purchase Price for the Notes and the related Warrants being purchased by such Buyer
at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided under the Escrow Agreement.
(c) The
representations and warranties of such Buyer shall be true and correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date
when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific
date, each of which shall be true and correct as of such date), and such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date. For clarification purposes only, the conditions set forth in each of the subsections of this Section
6, including, but not limited to, Sections 6(a) and (b), must be satisfied in all respects, or waived as provided for in this Section
6.
7. CONDITIONS TO EACH BUYER’S
OBLIGATION TO PURCHASE. The obligation of each Buyer hereunder to purchase the Notes and the related Warrants at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s
sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:
(a) Each
of the Company and each of their Subsidiaries, to the extent each is a party thereto, shall have executed and delivered to such Buyer
or to the Company’s counsel for delivery to such Buyer (i) each of the Transaction Documents, (ii) the Notes (in such
Principal Amounts as such Buyer shall request) being purchased by such Buyer at the Closing pursuant to this Agreement and (iii) the
Warrants (in such denominations as such Buyer shall request) being purchased by such Buyer at the Closing pursuant to this Agreement.
(b) The
Company shall have delivered to such Buyer a copy of the Transfer Agent Instructions, in the form of Exhibit F attached hereto,
which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.
(c) The
Company shall have delivered to such Buyer a copy of a certificate evidencing incorporation, partnership or the formation, as applicable,
and good standing of the Company, and each of the Subsidiaries in such entity’s jurisdiction of formation issued by the Secretary
of State (or comparable office) of such jurisdiction, as of a date within the 30 days prior to the Closing Date.
(d) If
applicable, the Company shall have delivered to such Buyer a certificate evidencing the Company’s and each Subsidiary’s qualification
as a foreign entity (or the equivalent) and good standing issued by the Secretary of State of the State (or comparable office) of each
jurisdiction in which the Company or such Subsidiary is required to qualify as a foreign entity, each as of a date within 30 days prior
to the Closing Date.
(e) The
Board of Directors shall have adopted resolutions consistent with Section 3(b) above and in a form reasonably acceptable to such
Buyer (the “Resolutions”).
(f) The
Company, and each Subsidiary of the Company shall have delivered to such Buyer a secretary’s certificate in the form attached hereto
as Exhibit G, executed by the secretary (or comparable office) of such Person and dated as of the Closing Date, certifying (A) that
the attached resolutions adopted by the board of directors of such Person in connection with the Transaction Documents are true, complete
and correct and remain unamended and in full force and effect, (B) that the attached articles of association, certificate of incorporation
or certificate of formation of such Person, certified as of a date within 30 days of the Closing Date, by the secretary of state of the
state of the jurisdiction of its organization, is true, complete and correct and remains unamended and in full force and effect, (C) that
the attached memorandum of association, bylaws or limited liability company or operating agreement of such Person are true, complete and
correct and remain unamended and in full force and effect and (D) as to the incumbency and specimen signature of each officer of such
Person executing this Agreement, the other Transaction Documents and any other document delivered in connection herewith on behalf of
such Person.
(g) The representations
and warranties of the Company and any Subsidiary set forth in this Agreement or any other Transaction Document shall be true and
correct in all material respects (except for those representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made
at that time (except for representations and warranties which speak as of a specific date, each of which shall be true and correct
as of such date) and the Company, or each Subsidiary, as applicable, shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied
with by such entity at or prior to the Closing Date. Such Buyer shall have received a certificate delivered and executed by the
President of each of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be
reasonably requested by such Buyer in the form attached hereto as Exhibit H.
(h) The
Company shall have (i) obtained all governmental, regulatory or third party consents and approvals, if any, and (ii) made all
filings under all applicable federal, state or foreign securities laws (to the extent such filings must be made on or prior to the Closing
Date in each case) necessary to consummate the issuance and the sale of the Securities.
(i) The
Guarantors shall have delivered to the Collateral Agent an aggregate of 403,000 Common Shares together with executed stock powers, to
be pledged pursuant to the Security Documents.
(j) No
Material Adverse Effect shall have occurred.
(k) The
Company shall have delivered a certificate of an officer of the Company and each Subsidiary certifying as to the solvency of the Company
or such Subsidiary.
(l) All
proceedings in connection with the issuance of the Notes and the other transactions contemplated by this Agreement and the other Transaction
Documents, and all documents incidental hereto and thereto, shall be reasonably satisfactory to the Buyers, and the Buyers shall have
received all such information and such counterpart originals or certified or other copies of such documents as the Collateral Agent may
reasonably request.
(m) The
Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as such Buyer
or its counsel may reasonably request.
8. TERMINATION. In
the event that the Closing shall not have occurred in respect of a Buyer on or before the tenth (10th) Business Day from the
date hereof due to the Company’s or such Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above
(and the nonbreaching party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate
this Agreement in respect of such breaching party at the close of business on such date without liability of any party to any other party.
9. MISCELLANEOUS.
(a) Governing Law;
Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of 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 jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, 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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were
an original, not a facsimile signature.
(c) Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability.
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.
(e) Entire
Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Buyers, the Company, their
affiliates and Persons acting on their behalf in respect of the matters discussed herein, and this Agreement, the Transaction Documents
and the instruments referenced herein contain the entire understanding of the parties in respect of the matters covered herein and therein
and, except as specifically set forth herein or therein, none of the Company and its Subsidiaries nor any Buyer makes any representation,
warranty, covenant or undertaking in respect of such matters. No provision of this Agreement may be amended other than by an instrument
in writing signed by the Company, and the Required Holders, and any amendment to this Agreement made in conformity with the provisions
of this Section 9(e) shall be binding on all Buyers and holders of Securities as applicable. No provision hereof may be waived other
than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the applicable Securities then outstanding. No consideration shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration
also is offered to all of the parties to the Transaction Documents, holders of Notes or holders of the Warrants, as the case may be. The
Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that,
except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing
to the Company or otherwise.
(f) Notices. Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally provided same is on a Business
Day and, if not, on the next Business Day; (ii) upon receipt, when sent by facsimile (provided that confirmation of
transmission is mechanically or electronically generated and kept on file by the sending party) provided same is on a Business Day
and, if not, on the next Business Day; (iii) one (1) Business Day after deposit with an overnight courier service, in each
case properly addressed to the party to receive the same; or (iv) if sent by certified mail, return receipt requested, when
received or three (3) days after deposited in the mails, whichever occurs first. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Room 503, Building C2, No. 1599
Xinjinqiao Road
Pudong New Area, Shanghai, China
Att.: Mr. Xueyuan Weng, CEO
Tel: (+86) 577-56765303
Email: 1667920909@qq.com
With a copy to:
GH Law Firm LLC
880 Third Avenue, 5th Floor
New York, NY 10022
(212) 705-8798
Attention: Charles Y. Fu, Esq.
E-mail: charlesfuesq@gmail.com
If to a Buyer, to its address and facsimile
number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers, or to such other address and/or facsimile number 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) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause
(i), (ii) or (iii) above, respectively.
(g) Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
permitted assigns, including any purchasers of the Notes or the Warrants. The Company shall not assign this Agreement or any rights
or obligations hereunder without the prior written consent of the Required Holders, including by way of a Fundamental Transaction
(unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes and
the Warrants). Subject to compliance with applicable securities laws, a Buyer may assign some or all of its rights hereunder and
under the other Transaction Documents without the consent of the Company, in which event such assignee shall be deemed to be a Buyer
hereunder and thereunder in respect of such assigned rights. A Buyer or the Collateral Agent making an assignment of this Agreement
shall provide the Company (and in the case of an assignment by a Buyer, the Collateral Agent) with written notice of such assignment
within ten (10) Business Days after such assignment is consummated; provided, however, that the failure by a Buyer or the Collateral
Agent to provide or timely provide such notice shall not invalidate the assignment.
(h) No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person except to the extent set forth
in Section 9(k).
(i) Survival.
Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5, 8 and 9 shall survive the Closing and the delivery,
conversion and exercise of the Securities, as applicable. Each Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.
(j) Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(k) Indemnification.
(i) In consideration
of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to
all of the Company’s other obligations under the Transaction Documents, unless this Agreement is terminated under Section 8
hereof, the Company shall defend, protect, indemnify and hold harmless each Buyer and each other holder of the 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 (a) any misrepresentation or breach of any representation or warranty made by the Company
in any Transaction Document or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of
any covenant, agreement or obligation of the Company contained in any Transaction Document or any other certificate, instrument or
document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a
third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from
(i) the execution, delivery, performance or enforcement of any Transaction Document or any other certificate, instrument or
document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, or (iii) the status of such Buyer or holder of the Securities
as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law provided that the Company
shall not be obligated to indemnify a Buyer or Collateral Agent for any Indemnified Liabilities caused by the gross negligence or
willful misconduct of that Buyer and the Company shall not be obligated to indemnify the Collateral Agent for any Indemnified
Liabilities caused by the gross negligence or willful misconduct of the Collateral Agent.
(ii) Promptly
after receipt by Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any governmental
action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 9(k), 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
Indemnitee, as the case may be; provided, however, that an Indemnitee shall have the right to retain its own counsel with
the fees and expenses of not more than one counsel for such Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion
of counsel retained by the indemnifying party, the representation by such counsel of the Indemnitee and the indemnifying party would be
inappropriate due to actual or potential differing interests between such Indemnitee and any other party represented by such counsel in
such proceeding. In the case of an Indemnitee, legal counsel referred to in the immediately preceding sentence shall be selected by Required
Holders, to which the claim relates. The Indemnitee 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 Indemnitee which relates to such action or claim. The indemnifying party shall keep the Indemnitee reasonably apprised
at all times as to the status of the defense or any settlement negotiations in respect thereof. 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 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 claim 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 indemnifying party shall be subrogated to all rights of the Indemnitee in respect of all
third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of
any liability to the Indemnitee under this Section 9(k), except to the extent that the indemnifying party is materially prejudiced in
its ability to defend such action.
(iii) The
indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Liabilities are incurred.
(iv) The
indemnity agreements contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the indemnifying
party or others, and (B) any liabilities the indemnifying party may be subject to pursuant to the law.
(l) No
Strict Construction. The language used in the Transaction Documents will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.
(m) Remedies.
Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders
have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically
(without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise
all other rights granted by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge
any or all of its obligations under the Transaction Documents, any remedy at law may prove to be inadequate relief to the Buyers. The
Company therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages and without posting a bond or other security.
(n) Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its sole discretion from
time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights
(o) Payment
Set Aside. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers or the Collateral Agent, as applicable, enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
(p) Independent Nature
of Buyers’ Obligations and Rights. The obligations of each Buyer under any Transaction Document are several and not joint
with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any
other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by
any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group in respect of such
obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges that the Buyers are not
acting in concert or as a group in respect of such obligations or the transactions contemplated by the Transaction Documents. Each
Buyer confirms that it has independently participated in the negotiation of the transaction contemplated by this Agreement and the
Transaction Documents with the advice of its own counsel and advisors, that it has independently determined to enter into the
transactions contemplated hereby and thereby, that it is not relying on any advice from or evaluation by any other Buyer, and that
it is not acting in concert with any other Buyer in making its purchase of Securities hereunder or in monitoring its investment in
the Company. The Buyers and, to its knowledge, the Company agree that no action taken by any Buyer pursuant hereto or to the other
Transaction Documents, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind
of entity or group, or create a presumption that the Buyers are in any way acting in concert or would deem such Buyers to be members
of a “group” for purposes of Section 13(d) of the 1934 Act. The Buyers each confirm that they have not agreed to
act together for the purpose of acquiring, holding, voting or disposing of equity securities of the Company. The Company has elected
to provide all Buyers with the same terms and Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by any of the Buyers. The Company acknowledges on behalf of itself and the Company that such
procedure in respect of the Transaction Documents in no way creates a presumption that the Buyers are in any way acting in concert
or as a “group” for purposes of Section 13(d) of the 1934 Act in respect of the Transaction Documents or the
transactions contemplated hereby or thereby. Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement, or out of the Registration Rights Agreement, its Note, its
Warrant and the right of set-off under the Guaranties, and it shall not be necessary for any other Buyer to be joined as an
additional party in any proceeding for such purpose.
(q) [intentionally
omitted.]
(r) Definitions:
For purposes of this Securities Purchase Agreement and the Notes, the following terms shall have the following meanings:
“Principal
Amount” shall mean the Principal (as defined in the Note) amount.
“Solvent” means,
with respect to any Person on a particular date, that on such date i) the fair value of the property of such Person is not less than the
total amount of the liabilities of such Person (and including as assets for this purpose at a fair valuation all rights of subrogation,
contribution or indemnification arising pursuant to any guarantees given by such Person, to the extent such amount is readily ascertainable),
ii) the present fair salable value of the assets of such Person (and including as assets for this purpose at a fair valuation all rights
of subrogation, contribution or indemnification arising pursuant to any guarantees given by such Person, to the extent such amount is
readily ascertainable) is not less than the amount that will be required to pay the probable liability of such Person on its existing
debts as they become absolute and matured, iii) such Person is able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course of business, iv) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and
v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s
property would constitute unreasonably small capital.
“Subsidiary”
means, from time to time, any entity in which the Company, directly or indirectly, owns any of the capital stock, equity or similar interest
or voting power of such entity at the date of this Agreement.
“Applicable Date”
means the earlier of (x) the first date on which the resale by the Buyers of all the Registrable Securities required to be filed on the
initial Registration Statement (as defined in the Registration Rights Agreement) pursuant to the Registration Rights Agreement is declared
effective by the SEC (and each prospectus contained therein is available for use on such date) or (y) the first date on which all of the
Registrable Securities are eligible to be resold by the Buyers pursuant to Rule 144 (or, if a Current Public Information Failure has occurred
and is continuing, such later date after which the Company has cured such Current Public Information Failure).
[Signature Pages Follow]
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.
| |
COMPANY: |
| |
|
|
| |
GOLDEN SUN HEALTH TECHNOLOGY GROUP LIMITED |
| |
|
|
| |
By: |
|
| |
|
Name: |
Xueyuan Weng |
| |
|
Title: |
CEO |
| |
|
|
| |
BUYERS: |
| |
|
|
| |
BRIXTON GSH FUND LLC |
| |
|
|
| |
By: Brixton GSH Capital Management LLC, Manager |
| |
|
|
| |
By: |
|
| |
|
Name: |
|
| |
|
Title: |
|
| |
|
|
| |
ZION ASSET MANAGEMENT LIMITED |
| |
|
|
| |
By: |
|
| |
|
Name: |
CHEN, SHIH-CHANG |
| |
|
Title: |
Director |
SCHEDULE OF BUYERS
| (1) |
|
(2) |
|
(3) |
|
(4) |
|
(5) |
| |
|
|
|
|
|
|
|
|
| Buyer |
|
Address, Telephone
Number and E-Mail |
|
Original
Principal
Amount of
Notes |
|
Purchase Price |
|
Legal Representative’s Address,
Telephone Number and
Facsimile Number |
|
Brixton GSH Fund LLC |
|
c/o 1345 Avenue of Americas, 33rd Floor, New York, New York 10105 |
|
$ |
200,000 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Zion
Asset Management Limited |
|
RM 1607 TREND CTR 9-31 CHEUNGLEE ST CHAI WAN, HONG KONG |
|
$ |
4,800,000 |
|
|
|
|
| Exhibit A |
Form of Notes |
| Exhibit B |
Form of Warrant |
| Exhibit C |
Form of Guaranty |
| Exhibit D |
Form of Shareholder Pledge Agreement |
| Exhibit E |
Form of Registration Rights Agreement |
| Exhibit F |
Form of Transfer Agent Instructions |
| Exhibit G |
Form of Secretary’s Certificate |
| Exhibit H |
Form of Officer’s Certificate |
| Exhibit I |
Form of Perfection Certificate |
| Exhibit J |
Form of Escrow Agreement |
| Exhibit K |
Form of Legal Opinion |
| Exhibit L |
Form of Security Agreement |
| |
| SCHEDULES |
| |
| Schedule 3(a) |
Organization and Qualification |
| Schedule 3(f) |
Acknowledgement Regarding Buyer’s Purchase of Securities |
| Schedule 3(k) |
Absence of Certain Changes |
| Schedule 3(n) |
Transactions with Affiliates |
| Schedule 3(o) |
Equity Capitalization; Debt |
| Schedule 3(p) |
Indebtedness and Other Contracts |
| Schedule 3(t) |
Title |
| Schedule 3(u) |
Intellectual Property Rights |
| Schedule 3(x) |
Tax Status |
| Schedule 3(ff) |
ERISA |
| Schedule 4(d) |
Use of Proceeds |
| Schedule 4(e) |
Litigation |
31
Exhibit 10.2
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. 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. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 18(a)
HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN
THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.
PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1),
MR, XUANYUAN WENG, A REPRESENTATIVE OF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE
AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). MR, XUANYUAN WENG MAY
BE REACHED AT TELEPHONE NUMBER (+86) 577-56765303.
Golden
Sun Health Technology Group Limited
Senior
Secured Convertible Note
|
Issuance Date: October 28, 2024 |
Original Principal Amount: U.S. $5,000,000 |
FOR VALUE RECEIVED,
Golden Sun Health Technology Group Limited, a company organized under the laws of Cayman Islands (the “Company”), hereby
promises to pay to the order of Zion Asset Management Limited, Brixton GSH Fund LLC and/or their affiliates or its registered assigns
(“Holder”) the amount set forth above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant
to redemption, conversion or otherwise, the “Principal”) when due, whether upon the Maturity Date, or upon acceleration,
redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any
outstanding Principal at the applicable Interest Rate (as defined below) from the date set forth above as the Issuance Date (the “Issuance
Date”) until the same becomes due and payable, whether upon the Maturity Date or upon acceleration, conversion, redemption or
otherwise (in each case in accordance with the terms hereof). This Senior Secured Convertible Note (including all Senior Secured Convertible
Notes issued in exchange, transfer or replacement hereof, this “Note”) is one of an issue of Senior Secured Convertible
Notes issued pursuant to the Securities Purchase Agreement, dated as of October 28, 2024 (the “Subscription Date”),
by and among the Company and the investors (the “Buyers”) referred to therein, as amended from time to time (collectively,
the “Notes”, and such other Senior Secured Convertible Notes, the “Other Notes”). Certain capitalized
terms used herein are defined in Section 31.
1. PAYMENTS
OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal,
accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 24(c)) on such Principal and Interest. The principal
and accrued interest may not be prepaid unless approved in writing by the Investor.
2. INTEREST;
INTEREST RATE.
(a) Interest
on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day months
and shall be payable in arrears on each Interest Date and shall compound on each Interest Date (if unpaid on such Interest Date), and
shall be payable in accordance with the terms of this Note. Interest shall be paid on such Interest Date in cash.
(b) Prior
to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of inclusion
of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption in accordance
with Section 11 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during the continuance
of any Event of Default, the Interest Rate shall automatically be increased to eighteen percent (18.0%) per annum (the “Default
Rate”). In the event that such Event of Default is subsequently cured (and no other Event of Default then exists, including,
without limitation, for the Company’s failure to pay such Interest at the Default Rate on the applicable Interest Date), the adjustment
referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure;
provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue
to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure
of such Event of Default.
3. CONVERSION
OF NOTES. At any time after the Issuance Date, at the option of the Investor, this Note shall be convertible into validly issued, fully
paid and non-assessable Common Shares (as defined below), on the terms and conditions set forth in this Section 3.
(a) Conversion
Right. Subject to the provisions of Section 3(d), at any time, the Holder shall be entitled to convert any portion of the outstanding
and unpaid Conversion Amount (as defined below) into validly issued, fully paid and non-assessable Common Shares in accordance with Section
3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a Common Share upon any conversion. If the
issuance would result in the issuance of a fraction of a Common Share, the Company shall round such fraction of a Common Share up to the
nearest whole share. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without
limitation, fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery
of Common Shares upon conversion of any Conversion Amount.
(b) Conversion
Rate. The number of Common Shares issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall be determined by
dividing (x) that portion of (A) the outstanding principal amount, plus (B) accrued and unpaid interest with respect to such outstanding
principal amount of the Note (the “Conversion Amount”) by (y) the Conversion Price then in effect on the date on which the
Investor delivers a notice of conversion. (the “Conversion Rate”).
(i) “Conversion
Amount” means that portion of (A) the outstanding principal amount, plus (B) accrued and unpaid interest with respect to such
outstanding principal amount of the Note (the “Conversion Amount”)
(ii) “Conversion
Price” means 70% of the lowest closing market trading price of the Company’s common stock during the fifteen (15) trading
days leading up to either (i) the date the very first conversion notice for either the Convertible Note or the Warrants is delivered or
(ii) the date each conversion notice is delivered, at the Holder’s sole discretion
(c) Mechanics
of Conversion.
(i) Optional
Conversion. To convert any Conversion Amount into Common Shares on any date (a “Conversion Date”), the Holder shall
deliver (whether via electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed
notice of conversion in the form attached hereto as Exhibit I (each, a “Conversion Notice”) to the Company.
If required by Section 3(c)(iii), within one (1) Trading Day following a conversion of this Note as aforesaid, the Holder shall surrender
this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking with respect
to this Note in the case of its loss, theft or destruction as contemplated by Section 18(b)). On the date of receipt of a Conversion Notice,
the Company shall transmit by electronic mail an acknowledgment, in the form attached hereto as Exhibit II, of confirmation of
receipt of such Conversion Notice and representation as to whether such Common Shares may then be resold pursuant to Rule 144 or an effective
and available registration statement (each, an “Acknowledgement”) to the Holder and the Company’s transfer agent
(the “Transfer Agent”) which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion
Notice in accordance with the terms herein. On or before the first (1st) Trading Day following the date on which the Company
has received a Conversion Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation
for the settlement of a trade initiated on the applicable Conversion Date of such Common Shares issuable pursuant to such Conversion Notice)
(the “Share Delivery Deadline”), the Company shall (1) provided that the Transfer Agent is participating in The Depository
Trust Company’s (“DTC”) Fast Automated Securities Transfer Program (“FAST”), credit such aggregate
number of Common Shares to which the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the Transfer Agent is not participating in FAST,
upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Conversion Notice,
a certificate, registered in the name of the Holder or its designee, for the number of Common Shares to which the Holder shall be entitled
pursuant to such conversion. If this Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal
of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable
and in no event later than two (2) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder (or
its designee) a new Note (in accordance with Section 18(d)) representing the outstanding Principal not converted. The Person or Persons
entitled to receive the Common Shares issuable upon a conversion of this Note shall be treated for all purposes as the record holder or
holders of such Common Shares on the Conversion Date; provided, that the Holder shall be deemed to have waived any voting rights of any
such Common Shares that may arise during the period commencing on such Conversion Date, through, and including such applicable Share Delivery
Deadline (each, an “Conversion Period”), as necessary, such that the aggregate voting rights of any Common Shares beneficially
owned by the Holder and/or Attribution Parties, collectively, on any such applicable date shall not exceed the Maximum Percentage (as
defined below) as a result of any such conversion of this Note. Notwithstanding anything to the contrary contained in this Note or the
Registration Rights Agreement, after the effective date of the Registration Statement (as defined in the Registration Rights Agreement)
and prior to the Holder’s receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement), the Company
shall cause the Transfer Agent to deliver unlegended Common Shares to the Holder (or its designee) in connection with any sale of Registrable
Securities (as defined in the Registration Rights Agreement) with respect to which the Holder has entered into a contract for sale, and
delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, and for which the
Holder has not yet settled.
(ii) Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery
Deadline, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its designee) a certificate
for the number of Common Shares to which the Holder is entitled and register such Common Shares on the Company’s share register
or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s designee with DTC
for such number of Common Shares to which the Holder is entitled upon the Holder’s conversion of this Note (as the case may be)
or (II) if the Registration Statement covering the resale of the Common Shares that are the subject of the Conversion Notice (the “Unavailable
Conversion Shares”) is not available for the resale of such Unavailable Conversion Shares and the Company fails to promptly,
but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the Common
Shares electronically without any restrictive legend by crediting such aggregate number of Common Shares to which the Holder is entitled
pursuant to such conversion to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian
system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, a “Conversion Failure”), then, in addition to all other
remedies available to the Holder, (1) the Company shall pay in cash to the Holder on each day after such Share Delivery Deadline that
the issuance of such Common Shares is not timely effected an amount equal to 2% of the product of (A) the sum of the number of Common
Shares not issued to the Holder on or prior to the Share Delivery Deadline and to which the Holder is entitled, multiplied by (B) any
trading price of the Common Shares selected by the Holder in writing as in effect at any time during the period beginning on the applicable
Conversion Date and ending on the applicable Share Delivery Deadline and (2) the Holder, upon written notice to the Company, may void
its Conversion Notice with respect to, and retain or have returned (as the case may be) any portion of this Note that has not been converted
pursuant to such Conversion Notice, provided that the voiding of a Conversion Notice shall not affect the Company’s obligations
to make any payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to
the foregoing, if on or prior to the Share Delivery Deadline either (A) if the Transfer Agent is not participating in FAST, the Company
shall fail to issue and deliver to the Holder (or its designee) a certificate and register such Common Shares on the Company’s share
register or, if the Transfer Agent is participating in FAST, the Transfer Agent shall fail to credit the balance account of the Holder
or the Holder’s designee with DTC for the number of Common Shares to which the Holder is entitled upon the Holder’s conversion
hereunder or pursuant to the Company’s obligation pursuant to clause (II) below or (B) a Notice Failure occurs, and if on or after
such Share Delivery Deadline the Holder acquires (in an open market transaction, stock loan or otherwise) Common Shares corresponding
to all or any portion of the number of Common Shares issuable upon such conversion that the Holder is entitled to receive from the Company
and has not received from the Company in connection with such Conversion Failure or Notice Failure, as applicable (a “Buy-In”),
then, in addition to all other remedies available to the Holder, the Company shall, within two (2) Business Days after receipt of the
Holder’s request and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the Common Shares
so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate (and to issue such Common Shares) or credit the
balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Common Shares to which the Holder
is entitled upon the Holder’s conversion hereunder (as the case may be) (and to issue such Common Shares) shall terminate, or (II)
promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such Common Shares or credit
the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Common Shares to which the
Holder is entitled upon the Holder’s conversion hereunder (as the case may be) and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (x) such number of Common Shares multiplied by (y) the lowest Closing Sale
Price of the Common Shares on any Trading Day during the period commencing on the date of the applicable Conversion Notice and ending
on the date of such issuance and payment under this clause (II) (the “Buy-In Payment Amount”). Nothing shall limit
the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing
Common Shares (or to electronically deliver such Common Shares) upon the conversion of this Note as required pursuant to the terms hereof.
(iii) Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and addresses
of the holders of each Note and the principal amount of the Notes held by such holders (the “Registered Notes”). The
entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders of the Notes
shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including, without limitation,
the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary. A Registered Note may be assigned,
transferred or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its receipt of a written
request to assign, transfer or sell all or part of any Registered Note by the holder thereof, the Company shall record the information
contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount as the principal amount
of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 18, provided that if the Company
does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within two (2) Business
Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer or sale (as the case
may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any portion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full
Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to the Company following conversion
thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written notice (which notice may be
included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall
maintain records showing the Principal, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions
and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not
to require physical surrender of this Note upon conversion. If the Company does not update the Register to record such Principal, Interest
and Late Charges converted and/or paid (as the case may be) and the dates of such conversions and/or payments (as the case may be) within
two (2) Business Days of such occurrence, then the Register shall be automatically deemed updated to reflect such occurrence.
(iv) Pro
Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for the same
Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company, subject
to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount of such holder’s
portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion on such date by such holder
relative to the aggregate principal amount of all Notes submitted for conversion on such date. In the event of a dispute as to the number
of Common Shares issuable to the Holder in connection with a conversion of this Note, the Company shall issue to the Holder the number
of Common Shares not in dispute and resolve such dispute in accordance with Section 23.
(d) Limitations
on Conversions. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right to
convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void and
treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution Parties
collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the Common Shares outstanding
immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of Common Shares beneficially
owned by the Holder and the other Attribution Parties shall include the number of Common Shares held by the Holder and all other Attribution
Parties plus the number of Common Shares issuable upon conversion of this Note with respect to which the determination of such sentence
is being made, but shall exclude Common Shares which would be issuable upon (A) conversion of the remaining, nonconverted portion of this
Note beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred shares or
warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 3(d). For purposes of this Section 3(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding Common Shares the Holder may acquire upon the
conversion of this Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding Common Shares as reflected
in (x) the Company’s most recent Annual Report on Form 20-F, Report of Foreign Issuer on Form 6-K or other public filing with the
SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer
Agent, if any, setting forth the number of Common Shares outstanding (the “Reported Outstanding Share Number”). If
the Company receives a Conversion Notice from the Holder at a time when the actual number of outstanding Common Shares is less than the
Reported Outstanding Share Number, the Company shall notify the Holder in writing of the number of Common Shares then outstanding and,
to the extent that such Conversion Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this
Section 3(d), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Common Shares to be purchased
pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within
one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of Common Shares then outstanding. In
any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities
of the Company, including this Note, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding
Share Number was reported. In the event that the issuance of Common Shares to the Holder upon conversion of this Note results in the Holder
and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of
outstanding Common Shares (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s
and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess
Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective
until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective
until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will
apply only to the Holder and the other Attribution Parties and not to any other holder of Notes that is not an Attribution Party of the
Holder. For purposes of clarity, the Common Shares issuable pursuant to the terms of this Note in excess of the Maximum Percentage shall
not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the
1934 Act. No prior inability to convert this Note pursuant to this paragraph shall have any effect on the applicability of the provisions
of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 3(d) to the extent necessary to correct
this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation
contained in this Section 3(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The
limitation contained in this paragraph may not be amended, modified waived and shall apply to a successor holder of this Note.
(e) Right
of Alternate Conversion.
(i) General.
(1) Alternate
Optional Conversion. Subject to Section 3(d), at any time, at the option of the Holder, the Holder may convert (each, an “Alternate
Optional Conversion”, and the date of such Alternate Optional Conversion, an “Alternate Optional Conversion Date”)
all, or any part, of this Note into Common Shares (such portion of the Conversion Amount subject to such Alternate Optional Conversion,
the “Alternate Optional Conversion Amount”) at the Alternate Conversion Price.
(2) Alternate
Conversion Upon an Event of Default. Subject to Section 3(d), at any time after the occurrence of an Event of Default (regardless
of whether such Event of Default has been cured, or if the Company has delivered an Event of Default Notice to the Holder or if the Holder
has delivered an Event of Default Redemption Notice to the Company or otherwise notified the Company that an Event of Default has occurred),
the Holder may, at the Holder’s option, convert (each, an “Alternate Event of Default Conversion” and together
with each Alternate Optional Conversion, each, an “Alternate Conversion”, and the date of such Alternate Event of Default
Conversion, each, an “Alternate Event of Default Conversion Date”, and together with each Alternate Optional Conversion
Date, each, an “Alternate Conversion Date”) all, or any part of, the Conversion Amount (such portion of the Conversion
Amount subject to such Alternate Conversion, the “Alternate Event of Default Conversion Amount” and together with each
Alternate Optional Conversion Amount, each, an “Alternate Conversion Amount”) into Common Shares at the Alternate Conversion
Price.
(ii) Mechanics
of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion Amount pursuant
to Section 3(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all purposes hereunder with
respect to such Alternate Conversion and, solely with respect to the calculation of the number of Common Shares issuable upon conversion
of any Conversion Amount in an Alternate Event of Default Conversion, with “Redemption Premium of the Conversion Amount” replacing
“Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect to such Alternate Conversion) by
designating in the Conversion Notice delivered pursuant to this Section 3(e) of this Note that the Holder is electing to use the Alternate
Conversion Price for such conversion; provided that in the event of the Conversion Floor Price Condition, on the applicable Alternate
Conversion Date the Company shall also deliver to the Holder the applicable Alternate Conversion Floor Amount. Notwithstanding anything
to the contrary in this Section 3(e), but subject to Section 3(d), until the Company delivers Common Shares representing the applicable
Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may be converted by the Holder into Common Shares pursuant
to Section 3(c) without regard to this Section 3(e).
4. RIGHTS
UPON EVENT OF DEFAULT.
(a) Event
of Default. Each of the following events shall constitute an “Event of Default” and each of the events in clauses
(ix), (x) and (xi) shall constitute a “Bankruptcy Event of Default”:
(i) the
failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC on or prior
to the date that is five (5) days after the applicable Filing Deadline (as defined in the Registration Rights Agreement) or the failure
of the applicable Registration Statement to be declared effective by the SEC on or prior to the date that is five (5) days after the applicable
Effectiveness Deadline (as defined in the Registration Rights Agreement);
(ii) while
the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of a stop
order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of Registrable Securities (as
defined in the Registration Rights Agreement) for sale of all of such holder’s Registrable Securities in accordance with the terms
of the Registration Rights Agreement, and such lapse or unavailability continues for a period of five (5) consecutive days or for more
than an aggregate of ten (10) days in any 365-day period (excluding days during an Allowable Grace Period (as defined in the Registration
Rights Agreement));
(iii) the
suspension (or threatened suspension) from trading or the failure (or threatened failure) of the Common Shares to be trading or listed
(as applicable) on an Eligible Market for a period of five (5) consecutive Trading Days;
(iv) the
Company’s (A) failure to cure a Conversion Failure by delivery of the required number of Common Shares within five (5) Trading Days
after the applicable Conversion Date or exercise date (as the case may be) or (B) notice, written or oral, to any holder of the Notes,
including, without limitation, by way of public announcement or through any of its agents, at any time, of its intention not to comply,
as required, with a request for conversion of any Notes into Common Shares that is requested in accordance with the provisions of the
Notes, other than pursuant to Section 3(d);
(v) except
to the extent the Company is in compliance with Section 31(a) below, at any time following the tenth (10th) consecutive day
that the Holder’s Authorized Share Allocation (as defined in Section 31(a) below) is less than the sum of the number of Common Shares
that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without regard to any limitations
on conversion set forth in Section 3(d) or otherwise);
(vi) the
Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts
when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure to pay any redemption
payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase Agreement) or any other agreement,
document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, except, in the
case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period of
at least two (2) Trading Days;
(vii) the
Company fails to remove any restrictive legend on any certificate or any Common Shares issued to the Holder upon conversion or exercise
(as the case may be) of any Securities (as defined in the Securities Purchase Agreement) acquired by the Holder under the Securities Purchase
Agreement (including this Note) as and when required by such Securities or the Securities Purchase Agreement, unless otherwise then prohibited
by applicable federal securities laws, and any such failure remains uncured for at least five (5) days;
(viii) the
occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $50,000 of Indebtedness (as
defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;
(ix) bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against
the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed within
thirty (30) days of their initiation;
(x) the
commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent
by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors,
or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission
by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Company or any
Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure
sale or any other similar action under federal, state or foreign law;
(xi) the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or approving
as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company
or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any
substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order,
judgment or other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period
of thirty (30) consecutive days;
(xii) a
final judgment or judgments for the payment of money aggregating in excess of $50,000 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 $50,000 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;
(xiii) the
Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace period,
any payment with respect to any Indebtedness in excess of $50,000 due to any third party (other than, with respect to unsecured Indebtedness
only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings and with respect
to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach or violation
of any agreement for monies owed or owing in an amount in excess of $50,000, which breach or violation permits the other party thereto
to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or event that would,
with or without the passage of time or the giving of notice, result in a default or event of default under any agreement binding the Company
or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the business, assets, operations
(including results thereof), liabilities, properties, condition (including financial condition) or prospects of the Company or any of
its Subsidiaries, individually or in the aggregate;
(xiv) other
than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation or warranty,
or any covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or
condition that is curable, only if such breach remains uncured for a period of two (2) consecutive Trading Days;
(xv) a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Event of Default
has occurred;
(xvi) any
breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 13 of this Note;
(xvii) any
Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs;
(xviii) any
provision of any Transaction Document (including, without limitation, the Security Documents and the Guaranties) shall at any time for
any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the parties thereto,
or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or
any Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability
thereof, or the Company or any Subsidiary shall deny in writing that it has any liability or obligation purported to be created under
any Transaction Document (including, without limitation, the Security Documents and the Guaranties);
(xix) any
Security Document shall for any reason fail or cease to create a separate valid and perfected and, except to the extent permitted by the
terms hereof or thereof, first priority Lien (as defined in the Securities Purchase Agreement) on the Collateral (as defined in the Security
Documents) in favor of the Collateral Agent (as defined in the Securities Purchase Agreement) or any material provision of any Security
Document shall at any time for any reason cease to be valid and binding on or enforceable against the Company or the validity or enforceability
thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any governmental authority having
jurisdiction over the Company, seeking to establish the invalidity or unenforceability thereof;
(xx) any
material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of the Company or any Subsidiary, if any such event or circumstance
could have a Material Adverse Effect; or
(xxi) any
Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.
(b) Notice
of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other Note,
the Company shall within one (1) Business Day deliver written notice thereof via electronic mail and overnight courier (with next day
delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s
receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder may require the Company to redeem
(regardless of whether such Event of Default has been cured) all or any portion of this Note by delivering written notice thereof (the
“Event of Default Redemption Notice”) to the Company, which Event of Default Redemption Notice shall indicate the portion
of this Note the Holder is electing to redeem. Each portion of this Note subject to redemption by the Company pursuant to this Section
4(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (A) the Conversion Amount to be redeemed multiplied
by (B) the Redemption Premium and (ii) the product of (X) the Conversion Rate with respect to the Conversion Amount in effect at such
time as the Holder delivers an Event of Default Redemption Notice multiplied by (Y) the product of (1) the Redemption Premium multiplied
by (2) the greatest Closing Sale Price of the Common Shares on any Trading Day during the period commencing on the date immediately preceding
such Event of Default and ending on the date the Company makes the entire payment required to be made under this Section 4(b) (the “Event
of Default Redemption Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions of
Section 11. To the extent redemptions required by this Section 4(b) are deemed or determined by a court of competent jurisdiction to be
prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the
contrary in this Section 3(e), but subject to Section 3(d), until the Event of Default Redemption Price (together with any Late Charges
thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 4(b) (together with any Late Charges thereon)
may be converted, in whole or in part, by the Holder into Common Shares pursuant to the terms of this Note. In the event of the Company’s
redemption of any portion of this Note under this Section 4(b), the Holder’s damages would be uncertain and difficult to estimate
because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute
investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 4(b) is intended by the parties to be,
and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. Any redemption
upon an Event of Default shall not constitute an election of remedies by the Holder, and all other rights and remedies of the Holder shall
be preserved.
(c) Mandatory
Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, and notwithstanding any conversion that
is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following the Maturity Date, the Company
shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal, accrued and unpaid Interest and accrued
and unpaid Late Charges on such Principal and Interest, multiplied by (ii) the Redemption Premium, in addition to any and all other amounts
due hereunder, without the requirement for any notice or demand or other action by the Holder or any other person or entity, provided
that the Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy Event of Default, in whole or in part,
and any such waiver shall not affect any other rights of the Holder hereunder, including any other rights in respect of such Bankruptcy
Event of Default, any right to conversion, and any right to payment of the Event of Default Redemption Price or any other Redemption Price,
as applicable.
5. RIGHTS
UPON FUNDAMENTAL TRANSACTION.
(a) Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all
of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this Section
5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental
Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to the Notes, including, without limitation, having a principal amount
and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held by such holder, having similar
conversion rights as the Notes and having similar ranking and security to the Notes, and satisfactory to the Holder and (ii) the
Successor Entity (including its Parent Entity) is a publicly traded corporation whose common equity is quoted on or listed for trading
on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for
(so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein. Upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to the
Holder confirmation that there shall be issued upon conversion or redemption of this Note at any time after the consummation of such Fundamental
Transaction, in lieu of the Common Shares (or other securities, cash, assets or other property (except such items still issuable under
Sections 6 and 15, which shall continue to be receivable thereafter)) issuable upon the conversion or redemption of the Notes prior to
such Fundamental Transaction, such shares of the publicly traded common equity (or their equivalent) of the Successor Entity (including
its Parent Entity) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Note
been converted immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion of this Note), as
adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option, by delivery
of written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction without the assumption of this Note.
The provisions of this Section 5 shall apply similarly and equally to successive Fundamental Transactions and shall be applied without
regard to any limitations on the conversion of this Note.
(b) Notice
of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days prior to the
consummation of a Change of Control (the “Change of Control Date”), but not prior to the public announcement of such
Change of Control, the Company shall deliver written notice thereof via electronic mail and overnight courier to the Holder (a “Change
of Control Notice”). At any time during the period beginning after the Holder’s receipt of a Change of Control Notice
or the Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to the Holder in accordance with the
immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later of (A) the date of consummation
of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of the announcement of such Change
of Control, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof (“Change
of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the Conversion Amount
the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section 5 shall be redeemed by the Company
in cash at a price equal to the greatest of (i) the product of (w) the Change of Control Redemption Premium multiplied by (y) the Conversion
Amount being redeemed, (ii) the product of (x) the Change of Control Redemption Premium multiplied by (y) the product of (A) the Conversion
Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the Common Shares during
the period beginning on the date immediately preceding the earlier to occur of (1) the consummation of the applicable Change of Control
and (2) the public announcement of such Change of Control and ending on the date the Holder delivers the Change of Control Redemption
Notice by (II) the Conversion Price then in effect and (iii) the product of (y) the Change of Control Redemption Premium multiplied by
(z) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the aggregate cash consideration and
the aggregate cash value of any non-cash consideration per Common Share to be paid to the holders of the Common Shares upon consummation
of such Change of Control (any such non-cash consideration constituting publicly-traded securities shall be valued at the highest of the
Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation of such Change of Control, the Closing
Sale Price of such securities on the Trading Day immediately following the public announcement of such proposed Change of Control and
the Closing Sale Price of such securities on the Trading Day immediately prior to the public announcement of such proposed Change of Control)
divided by (II) the Conversion Price then in effect (the “Change of Control Redemption Price”). If the Company is acquired,
the Investor shall receive a cash repayment equal to the 2x of the principal and accrued interest. Redemptions required by this Section
5 shall be made in accordance with the provisions of Section 11 and shall have priority to payments to shareholders in connection with
such Change of Control. To the extent redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction
to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything
to the contrary in this Section 5, but subject to Section 3(d), until the Change of Control Redemption Price (together with any Late Charges
thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 5(b) (together with any Late Charges thereon)
may be converted, in whole or in part, by the Holder into Common Shares pursuant to Section 3. In the event of the Company’s redemption
of any portion of this Note under this Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of
the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall
be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.
6. RIGHTS
UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 7 and 15 below, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase shares, warrants, securities or other property pro rata to all or substantially
all of the record holders of any class of Common Shares (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the
Holder had held the number of Common Shares acquirable upon complete conversion of this Note (without taking into account any limitations
or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate Conversion
Price as of the applicable record date) immediately prior to the date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the
grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate
in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder
shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial
ownership of such Common Shares as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such
Purchase Right to such extent shall be held in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar
provision, such term shall be extended by such number of days held in abeyance, if applicable) for the benefit of the Holder until such
time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase
Right or on any subsequent Purchase Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date
or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent as
if there had been no such limitation).
(b) Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of Common Shares are entitled to receive securities or other assets with respect to or in exchange
for Common 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 Note, at the Holder’s option (i) in addition to the Common Shares
receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such Common
Shares had such Common 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 Note) or (ii) in lieu of the Common Shares otherwise receivable upon such conversion, such
securities or other assets received by the holders of Common Shares in connection with the consummation of such Corporate Event in such
amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such
consideration (as opposed to Common Shares) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision
made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions of this Section 6
shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion
or redemption of this Note.
7. RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.
(a) Adjustment
of Conversion Price upon Issuance of Common Shares. If and whenever on or after the Subscription Date the Company grants, issues or
sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section 7(a) is deemed to have granted, issued
or sold, any Common Shares (including the granting, issuance or sale of Common Shares owned or held by or for the account of the Company,
but excluding any Excluded Securities granted, issued or sold or deemed to have been granted, issued or sold) for a consideration per
share (the “New Issuance Price”) less than a price equal to the Conversion Price in effect immediately prior to such
granting, issuance or sale or deemed granting, issuance or sale (such Conversion Price then in effect is referred to herein as the “Applicable
Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Conversion
Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without
limitation, determining the adjusted Conversion Price and the New Issuance Price under this Section 7(a)), the following shall be applicable:
(i) Issuance
of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options
and the lowest price per share for which one Common Share is at any time issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof
is less than the Applicable Price, then such Common Share shall be deemed to be outstanding and to have been issued and sold by the Company
at the time of the granting, issuance or sale of such Option for such price per share. For purposes of this Section 7(a)(i), the “lowest
price per share for which one Common Share is at any time issuable upon the exercise of any such Option or upon conversion, exercise or
exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof” shall
be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect
to any one Common Share upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion, exercise
or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest
exercise price set forth in such Option for which one Common Share is issuable (or may become issuable assuming all possible market conditions)
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option or otherwise pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Option
(or any other Person) with respect to any one Common Share upon the granting, issuance or sale of such Option, upon exercise of such Option
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the
terms thereof plus the value of any other consideration (including, without limitation, consideration consisting of cash, debt forgiveness,
assets or any other property) received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except
as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Share or of
such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof or upon the actual issuance of
such Common Shares upon conversion, exercise or exchange of such Convertible Securities.
(ii) Issuance
of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Convertible
Securities and the lowest price per share for which one Common Share is at any time issuable upon the conversion, exercise or exchange
thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such Common Share shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the issuance or sale (or the time of execution of such agreement to issue
or sell, as applicable) of such Convertible Securities for such price per share. For the purposes of this Section 7(a)(ii), the “lowest
price per share for which one Common Share is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant
to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to one Common Share upon the issuance or sale (or pursuant to the agreement to issue or sell, as
applicable) of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant to
the terms thereof and (y) the lowest conversion price set forth in such Convertible Security for which one Common Share is issuable (or
may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the
terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person) with respect
to any one Common Share upon the issuance or sale (or the agreement to issue or sell, as applicable) of such Convertible Security plus
the value of any other consideration received or receivable (including, without limitation, any consideration consisting of cash, debt
forgiveness, assets or other property) by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except
as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Shares upon
conversion, exercise or exchange of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or
sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price has been or is to
be made pursuant to other provisions of this Section 7(a), except as contemplated below, no further adjustment of the Conversion Price
shall be made by reason of such issuance or sale.
(iii) Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exercisable or exchangeable for Common Shares increases or decreases at any time (other than proportional changes
in conversion or exercise prices, as applicable, in connection with an event referred to in Section 7(b) below), the Conversion Price
in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been in effect at such time
had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased
or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes of this Section 7(a)(iii),
if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible Security that was outstanding
as of the Subscription Date) are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the Common Shares deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such increase or decrease. No adjustment pursuant to this Section 7(a) shall be made if such adjustment would
result in an increase of the Conversion Price then in effect.
(iv) Calculation
of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary Security”,
and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”), together comprising
one integrated transaction (or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the Company
either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity to each other and/or (C) are
consummated under the same plan of financing), the aggregate consideration per Common Share with respect to such Primary Security shall
be deemed to be equal to the difference of (x) the lowest price per share for which one Common Share was issued (or was deemed to be issued
pursuant to Section 7(a)(i) or 7(a)(ii) above, as applicable) in such integrated transaction solely with respect to such Primary Security,
minus (y) with respect to such Secondary Securities, the sum of (I) the Black Scholes Consideration Value of each such Option, if any,
(II) the fair market value (as determined by the Holder in good faith) or the Black Scholes Consideration Value, as applicable, of such
Adjustment Right, if any, and (III) the fair market value (as determined by the Holder) of such Convertible Security, if any, in each
case, as determined on a per share basis in accordance with this Section 7(a)(iii). If any Common Shares, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining
the consideration paid for such Common Shares, Option or Convertible Security, but not for the purpose of the calculation of the Black
Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor. If any Common Shares,
Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by
the Company (for the purpose of determining the consideration paid for such Common Shares, Option or Convertible Security, but not for
the purpose of the calculation of the Black Scholes Consideration Value) will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities
will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt.
If any Common Shares, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger
in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining the consideration paid
for such Common Shares, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration
Value) will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable
to such Common Shares, Options or Convertible Securities (as the case may be). The fair value of any consideration other than cash or
publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within
ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such
consideration will be determined within five (5) Trading Days after the tenth (10th) day following such Valuation Event by
an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final
and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of Common Shares for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Shares, Options or in Convertible Securities or (B) to subscribe for or purchase Common Shares, Options
or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the Common Shares deemed to
have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of
such right of subscription or purchase (as the case may be).
(b) Adjustment
of Conversion Price upon Subdivision or Combination of Common Shares. Without limiting any provision of Section 6, Section 15
or Section 7(a), if the Company at any time on or after the Subscription Date subdivides (by any share split, share dividend, share
combination, recapitalization or other similar transaction) one or more classes of its outstanding Common Shares into a greater number
of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any
provision of Section 6, Section 15 or Section 7(a), if the Company at any time on or after the Subscription Date combines (by
any share split, share dividend, share combination, recapitalization or other similar transaction) one or more classes of its outstanding
Common Shares into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately
increased. Any adjustment pursuant to this Section 7(b) shall become effective immediately after the effective date of such subdivision
or combination. If any event requiring an adjustment under this Section 7(b) occurs during the period that a Conversion Price is calculated
hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.
(c) Holder’s
Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section 7, if the Company
in any manner issues or sells or enters into any agreement to issue or sell, any Common Shares, Options or Convertible Securities (any
such securities, “Variable Price Securities”), after the Subscription Date that are issuable pursuant to such agreement
or convertible into or exchangeable or exercisable for Common Shares at a price which varies or may vary with the market price of the
Common Shares, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution
provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable
price being herein referred to as, the “Variable Price”), the Company shall provide written notice thereof via electronic
mail and overnight courier to the Holder on the date of such agreement and the issuance of such Common Shares, Convertible Securities
or Options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the Holder shall
have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Conversion Price upon conversion
of this Note by designating in the Conversion Notice delivered upon any conversion of this Note that solely for purposes of such conversion
the Holder is relying on the Variable Price rather than the Conversion Price then in effect. The Holder’s election to rely on a
Variable Price for a particular conversion of this Note shall not obligate the Holder to rely on a Variable Price for any future conversion
of this Note.
(d) Share
Combination Event Adjustments. If at any time and from time to time on or after the Subscription Date there occurs any share split,
share dividend, share combination recapitalization or other similar transaction involving the Common Shares (each, a “Share Combination
Event”, and such date thereof, the “Share Combination Event Date”) and the Event Market Price is less than
the Conversion Price then in effect (after giving effect to the adjustment in Section 7(b) above), then on the sixteenth (16th)
Trading Day immediately following such Share Combination Event Date, the Conversion Price then in effect on such sixteenth (16th)
Trading Day (after giving effect to the adjustment in Section 7(b) above) shall be reduced (but in no event increased) to the Event Market
Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the
Conversion Price hereunder, no adjustment shall be made.
(e) Other
Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly applicable,
or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions
of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of share appreciation
rights, phantom share rights or other rights with equity features), then the Company’s board of directors shall in good faith determine
and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder, provided that no such adjustment
pursuant to this Section 7(e) will increase the Conversion Price as otherwise determined pursuant to this Section 7, provided further
that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the
Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized
standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and
expenses shall be borne by the Company.
(f) Calculations.
All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th of a share,
as applicable. The number of Common Shares outstanding at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Shares.
(g) Voluntary
Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during the term of
this Note, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce the then current
Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the board of directors of the Company.
(h) Adjustment
Dates. On each of (i) the Effective Date (as defined in the Registration Rights Agreement) of the Registration Statement (as defined
in the Registration Rights Agreement) filed pursuant to the Registration Rights Agreement, (ii) the Applicable Date (as defined in the
Securities Purchase Agreement), and (iii) the first Trading Day of each Fiscal Quarter after the Issuance Date (each a “Basic
Adjustment Date”) the Conversion Price in effect on any such Basic Adjustment Date is less than the Market Price then in effect
(each, an “Adjustment Measuring Price”) or (iv) any Trading Day (each, a “Volume Adjustment Date”,
and together with each Basic Adjustment Date, each an “Adjustment Date”) in which the aggregate daily dollar trading
volume (as reported on Bloomberg) of the Common Shares is equal to or greater than $200,000 by 11:00 a.m. (New York City time) (the “Volume
Adjustment Measuring Time”) on such Trading Day and the VWAP of the Common Shares of such Trading Day as of the Volume Adjustment
Measuring Time is less than the Conversion Price then in effect, in each case, on each such applicable Adjustment Date, as applicable,
the Conversion Price then in effect shall automatically lower to the Market Price as of such Adjustment Date.
8. REDEMPTIONS
AT THE COMPANY’S ELECTION.
(a) Company
Optional Redemption. At any time the Company may have the right to redeem all, but not less than all, of the Conversion Amount then
remaining under this Note (the “Company Optional Redemption Amount”) on the Company Optional Redemption Date (each
as defined below) (a “Company Optional Redemption”) only if the Company Optional Redemption is approved in writing
by the Investor. The portion of this Note subject to redemption pursuant to this Section 8(a) shall be redeemed by the Company in cash
at a price (the “Company Optional Redemption Price”) equal to 120% of the greater of (i) the Conversion Amount being
redeemed as of the Company Optional Redemption Date and (ii) the product of (1) the Conversion Rate with respect to the Conversion Amount
being redeemed as of the Company Optional Redemption Date multiplied by (2) the greatest Closing Sale Price of the Common Shares on any
Trading Day during the period commencing on the date immediately preceding such Company Optional Redemption Notice Date and ending on
the Trading Day immediately prior to the date the Company makes the entire payment required to be made under this Section 8(a). The Company
may exercise its right to require redemption under this Section 8(a) by delivering a written notice thereof by electronic mail and overnight
courier to all, but not less than all, of the holders of Notes (the “Company Optional Redemption Notice” and the date
all of the holders of Notes received such notice is referred to as the “Company Optional Redemption Notice Date”).
The Company may deliver only one Company Optional Redemption Notice hereunder and such Company Optional Redemption Notice shall be irrevocable.
The Company Optional Redemption Notice shall (x) state the date on which the Company Optional Redemption shall occur (the “Company
Optional Redemption Date”) which date shall not be less than sixty (60) Trading Days nor more than one hundred (100) Trading
Days following the Company Optional Redemption Notice Date, and (y) state the aggregate Conversion Amount of the Notes which is being
redeemed in such Company Optional Redemption from the Holder and all of the other holders of the Notes pursuant to this Section 8 (and
analogous provisions under the Other Notes) on the Company Optional Redemption Date. Redemptions made pursuant to this Section 8 shall
be made in accordance with Section 11. In the event of the Company’s redemption of any portion of this Note under this Section 8,
the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest
rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption
premium due under this Section 8 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual
loss of its investment opportunity and not as a penalty. For the avoidance of doubt, the Company shall have no right to effect a Company
Optional Redemption if any Event of Default has occurred and continuing, but any Event of Default shall have no effect upon the Holder’s
right to convert this Note in its discretion.
(b) Pro
Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section 8, then
it must simultaneously take the same action with respect to all of the Other Notes.
9. [intentionally
omitted.]
10. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Association (as defined in the Securities
Purchase Agreement), Memorandum of Association (as defined in the Securities Purchase Agreement) or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of
the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note. Without limiting
the generality of the foregoing or any other provision of this Note or the other Transaction Documents, the Company (a) shall not
increase the par value of any Common Shares receivable upon conversion of this Note above the Conversion Price then in effect, and (b) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable
Common Shares upon the conversion of this Note. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day
anniversary of the Issuance Date, the Holder is not permitted to convert this Note in full for any reason (other than pursuant to restrictions
set forth in Section 3(d) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation,
obtaining such consents or approvals as necessary to permit such conversion into Common Shares.
11. REDEMPTIONS.
(a) Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business Days after the
Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has submitted a Change of Control Redemption
Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption Price to the Holder in cash
concurrently with the consummation of such Change of Control if such notice is received prior to the consummation of such Change of Control
and within five (5) Business Days after the Company’s receipt of such notice otherwise. The Company shall deliver the applicable
Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. The Company shall deliver
the applicable subsequent placement optional redemption Price to the Holder in cash on the applicable subsequent placement optional redemption
Date. Notwithstanding anything herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to
receive a cash payment under any of the other Transaction Documents, at the option of the Holder delivered in writing to the Company,
the applicable Redemption Price hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Transaction
Document and, upon payment in full or conversion in accordance herewith, shall satisfy the Company’s payment obligation under such
other Transaction Document. In the event of a redemption of less than all of the Conversion Amount of this Note, the Company shall promptly
cause to be issued and delivered to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding Principal which
has not been redeemed. In the event that the Company does not pay the applicable Redemption Price to the Holder within the time period
required, at any time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in
lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this Note representing the Conversion
Amount that was submitted for redemption and for which the applicable Redemption Price (together with any Late Charges thereon) has not
been paid. Upon the Company’s receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to
such Conversion Amount, (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 18(d)), to
the Holder, and in each case the principal amount of this Note or such new Note (as the case may be) shall be increased by an amount
equal to the difference between (1) the applicable Redemption Price (as the case may be, and as adjusted pursuant to this Section 11,
if applicable) minus (2) the Principal portion of the Conversion Amount submitted for redemption and (z) the Conversion Price of this
Note or such new Notes (as the case may be) shall be automatically adjusted with respect to each conversion effected thereafter by the
Holder to the lowest of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided, (B) the
greater of (x) the Floor Price and (y) 75% of the lowest Closing Bid Price of the Common Shares during the period beginning on and including
the date on which the applicable Redemption Notice is delivered to the Company and ending on and including the date on which the applicable
Redemption Notice is voided and (C) the greater of (x) the Floor Price and (y) 75% of the quotient of (I) the sum of the five (5) lowest
VWAPs of the Common Shares during the twenty (20) consecutive Trading Day period ending and including the applicable Conversion Date divided
by (II) five (5) (it being understood and agreed that all such determinations shall be appropriately adjusted for any share dividend,
share split, share combination or other similar transaction during such period). The Holder’s delivery of a notice voiding a Redemption
Notice and exercise of its rights following such notice shall not affect the Company’s obligations to make any payments of Late
Charges which have accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.
(b) Redemption
by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption or repayment
as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b) or Section 5(b) (each,
an “Other Redemption Notice”), the Company shall immediately, but no later than one (1) Business Day of its receipt
thereof, forward to the Holder by electronic mail a copy of such notice. If the Company receives a Redemption Notice and one or more Other
Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is two (2) Business Days prior
to the Company’s receipt of the Holder’s applicable Redemption Notice and ending on and including the date which is two (2)
Business Days after the Company’s receipt of the Holder’s applicable Redemption Notice and the Company is unable to redeem
all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during such
seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes (including the Holder) based
on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received
by the Company during such seven (7) Business Day period.
12. VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law and as expressly provided in
this Note.
13. COVENANTS.
Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:
(a) Rank.
All payments due under this Note (a) shall rank pari passu with all Other Notes and (b) shall be senior to all other Indebtedness
of the Company and its Subsidiaries (other than Permitted Senior Indebtedness solely with respect to Permitted Senior Indebtedness Collateral).
(b) Incurrence
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, incur
or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note and the Other Notes and
(ii) other Permitted Indebtedness).
(c) Existence
of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, allow or suffer
to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts
and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other than Permitted Liens.
(d) Restricted
Payments and Investments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part,
whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other
than the Notes) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness or make any
Investment, as applicable, if at the time such payment with respect to such Indebtedness and/or Investment, as applicable, is due or is
otherwise made or, after giving effect to such payment, (i) an event constituting an Event of Default has occurred and is continuing or
(ii) an event that with the passage of time and without being cured would constitute an Event of Default has occurred and is continuing.
(e) Restriction
on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its share capital.
(f) Restriction
on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the Company
or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other than (i) sales,
leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company and its Subsidiaries
in the ordinary course of business consistent with its past practice and (ii) sales of inventory and product in the ordinary course of
business.
(g) Maturity
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, permit
any Indebtedness of the Company or any of its Subsidiaries to mature or accelerate prior to the Maturity Date.
(h) Change
in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly contemplated
to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially related or incidental
thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their
corporate structure or purpose.
(i) Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing
in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes
such qualification necessary.
(j) Maintenance
of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its
properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and
tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is
a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(k) Maintenance
of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable to
maintain all of the Intellectual Property Rights (as defined in the Securities Purchase Agreement) of the Company and/or any of its Subsidiaries
that are necessary or material to the conduct of its business in full force and effect.
(l) Maintenance
of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption
insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering
such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally in accordance
with sound business practice by companies in similar businesses similarly situated.
(m) Transactions
with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to,
any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property
or assets of any kind or the rendering of services of any kind) with any affiliate, except transactions in the ordinary course of business
in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for fair
consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction
with a Person that is not an affiliate thereof.
(n) Restricted
Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of a majority in aggregate
principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated by the Securities Purchase Agreement and
the Notes) or (ii) issue any other securities that would cause a breach or default under the Notes.
(o) New
Subsidiaries. Simultaneously with the acquisition or formation of each New Subsidiary, the Company shall cause such New Subsidiary
to execute, and deliver to each holder of Notes, all Security Documents (as defined in the Securities Purchase Agreement) and Guaranties
(as defined in the Securities Purchase Agreement) as requested by the Collateral Agent or the Required Holders, as applicable. The Company
shall also deliver to the Collateral Agent an opinion of counsel to such New Subsidiary that is reasonably satisfactory to the Collateral
Agent and the Required Holders covering such legal matters with respect to such New Subsidiary becoming a guarantor of the Company’s
obligations, executing and delivering the Security Document and the Guaranties and any other matters that the Collateral Agent or the
Required Holders may reasonably request. The Company shall deliver, or cause the applicable Subsidiary to deliver to the Collateral Agent,
each of the physical share certificates of such New Subsidiary, along with undated share powers for each such certificates, executed in
blank (or, if any such shares of share capital are uncertificated, confirmation and evidence reasonably satisfactory to the Collateral
Agent and the Required Holders that the security interest in such uncertificated securities has been transferred to and perfected by the
Collateral Agent, in accordance with Sections 8-313, 8-321 and 9-115 of the Uniform Commercial Code or any other similar or local or foreign
law that may be applicable).
(p) Change
in Collateral; Collateral Records. The Company shall (i) give the Collateral Agent not less than thirty (30) days’ prior written
notice of any change in the location of any Collateral (as defined in the Security Documents), other than to locations set forth in the
Perfection Certificate hereto and with respect to which the Collateral Agent has filed financing statements and otherwise fully perfected
its Liens thereon, (ii) advise the Collateral Agent promptly, in sufficient detail, of any material adverse change relating to the
type, quantity or quality of the Collateral or the Lien granted thereon and (iii) execute and deliver, and cause each of its Subsidiaries
to execute and deliver, to the Collateral Agent for the benefit of the Holder and holders of the Other Notes from time to time, solely
for the Collateral Agent’s convenience in maintaining a record of Collateral, such written statements and schedules as the Collateral
Agent or any Holder may reasonably require, designating, identifying or describing the Collateral.
(q) Stay,
Extension and Usury Laws. To the extent that it may lawfully do so, the Company (A) agrees that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law (wherever or whenever enacted
or in force) that may affect the covenants or the performance of this Note; and (B) expressly waives all benefits or advantages of any
such law and agrees that it will not, by resort to any such law, hinder, delay or impede the execution of any power granted to the Holder
by this Note, but will suffer and permit the execution of every such power as though no such law has been enacted.
(r) Taxes.
The Company and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed or assessed against the Company and its Subsidiaries or their respective assets or upon
their ownership, possession, use, operation or disposition thereof or upon their rents, receipts or earnings arising therefrom (except
where the failure to pay would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries).
The Company and its Subsidiaries shall file on or before the due date therefor all personal property tax returns (except where the failure
to file would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries). Notwithstanding
the foregoing, the Company and its Subsidiaries may contest, in good faith and by appropriate proceedings, taxes for which they maintain
adequate reserves therefor in accordance with GAAP.
(s) Announcement
of Operating Results.
(i) Operating
Results Announcement. Commencing on the Covenant Measuring Date, the Company shall publicly disclose and disseminate (such date, the
“Announcement Date”), if any Financial Test has not been satisfied for such calendar month, Fiscal Quarter or Fiscal
Year, as applicable, a statement to that effect no later than the tenth (10th) day after the end of such calendar month, Fiscal
Quarter or Fiscal Year, as applicable, and such announcement shall include a statement to the effect that the Company is (or is not, as
applicable) in breach of a Financial Test for such calendar month, Fiscal Quarter or Fiscal Year, as applicable. On the Announcement Date,
the Company shall also provide to the Holder a certification, executed on behalf of the Company by the Chief Financial Officer of the
Company, certifying that the Company satisfied the Financial Tests for such calendar month, Fiscal Quarter or Fiscal Year, as applicable,
if that is the case. If the Company has failed to meet one or more Financial Tests for a calendar month, Fiscal Quarter or Fiscal Year,
as applicable, (each a “Financial Covenant Failure”), on or prior to the Announcement Date, the Company shall provide
to the Holders a written certification, executed on behalf of the Company by the Chief Financial Officer of the Company, certifying that
such Financial Test(s) has not been met for such calendar month, Fiscal Quarter or Fiscal Year, as applicable (a “Financial Covenant
Failure Notice”).
(t) Independent
Investigation. At the request of the Holder either (x) at any time when an Event of Default has occurred and is continuing, (y) upon
the occurrence of an event that with the passage of time or giving of notice would constitute an Event of Default or (z) at any time the
Holder reasonably believes an Event of Default may have occurred or be continuing, the Company shall hire an independent, reputable investment
bank selected by the Company and approved by the Holder to investigate as to whether any breach of this Note has occurred (the “Independent
Investigator”). If the Independent Investigator determines that such breach of this Note has occurred, the Independent Investigator
shall notify the Company of such breach and the Company shall deliver written notice to each holder of a Note of such breach. In connection
with such investigation, the Independent Investigator may, during normal business hours, inspect all contracts, books, records, personnel,
offices and other facilities and properties of the Company and its Subsidiaries and, to the extent available to the Company after the
Company uses reasonable efforts to obtain them, the records of its legal advisors and accountants (including the accountants’ work
papers) and any books of account, records, reports and other papers not contractually required of the Company to be confidential or secret,
or subject to attorney-client or other evidentiary privilege, and the Independent Investigator may make such copies and inspections thereof
as the Independent Investigator may reasonably request. The Company shall furnish the Independent Investigator with such financial and
operating data and other information with respect to the business and properties of the Company as the Independent Investigator may reasonably
request. The Company shall permit the Independent Investigator to discuss the affairs, finances and accounts of the Company with, and
to make proposals and furnish advice with respect thereto to, the Company’s officers, directors, key employees and independent public
accountants or any of them (and by this provision the Company authorizes said accountants to discuss with such Independent Investigator
the finances and affairs of the Company and any Subsidiaries), all at such reasonable times, upon reasonable notice, and as often as may
be reasonably requested.
14. SECURITY.
This Note and the Other Notes are secured to the extent and in the manner set forth in the Transaction Documents (including, without limitation,
the Security Agreement, the other Security Documents and the Guaranties).
15. DISTRIBUTION
OF ASSETS. In addition to any adjustments pursuant to Sections 6 and 7, if the Company shall declare or make any dividend or other
distributions of its assets (or rights to acquire its assets) to any or all holders of Common Shares, by way of return of capital or otherwise
(including without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”),
then the Holder will be entitled to such Distributions as if the Holder had held the number of Common Shares acquirable upon complete
conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming for
such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to the
date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common
Shares are to be determined for such Distributions (provided, however, that to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder
shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial
ownership of such Common Shares as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the
portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto
would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall
be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held
similarly in abeyance) to the same extent as if there had been no such limitation).
16. AMENDING
THE TERMS OF THIS NOTE. Except for Section 3(d) and this Section 16, which may not be amended, modified or waived by the parties hereto,
the prior written consent of the Holder shall be required for any change, waiver or amendment to this Note.
17. TRANSFER.
This Note and any Common Shares issued upon conversion of this Note may be offered, sold, assigned or transferred by the Holder without
the consent of the Company, subject only to the provisions of Section 2(g) of the Securities Purchase Agreement.
18. REISSUANCE
OF THIS NOTE.
(a) Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and
deliver upon the order of the Holder a new Note (in accordance with Section 18(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a new
Note (in accordance with Section 18(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any
assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following conversion
or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on
the face of this Note.
(b) Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder
a new Note (in accordance with Section 18(d)) representing the outstanding Principal.
(c) Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Note or Notes (in accordance with Section 18(d) and in principal amounts of at least $1,000) representing in
the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal
as is designated by the Holder at the time of such surrender.
(d) Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be
of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or
in the case of a new Note being issued pursuant to Section 18(a) or Section 18(c), the Principal designated by the Holder which, when
added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining
outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face
of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and
(v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note, from the Issuance Date.
19. REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and
consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the part of the Holder to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise
by the Holder of any right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or
remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under this Note or any of the documents shall
not be deemed to be an election of Holder’s rights or remedies under such documents or at law or equity. The Company covenants to
the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth
or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received
by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that
the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened
breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary
and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of
proving actual damages and without posting a bond or other security. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of
this Note (including, without limitation, compliance with Section 7).
20. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement or
is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to
enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings
affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the
Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that no amounts
due under this Note shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the original Principal
amount hereof.
21. CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any such
Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation
of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Note instead of just the provision in which
they are found. Unless expressly indicated otherwise, all section references are to sections of this Note. Terms used in this Note and
not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed to such terms on the Closing
Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
22. FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 22 shall permit any waiver of any
provision of Section 3(d).
23. DISPUTE
RESOLUTION.
(a) Submission
to Dispute Resolution.
(i) In
the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a Black-Scholes
Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate or the applicable Redemption Price
(as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or
the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company, within two (2)
Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating
to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion Price, such Black-Scholes Consideration
Value, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption Price
(as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder
(as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select
an independent, reputable investment bank to resolve such dispute.
(ii) The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 23 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the Holder
selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding
clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood
and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission
Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives
its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such
investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank
prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested
by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other
support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii) The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder
of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of
such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b) Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 23 constitutes an agreement to arbitrate between the Company and the
Holder (and constitutes an arbitration agreement) under the rules then in effect under the American Arbitration Association (AAA) Arbitration
Act, as amended, (ii) a dispute relating to a Conversion Price includes, without limitation, disputes as to (A) whether an issuance or
sale or deemed issuance or sale of Common Shares occurred under Section 7(a), (B) the consideration per share at which an issuance or
deemed issuance of Common Shares occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Shares was an issuance
or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like constitutes and
Option or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Note and each other applicable Transaction
Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank
shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines
are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such investment
bank shall apply such findings, determinations and the like to the terms of this Note and any other applicable Transaction Documents,
(iv) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 23
to any state or federal court sitting in New York Country, New York in lieu of utilizing the procedures set forth in this Section 23 and
(v) nothing in this Section 23 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without
limitation, with respect to any matters described in this Section 23).
24. NOTICES;
CURRENCY; PAYMENTS.
(a) Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken
pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality
of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting
forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on
which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Shares, (B) with
respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase shares, warrants, securities or
other property to holders of Common Shares or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution
or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice
being provided to the Holder.
(b) Currency.
All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all amounts owing under
this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation
to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as published in the Wall
Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated with reference to,
or over, a period of time, the date of calculation shall be the final date of such period of time).
(c) Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth herein,
such payment shall be made in lawful money of the United States of America by a certified check drawn on the account of the Company and
sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address, in
the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement),
provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company
with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any amount expressed to
be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day
which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which is not paid when due shall
result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of eighteen
percent (18%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).
25. CANCELLATION.
After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid in full, this Note
shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.
26. WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all other
demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase
Agreement.
27. GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation
and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to any provision
of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Except as otherwise required by Section 23 above, the Company hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, 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. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein
(i) shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other
jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such
obligations, or to enforce a judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed
to limit, any provision of Section 23. The Company (on behalf of itself and each of its Subsidiaries) hereby appoints the Service Agent
(as defined in the Securities Purchase Agreement), as its agent for service of process in New York. THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The choice of the laws of the State of New York as the governing
law of this Note is a valid choice of law and would be recognized and given effect to in any action brought before a court of competent
jurisdiction in other jurisdiction applicable to the Company or any of its Subsidiaries except for those laws (i) which such court considers
to be procedural in nature, (ii) which are revenue or penal laws or (iii) the application of which would be inconsistent with public policy,
as such term is interpreted under the laws of other jurisdiction applicable to the Company or any of its Subsidiaries. The Company or
any of their respective properties, assets or revenues does not have any right of immunity under the laws of other jurisdiction applicable
to the Company or any of its Subsidiaries or New York law, from any legal action, suit or proceeding, from the giving of any relief in
any such legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any other jurisdiction applicable to
the Company or any of its Subsidiaries or any New York or United States federal court, from service of process, attachment upon or prior
to judgment, or attachment in aid of execution of judgment, or from execution of a judgment, or other legal process or proceeding for
the giving of any relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any
other matter under or arising out of or in connection with the Transaction Documents; and, to the extent that the Company, or any of its
properties, assets or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings
may at any time be commenced, the Company hereby waives such right to the extent permitted by law and hereby consents to such relief and
enforcement as provided in this Note and the other Transaction Documents.
28. JUDGMENT
CURRENCY.
(a) If
for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 28 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:
(i) the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(ii) the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which
such conversion is made pursuant to this Section 28(a)(ii) being hereinafter referred to as the “Judgment Conversion Date”).
(b) If
in the case of any proceeding in the court of any jurisdiction referred to in Section 28(a)(ii) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c) Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.
29. SEVERABILITY.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining
provisions of this Note so long as this Note as so modified continues to express, without material change, the original intentions of
the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question
does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the
benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s).
30. MAXIMUM
PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that
the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of
such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.
31. RESERVATION
OF AUTHORIZED SHARES.
(a) Reservation.
So long as any Notes remain outstanding, the Company shall at all times reserve at least 100% or of the number of shares of Common Shares
as shall from time to time be necessary to effect the conversion, including without limitation, Alternate Conversions, of all of the Notes
then outstanding (without regard to any limitations on conversions and assuming such Notes remain outstanding until the Maturity Date)
at the Floor Price then in effect (the “Required Reserve Amount”). The Required Reserve Amount (including, without
limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Notes based on the
original principal amount of the Notes held by each holder on the Closing Date (as defined in the Securities Purchase Agreement) or increase
in the number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder
shall sell or otherwise transfer any of such holder’s Notes, each transferee shall be allocated a pro rata portion of such holder’s
Authorized Share Allocation. Any shares of Common Shares reserved and allocated to any Person which ceases to hold any Notes shall be
allocated to the remaining holders of Notes, pro rata based on the principal amount of the Notes then held by such holders.
(b) Insufficient
Authorized Shares. If, notwithstanding Section 31(a), and not in limitation thereof, at any time while any of the Notes remain outstanding
the Company does not have a sufficient number of authorized and unreserved Common Shares to satisfy its obligation to reserve for issuance
upon conversion of the Notes at least a number of Common Shares equal to the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company’s authorized Common Shares to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60)
days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an
increase in the number of authorized Common Shares. In connection with such meeting, the Company shall provide each shareholder with a
proxy statement and shall use its best efforts to solicit its shareholders’ approval of such increase in authorized Common Shares
and to cause its board of directors to recommend to the shareholders that they approve such proposal. In the event that the Company is
prohibited from issuing Common Shares pursuant to the terms of this Note due to the failure by the Company to have sufficient Common Shares
available out of the authorized but unissued shares of Common Shares (such unavailable number of Common Shares, the “Authorized
Failure Shares”), in lieu of delivering such Authorized Failure Shares to the Holder, the Company shall pay cash in exchange
for the redemption of such portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum
of (i) the product of (x) such number of Authorized Failure Shares and (y) the greatest VWAP of the Common Shares on any Trading Day during
the period commencing on the date the Holder delivers the applicable Conversion Notice with respect to such Authorized Failure Shares
to the Company and ending on the date of such issuance and payment under this Section 31(a); and (ii) to the extent the Holder purchases
(in an open market transaction or otherwise) Common Shares to deliver in satisfaction of a sale by the Holder of Authorized Failure Shares,
any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained
in Section 31(a) or this Section 31(a) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
32. CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a) “1933
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b) “1934
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c) “Adjusted
Floor Price” means, as determined on each six month anniversary of the Issuance Date (each, an “Adjustment Date”),
the lower of (i) the Floor Price then in effect and (ii) 20% of the lower of (x) the Nasdaq Closing Price of the Common Shares as of the
Trading Day ended immediately prior to such applicable Adjustment Date and (y) the quotient of (I) the sum of each Nasdaq Closing Price
of the Common Shares on each Trading Day of the five (5) Trading Day period ended on, and including, the Trading Day ended immediately
prior to such applicable Adjustment Date, divided by (II) five (5). All such determinations to be appropriately adjusted for any stock
split, stock dividend, stock combination or other similar transaction during any such measuring period.
(d)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect
to, any issuance or sale (or deemed issuance or sale in accordance with Section 7) of Common Shares (other than rights of the type described
in Section 6(a) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect
to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(e) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly
or indirectly either to vote 10% or more of the shares having ordinary voting power for the election of directors of such Person or direct
or cause the direction of the management and policies of such Person whether by contract or otherwise.
(f) “Alternate
Conversion Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately available funds pursuant to
wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying (A) the higher of (I)
the highest price that the Common Shares trades at on the Trading Day immediately preceding the relevant Alternate Conversion Date and
(II) the applicable Alternate Conversion Price and (B) the difference obtained by subtracting (I) the number of Common Shares delivered
(or to be delivered) to the Holder on the applicable Share Delivery Deadline with respect to such Alternate Conversion from (II) the quotient
obtained by dividing (x) the applicable Conversion Amount that the Holder has elected to be the subject of the applicable Alternate Conversion,
by (y) the applicable Alternate Conversion Price without giving effect to clause (x) of such definition.
(g)
“Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the lower of
(i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) the
greater of (x) the Floor Price then in effect and (y) 85% of the lowest trading price of the Common Shares during the fifteen (15) consecutive
Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion
Notice (such period, the “Alternate Conversion Measuring Period”). All such determinations to be appropriately adjusted
for any share dividend, share split, share combination, reclassification or similar transaction that proportionately decreases or increases
the Common Shares during such Alternate Conversion Measuring Period.
(h)
“Approved Share Plan” means any employee benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the Subscription Date pursuant to which Common Shares and standard options to purchase Common Shares may be
issued to any employee, officer or director for services provided to the Company in their capacity as such.
(i) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds
or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder’s
investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing,
(iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other
Persons whose beneficial ownership of the Company’s Common Shares would or could be aggregated with the Holder’s and the other
Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively
the Holder and all other Attribution Parties to the Maximum Percentage.
(j) “Black
Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the case
may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Shares on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option,
Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date
of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the “HVT” function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible
Security or Adjustment Right (as the case may be).
(k) “Bloomberg”
means Bloomberg, L.P.
(l) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(m) “Cash”
of the Company and its Subsidiaries on any date shall be determined from such Persons’ books maintained in accordance with GAAP,
and means, without duplication, the cash, cash equivalents and Eligible Marketable Securities accrued by the Company and its wholly owned
Subsidiaries on a consolidated basis on such date.
(n)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct
or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the Common Shares in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly
or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority
or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or
entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely for
the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(o) “Change
of Control Redemption Premium” means 125%.
(p) “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and
last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market
begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may
be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or
last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed
or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of
such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing
bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 23. All
such determinations shall be appropriately adjusted for any share splits, share dividends, share combinations, recapitalizations or other
similar transactions during such period.
(q) “Common
Shares” means (i) the Company’s common shares, no par value per share, and (ii) any share capital into which such common
shares shall have been changed or any share capital resulting from a reclassification of such common shares.
(r) “Conversion
Floor Price Condition” means that the relevant Alternate Conversion Price is being determined based on clause (x) of such definition.
(s)
“Convertible Securities” means any shares or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any Common Shares.
(t) “Current
Subsidiary” means any Person in which the Company on the Subscription Date, directly or indirectly, (i) owns any of the outstanding
share capital or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations
or administration of such Person, and all of the foregoing, collectively, “Current Subsidiaries”.
(u) “Eligible
Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Select Market, the
Nasdaq Global Market.
(v) “Eligible
Marketable Securities” as of any date means marketable securities which would be reflected on a consolidated balance sheet of
the Company and its Subsidiaries prepared as of such date in accordance with GAAP, and which are permitted under the Company’s investment
policies as in effect on the Issuance Date or approved thereafter by the Company’s Board of Directors.
(w)
“Event Market Price” means, with respect to any Share Combination Event Date, the quotient determined by dividing (x)
the sum of the VWAP of the Common Shares for each of the five (5) Trading Days with the lowest VWAP of the Common Shares during the fifteen
(15) consecutive Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after
such Share Combination Event Date, divided by (y) five (5).
(x) “Excluded
Securities” means (i) Common Shares or standard options to purchase Common Shares issued to directors, officers or employees
of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Share Plan (as defined above), provided
that (A) all such issuances (taking into account the Common Shares issuable upon exercise of such options) after the Subscription Date
pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Shares issued and outstanding immediately prior
to the Subscription Date and (B) the exercise price of any such options is not lowered, none of such options are amended to increase the
number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner
that adversely affects any of the Buyers; (ii) Common Shares issued upon the conversion or exercise of Convertible Securities or Options
(other than standard options to purchase Common Shares issued pursuant to an Approved Share Plan that are covered by clause (i) above)
issued prior to the Subscription Date, provided that the conversion price of any such Convertible Securities (other than standard options
to purchase Common Shares issued pursuant to an Approved Share Plan that are covered by clause (i) above) is not lowered, none of such
Convertible Securities or Options (other than standard options to purchase Common Shares issued pursuant to an Approved Share Plan that
are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions
of any such Convertible Securities or Options (other than standard options to purchase Common Shares issued pursuant to an Approved Share
Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the Buyers; and
(iii) the Common Shares issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes; provided, that the terms
of the Notes are not amended, modified or changed on or after the Subscription Date (other than antidilution adjustments pursuant to the
terms thereof in effect as of the Subscription Date).
(y) “Fiscal
Quarter” means each of the fiscal quarters adopted by the Company for financial reporting purposes that correspond to the Company’s
fiscal year as of the date hereof that ends on September 30.
(z) “Floor
Price” means $0.7041 (or such
lower amount as permitted, from time to time, by the Principal Market), subject to adjustment for stock splits, stock dividends, stock
combinations, recapitalizations or other similar events; provided, that if on an Adjustment Date the Floor Price then in effect is higher
than the Adjusted Floor Price with respect to such Adjustment Date, on such Adjustment Date the Floor Price shall automatically lower
to such applicable Adjusted Floor Price.
| 1 | Insert 20% of the Nasdaq “market price” as of the
Trading Day ended immediately prior to the time of execution of the Securities Purchase Agreement |
(aa) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Shares be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding Common Shares, (y) 50% of the outstanding Common Shares calculated as if any Common Shares held by all Subject
Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were
not outstanding; or (z) such number of Common Shares such that all Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding Common Shares, or (iv) consummate a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or
more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding
Common Shares, (y) at least 50% of the outstanding Common Shares calculated as if any Common Shares held by all the Subject Entities making
or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were
not outstanding; or (z) such number of Common Shares such that the Subject Entities become collectively the beneficial owners (as defined
in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding Common Shares, or (v) reorganize, recapitalize or reclassify its
Common Shares, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding Common Shares, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Shares, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Shares not held by all such Subject Entities as of
the date of this Note calculated as if any Common Shares held by all such Subject Entities were not outstanding, or (z) a percentage of
the aggregate ordinary voting power represented by issued and outstanding Common Shares or other equity securities of the Company sufficient
to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company
to surrender their Common Shares without approval of the shareholders of the Company or (C) directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument
or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary
to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such
instrument or transaction.
(bb) “GAAP”
means United States generally accepted accounting principles, consistently applied.
(cc) “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(dd) “Holder
Pro Rata Amount” means a fraction (i) the numerator of which is the original Principal amount of this Note on the Closing Date
and (ii) the denominator of which is the aggregate original principal amount of all Notes issued to the initial purchasers pursuant to
the Securities Purchase Agreement on the Closing Date.
(ee) “Indebtedness”
shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(ff) “Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company initially issued
Notes pursuant to the terms of the Securities Purchase Agreement.
(gg) “Interest
Date” means October 28, 2024 and each six month anniversary thereafter.
(hh) “Interest
Rate” means two point seventy-five percent (2.75%) per annum.
(ii) “Investment”
means any beneficial ownership (including stock, partnership or limited liability company interests) of or in any Person, or any loan,
advance or capital contribution to any Person or the acquisition of all, or substantially all, of the assets of another Person or the
purchase of any assets of another Person for greater than the fair market value of such assets.
(jj) “Market
Price” means, with respect to any given Adjustment Date, that price which shall be the lowest of (i) the applicable Conversion
Price as in effect on the applicable Adjustment Date, (ii) 85% of the lowest VWAP of the Common Shares during the fifteen (15) consecutive
Trading Day period ending and including the Trading Day immediately preceding such applicable Adjustment Date (such period, the “Market
Price Measuring Period”). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction that proportionately decreases or increases the Common Shares during such Market Price Measuring
Period.
(kk) “Maturity
Date” shall mean unless repaid or converted at an earlier date, outstanding principal and unpaid accrued interest on the Notes
shall be due and payable upon request of the Investor made on or after the date that is 11 months after the closing (the “Maturity
Date”).
(ll) “New
Subsidiary” means, as of any date of determination, any Person in which the Company after the Subscription Date, directly or
indirectly, (i) owns or acquires any of the outstanding share capital or holds any equity or similar interest of such Person or (ii) controls
or operates all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, “New
Subsidiaries”.
(mm) “Options”
means any rights, warrants or options to subscribe for or purchase Common Shares or Convertible Securities.
(nn) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(oo) “Permitted
Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness set forth on Schedule 3(p)
to the Securities Purchase Agreement, as in effect as of the Subscription Date and (iii) Indebtedness secured by Permitted Liens or unsecured
but as described in clauses (iv) and (v) of the definition of Permitted Liens.
(pp) “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business
by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation of law, such as
materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect to
a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) Liens (A) upon
or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or Indebtedness
incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time
of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of
such equipment, in either case, with respect to Indebtedness in an aggregate amount not to exceed $50,000, (v) Liens incurred in
connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above,
provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal
amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of custom duties in connection with the importation of goods, and (vii) Liens arising from
judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(xii) and (viii) Liens with
respect to the Permitted Senior Indebtedness Collateral.
(qq) “Permitted
Senior Indebtedness” means a real estate mortgage on the Permitted Senior Indebtedness Collateral in an aggregate principal
amount not to exceed the fair market value of the Permitted Senior Indebtedness Collateral (as reasonably determined by the Holder).
(rr) “Permitted
Senior Indebtedness Collateral” means that certain Real Property of the Company described on Schedule I attached
hereto.
(ss) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(tt) “Prime
Rate” means the “prime rate” which from time to time published in the “Money Rates” column of The Wall
Street Journal (Eastern Edition, New York Metro); provided, however, if the Money Rates column of The Wall Street Journal (Eastern Edition,
New York Metro) ceases to be published or otherwise does not designate a “prime rate” as of a Business Day, the Holder has
the right to obtain such information from a similar business publication of its selection.
(uu) “Principal
Market” means the Nasdaq Capital Market.
(vv) “Redemption
Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption Notices, the Subsequent
Placement Optional Redemption Notices and the Change of Control Redemption Notices, and each of the foregoing, individually, a “Redemption
Notice.”
(ww) “Redemption
Premium” means 125%.
(xx) “Redemption
Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices, the Company Optional
Redemption Prices and the Subsequent Placement Optional Redemption Prices, and each of the foregoing, individually, a “Redemption
Price.”
(yy) “Registration
Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by and among the Company and
the holders of the Notes relating to, among other things, the registration of the resale of the Common Shares issuable upon conversion
of the Notes or otherwise pursuant to the terms of the Notes, as may be amended from time to time.
(zz) “SEC”
means the United States Securities and Exchange Commission or the successor thereto.
(aaa) “Securities
Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription Date, by and among the Company
and the holders of the Notes pursuant to which the Company issued the Notes, as may be amended from time to time.
(bbb) “Security
Agreement” shall have the meaning as set forth in the Securities Purchase Agreement.
(ccc) “Subscription
Date” means October 28, 20242.
(ddd) “Subsidiaries”
means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries, and each of the foregoing, individually,
a “Subsidiary.”
(eee) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(fff) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(ggg) “Trading
Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Shares, any
day on which the Common Shares is traded on the Principal Market, or, if the Principal Market is not the principal trading market for
the Common Shares, then on the principal securities exchange or securities market on which the Common Shares is then traded, provided
that “Trading Day” shall not include any day on which the Common Shares is scheduled to trade on such exchange or market for
less than 4.5 hours or any day that the Common Shares is suspended from trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect
to all determinations other than price determinations relating to the Common Shares, any day on which The New York Stock Exchange (or
any successor thereto) is open for trading of securities.
(hhh) “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the
Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market
on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time,
as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or, if the foregoing does
not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg,
or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing
bid price and the lowest closing ask price of any of the market makers for such security as reported in The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date
on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved in accordance with the procedures in Section 23. All such determinations shall be appropriately adjusted for any share dividend,
share split, share combination, recapitalization or other similar transaction during such period.
| 2 | Insert date that Securities
Purchase Agreement was executed. |
33. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this
Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public
information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business
Day immediately following such notice delivery date, publicly disclose such material, non-public information on a Report of Foreign Private
Issuer on Form 6-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating
to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately
upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification
from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained
in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing contained
in this Section 33 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(i) of the Securities Purchase
Agreement.
34. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may
possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
[signature page follows]
IN WITNESS WHEREOF, the Company
has caused this Note to be duly executed as of the Issuance Date set out above.
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Golden Sun Health Technology Group Limited |
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By: |
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Name: Xueyuan Weng |
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Title: CEO |
Senior Convertible Note
- Signature Page
EXHIBIT
I
Golden Sun Health Technology Group Limited
CONVERSION NOTICE
Reference is made to the Senior
Secured Convertible Note (the “Note”) issued to the undersigned by Golden Sun Health Technology Group Limited, a company
organized under the laws of Cayman Islands (the “Company”). In accordance with and pursuant to the Note, the undersigned
hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into Common Shares, no par value per
share (the “Common Shares”), of the Company, as of the date specified below. Capitalized terms not defined herein shall
have the meaning as set forth in the Note.
| Date of Conversion: |
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| Aggregate Principal to be converted: |
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| Aggregate accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such Aggregate Interest to be converted: |
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| AGGREGATE
CONVERSION AMOUNT TO BE CONVERTED: |
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| Please confirm the following information: |
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| Conversion Price: |
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| Number of Common Shares to be issued: |
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If this Conversion Notice
is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use the following Alternate Conversion
Price:____________
Please issue the Common Shares into which the
Note is being converted to Holder, or for its benefit, as follows:
Check here if requesting delivery as a
certificate to the following name and to the following address:
Check here if requesting delivery by Deposit/Withdrawal at Custodian
as follows:
| DTC Participant: |
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| DTC Number: |
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| Account Number: |
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Date: _____________ __, _____
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| Name of Registered Holder |
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| By: |
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Name: |
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Title: |
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Tax ID: |
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| E-mail Address: |
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Exhibit II
ACKNOWLEDGMENT
The Company hereby (a) acknowledges
this Conversion Notice, (b) certifies that the above indicated number of Common Shares [are][are not] eligible to be resold by the Holder
either (i) pursuant to Rule 144 (subject to the Holder’s execution and delivery to the Company of a customary 144 representation
letter) or (ii) an effective and available registration statement and (c) hereby directs _________________ to issue the above indicated
number of Common Shares in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Company and acknowledged
and agreed to by ________________________.
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Golden Sun Health Technology Group Limited |
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By: |
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Name: |
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Title: |
Exhibit 10.3
SHAREHOLDER PLEDGE AGREEMENT
SHAREHOLDER PLEDGE AGREEMENT
(this “Agreement”), dated as of October 28, 2024, made by and between Mr. Xueyuan Weng (the “Pledgor”),
Golden Sun Health Technology Group Limited, a company organized under the laws of Cayman Islands, with principal executive office located
at Room 503, Building C2, No. 1599 Xinjinqiao Road, Pudong New Area, Shanghai, China (the “Company”), and the secured
parties listed on the signature pages hereof (collectively, the “Secured Parties” and each, individually, a “Secured
Party”).
W I T N E S S E T H:
WHEREAS, the Company and the
Secured Party are parties to the Securities Purchase Agreement, dated as of October 28, 2024 (as amended, restated or otherwise modified
from time to time, the “Securities Purchase Agreement”), pursuant to which the Company has agreed to sell, and the
Secured Party has agreed to purchase, the Notes (as defined in the Securities Purchase Agreement); and
WHEREAS, in order to induce
the Secured Party to purchase, severally and not jointly, the Notes as provided for in the Securities Purchase Agreement, the Pledgor
has agreed to agreed to grant the Secured Party a separate, continuing security interest in and to the Pledged Collateral (as defined
below) in order to secure the prompt and complete payment, observance and performance of the Secured Obligations (as defined below).
NOW, THEREFORE, for and in consideration
of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged,
the parties hereto agree as follows:
SECTION 1.
Definitions and Rules of Interpretation.
(a)
Definitions. Reference is made to the Securities Purchase Agreement and the Notes for a statement of terms thereof.
All terms used in this Agreement which are defined in the Securities Purchase Agreement or the Notes or in Article 8 or Article 9 of the
Uniform Commercial Code as in effect from time to time in the State of New York (the “Code”) and which are not otherwise
defined herein shall have the same meanings herein as set forth therein; provided, that terms used herein which are defined in
the Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement
or amendment of such statute except as the Secured Parties holding a majority of the Secured Obligations then outstanding (the “Required
Holders”) may otherwise determine. In the event that any such term is defined in both the Securities Purchase Agreement, the
Notes and the Code, the definition of such term in the Securities Purchase Agreement or the Notes shall control.
(b)
Rules of Interpretation. Except as otherwise expressly provided in this Agreement, the following rules of interpretation
apply to this Agreement: (i) the singular includes the plural and the plural includes the singular; (ii) “or” and “any”
are not exclusive and “include” and “including” are not limiting; (iii) a reference to any agreement or other
contract includes permitted supplements and amendments; (iv) a reference to a law includes any amendment or modification to such law and
any rules or regulations issued thereunder; (v) a reference to a person includes its permitted successors and assigns; and (vi) a reference
in this Agreement to an Article, Section, Annex, Exhibit or Schedule is to the Article, Section, Annex, Exhibit or Schedule of this Agreement.
SECTION 2.
Pledge and Grant of Security Interest. As collateral security for all of the Secured Obligations (as defined in Section
3 hereof), the Pledgor hereby pledges and assigns and grants to each Secured Party a separate, continuing security interest in, and Lien
on, all of his right, title and interest in and to the following (collectively, the “Pledged Collateral”):
(a)
The Pledgor’s Common Shares of the Company as set forth in Schedule I (as such Schedule is amended from time
to time in accordance with the terms hereof), and all future, issued and outstanding share capital, or other equity or investment securities
of, or partnership, membership, or joint venture interests in, the Company that are required to be pledged from time to time in accordance
with the terms hereof including without limitation, any Additional Pledged Shares required to be pledged in accordance with Section 4(a)
of this Agreement, whether now owned or hereafter acquired by the Pledgor and whether or not evidenced or represented by any share certificate,
certificated security or other instrument, together with the certificates representing such equity interests, all options and other rights,
contractual or otherwise, in respect thereof and all dividends, distributions, cash, instruments, investment property and any other property
(including, but not limited to, any share dividend and any distribution in connection with a share split) from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing and all cash and noncash proceeds thereof
(collectively, the “Pledged Shares”);
(b)
all present and future increases, profits, combinations, reclassifications, and substitutes and replacements for all or
part of the foregoing collateral heretofore described;
(c)
all investment property, financial assets, securities, share capital, other equity interests, share options and commodity
contracts of the Pledgor, all notes, debentures, bonds, promissory notes or other evidences of indebtedness payable or owing to the Pledgor,
and all other assets now or hereafter received or receivable with respect to the foregoing;
(d)
all securities entitlements of the Pledgor in any and all of the foregoing; and
(e)
all proceeds (including proceeds of proceeds) of any and all of the foregoing;
in each case, whether now owned or hereafter acquired
by the Pledgor and howsoever his interest therein may arise or appear (whether by ownership, security interest, Lien, claim or otherwise).
SECTION 3.
Security for Secured Obligations. The security interest created hereby in the Pledged Collateral constitutes continuing
collateral security for the prompt payment and due performance and observance of all of the following Secured Obligations (the “Secured
Obligations”):
(a)
all liabilities, obligations, or undertakings owing by the Company to the Secured Parties of any kind or description arising out
of or outstanding under, advanced or issued pursuant to, or evidenced by the Securities Purchase Agreement, the Notes or any of the other
Transaction Documents, and
(b)
all liabilities, obligations, or undertakings owing by Pledgor to the Secured Parties under this Agreement, in each case with respect
to the foregoing liabilities, obligations or undertakings, irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, liquidated or unliquidated, determined or undetermined, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest, costs, indemnities, fees (including attorneys fees), and expenses (including
interest, costs, indemnities, fees, and expenses that, but for the provisions of the Bankruptcy Code, would have accrued irrespective
of whether a claim therefor is allowed) and any and all other amounts which Company or Pledgor is required to pay pursuant to any of the
foregoing, by law, or otherwise.
SECTION 4.
Delivery of the Pledged Collateral.
(a)
The fair market value of the Pledged Shares held by any Secured Party as of any time of determination shall equal the product
of (i) the aggregate number of Common Shares pledged to such Secured Party hereunder and (ii) the quotient of (x) the sum of the two (2)
lowest VWAP (as defined in the Notes) of the Common Shares during the five (5) Trading Day period immediately prior to such time of determination,
divided by (y) two (2) (subject to adjustment for any share splits, share dividends, share combinations, recapitalizations and similar
events during such measuring period) (the “Pledged Share Value”) and shall at all times equal or exceed the aggregate
principal amount outstanding under the Note (whether or not then due and payable) of such Secured Party. The Pledgor shall, within five
business days following the receipt of notice from such Secured Party that the Pledged Share Value is less than the aggregate principal
amount outstanding under the Note of such Secured Party, deliver additional shares (“Additional Pledged Shares”) to
such Secured Party in accordance with the terms of this Section 4 such that the Pledged Share Value (taking into account the fair
market value of such Additional Pledged Shares) shall be no less than the aggregate principal amount outstanding under the Note.
(b)
In accordance with the terms and conditions set forth in the Securities Purchase Agreement, the Pledgor shall deliver to
each of the Secured Parties as of date hereof a certificate with respect to the Pledged Shares to be initially held by such Security Party
in such amounts as set forth on Schedule I attached hereto. As of any given date, with respect to all other promissory notes, certificates
and instruments constituting Pledged Collateral from time to time or required to be pledged to the Secured Parties pursuant to the terms
of this Agreement or the Securities Purchase Agreement, including without limitation, any Additional Pledged Shares required to be pledged
in accordance with Section 4(a) above (collectively the “Additional Collateral”) such amount equal to a fraction (i)
the numerator of which is the principal amount of such Secured Party’s Note on such given date and (ii) the denominator of which
is the aggregate principal amount of all Notes outstanding as of such given date (the “Secured Party Pro Rata Amount”)
of such Additional Collateral shall be delivered to each Secured Party promptly upon receipt thereof by or on behalf of the Pledgor. All
such promissory notes, certificates and instruments shall be held by each Secured Party pursuant hereto and shall be delivered in suitable
form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment or undated share powers executed
in blank, all in form and substance reasonably satisfactory to the Secured Parties. If any Pledged Collateral consists of uncertificated
securities, unless the immediately following sentence is applicable thereto, the Pledgor shall cause the applicable Secured Party (or
its designated custodian, nominee or other designee) to become the registered holder thereof, or cause each issuer of such securities
to agree that it will comply with instructions originated by the applicable Secured Party (or its designated custodian, nominee or other
designee), with respect to such securities without further consent by the Pledgor. If any Pledged Collateral consists of securities entitlements,
the Pledgor shall transfer the applicable Secured Party Pro Rata Amount of such securities entitlements to each Secured Party (or its
designated custodian, nominee or other designee) or cause the applicable securities intermediary to agree that it will comply with entitlement
orders by such Secured Party (or its designated custodian, nominee or other designee) without further consent by the Pledgor.
(c)
Promptly upon the receipt by the Pledgor of any Additional Collateral and contemporaneously with any delivery of Additional
Pledged Shares in accordance with Section 4(a), a Pledge Amendment, duly executed by the Pledgor, in substantially the form of Annex
I hereto (a “Pledge Amendment”), shall be delivered to each Secured Party, in respect of the Additional Collateral
which is or are to be pledged pursuant to this Agreement and the Securities Purchase Agreement, which Pledge Amendment shall from and
after delivery thereof constitute part of Schedule I hereto. The Pledgor hereby authorizes each Secured Party to attach each Pledge
Amendment to this Agreement and agrees that all promissory notes, certificates or instruments listed on any Pledge Amendment shall for
all purposes hereunder constitute Pledged Collateral and the Pledgor shall be deemed upon delivery thereof to have made the representations
and warranties set forth in Section 6 with respect to such Additional Collateral.
(d)
If the Pledgor shall receive, by virtue of the Pledgor’s being or having been an owner of any Pledged Collateral,
any (i) share certificate (including, without limitation, any certificate representing a share dividend or distribution in connection
with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares, share split,
spin-off or split-off), promissory note or other instrument, (ii) option or right, whether as an addition to, substitution for, or in
exchange for, any Pledged Collateral, or otherwise, (iii) dividends payable in cash (except such dividends permitted to be retained
by the Pledgor pursuant to Section 8 hereof) or in securities or other property or (iv) dividends, distributions, cash, instruments,
investment property and other property in connection with a partial or total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in surplus (collectively, the “Distribution Collateral”), the Pledgor shall hold
such Distribution Collateral in trust for the benefit of the Secured Parties, shall segregate it from the Pledgor’s other property
and shall deliver the applicable Secured Party Pro Rata Amount of such Distribution Collateral forthwith to each Secured Party in the
exact form received, with any necessary endorsement and/or appropriate share powers duly executed in blank, to be held by the each Secured
Party as Pledged Collateral and as further collateral security for the Secured Obligations.
SECTION 5.
Taxes.
(a)
All payments made by the Pledgor hereunder or under any other Transaction Document shall be made in accordance with the
terms of the respective Transaction Document and shall be made without set-off, counterclaim, deduction or other defense. All such payments
shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on the net income of any Secured Party by the jurisdiction in
which such Secured Party is organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively or individually, “Taxes”). If the Pledgor shall be required to
deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Transaction Document:
(i) the
amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings
(including Taxes on amounts payable to any Secured Party pursuant to this sentence) each Secured Party receives an amount equal to
the sum it would have received had no such deduction or withholding been made,
(ii)
the Pledgor shall make such deduction or withholding,
(iii)
the Pledgor shall pay the full amount deducted or withheld to the relevant taxation authority in accordance with applicable
law, and
(iv)
as promptly as possible thereafter, the Pledgor shall send the Secured Parties an official receipt (or, if an official receipt
is not available, such other documentation as shall be satisfactory to the Secured Parties, as the case may be) showing payment.
In addition, the Pledgor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise
with respect to, this Agreement or any other Transaction Document (collectively, “Other Taxes”).
(b)
The Pledgor hereby indemnifies and agrees to hold each Secured Party (each an “Indemnified Party”) harmless
from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 5) paid by any Indemnified Party as a result of any payment made hereunder or from the execution,
delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document, and any liability
(including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be paid within 30 days from the
date on which such Secured Party makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other
Taxes.
(c)
If the Pledgor fails to perform any of its obligations under this Section 5, the Pledgor shall indemnify each
Secured Party for any taxes, interest or penalties that may become payable as a result of any such failure. The obligations of the Pledgor
under this Section 5 shall survive the termination of this Pledge Agreement and the payment of the Obligations and all other
amounts payable hereunder.
SECTION 6.
Representations and Warranties. The Pledgor represents and warrants as follows:
(a)
The Pledgor has all requisite legal capacity, power and authority to execute, deliver and perform its obligations under
this Agreement. This Agreement has been duly executed and delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor, enforceable against the Pledgor in accordance with its terms, except (a) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws now or hereafter in effect relating to, or affecting
generally, the enforcement of creditors’ and other obligees’ rights and (b) where the remedy of specific performance or other
forms of equitable relief may be subject to certain equitable defenses and principles and to the discretion of the court before which
the proceeding may be brought.
(b)
The Pledged Shares have been duly authorized and validly issued, are fully paid and nonassessable and the holders thereof
are not entitled to any preemptive first refusal or other similar rights. All other shares constituting Pledged Collateral will be, when
issued, duly authorized and validly issued, fully paid and nonassessable.
(c)
The Pledgor is and will be at all times the legal and beneficial owner of the Pledged Collateral free and clear of any Lien,
security interest, option or other charge or encumbrance except for the security interest and Lien created by this Agreement or any Permitted
Liens.
(d)
The exercise by any Secured Party of any of its rights and remedies hereunder will not contravene any law or any contractual
restriction binding on or affecting the Pledgor or any of the properties of the Pledgor and will not result in or require the creation
of any Lien, security interest or other charge or encumbrance upon or with respect to any of the properties of the Pledgor other than
pursuant to this Agreement and the other Transaction Documents, as defined in the Securities Purchase Agreement, the “Transaction
Documents”).
(e)
No authorization or approval or other action by, and no notice to or filing with, any governmental authority is required
to be obtained or made by the Pledgor for (i) the due execution, delivery and performance by the Pledgor of this Agreement, (ii) the grant
by the Pledgor, or the perfection, of the security interest and Lien purported to be created hereby in the Pledged Collateral or (iii)
the exercise by any Secured Party of any of its rights and remedies hereunder, except as may be required in connection with any sale of
any Pledged Collateral by laws affecting the offering and sale of securities generally.
(f)
This Agreement creates a valid security interest and Lien in favor of the Secured Parties in the Pledged Collateral, as
security for the Secured Obligations. Each Secured Party having possession of the certificates representing the Pledged Shares and all
other certificates, instruments and cash constituting Pledged Collateral from time to time results in the perfection of such security
interest and Lien. Such security interest and Lien is, or in the case of Pledged Collateral in which the Pledgor obtains rights after
the date hereof, will be, a perfected Lien, subject only to the Permitted Liens. All action necessary or desirable to perfect and protect
such security interest and Lien has been duly taken, except for such Secured Party’s having possession of certificates, instruments
and cash constituting Pledged Collateral after the date hereof.
SECTION 7.
Covenants as to the Pledged Collateral. So long as any Secured Obligations shall remain outstanding, the Pledgor will, unless
the Required Holders, shall otherwise consent in writing:
(a)
keep adequate records concerning the Pledged Collateral and permit the Secured Parties, or any designees or representatives
thereof at any time or from time to time during reasonable hours after prior written notice to examine and make copies of and abstracts
from such records;
(b)
at the Pledgor’s expense, promptly deliver to each Secured Party a copy of each material notice or other material
communication received by the Pledgor in respect of the Pledged Collateral;
(c)
at the Pledgor’s expense, defend each Secured Party’s right, title and security interest in and to the Pledged
Collateral against the claims of any Person;
(d)
at the Pledgor’s expense, at any time and from time to time, promptly execute and deliver all further instruments
and documents and take all further action that may be necessary or desirable or that any Secured Party may reasonably request in order
to (i) perfect and protect, or maintain the perfection of, the security interest and Lien purported to be created hereby, (ii) enable
such Secured Party to exercise and enforce its rights and remedies hereunder in respect of the Pledged Collateral or (iii) otherwise effect
the purposes of this Agreement, including, without limitation, delivering to such Secured Party irrevocable proxies in respect of the
Pledged Collateral;
(e)
not sell, assign (by operation of law or otherwise), exchange or otherwise dispose of any Pledged Collateral or any interest
therein except as expressly permitted by the Securities Purchase Agreement or the Notes;
(f)
not create or suffer to exist any Lien, upon or with respect to any Pledged Collateral except for the Lien created hereby
or for any Permitted Lien;
(g)
not make or consent to any amendment or other modification or waiver with respect to any Pledged Collateral or enter into
any agreement or permit to exist any restriction with respect to any Pledged Collateral;
(h)
except as expressly permitted by the Securities Purchase Agreement, not permit the issuance of (i) any additional shares
of any class of share capital, partnership interests, member interests or other equity of the Company, (ii) any securities convertible
voluntarily by the holder thereof or automatically upon the occurrence or non-occurrence of any event or condition into, or exchangeable
for, any such shares of share capital or (iii) any warrants, options, contracts or other commitments entitling any Person to purchase
or otherwise acquire any such shares of share capital;
(i) not
issue any share certificate, certificated security or other instrument to evidence or represent any share capital, any partnership
interest or membership interest described in Schedule I hereto; and
(j) not
take or fail to take any action which would in any manner impair the validity or enforceability of each Secured Party’s
security interest in and Lien on any Pledged Collateral.
SECTION 8.
Voting Rights, Dividends, Etc. in Respect of the Pledged Collateral.
(a)
So long as no Event of Default shall have occurred and be continuing:
(i) the
Pledgor may exercise any and all voting and other consensual rights pertaining to any Pledged Collateral for any purpose not
inconsistent with the terms of this Agreement, the Securities Purchase Agreement or the Notes;
(ii)
the Pledgor may receive and retain any and all dividends, interest or other distributions paid in respect of the Pledged
Collateral to the extent permitted by the Securities Purchase Agreement; provided, however, that any and all (A) dividends
and interest paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed
in respect of or in exchange for, any Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of
any Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in surplus, and (C) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Pledged
Collateral, together with any dividend, distribution, interest or other payment which at the time of such dividend, distribution, interest
or other payment was not permitted by the Securities Purchase Agreement, shall be, and shall forthwith be delivered to each Secured Party
in proportion to their Secured Party Pro Rata Amount to hold as, Pledged Collateral and shall, if received by the Pledgor, be received
in trust for the benefit of such Secured Party, shall be segregated from the other property or funds of the Pledgor, and shall be forthwith
delivered to such Secured Party in the exact form received with any necessary indorsement and/or appropriate share powers duly executed
in blank, to be held by such Secured Party as Pledged Collateral and as further collateral security for the Secured Obligations; and
(iii)
each Secured Party will execute and deliver (or cause to be executed and delivered) to the Pledgor all such proxies and
other instruments as the Pledgor may reasonably request for the purpose of enabling the Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to paragraph (i) of this Section 8(a) and to receive the dividends, distributions, interest
and other payments which it is authorized to receive and retain pursuant to paragraph (ii) of this Section 8(a), in each case,
to the extent that such Secured Party has possession of such Pledged Collateral.
(b)
Upon the occurrence and during the continuance of an Event of Default (as defined in the Notes) (an “Event of Default”),
(i) all
rights of the Pledgor to exercise the voting and other consensual rights which he would otherwise be entitled to exercise pursuant
to paragraph (i) of subsection (a) of this Section 8, and to receive the dividends, distributions, interest and other
payments which he would otherwise be authorized to receive and retain pursuant to paragraph (ii) of subsection (a) of this Section 8,
shall cease, and all such rights shall thereupon become vested in each Secured Party which shall thereupon have the sole right to
exercise such voting and other consensual rights and to receive and hold as Pledged Collateral such dividends, distributions,
interest and other payments;
(ii)
without limiting the generality of the foregoing, each Secured Party may at his option exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to any of the Pledged Collateral as if it were the absolute
owner thereof, including, without limitation, the right to exchange, in its discretion, any and all of the Pledged Collateral upon the
merger, consolidation, reorganization, recapitalization or other adjustment of any issuer of the Pledged Collateral or upon the exercise
by any issuer of the Pledged Collateral of any right, privilege or option pertaining to any Pledged Collateral, and, in connection therewith,
to deposit and deliver any and all of the Pledged Collateral with any committee, depository, transfer agent, registrar or other designated
agent upon such terms and conditions as the Secured Parties may determine; and
(iii)
all dividends, distributions, interest and other payments which are received by the Pledgor contrary to the provisions of
paragraph (i) of this Section 8(b) shall be received in trust for the benefit of the Secured Parties, shall be segregated from
other funds of the Pledgor, and shall be forthwith paid over to the Secured Parties in proportion to the applicable Secured Party Pro
Rata Amount as Pledged Collateral in the exact form received with any necessary indorsement and/or appropriate share powers duly executed
in blank, to be held by such Secured Party as Pledged Collateral and as further collateral security for the Secured Obligations.
SECTION 9.
Additional Provisions Concerning the Pledged Collateral.
(a)
The Pledgor hereby (i) authorizes the Secured Parties to file one or more financing or continuation statements, and amendments
thereto, relating to the Pledged Collateral, without the signature of the Pledgor where permitted by law, (ii) ratifies such authorization
to the extent that the Secured Parties has filed any such financing or continuation statements, or amendments thereto, without the signature
of the Pledgor prior to the date hereof and (iii) authorizes each Secured Party to execute any agreements, instruments or other documents
in the Pledgor’s name and to file such agreements, instruments or other documents that are related to the security interest and
Lien of each Secured Party in the Pledged Collateral or as provided under Article 8 or Article 9 of the Code or any other applicable uniform
commercial code or other law in any appropriate filing office. Notwithstanding anything to the contrary contained herein, no Secured Party
shall have any responsibility for the preparing, recording, filing, re-recording, or re-filing of any financing statement, continuation
statement or other instrument in any public office.
(b)
The Pledgor hereby irrevocably appoints each Secured Party as his attorney-in-fact and proxy, with full authority in the
place and stead and in his name or otherwise, from time to time in the Secured Parties’ discretion to take any action and to execute
any instrument which the Secured Parties may deem necessary or advisable to accomplish the purposes of this Agreement (subject to the
rights of the Pledgor under Section 8(a) hereof), including, without limitation, to receive, indorse and collect all instruments
made payable to the Pledgor representing any dividend, interest payment or other distribution in respect of any Pledged Collateral and
to give full discharge for the same. This power is coupled with an interest and is irrevocable until the termination of this Agreement.
(c)
If the Pledgor fails to perform any agreement or obligation contained herein, each Secured Party may perform, or cause performance
of, such agreement or obligation, and the expenses of such Secured Party incurred in connection therewith shall be payable by the Pledgor
pursuant to Section 11 hereof and shall be secured by the Pledged Collateral.
(d)
Other than the exercise of reasonable care to assure the safe custody of the Pledged Collateral while held hereunder, no
Secured Party shall have any duty or liability to preserve rights pertaining thereto and shall be relieved of all responsibility for the
Pledged Collateral upon surrendering it or tendering surrender of it to any of the Pledgor. Each Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment substantially equal to that which such Secured Party accords its own property, it being understood that no Secured Party shall
have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Pledged Collateral, whether or not such Secured Party has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral. Each Secured Party agrees that,
with respect to any Pledged Collateral at any time or times in its possession and in which any other Secured Party has a Lien, the Secured
Party in possession of any such Pledged Collateral shall be the bailee of each other Secured Party solely for purposes of perfecting (to
the extent not otherwise perfected) each other Secured Party’s Lien in such Pledged Collateral, provided that no Secured Party shall
be obligated to obtain or retain possession of any such Pledged Collateral. Without limiting the generality of the foregoing, Secured
Parties and Pledgor hereby agree that any Secured Party that is in possession of any Pledged Collateral at such time as the Secured Obligations
owing to such Secured Party have been paid in full may deliver such Pledged Collateral to the Company or, if requested by any Secured
Party prior to such delivery, may deliver such Pledged Collateral (unless otherwise restricted by applicable law or court order and subject
in all events to the receipt of an indemnification of all liabilities arising from such delivery) to the requesting Secured Party, without
recourse to or representation or warranty by the Secured Party in such possession. No later than the third business day after the Company’s
receipt of such Pledged Collateral, the Company shall deliver to each Secured Party with Secured Obligations then outstanding the applicable
Secured Party Pro Rata Amount of such Pledged Collateral.
(e)
The powers conferred on each Secured Party hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe custody of any Pledged Collateral in its possession and the
accounting for monies actually received by it hereunder, no Secured Party shall have any duty as to any Pledged Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Pledged Collateral.
(f)
Upon the occurrence and during the continuation of any Default or Event of Default, each Secured Party may at any time in
its discretion (i) without notice to the Pledgor, transfer or register in the name of such Secured Party or any of its nominees any or
all of the Pledged Collateral, subject only to the revocable rights of the Pledgor under Section 8(a) hereof, and (ii) exchange
certificates or instruments constituting Pledged Collateral for certificates or instruments of smaller or larger denominations.
SECTION 10. Remedies
Upon Default. If any Event of Default shall have occurred and be continuing:
(a)
Each Secured Party may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all of the rights and remedies of a secured party on default under the Code then in effect in
the State of New York; and without limiting the generality of the foregoing and without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale, at any exchange or broker’s board or elsewhere,
at such price or prices and on such other terms as such Secured Party may deem commercially reasonable. The Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days’ notice to any of the Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall constitute reasonable notification. No Secured Party shall be
obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. Each Secured Party may adjourn any public
or private sale by such Secured Party from time to time by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b)
The Pledgor recognizes that it may be impracticable to effect a public sale of all or any part of the Pledged Shares or
any other securities constituting Pledged Collateral and that each Secured Party may, therefore, determine to make one or more private
sales of any such securities to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such securities
for its own account, for investment and not with a view to the distribution or resale thereof. The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller than the prices and other terms which might have been obtained
at a public sale and, notwithstanding the foregoing, agrees that such private sales shall be deemed to have been made in a commercially
reasonable manner and that no Secured Party shall have any obligation to delay sale of any such securities for the period of time necessary
to permit the issuer of such securities to register such securities for public sale under the Securities Act of 1933, as amended (the
“Securities Act”). The Pledgor further acknowledges and agrees that any offer to sell such securities which has been
(i) publicly advertised on a bona fide basis in a newspaper or other publication of general circulation in the financial community of
New York, New York (to the extent that such an offer may be so advertised without prior registration under the Securities Act) or (ii)
made privately in the manner described above to not less than fifteen (15) bona fide offerees shall be deemed to involve a “public
disposition” for the purposes of Section 9-610 of the Code (or any successor or similar, applicable statutory provision) as then
in effect in the State of New York, notwithstanding that such sale may not constitute a “public offering” under the Securities
Act, and that any Secured Party may, in such event, bid for the purchase of such securities.
(c)
Any cash held by any Secured Party as Pledged Collateral and all cash proceeds received by such Secured Party in respect
of any sale of, collection from, or other realization upon, all or any part of the Pledged Collateral shall be applied (after payment
of any amounts payable to such Secured Party pursuant to Section 11 hereof) by such Secured Party against, all or any part of the
Secured Obligations in such order as such Secured Party shall elect consistent with the provisions of the Securities Purchase Agreement.
(d)
In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which
any Secured Party is legally entitled, the Pledgor shall be jointly and severally liable for the deficiency, together with interest thereon
at the highest rate specified in the Notes for interest on overdue principal thereof or such other rate as shall be fixed by applicable
law, together with the costs of collection and the reasonable fees, costs and expenses of any attorneys employed by such Secured Party
to collect such deficiency.
SECTION 11.
Indemnity and Expenses.
(a)
The Pledgor hereby agrees to indemnify and hold each Secured Party (and all of its officers, directors, employees, attorneys,
consultants) harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses
(including, without limitation, reasonable legal fees and disbursements of counsel) to the extent that they arise out of or otherwise
result from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabilities arising
or resulting directly from such Person’s gross negligence or willful misconduct as determined by a court of competent jurisdiction.
(b)
The Pledgor shall be obligated for, and will upon demand pay to each Secured Party the reasonable amount of any and all
out-of-pocket costs and expenses, including the reasonable fees and disbursements of such Secured Party’s counsel and of any experts
which such Secured Party may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration,
amendment, waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
such Secured Party hereunder, or (iv) the failure by the Pledgor to perform or observe any of the provisions hereof.
SECTION 12. Notices,
Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail,
postage prepaid and return receipt requested), sent by Federal Express or other recognized courier service (return receipt
requested), telecopied or delivered, if to the Pledgor, to him at the address specified in the Securities Purchase Agreement or if
to the Secured Parties, to it at the address specified in the Securities Purchase Agreement; or as to either such Person at such
other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms
of this Section 12. All such notices and other communications shall be effective (i) if sent by certified mail, postage prepaid,
return receipt requested, when received or three (3) Business Days after mailing, whichever first occurs, (ii) if telecopied, when
transmitted and confirmation is received, provided same is on a Business Day and, if not, on the next Business Day or (iii) if
delivered or sent by Federal Express or other recognized courier service (return receipt requested), upon delivery, provided same is
on a Business Day and, if not, on the next Business Day.
SECTION 13. Security
Interest Absolute. All rights of the Secured Parties, all Liens and all obligations of the Pledgor hereunder shall be absolute and
unconditional irrespective of: (i) any lack of validity or enforceability of the Securities Purchase Agreement, the Notes or any other
Transaction Document, (ii) any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the
Secured Obligations, or any other amendment or waiver of or consent to any departure from the Securities Purchase Agreement, the Notes
or any other Transaction Document, (iii) any exchange or release of, or non-perfection of any Lien on any Collateral, or any release
or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations, or (iv) any other circumstance
which might otherwise constitute a defense available to, or a discharge of, the Pledgor in respect of the Secured Obligations (other
than the payment in full of the Secured Obligations or complete conversion to equity securities of the Company of all indebtedness obligations
owed by the Company to the Secured Parties under the Notes (including, without limitation, all principal, interest and fees related to
the Notes)). All authorizations and agencies contained herein with respect to any of the Pledged Collateral are irrevocable and powers
coupled with an interest.
SECTION 14. Beneficial Ownership. Each Secured Party shall not have the right to exercise its rights under this Agreement and any such
exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, such applicable
Secured Party together with its other Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum
Percentage”) of the Common Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of Common Shares beneficially owned by a Secured Party and its other Attribution Parties shall include
the number of Common Shares held by such Secured Party and all its other Attribution Parties plus the number of Common Shares to be acquired
by such Secured Party with respect to which the determination of such sentence is being made, but shall exclude the remaining Common Shares
pledged to such Secured Party that are not then being acquired upon such Secured Party’s exercise of its right hereunder and any
Common Shares which would be issuable upon (A) conversion of the remaining, nonconverted portion of the Note beneficially owned by such
Secured Party or any its other Attribution Parties, (B) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any convertible notes or convertible preferred shares or warrants) beneficially
owned by such Secured Party or any its other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 14. For purposes of this Section 14, beneficial ownership shall be calculated in accordance with Section 13(d)
of the 1934 Act. For purposes of determining the number of outstanding Common Shares a Secured Party may acquire upon exercise of its
rights hereunder at any time of determination without exceeding the Maximum Percentage, each Secured Party may rely on the number of outstanding
Common Shares as reflected in (x) the Company’s most recent Annual Report on Form 20-F, Report of Foreign Issuer on Form 6-K or
other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice
by the Company or the Transfer Agent, if any, setting forth the number of Common Shares outstanding (the “Reported Outstanding
Share Number”). For any reason at any time, upon the written or oral request of a Secured Party, the Company shall within one
(1) Business Day confirm orally and in writing or by electronic mail to such Secured party the number of Common Shares then outstanding.
In the event that the exercise of rights by a Secured Party hereunder and transfer of Common Shares from the Pledgor to such Secured Party
hereunder would result in such Secured Party and its other Attribution Parties being deemed to beneficially own, in the aggregate, more
than the Maximum Percentage of the number of outstanding Common Shares (as determined under Section 13(d) of the 1934 Act), the transfer
from the Pledgor to such Secured Party of such number of shares by which such Secured Party’s and its other Attribution Parties’
aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and
shall be cancelled ab initio, and such Secured Party shall not have the power to vote or to transfer the Excess Shares. Upon delivery
of a written notice to the Company, a Secured Party may from time to time increase (with such increase not effective until the sixty-first
(61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified
in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after
such notice is delivered to the Company and (ii) any such increase or decrease will apply only to such Secured Party and its other Attribution
Parties and not to any other Secured Party that is not an Attribution Party of such Secured Party. For purposes of clarity, the Common
Shares in excess of the Maximum Percentage shall not be deemed to be beneficially owned by such Secured Party for any purpose including
for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability of a Secured Party to exercise its rights hereunder
and acquire any Common Shares from the Pledger to such Secured Party pursuant to this paragraph shall have any effect on the applicability
of the provisions of this paragraph with respect to any subsequent determination of transferability. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 14 to the extent necessary
to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership
limitation contained in this Section 14 or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitation contained in this paragraph may not be waived and shall apply to a successor Secured Party.
SECTION 15. Acknowledgment.
(a)
Each Secured Party hereby agrees and acknowledges that no other Secured Party has agreed to act for it as an administrative
or collateral agent, and each Secured Party is and shall remain solely responsible for the attachment, perfection and priority of all
Liens created by this Agreement or any other Security Document in favor of such Secured Party. No Secured Party shall have by reason of
this Agreement or any other Transaction Document an agency or fiduciary relationship with any other Secured Party. No Secured Party
(which term, as used in this sentence, shall include reference to each Secured Party’s officers, directors, employees, attorneys,
agents and affiliates and to the officers, directors, employees, attorneys and agents of such Secured Party’s affiliates) shall:
(i) have any duties or responsibilities except those expressly set forth in this Agreement and the other Security Documents or (ii) be
required to take, initiate or conduct any enforcement action (including any litigation, foreclosure or collection proceedings hereunder
or under any of the other Security Documents). Without limiting the foregoing, no Secured Party shall have any right of action whatsoever
against any other Secured Party as a result of such Secured Party acting or refraining from acting hereunder or under any of the Security
Documents except as a result and to the extent of losses caused by such Secured Party’s actual gross negligence or willful misconduct.
No Secured Party assumes any responsibility for any failure or delay in performance or breach by the Pledgor or any Secured Party of its
obligations under this Agreement or any other Transaction Document. No Secured Party makes to any other Secured Party any express
or implied warranty, representation or guarantee with respect to any Secured Obligations, Pledged Collateral, Transaction Document or
the Pledgor. No Secured Party nor any of its officers, directors, employees, attorneys or agents shall be responsible to any other Secured
Party or any of its officers, directors, employees, attorneys or agents for: (i) any recitals, statements, information, representations
or warranties contained in any of the Transaction Documents or in any certificate or other document furnished pursuant to the terms hereof;
(ii) the execution, validity, genuineness, effectiveness or enforceability of any of the Transaction Documents; (iii) the validity,
genuineness, enforceability, collectability, value, sufficiency or existence of any Pledged Collateral, or the attachment, perfection
or priority of any Lien therein; or (iv) the assets, liabilities, financial condition, results of operations, business, creditworthiness
or legal status of the Pledgor. No Secured Party nor any of its officers, directors, employees, attorneys or agents shall have any obligation
to any other Secured Party to ascertain or inquire into the existence of any default or Event of Default, the observance or performance
by the Pledgor of any of the duties or agreements of the Pledgor under any of the Transaction Documents or the satisfaction of any conditions
precedent contained in any of the Transaction Documents.
(b)
Each Secured Party hereby acknowledges and represents that it has, independently and without reliance upon any other Secured
Party, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of the Pledgor
and the Company and its own decision to enter into the Transaction Documents and to purchase the Notes, and each Secured Party has
made such inquiries concerning the Transaction Documents, the Pledged Collateral, the Company and the Pledgor as such Secured Party feels
necessary and appropriate, and has taken such care on its own behalf as would have been the case had it entered into the Transaction Documents
without any other Secured Party. Each Secured Party hereby further acknowledges and represents that the other Secured Parties have not
made any representations or warranties to it concerning the Pledgor, any of the Pledged Collateral or the legality, validity, sufficiency
or enforceability of any of the Transaction Documents. Each Secured Party also hereby acknowledges that it will, independently and without
reliance upon the other Secured Parties, and based upon such financial statements, documents and information as it deems appropriate at
the time, continue to make and rely upon its own credit decisions in taking or refraining to take any other action under this Agreement
or the Transaction Documents. No Secured Party shall have any duty or responsibility to provide any other Secured Party with any notices,
reports or certificates furnished to such Secured Party by the Pledgor or any credit or other information concerning the affairs, financial
condition, business or assets of the Company (or any of its affiliates) or any Pledgor which may come into possession of such Secured
Party
SECTION 16. Miscellaneous.
(a)
No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by the Pledgor and
the Required Holders, and no waiver of any provision of this Agreement, and no consent to any departure by the Pledgor therefrom, shall
be effective unless it is in writing and signed by the Required Holders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
(b)
No failure on the part of any Secured Party to exercise, and no delay in exercising, any right hereunder or under any other
Transaction Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The rights and remedies of the Secured Parties provided herein and in
the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The
rights of the each Secured Party under any Transaction Document against any party thereto are not conditional or contingent on any attempt
by such Secured Party to exercise any of its rights under any other Transaction Document against such party or against any other Person.
(c)
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
(d)
This Agreement shall create a continuing security interest in and Lien on the Pledged Collateral and shall (i) remain in
full force and effect until the termination of this Agreement in accordance with the terms hereof and (ii) be binding on the Pledgor
and his heirs and assigns and shall inure, together with all rights and remedies of each Secured Party and its successors, transferees
and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, each Secured party may assign or otherwise
transfer its rights and obligations under this Agreement and any other Transaction Document to any other Person pursuant to the terms
of the Securities Purchase Agreement, and such other Person shall thereupon become vested with all of the benefits in respect thereof
granted to such Secured Party herein or otherwise. Upon any such assignment or transfer, all references in this Agreement to such Secured
Party shall mean the assignee of such Secured Party. None of the rights or obligations of the Pledgor hereunder may be assigned or otherwise
transferred without the prior written consent of the Required Holders, and any such assignment or transfer without such consent shall
be null and void.
(e)
Notwithstanding anything to the contrary in this Agreement, (i) this Agreement (along with all powers of attorney granted
hereunder) and the security interests and Lien created hereby shall terminate and all rights to the Pledged Collateral shall revert to
the Pledgor upon the repayment in full and/or complete conversion to equity securities of the Company of all indebtedness obligations
owed by the Company to the Secured Parties under the Notes (including, without limitation, all principal, interest and fees related to
the Notes), and (ii) the Secured Parties will, upon the Pledgor’s request and at the Pledgor’s expense, (A) return to the
Pledgor such of the Pledged Collateral (to the extent delivered to such Secured Party) as shall not have been sold or otherwise disposed
of or applied pursuant to the terms hereof, and (B) execute and deliver to the Pledgor, without recourse, representation or warranty,
such documents as the Pledgor shall reasonably request to evidence such termination.
(f)
The internal laws, and not the laws of conflicts, of the State of New York shall govern the enforceability and validity
of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, except as required by
mandatory provisions of law and except to the extent that the validity and perfection or the perfection and the effect of perfection or
non-perfection of the security interest and Lien created hereby, or remedies hereunder, in respect of any particular Pledged Collateral
are governed by the law of a jurisdiction other than the State of New York.
(g)
Each party to this Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the United States District Court for the Southern District of New York sitting in Manhattan or the Commercial Division,
Civil Branch of the Supreme Court of the State of New York sitting in New York County in connection with any suit, action or proceeding
directly or indirectly arising out of, under or in connection with this Agreement or the other Transaction Documents or the transactions
contemplated hereby or thereby. No party to this Agreement may move to (i) transfer any such suit, action or proceeding brought in such
New York court or federal court to another jurisdiction, (ii) consolidate any such suit, action or proceeding brought in such New York
court or federal court with a suit, action or proceeding in another jurisdiction or (iii) dismiss any such suit, action or proceeding
brought in such New York court or federal court for the purpose of bringing the same in another jurisdiction. Each party to this Agreement
agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in any other jurisdiction
by suit on the judgment or in any other manner provided by law. Each party to this Agreement hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement, or the other Transaction Documents in any New York court
sitting in New York County or any federal court sitting in the Southern District of New York.
(h)
The Company hereby appoints Cogency Global Inc., with an address of 122 East 42nd Street, 18th Floor, New York, NY 10168,
as its agent for service of process in New York. Nothing contained herein shall affect the right of each Secured Party to serve process
in any other manner permitted by law or commence legal proceedings or otherwise proceed against the Pledgor or any property of the Pledgor
in any other jurisdiction.
(i) The
Pledgor irrevocably and unconditionally waives any right he may have to claim or recover in any legal action, suit or proceeding
referred to in this Section any special, exemplary, punitive or consequential damages.
(j) EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY SUIT, ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR OTHER
TRANSACTION DOCUMENTS.
(k)
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit
or affect any of the provisions hereof. 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.
(l) This
Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
[Signature
Page Follows]
In
Witness Whereof, the Pledgor, the Company and the Secured Parties have executed and delivered this Agreement as of the date first
above written.
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PLEDGOR: |
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MR. XUEYUAN WENG |
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By: |
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Mr. Xueyuan Weng |
[Signature
Page to Shareholder Pledge Agreement]
In
Witness Whereof, the Pledgor, the Company and the Secured Parties have executed and delivered this Agreement as of the date first
above written.
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SECURED PARTY: |
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Zion Asset Management Limited |
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By: |
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Name: |
CHEN, SHIH-CHANG |
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Title: |
Director |
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|
|
|
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Brixton GSH Fund LLC |
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|
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By: Brixton GSH Capital Management LLC, Manager |
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|
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By: |
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|
Name: |
Timothy J. Craddock |
| |
|
Title: |
Manager |
[Signature
Page to Shareholder Pledge Agreement]
In
Witness Whereof, the Pledgor, the Company and the Secured Parties have executed and delivered this Agreement as of the date first
above written.
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COMPANY: |
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GOLDEN SUN HEALTH TECHNOLOGY GROUP LIMITED |
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By: |
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Name: |
Xueyuan Weng |
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|
Title: |
Chief Executive Officer |
[Signature
Page to Shareholder Pledge Agreement]
SCHEDULE I TO PLEDGE
AGREEMENT
Pledged Shares
| Pledgor | |
Name of Issuer | |
Number of
Shares | |
% of
Shares | |
Class | |
Secured Party
to Initially
Hold Certificate
with respect to such
Pledged Shares |
| Xueyuan Weng | |
Golden Sun Health Technology Group Limited | |
403,000 | |
20.3% | |
B | |
Zion Asset Management Limited
|
| |
| |
| |
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Brixton GSH Fund LLC |
ANNEX I
TO
PLEDGE AGREEMENT
PLEDGE AMENDMENT
This Pledge Amendment, dated
__, 20__, is delivered pursuant to Section 4 of the Pledge Agreement referred to below. The undersigned hereby agrees that this
Pledge Amendment may be attached to the Amended and Restated Pledge Agreement, dated as of __, 20__, made by ___________ in favor of the
secured parties signatory thereto (the “Secured Parties”) as it may heretofore have been or hereafter may be amended
or otherwise modified or supplemented from time to time and that the promissory notes [and/or] shares or other equity interests listed
on this Pledge Amendment shall be hereby pledged and assigned to the Secured Parties and become part of the Pledged Collateral referred
to in such Pledge Agreement and shall secure all of the obligations referred to in such Pledge Agreement.
Pledged Shares
| Pledgor | |
Name of Issuer | |
Number of Shares or Other Equity Interests | |
Class | |
Certificate No(s) |
| |
| |
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|
| | |
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[PLEDGOR] |
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By: |
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|
[SHAREHOLDER] |
Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of October 28, 2024, is by and among Golden Sun Health Technology Group
Limited, a company organzied under the laws of Cayman Islands with principal executive office located at Room 503, Building C2, No. 1599
Xinjinqiao Road, Pudong New Area, Shanghai, China (the “Company”), and the undersigned buyers (each, a “Buyer,”
and collectively, the “Buyers”).
RECITALS
A. In
connection with the Securities Purchase Agreement by and among the parties hereto, dated as of October 28, 2024 (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 each Buyer the Notes (as defined in the Securities Purchase Agreement) which will be convertible into Conversion
Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of the Notes.
B. To
induce the Buyers to consummate the transactions contemplated by 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 “1933 Act”), and applicable state securities laws.
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 of the Buyers 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) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(b) “Effective
Date” means the date that the applicable Registration Statement has been declared effective by the SEC.
(c) “Effectiveness
Deadline” means (i) with respect to the Registration Statement required to be filed pursuant to Section 2(a), the earlier
of the (A) 120th calendar day after the Closing Date and (B) 5th 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) 120th calendar day following the date on which the Company was required to file such additional
Registration Statement and (B) 5th 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.
(d) “Filing
Deadline” means (i) with respect to the Registration Statement required to be filed pursuant to Section 2(a), the 90th
calendar day after the Closing Date 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)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.
(f) “Investor”
means a Buyer or any transferee or assignee of any Registrable Securities or Notes, as applicable, to whom a Buyer assigns its rights
under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee
or assignee thereof to whom a transferee or assignee of any Registrable Securities or Notes, as applicable, assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.
(g) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
or a government or any department or agency thereof.
(h) “register,”
“registered,” and “registration” refer to a registration effected by preparing and filing one or
more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness of such Registration
Statement(s) by the SEC.
(i) “Registrable
Securities” means (i) the Conversion Shares, and (ii) any share capital of the Company issued or issuable with respect to the
Conversion Shares or the Notes, including, without limitation, (1) as a result of any share split, share dividend, recapitalization, exchange
or similar event or otherwise and (2) any share capital of the Company into which the Common Shares (as defined in the Note) are converted
or exchanged and share capital of a Successor Entity (as defined in the Note) into which the Common Shares are converted or exchanged,
in each case, without regard to any limitations on conversion of the Notes.
(j) “Registration
Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering Registrable
Securities.
(k) “Required
Holders” shall have the meaning as set forth in the Securities Purchase Agreement.
(l) “Required
Registration Amount” means, as of any time of determination, the maximum number of Conversion Shares issuable upon conversion
of the Notes (assuming for purposes hereof that (w) all the Notes (as defined in the Securities Purchase Agreement) issuable pursuant
to the Securities Purchase Agreement shall have been issued at Closing (as defined in the Securities Purchase Agreement) (x) the Notes
are convertible at the Floor Price (as defined in the Note) as of such time of determination, (y) interest on the Notes shall accrue through
the first anniversary of the Closing Date and will be converted in Common Shares at the Floor Price as of such time of determination and
(z) any such conversion shall not take into account any limitations on the conversion of the Notes set forth in the Notes), all subject
to adjustment as provided in Section 2(d) and/or Section 2(f).
(m) “Rule
144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar
or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without
registration.
(n) “Rule
415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar
or successor rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.
(o) “SEC”
means the United States Securities and Exchange Commission or any successor thereto.
2.
Registration.
(a) Mandatory
Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline, file with
the SEC an Registration Statement on Form F-3 covering the resale of all of the Registrable Securities, provided that such
Registration Statement shall register for resale at least the number of Common Shares equal to the Required Registration Amount as
of the date such Registration Statement is filed with the SEC; provided further that if Form F-3 is unavailable for such a
registration, the Company shall use such other form as is required by Section 2(c). Such Registration Statement, and each other
Registration Statement required to be filed pursuant to the terms of this Agreement, shall contain (except if otherwise directed by
the Required Holders) the “Selling Shareholders” and “Plan of Distribution” sections in
substantially the form attached hereto as Exhibit B. The Company shall use its best efforts to have such Registration
Statement, and each other Registration Statement required to be filed pursuant to the terms of this Agreement, declared effective by
the SEC as soon as practicable, but in no event later than the applicable Effectiveness Deadline for such Registration
Statement.
(b) Ineligibility to
Use Form F-3. In the event that Form F-3 is not available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable Securities on Form F-1 or another appropriate form
reasonably acceptable to the Required Holders and (ii) undertake to register the resale of the Registrable Securities on
Form F-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of all Registration
Statements then in effect until such time as a Registration Statement on Form F-3 covering the resale of all the Registrable
Securities has been declared effective by the SEC and the prospectus contained therein is available for use.
(c) Sufficient Number
of Shares Registered. In the event the number of shares available under any Registration Statement is insufficient to cover all
of the Registrable Securities required to be covered by such Registration Statement or an Investor’s allocated portion of the
Registrable Securities pursuant to Section 2(h), the Company shall amend such Registration Statement (if permissible), or file
with the SEC a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least
the Required Registration Amount as of the Trading Day immediately preceding the date of the filing of such amendment or new
Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity
therefor arises (but taking account of any Staff position with respect to the date on which the Staff will permit such amendment to
the Registration Statement and/or such new Registration Statement (as the case may be) to be filed with the SEC). The Company shall
use its best efforts to cause such amendment to such Registration Statement and/or such new Registration Statement (as the case may
be) to become effective as soon as practicable following the filing thereof with the SEC, but in no event later than the applicable
Effectiveness Deadline for such Registration Statement. For purposes of the foregoing provision, the number of shares available
under a Registration Statement shall be deemed “insufficient to cover all of the Registrable Securities” if at any time
the number of Common Shares available for resale under the applicable Registration Statement is less than the product determined by
multiplying (i) the Required Registration Amount as of such time by (ii) 0.90. The calculation set forth in the foregoing sentence
shall be made without regard to any limitations on conversion, amortization and/or redemption of the Note (and such calculation
shall assume (A) that the Note are then convertible in full into Common Shares at the then prevailing Conversion Rate (as defined in
the Note), and (B) the outstanding principal amount of the Note remains outstanding through the scheduled Maturity Date (as defined
in the Note) and no redemptions of the Notes occur prior to the scheduled Maturity Date).
(d)
Effect of Failure to File and Obtain and Maintain Effectiveness of any Registration Statement. If (i) a Registration Statement
covering the resale of all of the Registrable Securities required to be covered thereby (disregarding any reduction pursuant to Section 2(f))
and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline for
such Registration Statement (a “Filing Failure”) (it being understood that if the Company files a Registration Statement
without affording each Investor and Legal Counsel the opportunity to review and comment on the same as required by Section 3(c) hereof,
the Company shall be deemed to not have satisfied this clause (i)(A) and such event shall be deemed to be a Filing Failure) or (B)
not declared effective by the SEC on or before the Effectiveness Deadline for such Registration Statement (an “Effectiveness
Failure”) (it being understood that if on the Business Day immediately following the Effective Date for such Registration Statement
the Company shall not have filed a “final” prospectus for such Registration Statement with the SEC under Rule 424(b) in accordance
with Section 3(b) (whether or not such a prospectus is technically required by such rule), the Company shall be deemed to not have
satisfied this clause (i)(B) and such event shall be deemed to be an Effectiveness Failure), (ii) other than during an Allowable Grace
Period (as defined below), on any day after the Effective Date of a Registration Statement sales of all of the Registrable Securities
required to be included on such Registration Statement (disregarding any reduction pursuant to Section 2(f)) 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, a suspension or delisting of
(or a failure to timely list) the Common Shares on the Principal Market (as defined in the Securities Purchase Agreement) or any other
limitations imposed by the Principal Market, or a failure to register a sufficient number of Common Shares or by reason of a stop order)
or the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”), or (iii) if
a Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for any reason,
and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure
to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been an issuer described in Rule 144(i)(1)(i)
or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Current
Public Information Failure”) as a result of which any of the Investors are unable to sell Registrable Securities without restriction
under Rule 144 (including, without limitation, volume restrictions), then, as partial relief for the damages to any holder by reason
of any such delay in, or reduction of, its ability to sell the underlying Common Shares (which remedy shall not be exclusive of any other
remedies available at law or in equity, including, without limitation, specific performance), the Company shall pay to each holder of
Registrable Securities relating to such Registration Statement an amount in cash equal to two percent (2%) of such Investor’s original
principal amount stated in such Investor’s Note on the Closing Date (1) on the date of such Filing Failure, Effectiveness Failure,
Maintenance Failure or Current Public Information Failure, as applicable, and (2) on every thirty (30) day anniversary of (I) a Filing
Failure until such Filing Failure is cured; (II) an Effectiveness Failure until such Effectiveness Failure is cured; (III) a Maintenance
Failure until such Maintenance Failure is cured; and (IV) a Current Public Information Failure until the earlier of (i) the date such
Current Public Information Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule 144
(in each case, pro rated for periods totaling less than thirty (30) days). The payments to which a holder of Registrable Securities shall
be entitled pursuant to this Section 2(e) are referred to herein as “Registration Delay Payments.” Following the
Registration Delay Payment for any particular event or failure (which shall be paid on the date of such event or failure, as set forth
above), without limiting the foregoing, if an event or failure giving rise to the Registration Delay Payments is cured prior to any thirty
(30) day anniversary of such event or failure, then such Registration Delay Payment shall be made on the third (3rd) Business
Day after such cure. In the event the Company fails to make Registration Delay Payments in a timely manner in accordance with the foregoing,
such Registration Delay Payments shall bear interest at the rate of two percent (2%) per month (prorated for partial months) until paid
in full. Notwithstanding the foregoing, no Registration Delay Payments shall be owed to an Investor (other than with respect to a Maintenance
Failure resulting from a suspension or delisting of (or a failure to timely list) the Common Shares on the Principal Market) with respect
to any period during which all of such Investor’s Registrable Securities may be sold by such Investor without restriction under
Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable).
(e) Offering.
Notwithstanding anything to the contrary contained in this Agreement, but subject to the payment of the Registration Delay Payments
pursuant to Section 2(e), in the event the staff of the SEC (the “Staff”) or the SEC seeks to characterize
any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of
securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit
such Registration Statement to become effective and used for resales in a manner that does not constitute such an offering and that
permits the continuous resale at the market by the Investors participating therein (or as otherwise may be acceptable to
each Investor) without being named therein as an “underwriter,” then the Company shall reduce the number of shares to be
included in such Registration Statement by all Investors until such time as the Staff and the SEC shall so permit such
Registration Statement to become effective as aforesaid. In making such reduction, the Company shall reduce the number of shares to
be included by all Investors on a pro rata basis (based upon the number of Registrable Securities otherwise required to be included
for each Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors are resulting in the
Staff or the SEC’s “by or on behalf of the Company” offering position, in which event the shares held by such
Investor or set of Investors shall be the only shares subject to reduction (and if by a set of Investors on a pro rata basis by such
Investors or on such other basis as would result in the exclusion of the least number of shares by all such Investors); provided,
that, with respect to such pro rata portion allocated to any Investor, such Investor may elect the allocation of such pro rata
portion among the Registrable Securities of such Investor. In addition, in the event that the Staff or the SEC requires any Investor
seeking to sell securities under a Registration Statement filed pursuant to this Agreement to be specifically identified
as an “underwriter” in order to permit such Registration Statement to become effective, and such Investor does not
consent to being so named as an underwriter in such Registration Statement, then, in each such case, the Company shall
reduce the total number of Registrable Securities to be registered on behalf of such Investor, until such time as the
Staff or the SEC does not require such identification or until such Investor accepts such identification and the manner thereof. Any
reduction pursuant to this paragraph will first reduce all Registrable Securities other than those issued pursuant to the
Securities Purchase Agreement. In the event of any reduction in Registrable Securities pursuant to this paragraph, an
affected Investor shall have the right to require, upon delivery of a written request to the Company signed by such Investor, the
Company to file a registration statement within twenty (20) days of such request (subject to any restrictions imposed by Rule 415 or
required by the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor, and the Company
shall following such request cause to be and keep effective such registration statement in the same manner as otherwise
contemplated in this Agreement for registration statements hereunder, in each case until such time as: (i) all Registrable
Securities held by such Investor have been registered and sold pursuant to an effective Registration Statement in a manner
acceptable to such Investor or (ii) all Registrable Securities may be resold by such Investor without restriction
(including, without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff position with respect to
“affiliate” status) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or (iii) such Investor agrees to be named as an underwriter in any such Registration Statement in a manner acceptable
to such Investor as to all Registrable Securities held by such Investor and that have not theretofore been included in a
Registration Statement under this Agreement (it being understood that the special demand right under this sentence may be exercised
by an Investor multiple times and with respect to limited amounts of Registrable Securities in order to permit the resale thereof by
such Investor as contemplated above).
(f) Piggyback
Registrations. Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement, if there is
not an effective Registration Statement covering all of the Registrable Securities or the prospectus contained therein is not
available for use and the Company shall determine to prepare and file with the SEC a registration statement or offering statement
relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities (other than
on Form F-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the
Company’s share option or other employee benefit plans), then the Company shall deliver to each Investor a written notice of
such determination and, if within fifteen (15) days after the date of the delivery of such notice, any such Investor shall so
request in writing, the Company shall include in such registration statement or offering statement all or any part of such
Registrable Securities such Investor requests to be registered; provided, however, the Company shall not be required to register any
Registrable Securities pursuant to this Section 2(g) that are eligible for resale pursuant to Rule 144 without restriction
(including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or that are the subject of a then-effective Registration Statement.
(g)
Allocation of Registrable Securities. The number of Registrable Securities included in any Registration Statement and any
increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number
of Registrable Securities held by each Investor at the time such Registration Statement covering such initial number of Registrable Securities
or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor’s
Registrable Securities, each transferee or assignee (as the case may be) that becomes an Investor shall be allocated a pro rata portion
of the then-remaining number of Registrable Securities included in such Registration Statement for such transferor or assignee (as the
case may be). Any Common Shares included in a Registration Statement and which remain allocated to any Person which ceases to hold any
Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number
of Registrable Securities then held by such Investors which are covered by such Registration Statement.
(h)
No Inclusion of Other Securities. The Company shall in no event include any securities other than Registrable Securities
on any Registration Statement filed in accordance herewith without the prior written consent of the Required Holders. Until the Applicable
Date (as defined in the Securities Purchase Agreement), the Company shall not enter into any agreement providing any registration rights
to any of its security holders, except as otherwise permitted under the Securities Purchase Agreement.
3.
Related Obligations.
The Company shall use its
best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof, and,
pursuant thereto, the Company shall have the following obligations:
(a) The Company shall
promptly prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities (but in no event
later than the applicable Filing Deadline) and use its best efforts to cause such Registration Statement to become effective as soon
as practicable after such filing (but in no event later than the Effectiveness Deadline). Subject to Allowable Grace Periods, the
Company shall keep each Registration Statement effective (and the prospectus contained therein available for use) pursuant to Rule
415 for resales by the Investors on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) at all
times until the earlier of (i) the date as of which all of the Investors may sell all of the Registrable Securities required to be
covered by such Registration Statement (disregarding any reduction pursuant to Section 2(f)) without restriction pursuant to
Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required by Rule
144(c)(1) (or Rule 144(i)(2), if applicable) or (ii) the date on which the Investors shall have sold all of the Registrable
Securities covered by such Registration Statement (the “Registration Period”). Notwithstanding anything to the
contrary contained in this Agreement, the Company shall ensure that, when filed and at all times while effective, each Registration
Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including, without limitation,
all amendments and supplements thereto) used in connection with such Registration Statement (1) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements
therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading and (2) will
disclose (whether directly or through incorporation by reference to other SEC filings to the extent permitted) all material
information regarding the Company and its securities. The Company shall submit to the SEC, within one (1) Business Day after the
later of the date that (i) the Company learns that no review of a particular Registration Statement will be made by the Staff or
that the Staff has no further comments on a particular Registration Statement (as the case may be) and (ii) the consent of Legal
Counsel is obtained pursuant to Section 3(c) (which consent shall be immediately sought), a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than twenty-four (24) hours after the submission of
such request. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon as
practicable, but in no event later than fifteen (15) days after the receipt of comments by or notice from the SEC that an amendment
is required in order for a Registration Statement to be declared effective.
(b)
Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including, without
limitation, post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with each
such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary
to keep each such Registration Statement effective at all times during the Registration Period for such Registration Statement, and, during
such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company required
to be 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; provided, however,
by 8:30 a.m. (New York time) on the Business Day immediately following each Effective Date, the Company shall file with the SEC in accordance
with Rule 424(b) under the 1933 Act the final prospectus to be used in connection with sales pursuant to the applicable Registration Statement
(whether or not such a prospectus is technically required by such rule). In the case of amendments and supplements to any Registration
Statement which are required to be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b))
by reason of the Company filing a report on Form 6-K, Form 20-F or any analogous report under the Securities Exchange Act of 1934, as
amended (the “1934 Act”), the Company shall, if permitted under the applicable rules and regulations of the SEC, have
incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with
the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such
Registration Statement.
(c) The Company shall
(A) permit Legal Counsel and legal counsel for each other Investor to review and comment upon (i) each Registration Statement at
least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to each Registration Statement
(including, without limitation, the prospectus contained therein) (except for Annual Reports on Form 20-F, Report of Foreign Issuer
on Form 6-K, and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B)
not file any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel or any legal counsel for any
other Investor reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto or to any prospectus contained therein without the prior consent of Legal Counsel,
which consent shall not be unreasonably withheld. The Company shall promptly furnish to Legal Counsel and legal counsel for each
other Investor, without charge, (i) copies of any correspondence from the SEC or the Staff to the Company or its representatives
relating to each Registration Statement, provided that such correspondence shall not contain any material, non-public information
regarding the Company or any of its Subsidiaries (as defined in the Securities Purchase Agreement), (ii) after the same is
prepared and filed with the SEC, one (1) copy of each Registration Statement and any amendment(s) and supplement(s) thereto,
including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by
an Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one (1) copy of the prospectus
included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with
Legal Counsel and legal counsel for each other Investor in performing the Company’s obligations pursuant to this Section
3.
(d)
The Company shall promptly furnish to each Investor whose Registrable Securities are included in any Registration Statement, without
charge, (i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration Statement and any amendment(s)
and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference,
if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each Registration Statement,
ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request from time to time) and (iii) such other documents, including, without limitation,
copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition
of the Registrable Securities owned by such Investor.
(e) The Company shall
use its best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by
Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky”
laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including,
without limitation, 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, the
Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 3(e), (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
Legal Counsel, legal counsel for each other Investor and 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 threatening of any proceeding for such purpose.
(f) The Company shall
notify Legal Counsel, legal counsel for each other Investor and each Investor in writing of the happening of any event, as promptly
as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then
in effect, may include 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 the light of the circumstances under which they were made, not misleading (provided
that in no event shall such notice contain any material, non-public information regarding the Company or any of its Subsidiaries),
and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement and such prospectus
contained therein to correct such untrue statement or omission and deliver ten (10) copies of such supplement or amendment to Legal
Counsel, legal counsel for each other Investor and each Investor (or such other number of copies as Legal Counsel, legal counsel for
each other Investor or such Investor may reasonably request). The Company shall also promptly notify Legal Counsel, legal counsel
for each other Investor and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, when a Registration Statement or any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel, legal counsel for each other Investor and each Investor by e-mail on the same day
of such effectiveness and by overnight mail), and when the Company receives written notice from the SEC that a Registration
Statement or any post-effective amendment will be reviewed by the SEC, (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information, (iii) of the Company’s reasonable determination that
a post-effective amendment to a Registration Statement would be appropriate; and (iv) of the receipt of any request by the SEC or
any other federal or state governmental authority for any additional information relating to the Registration Statement or any
amendment or supplement thereto or any related prospectus. The Company shall respond as promptly as practicable to any comments
received from the SEC with respect to each Registration Statement or any amendment thereto (it being understood and agreed that the
Company’s response to any such comments shall be delivered to the SEC no later than fifteen (15) Business Days after the
receipt thereof).
(g)
The Company shall (i) use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of each
Registration Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the loss of an exemption
from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible moment and (ii) notify Legal Counsel, legal counsel for each
other Investor and each Investor who holds Registrable Securities 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.
(h)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, at the request of any Investor, the Company shall furnish to such Investor,
on the date of the effectiveness of such Registration Statement and thereafter from time to time on such dates as an Investor may reasonably
request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and
(ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope
and substance as is customarily given in an underwritten public offering, addressed to the Investors.
(i)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, upon the written request of such Investor, the Company shall make available
for inspection by (i) such Investor, (ii) legal counsel for such Investor and (iii) one (1) firm of accountants or other agents retained
by such Investor (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably
request; provided, however, each Inspector shall agree in writing to hold in strict confidence and not to make any disclosure (except
to such Investor) or use of any Record or other information which the Company’s board of directors determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless (1) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (2) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or
(3) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement
or any other Transaction Document (as defined in the Securities Purchase Agreement). Such Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company
and such Investor, if any) shall be deemed to limit any Investor’s ability to sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations.
(j)
The Company shall hold in confidence and not make any disclosure of information concerning an 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 or is otherwise required to be disclosed in
such Registration Statement pursuant to the 1933 Act, (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 Transaction Document. The Company agrees
that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at such Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
(k)
Without limiting any obligation of the Company under the Securities Purchase Agreement, the Company shall use its best efforts
either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each securities exchange
on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities
is then permitted under the rules of such exchange, (ii) secure designation and quotation of all of the Registrable Securities covered
by each Registration Statement on an eligible market (as defined in the Securities Purchase Agreement), or (iii) if, despite the Company’s
best efforts to satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding clauses (i) or
(ii), without limiting the generality of the foregoing, to use its best efforts to arrange for at least two market makers to register
with the Financial Industry Regulatory Authority (“FINRA”) as such with respect to such Registrable Securities. In
addition, the Company shall cooperate with each Investor and any broker or dealer through which any such Investor proposes to sell its
Registrable Securities in effecting a filing with FINRA pursuant to FINRA Rule 5110 as requested by such Investor. The Company shall pay
all fees and expenses in connection with satisfying its obligations under this Section 3(k).
(l)
The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts (as the case may be)
as the Investors may reasonably request from time to time and registered in such names as the Investors may request.
(m)
If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor and subject to
Section 3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information
with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms
of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement
or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
and (iii) supplement or make amendments to any Registration Statement or prospectus contained therein if reasonably requested by an Investor
holding any Registrable Securities.
(n)
The Company shall use its best efforts to cause the Registrable Securities covered by a Registration Statement 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.
(o)
The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal
quarter next following the applicable Effective Date of each Registration Statement.
(p)
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.
(q)
Within one (1) 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 Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.
(r)
Notwithstanding anything to the contrary herein (but subject to the last sentence of this Section 3(r)), at any time after
the Effective Date of a particular Registration Statement, the Company may delay the disclosure of material, non-public information concerning
the Company or any of its Subsidiaries the disclosure of which at the time is not, in the good faith opinion of the board of directors
of the Company, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace
Period”), provided that the Company shall promptly notify the Investors in writing of the (i) existence of material, non-public
information giving rise to a Grace Period (provided that in each such notice the Company shall not disclose the content of such material,
non-public information to any of the Investors) and the date on which such Grace Period will begin and (ii) date on which such Grace
Period ends, provided further that (I) no Grace Period shall exceed ten (10) consecutive days and during any three hundred sixty five
(365) day period all such Grace Periods shall not exceed an aggregate of thirty (30) days, (II) the first day of any Grace Period must
be at least five (5) Trading Days after the last day of any prior Grace Period and (III) no Grace Period may exist during the sixty
(60) Trading Day period immediately following the Effective Date of such Registration Statement (provided that such sixty (60) Trading
Day period shall be extended by the number of Trading Days during such period and any extension thereof contemplated by this proviso during
which such Registration Statement is not effective or the prospectus contained therein is not available for use) (each, an “Allowable
Grace Period”). For purposes of determining the length of a Grace Period above, such Grace Period shall begin on and include
the date the Investors receive the notice referred to in clause (i) above and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) above and the date referred to in such notice. The provisions of Section 3(g) hereof
shall not be applicable during the period of any Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again
be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary contained in this Section 3(r), the Company shall cause
its transfer agent to deliver unlegended Common 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 such Investor has entered into a contract for sale,
and delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, prior to such
Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.
(s) The Company shall
take all other reasonable actions necessary to expedite and facilitate disposition by each Investors of its Registrable Securities
pursuant to each Registration Statement.
(t)
Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure
or filing with the SEC, the Principal Market or any Eligible Market and any Buyer being deemed an underwriter by the SEC shall not relieve
the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Securities Purchase Agreement);
provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the "Plan of Distribution"
section attached hereto as Exhibit B in the Registration Statement.
(u)
Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing
the rights granted to the Buyers in this Agreement or otherwise conflicts with the provisions hereof.
4.
Obligations of the Investors.
(a) At least five (5)
Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify each Investor in
writing of the information the Company requires from each such Investor with respect to such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself,
the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be
reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute
such documents in connection with such registration as the Company may reasonably request.
(b)
Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from
such Registration Statement.
(c) Each Investor agrees
that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the
first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no
supplement or amendment is required. Notwithstanding anything to the contrary in this Section 4(c), the Company shall cause its
transfer agent to deliver unlegended Common 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 such 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(g) or the first sentence of Section 3(f) and for which such Investor has not yet settled.
5.
Expenses of Registration.
All reasonable expenses, other
than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2
and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, FINRA filing fees
(if any) and fees and disbursements of counsel for the Company shall be paid by the Company.
6.
Indemnification.
(a) To the fullest
extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and each of its
directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) and each
Person, if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the directors, officers,
shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each,
an “Indemnified Person”), against any losses, obligations, claims, damages, liabilities, contingencies,
judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’ fees and costs
of defense and investigation), 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 Person 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 preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the 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 1933
Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this
Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to
Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and
payable, for any legal fees 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):
(i) 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 for such Indemnified Person expressly
for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) 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 or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of any of the Registrable Securities by any of the Investors
pursuant to Section 9.
(b)
In connection with any Registration Statement in which an Investor is participating, such Investor agrees to severally and not
jointly 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 who signs the Registration Statement and each Person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages
to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise
out of or are 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(c) and the below provisos in this Section 6(b), such Investor will reimburse an Indemnified
Party any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such
Claim; provided, however, 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 or delayed, provided further that such 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 applicable 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 and shall survive the transfer of any
of the Registrable Securities by any of the Investors pursuant to Section 9.
(c) Promptly after
receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of the commencement
of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party (as the case may be) 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, an Indemnified
Person or Indemnified Party (as the case may be) shall have the right to retain its own counsel with the fees and expenses of such
counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses;
(ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably
satisfactory to such Indemnified Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to
any such Claim (including, without limitation, any impleaded parties) include both such Indemnified Person or Indemnified Party (as
the case may be) and the indemnifying party, and such Indemnified Person or such Indemnified Party (as the case may be) shall have
been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Person
or such Indemnified Party and the indemnifying party (in which case, if such Indemnified Person or such Indemnified Party (as the
case may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying
party, then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall be at the expense
of the indemnifying party, provided further that in the case of clause (iii) above the indemnifying party shall not be responsible
for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnified Person or Indemnified Party
(as the case may be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate 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 (as the case
may be) which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person (as the
case may be) reasonably 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, 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 (as the case may be), 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 (as the case may be) of a release from all liability in
respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified
Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person (as the case may be) 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 (as the case may be) under this Section 6, except to the extent that the indemnifying party is
materially and adversely 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 and
contribution 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:
(i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards
set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which Person is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution
by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the applicable
sale of such Registrable Securities pursuant to such Registration Statement. Notwithstanding the provisions of this Section 7, no
Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received
by such Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that such
Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or
alleged untrue statement or omission or alleged omission.
8.
Reports Under the 1934 Act.
With a view to making available
to the Investors the benefits of Rule 144, the Company agrees to:
(a) make and keep public
information available, as those terms are understood and defined in Rule 144;
(b)
file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements (it being understood and agreed that nothing herein shall limit any obligations
of the Company under the Securities Purchase Agreement) and the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and
(c) furnish to each
Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act and the 1934 Act, (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
with the SEC if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.
9.
Assignment of Registration Rights.
All or any portion of the
rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee (as the case may be) of all
or any portion of such Investor’s Registrable Securities, or Notes if: (i) such Investor agrees in writing with such transferee
or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is, within a reasonable time after such
transfer or assignment (as the case may be), furnished with written notice of (a) the name and address of such transferee or assignee
(as the case may be), and (b) the securities with respect to which such registration rights are being transferred or assigned (as the
case may be); (iii) immediately following such transfer or assignment (as the case may be) the further disposition of such securities
by such transferee or assignee (as the case may be) is restricted under the 1933 Act or applicable state securities laws if so required;
(iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence such transferee or assignee
(as the case may be) agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer or assignment
(as the case may be) shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement, the Notes;
and (vi) such transfer or assignment (as the case may be) shall have been conducted in accordance with all applicable federal and state
securities laws.
10.
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 the Required Holders; provided that any such amendment or waiver that complies with the
foregoing, but that disproportionately, materially and adversely affects the rights and obligations of any Investor relative to the comparable
rights and obligations of the other Investors shall require the prior written consent of such adversely affected Investor. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company, provided that no such amendment
shall be effective to the extent that it (1) applies to less than all of the holders of Registrable Securities or (2) imposes any obligation
or liability on any Investor without such Investor’s prior written consent (which may be granted or withheld in such Investor’s
sole discretion). No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement
unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.
11.
Miscellaneous.
(a) Solely for purposes
of this Agreement, 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. 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 such record owner of such Registrable Securities.
(b)
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending
party does not receive an automatically generated message from the recipient’s email server that such e-mail could not be delivered
to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in
each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications shall
be:
If to the Company:
Golden Sun Health Technology Group Limited
Room 503, Building C2, No. 1599
Xinjinqiao Road
Pudong New Area, Shanghai, China
Att.: Mr. Xueyuan Weng, CEO
Tel: (+86) 577-56765303
Email: 1667920909@qq.com
If to the Transfer Agent:
Transhare Corporation
Bayside Center 1
17755 US Highway 19 N, Suite 140
Clearwater, FL 33764
Tel: 303-662-1112
Attention: Jinlong Liu
E-Mail: jliu@transhare.com1
If to Legal Counsel:
GH Law Firm LLC
880 Third Avenue, 5th Floor
New York, NY 10022
(212) 705-8798
Attention: Charles Y. Fu, Esq.
E-mail: charlesfuesq@gmail.com
If to a Buyer, to its mailing address and/or email
address set forth on the Schedule of Buyers attached to the Securities Purchase Agreement, with copies to such Buyer’s representatives
as set forth on the Schedule of Buyers, or to such other mailing address and/or email address and/or to the attention of such other Person
as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change,
provided that the Company shall only be provided notices sent to the lead investor. Written confirmation of receipt (A) given by
the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s
e-mail containing the time, date and recipient’s e-mail or (C) provided by a courier or overnight courier service shall be rebuttable
evidence of personal service, receipt by e-mail or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.
| 1 | Company to confirm and conform SPA notice section. |
(c) 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. The Company and each Investor acknowledge and agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement by any other party hereto and to enforce specifically the terms and provisions hereof (without the
necessity of showing economic loss and without any bond or other security being required), this being in addition to any other
remedy to which any party may be entitled by law or equity.
(d)
All 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 provision of law or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, 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. The Company hereby appoints the service agent (as defined in the Securities Purchase Agreement), as its agent for service
of process in New York. Each party hereby irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, 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. The choice of the laws of the State of New York as the governing law of this Agreement
is a valid choice of law and would be recognized and given effect to in any action brought before a court of competent jurisdiction in
New York. The Company or any of their respective properties, assets or revenues does not have any right of immunity under New York law,
from any legal action, suit or proceeding, from the giving of any relief in any such legal action, suit or proceeding, from set-off or
counterclaim, from the jurisdiction of any New York or United States federal court, from service of process, attachment upon or prior
to judgment, or attachment in aid of execution of judgment, or from execution of a judgment, or other legal process or proceeding for
the giving of any relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any
other matter under or arising out of or in connection with this Agreement; and, to the extent that the Company, or any of its properties,
assets or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may
at any time be commenced, the Company hereby waives such right to the extent permitted by law and hereby consents to such relief and enforcement
as provided in this Agreement and the other Transaction Documents.
(e) If any provision of
this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the
remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or unenforceable provision(s).
(f) This Agreement, the
other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto and thereto solely with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein supersede all prior agreements and understandings among the parties hereto solely with respect to the
subject matter hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction Document shall
(or shall be deemed to) (i) have any effect on any agreements any Investor has entered into with the Company or any of its
Subsidiaries prior to the date hereof with respect to any prior investment made by such Investor in the Company, (ii) waive, alter,
modify or amend in any respect any obligations of the Company or any of its Subsidiaries or any rights of or benefits to any
Investor or any other Person in any agreement entered into prior to the date hereof between or among the Company and/or any of its
Subsidiaries and any Investor and all such agreements shall continue in full force and effect or (iii) limit any obligations of the
Company under any of the other Transaction Documents.
(g)
Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision hereof
be enforced by, any Person, other than the parties hereto, their respective permitted successors and assigns and the Persons referred
to in Sections 6 and 7 hereof.
(h)
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
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.
(i)
This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original, but all of which
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party. In the event that any signature is delivered by facsimile transmission or by an email 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.
(j)
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(k)
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. Notwithstanding anything to the contrary set forth in Section 10, terms
used in this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date
in such other Transaction Documents unless otherwise consented to in writing by each Investor.
(l)
All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders, determined as if all of the outstanding Notes then held by the Investors have been
converted for Registrable Securities without regard to any limitations on redemption, amortization and/or conversion of the Notes then
held by Investors.
(m)
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.
(n)
The obligations of each Investor under this Agreement and the other Transaction Documents are several and not joint with the obligations
of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under
this Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by
any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors
do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that
the Investors are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated
by the Transaction Documents or any matters, and the Company acknowledges that the Investors are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by this Agreement or
any of the other the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary
for any other Investor to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect
to the obligations of the Company contained herein was solely in the control of the Company, not the action or decision of any Investor,
and was done solely for the convenience of the Company and not because it was required or requested to do so by any Investor. It is expressly
understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and
an Investor, solely, and not between the Company and the Investors collectively and not between and among Investors.
[signature page follows]
IN WITNESS WHEREOF, each Buyer and the Company
have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.
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COMPANY: |
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GOLDEN SUN HEALTH TECHNOLOGY GROUP LIMITED |
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By: |
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Name: |
Xueyuan Weng |
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Title: |
CEO |
IN WITNESS WHEREOF, each Buyer and the Company
have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.
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BUYERS: |
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BRIXTON GSH FUND LLC |
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By: Brixton GSH Capital Management LLC, Manager |
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By: |
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Name: |
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Title: |
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ZION ASSET MANAGEMENT LIMITED |
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By: |
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Name: |
CHEN, SHIH-CHANG |
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Title: |
Director |
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
______________________
______________________
______________________
Attention: _____________
| Re: | Golden Sun Health Technology Group Limited |
Ladies and Gentlemen:
[We are][I am] counsel to Golden
Sun Health Technology Group Limited, a company organzied under the laws of Cayman Islands (the “Company”), and have
represented the Company in connection with that certain Securities Purchase Agreement (the “Securities Purchase Agreement”)
entered into by and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to which
the Company issued to the Holders senior secured convertible notes (the “Notes”) convertible into the Company’s
common shares, no par value per share (the “Common Shares”). Pursuant to the Securities Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant
to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement),
including the Common Shares issuable upon conversion of the Notes, under the Securities Act of 1933, as amended (the “1933 Act”).
In connection with the Company’s obligations under the Registration Rights Agreement, on ____________ ___, 20__, the Company filed
a Registration Statement on Form [F-1][F-3] (File No. 333-_____________) (the “Registration Statement”) with the
Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names each of the Holders
as a selling shareholder thereunder.
In connection with the foregoing,
[we][I] advise you that [a member of the SEC’s staff has advised [us][me] by telephone that [the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] [an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] has been posted
on the web site of the SEC at www.sec.gov] and [we][I] have no knowledge, after a review of information posted on the website of the SEC
at http://www.sec.gov/litigation/stoporders.shtml, that any stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933
Act pursuant to the Registration Statement.
This letter shall serve as our
standing opinion to you that the Common Shares underlying the Notes are freely transferable by the Holders pursuant to the Registration
Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of such Common Shares
to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated _________ __, 20__.
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Very truly yours, |
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[ISSUER’S COUNSEL] |
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By: |
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EXHIBIT B
SELLING SHAREHOLDERS
The common shares being offered
by the selling shareholders are those issuable to the selling shareholders upon conversion of the notes. For additional information regarding
the issuance of the notes, see “Private Placement of Note” above. We are registering the common shares in order to permit
the selling shareholders to offer the shares for resale from time to time. Except for the ownership of the notes issued pursuant to the
Securities Purchase Agreement, the selling shareholders have not had any material relationship with us within the past three years.
The table below lists the
selling shareholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder) of the common shares held by each of the selling shareholders. The
second column lists the number of common shares beneficially owned by the selling shareholders, based on their respective ownership of
common shares and notes, as of ________, 20__, assuming conversion of the notes held by each such selling shareholder on that date but
taking account of any limitations on conversion set forth therein.
The third column lists the
common shares being offered by this prospectus by the selling shareholders and does not take in account any limitations on conversion
of the notes set forth therein.
In accordance with the terms
of a registration rights agreement with the holders of the notes, this prospectus generally covers the resale of the sum of the maximum
number of common shares issued or issuable pursuant to the notes, including payment of interest on the notes through [DATE], determined
as if the outstanding notes (including interest on the notes through [DATE]) were converted in full (without regard to any limitations
on conversion contained therein solely for the purpose of such calculation) at the $[ ] floor price of the notes then in effect calculated
as of the trading day immediately preceding the date this registration statement was initially filed with the SEC. Because the conversion
price and alternate conversion price of the notes may be adjusted, the number of shares that will actually be issued may be more or less
than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the selling
shareholders pursuant to this prospectus.
Under the terms of the notes,
a selling shareholder may not convert the notes to the extent (but only to the extent) such selling shareholder or any of its affiliates
would beneficially own a number of shares of our common shares which would exceed 4.99% of the outstanding shares of the Company. The
number of shares in the second column reflects these limitations. The selling shareholders may sell all, some or none of their shares
in this offering. See “Plan of Distribution.”
| Name of Selling Shareholder | |
Number of Common
Shares Owned Prior to
Offering | |
Maximum Number of
Common Shares to be Sold
Pursuant to this Prospectus | |
Number of Common
Shares of Owned After
Offering |
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PLAN OF DISTRIBUTION
We are registering the common
shares issuable upon conversion of the notes to permit the resale of these common shares by the holders of the notes from time to time
after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the common shares.
We will bear all fees and expenses incident to our obligation to register the common shares.
The selling shareholders
may sell all or a portion of the common shares held by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the common shares are sold through underwriters or broker-dealers, the selling shareholders will be responsible
for underwriting discounts or commissions or agent’s commissions. The common shares may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated
prices. These sales may be effected in transactions, which may involve crosses
or block transactions, pursuant to one or more of the following methods:
| ● | on
any national securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale; |
| ● | in
the over-the-counter market; |
| ● | in
transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| ● | through
the writing or settlement of options, whether such options are listed on an options exchange
or otherwise; |
| ● | ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block
trades in which the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● | an
exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately
negotiated transactions; |
| ● | short
sales made after the date the Registration Statement is declared effective by the SEC; |
| ● | broker-dealers
may agree with a selling security holder to sell a specified number of such shares at a stipulated
price per share; |
| ● | a
combination of any such methods of sale; and |
| ● | any
other method permitted pursuant to applicable law. |
The
selling shareholders may also sell common shares under Rule 144 promulgated under the Securities Act of 1933, as amended, if available,
rather than under this prospectus. In addition, the selling shareholders may transfer the common shares by other means not described
in this prospectus. If the selling shareholders effect such transactions by selling common shares to or through underwriters, broker-dealers
or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from
the selling shareholders or commissions from purchasers of the common shares for whom they may act as agent or to whom they may sell
as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of
those customary in the types of transactions involved). In connection with sales of the common shares or otherwise, the selling shareholders
may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the common shares in the course of
hedging in positions they assume. The selling shareholders may also sell common shares short and deliver common shares covered by this
prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may
also loan or pledge common shares to broker-dealers that in turn may sell such shares.
The selling shareholders may
pledge or grant a security interest in some or all of the notes or common shares owned by them and, if they default in the performance
of their secured obligations, the pledgees or secured parties may offer and sell the common shares from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary,
the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this
prospectus. The selling shareholders also may transfer and donate the common shares in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
To the extent required by
the Securities Act and the rules and regulations thereunder, the selling shareholders and any broker-dealer participating in the distribution
of the common shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid,
or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the
Securities Act. At the time a particular offering of the common shares is made, a prospectus supplement, if required, will be distributed,
which will set forth the aggregate amount of common shares being offered and the terms of the offering, including the name or names of
any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any
discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws
of some states, the common shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some
states the common shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
There can be no assurance
that any selling shareholder will sell any or all of the common shares registered pursuant to the registration statement, of which this
prospectus forms a part.
The selling shareholders and
any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange
Act, which may limit the timing of purchases and sales of any of the common shares by the selling shareholders and any other participating
person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the common shares
to engage in market-making activities with respect to the common shares. All of the foregoing may affect the marketability of the common
shares and the ability of any person or entity to engage in market-making activities with respect to the common shares.
We will pay all expenses of
the registration of the common shares pursuant to the registration rights agreement, estimated to be $[ ]
in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, a selling shareholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities Act in accordance
with the registration rights agreements or the selling shareholders will be entitled to contribution. We may be indemnified by the selling
shareholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished
to us by the selling shareholder specifically for use in this prospectus, in accordance with the related registration rights agreements
or we may be entitled to contribution.
Once sold under the registration
statement, of which this prospectus forms a part, the common shares will be freely tradable in the hands of persons other than our affiliates.
Exhibit 10.5
SECURITY AND PLEDGE
AGREEMENT
SECURITY AND PLEDGE AGREEMENT,
dated as of October 28, 2024 (this “Agreement”), made by Golden Sun Health Technology Group Limited, a company organized
under the laws of Cayman Islands, with principal executive office located at Room 503, Building C2, No. 1599 Xinjinqiao Road, Pudong New
Area, Shanghai, China (the “Company”), and each of the undersigned direct and indirect Domestic Subsidiaries (as defined
below) of the Company from time to time, if any (each a “Grantor” and together with the Company, collectively, the
“Grantors”), in favor of Zion Asset Management Limited and Brixton GSH Fund LLC, in its capacity as collateral agent
(together with its successors and assignees, in such capacity, the “Collateral Agent”) for the Noteholders (as defined
below) party to the Securities Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Company is party
to that certain Securities Purchase Agreement, dated as of October 28, 2024 (as amended, modified, supplemented, extended, renewed, restated
or replaced from time to time in accordance with the terms thereof, the “Securities Purchase Agreement”) by and among
the Company and each party listed as a “Buyer” on the Schedule of Buyers attached thereto (each a “Buyer”
and collectively, the “Buyers”), pursuant to which the Company shall be required to sell, and the Buyers shall purchase
or have the right to purchase, the “Notes” issued pursuant thereto (as such Notes may be amended, modified, supplemented,
extended, renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”);
WHEREAS, certain Grantors (other
than the Company) from time to time (each a “Guarantor” and collectively, the “Guarantors”) may
execute and deliver one or more guarantees (each, a “Guaranty” and collectively, the “Guaranties”)
in form and substance acceptable to and in favor of the Collateral Agent, for the ratable benefit of itself and the Noteholders, with
respect to the Company’s obligations under the Securities Purchase Agreement, the Notes and the other “Transaction Documents”
(as defined below);
WHEREAS, it is a condition precedent
to the Buyers’ obligation to purchase the Notes that the Grantors shall have executed and delivered to the Collateral Agent this
Agreement providing for the grant to the Collateral Agent, for the ratable benefit of itself and the Noteholders, of a valid, enforceable,
and perfected security interest in all personal property of each Grantor to secure all of the Company’s obligations under the Transaction
Documents and the Guarantors’ obligations under the Guaranties, as applicable; and
WHEREAS, the Grantors are Affiliates
that are part of a common enterprise such that each Grantor will derive substantial direct and indirect financial and other benefits from
the consummation of the transactions contemplated under the Transaction Documents and, accordingly, the consummation of such transactions
are in the best interests of each Grantor;
NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Grantor
agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows:
Section
1. Definitions.
(a) Reference
is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used in this Agreement
and the recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in the Code, and which are not otherwise
defined herein shall have the same meanings herein as set forth therein; provided that terms used herein which are defined in the
Code on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of the Code except as the
Collateral Agent may otherwise determine in its sole and absolute discretion.
(b) Without
limiting the generality of, and subject to the proviso at the end of, Section 1(a) of this Agreement, the following terms shall have the
respective meanings provided for in the Code: “Accounts”, “Account Debtor”, “Cash Proceeds”, “Certificate
of Title”, “Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”, “Commodity Contracts”,
“Deposit Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Fixtures”,
“General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”,
“Letter-of-Credit Rights”, “Noncash Proceeds”, “Payment Intangibles”, “Proceeds”, “Promissory
Notes”, “Security”, “Record”, “Security Account”, “Software”, “Supporting
Obligations” and “Uncertificated Securities”.
(c) As
used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally
to both the singular and plural forms of such terms:
“Affiliate”
of any Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control with such
Person and any officer or director of such Person. Without limiting the generality of the foregoing, a Person shall be deemed to be “controlled
by” any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
“Bankruptcy Code”
means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency
or similar laws).
“Bankruptcy Event
of Default” means any Event of Default under Section 4(a)(viii) of the Note.
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to
remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar
orders or restrictions or the closure of any physical branch locations at the direction of any Governmental Authority so long as the electronic
funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers
on such day.
“Buyer”
or “Buyers” shall have the meaning set forth in the recitals hereto.
“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities
exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any Person that is not an individual
or a corporation, any and all partnership, membership, trust or other equity interests of such Person.
“Closing Date”
means the date the Company initially issues the Notes pursuant to the terms of the Securities Purchase Agreement.
“Code”
means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Code” means the Uniform Commercial
Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect
of perfection or non-perfection or priority.
“Collateral”
shall have the meaning set forth in Section 3(a) of this Agreement.
“Collateral Agent”
shall have the meaning set forth in the preamble hereto.
“Company”
shall have the meaning set forth in the preamble hereto.
“Controlled Account
Agreement” means a deposit account control agreement or securities account control agreement with respect to a Pledged Account,
pursuant to which the Collateral Agent is granted control over such Pledged Account in a manner that perfects its security interest in
such Pledged Account under applicable law, all in form and substance satisfactory to the Collateral Agent, as the same may be amended,
modified, supplemented, extended, renewed, restated or replaced from time to time.
“Controlled Accounts”
means the Deposit Accounts, Commodity Accounts, Securities Accounts, and/or Foreign Currency Controlled Account of the Grantors listed
on Schedule IV attached hereto.
“Controlled Account
Bank” shall have the meaning set forth in Section 6(i) of this Agreement.
“Copyright Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to use or sell any works covered by any Copyright (including, without limitation, all Copyright Licenses set forth
in Schedule II hereto).
“Copyrights”
means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout the
universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of
authorship fixed in any tangible medium of expression, acquired or used by any Grantor (including, without limitation, all copyrights
described in Schedule II hereto), all applications, registrations and recordings thereof (including, without limitation, applications,
registrations and recordings in the United States Copyright Office or in any similar office or agency of the United States or any other
country or any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals
thereof.
“Domestic Subsidiary”
means any Subsidiary other than a Foreign Subsidiary.
“Event of Default”
shall have the meaning set forth in Section 4(a) of the Notes.
“Excluded Collateral”
means such portion of the voting Capital Stock of any Foreign Subsidiary in excess of 65% of the issued and outstanding voting Capital
Stock of such Foreign Subsidiary at any time the pledging of more than 65% of the total outstanding voting Capital Stock of such Foreign
Subsidiary would result in a material adverse tax consequence to a Grantor.
“Foreign Currency
Controlled Accounts” means any Controlled Account of a Grantor or any of its Subsidiaries holding a deposit denominated in a
currency other than United States dollar.
“Foreign Subsidiary”
means any Subsidiary of a Grantor organized under the laws of a jurisdiction other than the United States, any of the states thereof,
Puerto Rico or the District of Columbia.
“GAAP”
means U.S. generally accepted accounting principles consistently applied.
“Governmental Authority”
means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other political subdivision thereof
or thereto and any department, commission, board, bureau, court, tribunal, instrumentality, agency or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guaranteed Obligations”
shall have the meaning set forth in Section 2 of each Guaranty.
“Guarantor”
or “Guarantors” shall have the meaning set forth in the recitals hereto.
“Guaranty”
or “Guaranties” shall have the meaning set forth in the recitals hereto.
“Insolvency Proceeding”
means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency
law or law for the relief of debtors, any proceeding relating to assignments for the benefit of creditors, formal or informal moratoria,
compositions, or extensions generally with creditors, or any proceeding seeking reorganization, arrangement, or other similar relief.
“Intellectual Property”
means, collectively, all intellectual property rights and assets, and all rights, interests and protections that are associated with,
similar to, or required for the exercise of, any of the foregoing, however arising, under the applicable laws of any jurisdiction throughout
the world, whether registered or unregistered, including, without limitation, any and all: (a) Trademarks; (b) internet domain names,
whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental Authority, web addresses,
web pages, websites and related content; (c) accounts with YouTube, LinkedIn, Twitter, Instagram, Facebook and other social media companies
and the content found thereon (to the extent that such accounts and content are transferable pursuant to the terms, conditions, and policies
of each applicable social media platform); (d) Copyrights; (e) Patents; and (f) business and technical information, databases, data collections
and other confidential and proprietary information and all rights therein.
“Intellectual Property
Security Agreement” means the Intellectual Property Security Agreement required to be delivered pursuant to Section 6(h)(i)
of this Agreement, substantially in the form attached hereto as Exhibit A.
“Licenses”
means, collectively, the Copyright Licenses, the Trademark Licenses and the Patent Licenses.
“Lien”
means any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance upon or in any property or assets.
“Noteholders”
means, at any time, the holders of the Notes at such time.
“Notes”
shall have the meaning set forth in the recitals hereto.
“Obligations”
shall have the meaning set forth in Section 4 of this Agreement.
“Paid in Full”
or “Payment in Full” means the indefeasible payment in full in cash of all of the Obligations.
“Patent Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all Patent Licenses
set forth in Schedule II hereto).
“Patents”
means all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other general
intangibles of like nature, now existing or hereafter acquired (including, without limitation, all domestic and foreign letters patent,
design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary
information, technology, know-how and formulae described in Schedule II hereto), all applications, registrations and recordings
thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office, or
in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, reexaminations,
divisions, continuations, continuations in part and extensions or renewals thereof.
“Perfection Requirement”
or “Perfection Requirements” shall have the meaning set forth in Section 5(j) of this Agreement.
“Permitted Liens”
shall have the meaning set forth in the Notes.
“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization,
joint venture or other enterprise or entity or Governmental Authority.
“Pledged Accounts”
means all of each Grantor’s right, title and interest in all of its Deposit Accounts, Commodity Accounts and Securities Accounts
(in all cases, including, without limitation, all Controlled Accounts and Foreign Currency Control Accounts).
“Pledged Collateral”
shall have the meaning set forth in Section 2(a).
“Pledged Debt”
shall have the meaning set forth in Section 2(a).
“Pledged Entity”
means, each Person listed from time to time on Schedule IV hereto as a “Pledged Entity,” together with each other Person,
any right in or interest in or to all or a portion of whose Securities or Capital Stock is acquired or otherwise owned by a Grantor after
the date hereof.
“Pledged Equity”
means all of each Grantor’s right, title and interest in and to all of the Securities and Capital Stock now or hereafter owned by
such Grantor (including, without limitation, those interests listed opposite the name of such Grantor on Schedule IV), regardless
of class or designation, including all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto,
also including, without limitation, any certificates representing such Securities and/or Capital Stock, the right to receive any certificates
representing any of such Securities and/or Capital Stock, all warrants, options, subscription, share appreciation rights and other rights,
contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income, profits, surplus, or other
compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments, and other property from time to
time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange
for any or all of the foregoing.
“Pledged Operating
Agreements” means all of each Grantor’s rights, powers and remedies under the limited liability company operating agreements
of each of the Pledged Entities that is a limited liability company, as may be amended, modified, supplemented, extended, renewed, restated
or replaced from time to time.
“Pledged Partnership
Agreements” means all of each Grantor’s rights, powers, and remedies under the general or limited partnership agreements
of each of the Pledged Entities that is a general or limited partnership, as may be amended, modified, supplemented, extended, renewed,
restated or replaced from time to time.
“Pledged Securities”
means any Promissory Notes, stock certificates, limited liability membership interests or other Securities, certificates or Instruments
now or hereafter included in the Pledged Collateral, including all Pledged Equity, Pledged Debt and all other certificates, instruments
or other documents representing or evidencing any Pledged Collateral.
“Securities Purchase
Agreement” shall have the meaning set forth in the recitals hereto.
“Subsidiary”
means any Person in which a Grantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity or similar
interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and
all of the foregoing, collectively, “Subsidiaries”.
“Trademark Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor or licensee and providing for
the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such licenses, contracts
or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or hereafter owned by any Grantor
and now or hereafter covered by such licenses, contracts or agreements (including, without limitation, all Trademark Licenses described
in Schedule II hereto).
“Trademarks”
means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s,
assumed names, Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles
of like nature, now or hereafter owned, adopted, acquired or used by any Grantor (including, without limitation, all domestic and foreign
trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, assumed names, Internet
domain names, trade styles, designs, logos and other source or business identifiers described in Schedule II hereto), all applications,
registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent
and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political
subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill of the business symbolized by such
marks and all customer lists, formulae and other Records of any Grantor relating to the distribution of products and services in connection
with which any of such marks are used.
Section
2. Pledge of Pledged Collateral.
(a) As
collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors
and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest
in, all of such Grantor’s right, title and interest in, to and under all of the following, wherever located and whether now or hereafter
existing and whether now owned or hereafter acquired: (i) the Pledged Equity; (ii) all Promissory Notes, Security and Instruments evidencing
debt now owned or at any time hereafter acquired by it (including, without limitation, those listed opposite the name of such Grantor
on Schedule IV) (the “Pledged Debt”); (iii) subject to Section 2(g) and 2(h), all payments of
principal or interest, dividends, distributions, cash, Promissory Notes, Securities, Instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received
in respect of, the Pledged Equity and the Pledged Debt; (iv) all rights and privileges of such Grantor with respect to the Securities
and other property referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of, and Security Entitlements in respect of,
any of the foregoing (the items referred to in clauses (a) through (v) above being collectively referred to as the “Pledged Collateral”);
provided that the Pledged Collateral shall not include any item referred to in clauses (a) through (f) above if, for so long as and to
the extent such item constitutes Excluded Collateral.
(b) On
the Closing Date (in the case of any Grantor that grants a Lien on any of its assets hereunder on the Closing Date) or on the date on
which it becomes a party to this Agreement pursuant to Section 6(m) (in the case of any other Grantor), each Grantor shall deliver
or cause to be delivered to the Collateral Agent any and all Pledged Securities (other than any Uncertificated Securities, but only for
so long as such Securities remain uncertificated) to the extent such Pledged Securities, in the case of Promissory Notes and other Instruments
evidencing debt, are required to be delivered pursuant to Section 2(c). Thereafter, whenever such Grantor acquires any other Pledged
Security (other than any Uncertificated Securities, but only for so long as such Uncertificated Securities remain uncertificated), such
Grantor shall promptly, and in any event within 30 days (or such longer period as the Collateral Agent may agree to in writing),
deliver or cause to be delivered to the Collateral Agent such Pledged Security as Collateral hereunder to the extent such Pledged Securities,
in the case of Promissory Notes and Instruments evidencing debt, are required to be delivered pursuant to Section 2(c).
(c) Each
Grantor will cause all debt for borrowed money in an aggregate principal amount of $10,000 or more owed to such Grantor by any other Person
to be evidenced by a duly executed Promissory Note, and shall cause each such Promissory Note to be pledged and delivered to the Collateral
Agent, (i) on the date hereof, in the case of any such debt existing on the date hereof (or, in the case of any Grantor that becomes
a party hereto after the date hereof, on the date such Grantor becomes a party hereto, in the case of any such debt existing on such date)
or (ii) promptly following the incurrence thereof, in the case of any such debt incurred after the date hereof (or such other date),
in each case pursuant to the terms hereof.
(d) Upon
delivery to the Collateral Agent, (i) any Pledged Securities required to be delivered pursuant to Section 2(b) and/or 2(c)
shall be accompanied by undated stock or note powers duly executed by the applicable Grantor in blank or other instruments of transfer
reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request
in order to effect the transfer of such Pledged Securities and (ii) all other property comprising part of the Pledged Collateral required
to be delivered pursuant to Section 2(b) and/or 2(c) shall be accompanied by undated proper instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request in order to
effect transfer of such Pledged Collateral. Each delivery of Pledged Securities or other Pledged Collateral shall be accompanied by a
schedule describing such Pledged Securities or Pledged Collateral, as the case may be, which schedule shall be deemed to supplement Schedule
IV and be made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such
pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.
(e) The
assignment, pledge, Lien and security interest granted in Section 2(a) are granted as security only and shall not subject the Collateral
Agent or any Buyer to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the
Pledged Collateral.
(f) If
an Event of Default shall occur and be continuing and, other than in the case of a Bankruptcy Event of Default, the Collateral Agent shall
have notified the Borrower of its intent to exercise such rights, (a) the Collateral Agent, shall have the right (in its sole and absolute
discretion) to cause each of the Pledged Securities to be transferred of record into the name of the Collateral Agent or into the name
of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
Agent and (b) to the extent permitted by the documentation governing such Pledged Securities and applicable law, the Collateral Agent
shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations
for any purpose consistent with this Agreement. Each Grantor will promptly give to the Collateral Agent copies of any material notices
received by it with respect to Pledged Securities registered in the name of such Grantor. Each Grantor will take any and all actions reasonably
requested by the Collateral Agent to facilitate compliance with this Section 2(f).
(g) Unless
and until an Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of Default, the
Collateral Agent shall have notified the Grantors that the rights of the Grantors under this Section 2(g) are being suspended:
(i) Each Grantor shall
be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any
part thereof for any purpose consistent with the terms of this Agreement and the other Transaction Documents.
(ii) The Collateral
Agent shall promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers
of attorney and other instruments as such Grantor may reasonably request in writing for the purpose of enabling such Grantor to exercise
the voting and/or consensual rights and powers it is entitled to exercise pursuant to Section 2(g)(i), in each case as shall be
specified in such request.
(iii) Each Grantor
shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect
of the Pledged Collateral, to the extent (and only to the extent) that such dividends, interest, principal and other distributions are
permitted by, the other Transaction Documents and applicable laws; provided that any noncash dividends, interest, principal or
other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification
of the outstanding equity interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall be held
in trust for the benefit of the Collateral Agent and shall, to the extent required by Section 2(b) and/or 2(c) be forthwith
delivered to the Collateral Agent in the same form as so received (with any necessary endorsement or documents set forth in Section
2(d) or as otherwise reasonably requested by the Collateral Agent). So long as no Event of Default has occurred and is continuing,
the Collateral Agent shall promptly deliver to each Grantor any Pledged Securities in its possession if requested to be delivered to the
issuer thereof in connection with any exchange or redemption of such Pledged Securities.
(h) Upon
the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default, after the
Collateral Agent shall have notified the Grantors of the suspension of the rights of the Grantors under Section 2(g)(iii), all rights
of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to Section
2(g)(iii) shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to receive and retain such dividends, interest, principal or other distributions as part of the Pledged Collateral,
subject to Section 2(k) and the last sentence of this Section 2(h). All dividends, interest, principal or other distributions
received by any Grantor contrary to the provisions of Section 2(g) or this Section 2(h) shall be held in trust for the benefit
of the Collateral Agent and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any
necessary endorsement reasonably requested by the Collateral Agent). Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of Section 2(g) and/or this Section 2(h) shall be retained by the Collateral
Agent in an account to be established by the Collateral Agent upon receipt of such money or other property, shall be held as security
for the payment and performance of the Obligations and shall be applied in accordance with the provisions of Section 8. After all
Events of Default have been cured or waived, and the Grantors have delivered to the Collateral Agent a certificate of an executive officer
to such effect, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other
distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of Section 2(g)(iii) in the absence
of an Event of Default and that remain in such account.
(i) Upon
the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default, after the
Collateral Agent shall have notified the Grantors of the suspension of the rights of the Grantors under Section 2(g)(i), all rights
of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to Section 2(g)(i),
and the obligations of the Collateral Agent under Section 2(g)(ii), shall cease, and all such rights shall thereupon become vested
in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and
powers subject to Section 2(k) and the last sentence of this Section 2(i); provided that, the Collateral Agent shall
have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.
After all Events of Default have been cured or waived, and the Grantors have delivered to the Collateral Agent a certificate of an executive
officer to such effect, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such
Grantor would otherwise be entitled to exercise pursuant to the terms of Section 2(g)(i), and the obligations of the Collateral
Agent under Section 2(g)(ii) shall be reinstated.
(j) Any
notice given by the Collateral Agent to the Grantors under Section 2(f) or Section 2(g) (i) may be given by telephone if
promptly confirmed in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii)
may suspend the rights of the Grantors under Section 2(g)(i) or 2(g)(iii) in part without suspending all such rights (as
specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.
(k) Nothing
contained in this Agreement shall be construed to make the Collateral Agent or any Buyer liable as a member of any limited liability company
or as a partner of any partnership, and neither the Collateral Agent nor any Buyer by virtue of this Agreement or otherwise (except as
referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company
or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner
of Pledged Equity consisting of a limited liability company interest or a partnership interest pursuant hereto, this Agreement shall not
be construed as creating a partnership or joint venture among the Collateral Agent, any Buyer, any Grantor and/or any other Person.
Section
3. Grant of Security Interest
(a) As
collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby
pledges and assigns to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors
and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest
in, all of such Grantor’s right, title and interest in, to and under all personal property and assets of such Grantor, wherever
located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind, nature and description, whether
tangible or intangible (together with the Pledged Collateral, the “Collateral”), including, without limitation, the
following:
(i) all
Accounts;
(ii) all
Chattel Paper (whether tangible or Electronic Chattel Paper);
(iii) all
Commercial Tort Claims, including, without limitation, those specified on Schedule VI hereto;
(iv) all
Documents;
(v) all
Equipment;
(vi) all
Fixtures;
(vii) all
General Intangibles (including, without limitation, all Payment Intangibles);
(viii) all
Goods;
(ix) all
Instruments;
(x) all
Inventory;
(xi) all
Investment Property (and, regardless of whether classified as Investment Property under the Code, all Pledged Equity, Pledged Operating
Agreements and Pledged Partnership Agreements);
(xii) all
Intellectual Property and all Licenses;
(xiii) all
Letter-of-Credit Rights;
(xiv) all
Pledged Accounts, all cash and other property from time to time deposited therein, and all monies and property in the possession or under
the control of the Collateral Agent or any Noteholder or any Affiliate, representative, agent or correspondent of the Collateral Agent
or any such Noteholder;
(xv) all
Supporting Obligations;
(xvi) all
other tangible and intangible personal property of each Grantor (whether or not subject to the Code), including, without limitation, all
Deposit Accounts and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions and replacements of and to any of the property of any Grantor described in the preceding clauses of this
Section 3(a) (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties
now or hereafter held by each Grantor in respect of any of the items listed above), and all books, correspondence, files and other Records,
including, without limitation, all tapes, desks, cards, Software, data and computer programs in the possession or under the control of
any Grantor or any other Person from time to time acting for any Grantor, in each case, to the extent of such Grantor’s rights therein,
that at any time evidence or contain information relating to any of the property described in the preceding clauses of this Section
3(a) or are otherwise necessary or helpful in the collection or realization thereof; and
(xvii) all
Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;
in each case howsoever any Grantor’s interest
therein may arise or appear (whether by ownership, security interest, claim or otherwise).
(b) Notwithstanding
anything herein to the contrary, the term “Collateral” shall not include any Excluded Collateral.
(c) Each
Grantor agrees not to further encumber, or permit any other Lien to exist that encumbers, any of its Intellectual Property, including,
without limitation, any of its Copyrights, Copyright applications, Copyright registrations and like protections in each work of authorship
and derivative work, whether published or unpublished, Licenses, Patents, Patent applications and like protections, including, without
limitation, improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, Trademarks,
service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill
of the business of such Grantor connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented
inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing, in each case without
the Collateral Agent’s prior written consent (which consent may be withheld or given in the Collateral Agent’s sole and absolute
discretion).
(d) Each
Grantor agrees that the pledge of the shares of Capital Stock acquired by such Grantor of any and all Persons now or hereafter existing
that is a Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share charges or other similar
agreements or instruments, executed and delivered by such Grantor in favor of the Collateral Agent, which agreements or instruments will
provide for the pledge of such shares of Capital Stock and perfection of the Lien on such shares in accordance with the laws of the applicable
foreign jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent may, at any time and from time to time, in its
sole and absolute discretion, take such actions in such foreign jurisdictions that will result in the perfection of the Lien created in
such shares of Capital Stock.
(e) In
addition, to secure the due and punctual payment and performance in full of the Obligations, as and when due, and in order to induce the
Buyers as aforesaid, each Grantor hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit
of the Collateral Agent and the Noteholders, a right of set-off against the property of such Grantor held by the Collateral Agent, for
itself and for the ratable benefit of the Noteholders, consisting of property described above in Section 2(a) and/or Section
3(a) now or hereafter in the possession or custody of or in transit to the Collateral Agent, for any purpose, including safekeeping,
collection or pledge, for the account of such Grantor, or as to which such Grantor may have any right or power; provided that such right
shall only to be exercised after an Event of Default has occurred and is continuing.
Section
4. Security for Obligations. The Lien and security interest created hereby in the Collateral constitutes continuing
collateral security for all of the following obligations, whether direct or indirect, absolute or contingent, and whether now existing
or hereafter incurred (collectively, the “Obligations”):
(a) (i) the payment by the Company and each other Grantor, as and when due and payable (by scheduled maturity, required prepayment, acceleration,
demand or otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement, this Agreement, the
Notes and the other Transaction Documents, and (ii) in the case of the Guarantors, the payment by such Guarantors, as and when due and
payable of all Guaranteed Obligations under the Guaranties, including, without limitation, in both cases, (A) all principal of, interest,
make-whole and other amounts on the Notes (including, without limitation, all interest, make-whole and other amounts that accrues after
the commencement of any Insolvency Proceeding of any Grantor, whether or not the payment of such interest is enforceable or is allowable
in such Insolvency Proceeding), and (B) all fees, interest, premiums, penalties, contract causes of action, costs, commissions, expense
reimbursements, indemnifications and all other amounts due or to become due under this Agreement or any of the Transaction Documents;
and
(b) the
due and punctual performance and observance by each Grantor of all of its other obligations from time to time existing in respect of any
of the Transaction Documents, including without limitation, with respect to any conversion or redemption rights of the Noteholders under
the Notes.
Section
5. Representations and Warranties. Each Grantor represents and warrants as follows:
(a) Schedule
I hereto sets forth (i) the exact legal name of each Grantor, and (ii) the state of incorporation, organization or formation and the
organizational identification number of each Grantor in such state. The information set forth in Schedule I hereto with respect
to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name (or operated under any other name),
jurisdiction of organization or organizational identification number from those set forth in Schedule I hereto except as disclosed
in Schedule I hereto.
(b) There
is no pending or, to its knowledge, written notice threatening any action, suit, proceeding or claim affecting any Grantor before any
Governmental Authority or any arbitrator, or any order, judgment or award issued by any Governmental Authority or arbitrator, in each
case, that may adversely affect the grant by any Grantor, or the perfection, of the Lien and security interest purported to be created
hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder.
(c) All
Federal, state and local tax returns and other reports required by applicable law to be filed by any Grantor have been filed, or extensions
have been obtained, and all taxes, assessments and other governmental charges or levies imposed upon any Grantor or any property of any
Grantor (including, without limitation, all federal income and social security taxes on employees’ wages) and which have become
due and payable on or prior to the date hereof have been paid, except to the extent contested in good faith by proper proceedings which
stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves have
been set aside for the payment thereof in accordance with GAAP.
(d) All
Equipment, Fixtures, Goods and Inventory of each Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory of each Grantor
hereafter existing will be, located and/or based at the addresses specified therefor in Schedule III hereto, except that each Grantor
will give the Collateral Agent written notice of any change in the location of any such Collateral within 20 days of such change, other
than to locations set forth on Schedule III hereto (and with respect to which the Collateral Agent has filed financing statements
and otherwise fully perfected its Liens thereon). Each Grantor’s principal place of business and chief executive office, the place
where each Grantor keeps its Records concerning the Collateral and all originals of all Chattel Paper in which any Grantor has any right,
title or interest are located and will continue to be located at the addresses specified therefor in Schedule III hereto.
None of the Accounts in which any Grantor has any right, title or interest is or will be evidenced by Promissory Notes or other Instruments.
(e) Set
forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of (i) all Pledged Debt, specifying
the debtor thereof and the outstanding principal amount thereof as of the Closing Date, Securities and other Instruments in which any
Grantor has any right, title or interest, (ii) each Pledged Account of each Grantor, together with the name and address of each institution
at which each such Pledged Account is maintained, the account number for each such Pledged Account and a description of the purpose of
each such Pledged Account and (iii) the name of each Foreign Currency Controlled Account of each Grantor, together with the name and address
of each institution at which each such Foreign Currency Controlled Account is maintained and the amount of cash or cash equivalents held
in each such Foreign Currency Controlled Account. Set forth in Schedule II hereto is a complete and correct list of each trade
name used by each Grantor and the name of, and each trade name used by, each Person from which each Grantor has acquired any substantial
part of the Collateral. All of the Pledged Debt, to the best of the Grantors’ knowledge (provided that no such knowledge qualification
applies to Pledged Debt issued by a Grantor or a Subsidiary), is the legal, valid and binding obligation of the issuer thereof, enforceable
against such issuer in accordance with its terms.
(f) Each
Grantor has delivered to the Collateral Agent complete and correct copies of each License described in Schedule II hereto, including
all schedules and exhibits thereto, which represent all of the Licenses of the Grantors existing on the date of this Agreement. Each such
License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter thereof, and there are
no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby or the rights of such Grantor
or any of its Affiliates in respect thereof. Each material License now existing is, and any material License entered into in the future
will be, the legal, valid and binding obligation of the parties thereto, enforceable against such parties in accordance with its terms.
No default under any material License by any such party has occurred, nor does any defense, offset, deduction or counterclaim exist thereunder
in favor of any such party.
(g) Each
Grantor owns and controls, or otherwise possesses adequate rights to use, all of its Intellectual Property, which is the only Intellectual
Property necessary to conduct its business in substantially the same manner as conducted as of the date hereof. Schedule II hereto
sets forth a true and complete list of all Intellectual Property and Licenses owned or used by each Grantor as of the date hereof, and
applications for grant or registration of Intellectual Property. To the knowledge of each Grantor, all such Intellectual Property of such
Grantor is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid and enforceable and has not
been abandoned in whole or in part. Except as set forth in Schedule II, no such Intellectual Property is the subject of any
licensing or franchising agreement. Except as set forth in Schedule II, no Grantor has any knowledge of any infringement upon or
conflict with the Patent, Trademark, Copyright, trade secret rights of others and, each Grantor is not now infringing or in conflict with
any Patent, Trademark, Copyright, trade secret or similar rights of others, and to the knowledge of each Grantor, no other Person is now
infringing or in conflict in any material respect with any such properties, assets and rights owned or used by each Grantor. No Grantor
has received any notice that it is violating or has violated the Trademarks, Patents, Copyrights, inventions, trade secrets, proprietary
information and technology, know-how, formulae, rights of publicity or other intellectual property rights of any third party.
(h) Each
Grantor is and will be at all times the sole and exclusive owner of the Collateral in which such Grantor has granted a Lien and security
interest hereunder free and clear of any Liens, except for (i) Permitted Liens thereon and (ii) certain Intellectual Property rights of
the Company which is jointly owned by the Company with certain third parties as described in Schedule II hereto. No effective financing
statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office
except such as (i) may have been filed in favor of the Collateral Agent and/or the Noteholders relating to this Agreement or the other
Transaction Documents, or (ii) are intended to perfect Permitted Liens existing as of the date hereof and disclosed on Schedule VII
hereto.
(i) The
exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any contractual restriction
binding on or otherwise affecting any Grantor or any of its properties and will not result in or require the creation of any Lien, upon
or with respect to any of its properties other than as granted pursuant to this Agreement.
(j) No authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority, is required for (i) the grant by each Grantor, or the perfection, of the Lien and security
interest purported to be created hereby in the Collateral, or (ii) the exercise by the Collateral Agent of any of its rights and
remedies hereunder, except for (A) the filing under the Code as in effect in the applicable jurisdiction of the financing statements
described in Schedule V hereto, all of which financing statements have been duly filed and are in full force and effect, (B) with
respect to all Pledged Accounts, and all cash and other property from time to time deposited therein, the execution of a Controlled Account
Agreement with the depository or other institution with which the applicable Pledged Accounts are maintained, as provided in Section
6(i), (C) with respect to Commodity Contracts, the execution of a control agreement with the commodity intermediary with which
such Commodity Contract is carried, as provided in Section 6(i), (D) with respect to the perfection of the security interest
created hereby in the United States Intellectual Property and Licenses, the recording of the appropriate Intellectual Property Security
Agreement in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, (E) with respect
to the perfection of the security interest created hereby in foreign Intellectual Property and Licenses, registrations and filings in
jurisdictions located outside of the United States and covering rights in such jurisdictions relating to such foreign Intellectual Property
and Licenses, (F) with respect to the perfection of the security interest created hereby in any Letter-of-Credit Rights, the consent of
the issuer of the applicable letter of credit to the assignment of proceeds as provided in the Code as in effect in the applicable jurisdiction,
(G) with respect to Investment Property constituting uncertificated securities, the applicable Grantor causing the issuer thereof either
(i) to register the Collateral Agent as the registered owner of such securities or (ii) to agree in an authenticated record with such
Grantor and the Collateral Agent that such issuer will comply with instructions with respect to such securities originated by the Collateral
Agent without further consent of such Grantor, such authenticated record to be in form and substance satisfactory to the Collateral Agent,
(H) with respect to Investment Property constituting certificated securities or instruments, such items to be delivered to and held by
or on behalf of the Collateral Agent pursuant hereto in suitable form for transfer by delivery or accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent, (I) with respect to any action that
may be necessary to obtain control of Collateral constituting Commodity Contracts, Electronic Chattel Paper or Letter of Credit Rights,
the taking of such actions, and (J) the Collateral Agent having possession of all Documents, Chattel Paper, Instruments and cash constituting
Collateral (subclauses (A) through (J) each a “Perfection Requirement” and collectively, the “Perfection Requirements”).
(k) This
Agreement creates in favor of the Collateral Agent a legal, valid and enforceable Lien on and security interest in the Collateral, as
security for the Obligations. The performance of the Perfection Requirements results in the perfection of such Lien on and security interest
in the Collateral. Such Lien and security interest is (or in the case of Collateral in which any Grantor obtains any right, title or interest
after the date hereof, will be), subject only to Permitted Liens and the Perfection Requirements, a first priority, valid, enforceable
and perfected Lien on and security interest in all personal property of each Grantor (other than Excluded Collateral). Such recordings
and filings and all other action necessary to perfect and protect such Lien and security interest have been duly taken (and, in the case
of Collateral in which any Grantor obtains right, title or interest after the date hereof, will be duly taken), except for the Collateral
Agent’s having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral after the date hereof and
the other actions, filings and recordations described above, including the Perfection Requirements.
(l) As
of the date hereof, no Grantor holds any Commercial Tort Claims or has knowledge of any pending Commercial Tort Claims, except for the
Commercial Tort Claims described in Schedule VI.
(m) All
of the Pledged Equity is presently owned by the applicable Grantor as set forth in Schedule IV free and clear of all Liens other
than Permitted Liens, and is presently represented by the certificates listed on Schedule IV hereto (if applicable). As of the
date hereof, there are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged Equity
other than as contemplated and permitted by the Transaction Documents. Each Grantor is the sole holder of record and the sole beneficial
owner of the Pledged Equity, as applicable. None of the Pledged Equity has been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject. The Pledged Equity constitutes
100% or such other percentage as set forth on Schedule IV of the issued and outstanding shares of Capital Stock of the applicable
Pledged Entity. All of the Pledged Equity has been duly and validly authorized and issued by the issuer thereof and (i) in the case of
Pledged Equity (other than Pledged Equity consisting of limited liability company interests or partnership interests which, pursuant to
the relevant organizational or formation documents, cannot be fully paid and non-assessable), is fully paid and non-assessable.
(n) Such
Grantor (i) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, organization or formation, (ii) has all requisite corporate, limited
liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and
to execute and deliver this Agreement and each other Transaction Document to which such Grantor is a party, and to consummate the transactions
contemplated hereby and thereby and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character
of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except where the
failure to be so qualified would not result in a Material Adverse Effect.
(o) The
execution, delivery and performance by each Grantor of this Agreement and each other Transaction Document to which such Grantor is a party
(i) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (ii) do not and will
not contravene its charter or by-laws, limited liability company or operating agreement, certificate of partnership or partnership agreement,
as applicable, or any applicable law or any contractual restriction binding on such Grantor or its properties, (iii) do not and will not
result in or require the creation of any Lien (other than pursuant to any Transaction Document) upon or with respect to any of its assets
or properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal
of any material permit, license, authorization or approval applicable to it or its operations or any of its assets or properties.
(p) This
Agreement has been duly executed and delivered by each Grantor and is the legal, valid and binding obligation of such Grantor, enforceable
against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought in equity
or at law). Each of the other Transaction Documents to which any Grantor is or will be a party, when delivered, duly executed and delivered
by such Grantor and the legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other
similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).
(q) There
are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.
Section
6. Covenants as to the Collateral. Until all of the Obligations shall have been fully performed and Paid in Full, unless
the Collateral Agent shall otherwise consent in writing (in its sole and absolute discretion):
(a) Further
Assurances. Each Grantor will, at its expense, at any time and from time to time,
promptly execute and deliver all further instruments and documents and take all further action that the Collateral Agent may reasonably
request in order to: (i) perfect and protect the Lien and security interest of the Collateral Agent created hereby; (ii) enable
the Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the Collateral, including, without limitation,
the Controlled Accounts; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) marking
conspicuously all Chattel Paper and each License and, at the request of the Collateral Agent, each of its Records pertaining to the Collateral
with a legend, in form and substance satisfactory to the Collateral Agent, indicating that such Chattel Paper, License or Collateral is
subject to the Lien and security interest created hereby, (B) delivering and pledging to the Collateral Agent each Promissory Note,
Security (subject to the limitations set forth in Section 3), Chattel Paper or other Instrument, now or hereafter owned by any
Grantor, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance satisfactory to the
Collateral Agent, (C) executing and filing (to the extent, if any, that any Grantor’s signature is required thereon) or authenticating
the filing of, such financing or continuation statements, or amendments thereto, as may be necessary or that the Collateral Agent may
reasonably request in order to perfect and preserve the security interest created hereby, (D) furnishing to the Collateral Agent
from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with
the Collateral in each case as the Collateral Agent may reasonably request, all in reasonable detail, (E) if any Collateral shall
be in the possession of a third party, notifying such Person of the Collateral Agent’s security interest created hereby and obtaining
a written acknowledgment from such Person, in form and substance satisfactory to the Collateral Agent, that such Person holds possession
of the Collateral for the benefit of the Collateral Agent (for the ratable benefit of the Collateral Agent and the Noteholders), (F) if
at any time after the date hereof, any Grantor acquires or holds any Commercial Tort Claim, promptly notifying the Collateral Agent in
a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim and granting to the Collateral Agent
a Lien and security interest therein and in the Proceeds thereof, which writing shall incorporate the provisions hereof and shall be in
form and substance satisfactory to the Collateral Agent, (G) upon the acquisition after the date hereof by any Grantor of any motor
vehicle or other Equipment subject to a certificate of title or ownership (other than a motor vehicle or Equipment that is subject to
a purchase money security interest), causing the Collateral Agent to be listed as the lienholder on such certificate of title or ownership
and delivering evidence of the same to the Collateral Agent in accordance with Section 6(j) hereof; and (H) taking all actions
required by the Code or by other law, as applicable, in any relevant Code jurisdiction, or by other law as applicable in any foreign jurisdiction.
(b) Location
of Collateral. Each Grantor will keep the Collateral (i) at the locations specified therefor on Schedule III hereto, or (ii)
at such other locations set forth on Schedule III and with respect to which the Collateral Agent has filed financing statements
and otherwise fully perfected its Liens thereon, or (iii) at such other locations in the United States, provided that 30 days prior to
any change in the location of any Collateral to such other location, or upon the acquisition of any Collateral to be kept at such other
locations, the Grantors shall give the Collateral Agent written notice thereof and deliver to the Collateral Agent a new Schedule III
indicating such new locations and such other written statements and schedules as the Collateral Agent may require.
Condition of Equipment.
Each Grantor will maintain or cause to be maintained and preserved in good condition, repair and working order, ordinary wear and tear
excepted, the Equipment (necessary or useful to its business) and will forthwith, or in the case of any loss or damage to any Equipment
of any Grantor within a commercially reasonable time after the occurrence thereof, make or cause to be made all repairs, replacements
and other improvements in connection therewith which are necessary or desirable, consistent with past practice, or which the Collateral
Agent may request to such end. Any Grantor will promptly furnish to the Collateral Agent a statement describing in reasonable detail
any such loss or damage in excess of $25,000 per occurrence to any Equipment.
Taxes, Etc.
Each Grantor agrees to pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against, the Equipment and Inventory, except to the extent the validity
thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from
the non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside for the payment thereof.
(e) Insurance.
(i) Each
Grantor will, at its own expense, maintain insurance (including, without limitation, comprehensive general liability, hazard, rent and
business interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in
such amounts and covering such risks, in such form and with responsible and reputable insurance companies or associations as is required
by any Governmental Authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated and in any event, in amount, adequacy and scope reasonably satisfactory to the Collateral
Agent.
(ii) To
the extent requested by the Collateral Agent at any time and from time to time, each such policy for liability insurance shall provide
for all losses to be paid on behalf of the Collateral Agent and any Grantor as their respective interests may appear, and each policy
for property damage insurance shall provide for all losses to be adjusted with, and paid directly to, the Collateral Agent. In addition
to and without limiting the foregoing, to the extent requested by the Collateral Agent at any time and from time to time, each such policy
shall in addition (A) name the Collateral Agent as an additional insured party and/or loss payee, as applicable, thereunder (without any
representation or warranty by or obligation upon the Collateral Agent) as its interests may appear, (B) contain an agreement by the insurer
that any loss thereunder shall be payable to the Collateral Agent on its own account notwithstanding any action, inaction or breach of
representation or warranty by any Grantor, (C) provide that there shall be no recourse against the Collateral Agent for payment of premiums
or other amounts with respect thereto, and (D) provide that at least 30 days’ prior written notice of cancellation, lapse, expiration
or other adverse change shall be given to the Collateral Agent by the insurer. Any Grantor will, if so requested by the Collateral Agent,
deliver to the Collateral Agent original or duplicate policies of such insurance (including certificates demonstrating compliance with
this Section 6(e)) and, as often as the Collateral Agent may reasonably request, a report of a reputable insurance broker with respect
to such insurance. Any Grantor will also, at the request of the Collateral Agent, execute and deliver instruments of assignment of such
insurance policies and cause the respective insurers to acknowledge notice of such assignment.
(iii) Reimbursement under any liability insurance maintained by any Grantor
pursuant to this Section 6(e) may be paid directly to the Person who shall have incurred liability covered by such insurance. In
the case of any loss involving damage to Equipment or Inventory, to the extent paragraph (iv) of this Section 6(e) is not applicable,
any proceeds of insurance involving such damage shall be paid to the Collateral Agent, and any Grantor will make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any proceeds of insurance maintained by any Grantor pursuant
to this Section 6(e) (except as otherwise provided in paragraph (iv) in this Section 6(e)) shall be paid by the Collateral
Agent to any Grantor as reimbursement for the reasonable costs of such repairs or replacements.
(iv) Notwithstanding anything to the contrary in subsection 6(e)(iii) above,
following and during the continuance of an Event of Default, all insurance payments in respect of each Grantor’s properties and
business shall be paid to the Collateral Agent and applied as specified in Section 8(b) hereof.
(f) Provisions
Concerning Name, Organization, Location, Accounts and Licenses.
(i) Each
Grantor will (A) give the Collateral Agent at least 30 days’ prior written notice of any change in such Grantor’s name, identity
or organizational structure, (B) maintain its jurisdiction of incorporation, organization or formation as set forth in Schedule I
hereto, (C) immediately notify the Collateral Agent upon obtaining an organizational identification number, if on the date hereof such
Grantor did not have such identification number, and (D) keep adequate records concerning the Collateral and permit representatives of
the Collateral Agent during normal business hours on reasonable notice to such Grantor, to inspect and make abstracts from such records.
(ii) Each Grantor will (except as otherwise provided in this subsection (f)),
continue to collect, at its own expense, all amounts due or to become due under the Accounts. In connection with such collections, any
Grantor may (and, at the Collateral Agent’s direction, will) take such action as any Grantor or the Collateral Agent may deem necessary
or advisable to enforce collection or performance of the Accounts; provided, however, that the Collateral Agent shall have
the right at any time following the occurrence and during the continuance of an Event of Default to notify the Account Debtors or obligors
under any Accounts of the assignment of such Accounts to the Collateral Agent and to direct such Account Debtors or obligors to make payment
of all amounts due or to become due to any Grantor thereunder directly to the Collateral Agent or its designated agent and, upon such
notification and at the expense of any Grantor and to the extent permitted by applicable law, to enforce collection of any such Accounts
and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as any Grantor might have
done. After receipt by any Grantor of a notice from the Collateral Agent that the Collateral Agent has notified, intends to notify, or
has enforced or intends to enforce any Grantor’s rights against the Account Debtors or obligors under any Accounts as referred to
in the proviso to the immediately preceding sentence, (A) all amounts and proceeds (including, without limitation, Instruments) received
by any Grantor in respect of the Accounts shall be received in trust for the benefit of the Collateral Agent hereunder (for the ratable
benefit of the Collateral Agent and the Noteholders), shall be segregated from other funds of any Grantor and shall be forthwith paid
over to the Collateral Agent in the same form as so received (with any necessary endorsement) to be applied as specified in Section
8(b) hereof, and (B) no Grantor will adjust, settle or compromise the amount or payment of any Account or release wholly or partly
any Account Debtor or obligor thereof or allow any credit or discount thereon. In addition, upon the occurrence and during the continuance
of an Event of Default, the Collateral Agent may (in its sole and absolute discretion) direct any or all of the banks and financial institutions
with which any Grantor either maintains a Deposit Account or a lockbox (including, without limitation, any Controlled Account) or deposits
the proceeds of any Accounts to send immediately to the Collateral Agent by wire transfer (to such deposit account as the Collateral Agent
shall specify, or in such other manner as the Collateral Agent shall direct) all or a portion of such Securities, cash, investments and
other items held by such institution. Any such Securities, cash, investments and other items so received by the Collateral Agent shall
be applied as specified in accordance with Section 8(b) hereof.
(iii) Upon the occurrence and during the continuance of any breach or default
under any material License referred to in Schedule II hereto by any party thereto other than any Grantor, each Grantor party thereto
will, promptly after obtaining knowledge thereof, give the Collateral Agent written notice of the nature and duration thereof, specifying
what action, if any, it has taken and proposes to take with respect thereto and thereafter will take reasonable steps to protect and preserve
its rights and remedies in respect of such breach or default, or will obtain or acquire an appropriate substitute License.
(iv) Each
Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each notice or other communication received by it by
which any other party to any material License referred to in Schedule II hereto purports to exercise any of its rights or affect
any of its obligations thereunder, together with a copy of any reply by such Grantor thereto.
(v) Each
Grantor will exercise promptly and diligently each and every right which it may have under each material License (other than any right
of termination) and will duly perform and observe in all respects all of its obligations under each material License and will take all
action necessary or reasonable to maintain such Licenses in full force and effect. No Grantor will, without the prior written consent
of the Collateral Agent (in its sole and absolute discretion), cancel, terminate, amend or otherwise modify in any respect, or waive any
provision of, any material License referred to in Schedule II hereto.
(g) Transfers
and Other Liens.
(i) Except
as otherwise expressly permitted in the other Transaction Documents, no Grantor shall, directly or indirectly, sell, lease, license, assign,
transfer, spin-off, split-off, close, convey or otherwise dispose of any Collateral whether in a single transaction or a series of related
transactions, other than (A) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights
by such Grantor for fair value in the ordinary course of business consistent with past practices and (B) sales of Inventory and product
in the ordinary course of business.
(ii) Except
as permitted under Section 14(e) of the Notes, no Grantor shall, directly or indirectly, redeem, repurchase or declare or pay any cash
dividend or distribution on any of its Capital Stock.
(iii) No
Grantor shall, directly or indirectly, without the prior written consent of the Required Holders, (A) issue any Notes (other than as contemplated
by the Securities Purchase Agreement and the Notes) or (B) issue any other Securities that would cause a breach or default under the Notes.
(iv) No
Grantor shall enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation,
the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate,
except in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the
prudent operation of its business, for fair consideration and on terms no less favorable to it than would be obtainable in a comparable
arm’s length transaction with a Person that is not an Affiliate thereof.
(v) No
Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted Lien.
(h) Intellectual
Property.
(i) If
applicable, each Grantor shall duly execute and deliver the applicable Intellectual Property Security Agreement. Each Grantor (either
itself or through licensees) will, and will cause each licensee thereof to, take all action necessary to maintain all of the Intellectual
Property in full force and effect, including, without limitation, using the proper statutory notices, numbers and markings (relating to
patent, trademark and copyright rights) and using the Trademarks on each applicable trademark class of goods in order to so maintain the
Trademarks in full force and free from any claim of abandonment for non-use, and each Grantor will not (nor permit any licensee thereof
to) do any act or knowingly omit to do any act whereby any Intellectual Property may become abandoned, cancelled or invalidated; provided,
however, that so long as no Event of Default has occurred and is continuing, no Grantor shall have an obligation to use or to maintain
any Intellectual Property (A) that relates solely to any product or work, that is no longer necessary or material and has been, or
is in the process of being, discontinued, abandoned or terminated in the ordinary course of business and consistent with the exercise
of reasonable business judgment, (B) that is being replaced with Intellectual Property substantially similar to the Intellectual Property
that may be abandoned or otherwise become invalid, so long as the failure to use or maintain such Intellectual Property does not materially
adversely affect the validity of such replacement Intellectual Property and so long as such replacement Intellectual Property is subject
to the Lien created by this Agreement and does not have a material adverse effect on the business of any Grantor or (C) that is substantially
the same as other Intellectual Property that is in full force, so long the failure to use or maintain such Intellectual Property does
not materially adversely affect the validity of such replacement Intellectual Property and so long as such other Intellectual Property
is subject to the Lien and security interest created by this Agreement and does not have a material adverse effect on the business of
any Grantor. Each Grantor will cause to be taken all necessary steps in any proceeding before the United States Patent and Trademark Office
and the United States Copyright Office or any similar office or agency in any other country or political subdivision thereof to maintain
each registration of the Intellectual Property and application for registration of Intellectual Property (other than the Intellectual
Property described in the proviso to the immediately preceding sentence), including, without limitation, filing of renewals, affidavits
of use, affidavits of incontestability and opposition, interference and cancellation proceedings and payment of maintenance fees, filing
fees, taxes or other governmental charges or fees. If any Intellectual Property (other than Intellectual Property described in the proviso
to the second sentence of subsection (i) of this clause (h)) is infringed, misappropriated, diluted or otherwise violated in any material
respect by a third party, each Grantor shall (x) upon learning of such infringement, misappropriation, dilution or other violation, promptly
notify the Collateral Agent and (y) promptly sue for infringement, misappropriation, dilution or other violation, seek injunctive relief
where appropriate and recover any and all damages for such infringement, misappropriation, dilution or other violation, or take such other
actions as such Grantor shall deem appropriate under the circumstances to protect such Intellectual Property. Each Grantor shall furnish
to the Collateral Agent from time to time upon its request statements and schedules further identifying and describing the Intellectual
Property and Licenses and such other reports in connection with the Intellectual Property and Licenses as the Collateral Agent may reasonably
request, all in reasonable detail and promptly upon request of the Collateral Agent, following receipt by the Collateral Agent of any
such statements, schedules or reports, each Grantor shall modify this Agreement by amending Schedule II hereto, as the case may
be, to include any Intellectual Property and License, as the case may be, which is or hereafter becomes part of the Collateral under this
Agreement and shall execute and authenticate such documents and do such acts as shall be necessary or, in the reasonable judgment of the
Collateral Agent, desirable to subject such Intellectual Property and Licenses to the Lien and security interest created by this Agreement.
Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default, no Grantor may
abandon, surrender or cancel or otherwise permit any Intellectual Property to become abandoned, surrendered, cancelled or invalid without
the prior written consent of the Collateral Agent (in its sole and absolute discretion), and if any Intellectual Property is infringed,
misappropriated, diluted or otherwise violated in any material respect by a third party, each Grantor will take such reasonable action
as the Collateral Agent shall deem appropriate under the circumstances to protect such Intellectual Property.
(ii) In
no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for the registration
of any Patent, Trademark or Copyright or the United States Copyright Office or the United States Patent and Trademark Office, as applicable,
or in any similar office or agency of the United States or any country or any political subdivision thereof unless it gives the Collateral
Agent prior written notice thereof. Upon request of the Collateral Agent, any Grantor shall execute, authenticate and deliver any and
all assignments, agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Collateral
Agent’s security interest hereunder in such Intellectual Property and the General Intangibles of any Grantor relating thereto or
represented thereby, and each Grantor hereby appoints the Collateral Agent its attorney-in-fact to execute and/or authenticate and file
all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed, and such power (being coupled
with an interest) shall be irrevocable until all Obligations are fully performed and Paid in Full.
(i) Pledged Accounts.
(A) Each Grantor shall cause
each bank and other financial institution which maintains a Controlled Account (each a “Controlled Account Bank”) to
execute and deliver to the Collateral Agent, in form and substance satisfactory to the Collateral Agent, a Controlled Account Agreement
with respect to such Controlled Account, duly executed by each Grantor and such Controlled Account Bank, pursuant to which such Controlled
Account Bank among other things shall irrevocably agree, with respect to such Controlled Account, that (i) at any time after any Grantor,
the Collateral Agent or any Buyer shall have notified such Controlled Account Bank that an Event of Default has occurred or is continuing,
such Controlled Account Bank will comply with any and all instructions originated by the Collateral Agent directing the disposition of
the funds in such Controlled Account without further consent by such Grantor, (ii) such Controlled Account Bank shall waive, subordinate
or agree not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for
payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned checks
or other items of payment, (iii) at any time after any Grantor, the Collateral Agent or any Buyer shall have notified such Controlled
Account Bank that an Event of Default has occurred or is continuing, with respect to each such Controlled Account, such Controlled Account
Bank shall not comply with any instructions, directions or orders of any form with respect to such Controlled Accounts other than instructions,
directions or orders originated by the Collateral Agent, (iv) all funds deposited by any Grantor with such Controlled Account Bank shall
be subject to a perfected, first priority security interest in favor of the Collateral Agent, and (v) upon receipt of written notice from
the Collateral Agent during the continuance of an Event of Default, such Controlled Account Bank shall immediately send to the Collateral
Agent by wire transfer (to such account as the Collateral Agent shall specify, or in such other manner as the Collateral Agent shall direct)
all such funds and other items held by it. No Grantor shall create or maintain any Pledged Account without the prior written consent of
the Collateral Agent (in its sole and absolute discretion) and complying with the terms of this Agreement.
(B) If at any time after the
date of this Agreement, the average daily balance of any Account that is not subject to a Controlled Account Agreement exceeds $10,000
during any calendar month (including the calendar month in which the date of this Agreement occurs), the Company shall, either (x) within
two (2) Business Days following such date, transfer to a Controlled Account an amount sufficient to reduce the total aggregate amount
of the cash in such Account to an amount not in excess of $10,000 or (y) within twenty-one (21) calendar days following the last day of
such calendar month, deliver to the Collateral Agent a Controlled Account Agreement with respect to such Account, duly executed by such
Grantor and the depositary bank in which such Account is maintained.
(C) Notwithstanding anything
to the contrary contained in Section 6(i)(B) above, and without limiting any of the foregoing, if at any time on or after the date
that is twenty-one (21) calendar days following the Closing Date, the total aggregate amount of the cash of the Company and any of its
Subsidiaries, in the aggregate, that is not held in a Controlled Account exceeds $100,000 (the “Maximum Free Cash Amount”),
the Company shall within two (2) Business Days following such date, either (x) transfer to a Controlled Account an amount sufficient to
reduce the total aggregate amount of the cash that is not held in a Controlled Account to an amount not in excess of the Maximum Free
Cash Amount or (y) deliver to the Collateral Agent a Controlled Account Agreement with respect to such Account (or Accounts), duly executed
by such Grantor and the depositary bank in which such Account (or Accounts) is maintained, as necessary to reduce the total aggregate
amount of the cash that is not held in a Controlled Account to an amount not in excess of the Maximum Free Cash Amount.
(j) Motor
Vehicles.
(i) Upon
the Collateral Agent’s written request, each Grantor shall deliver to the Collateral Agent originals of the certificates of title
or ownership for each motor vehicle with a value in excess of $10,000 owned by it, with the Collateral Agent listed as lienholder, for
the ratable benefit of the Collateral Agent and the Noteholders.
(ii) Each
Grantor hereby appoints the Collateral Agent as its attorney-in-fact for the purpose of (A) executing on behalf of such Grantor title
or ownership applications for filing with appropriate Governmental Authorities to enable motor vehicles now owned or hereafter acquired
by such Grantor to be retitled and the Collateral Agent listed as lienholder thereof, (B) filing such applications with such Governmental
Authorities, and (C) executing such other agreements, documents and instruments on behalf of, and taking such other action in the
name of, such Grantor as the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof (including, without limitation,
for the purpose of creating in favor of the Collateral Agent a perfected Lien on the motor vehicles and exercising the rights and remedies
of the Collateral Agent hereunder). This appointment as attorney-in-fact is coupled with an interest and is irrevocable until all of the
Obligations are fully performed and Paid in Full.
(iii) Any
certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by accurate odometer statements for each
motor vehicle covered thereby.
(iv) So
long as no Event of Default shall have occurred and be continuing, upon the request of any Grantor, the Collateral Agent shall execute
and deliver to any Grantor such instruments as such Grantor shall reasonably request to remove the notation of the Collateral Agent as
lienholder on any certificate of title for any motor vehicle; provided, however, that any such instruments shall be delivered,
and the release effective, only upon receipt by the Collateral Agent of a certificate from any Grantor stating that such motor vehicle
is to be sold or has suffered a casualty loss (with title thereto in such case passing to the casualty insurance company therefor in settlement
of the claim for such loss) and the amount that any Grantor will receive as sale proceeds or insurance proceeds. Any proceeds of such
sale or casualty loss shall be paid to the Collateral Agent hereunder immediately upon receipt, to be applied to the Obligations then
outstanding.
(k) Control.
Each Grantor hereby agrees to take any or all action that may be necessary or that the Collateral Agent may reasonably request in order
for the Collateral Agent to obtain “control” in accordance with Sections 9-105 through 9-107 of the Code with respect to the
following Collateral: (i) Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit Rights.
(l) Inspection
and Reporting. Each Grantor shall permit the Collateral Agent, or any agent or representatives thereof or such attorneys, accountant
or other professionals or other Persons as the Collateral Agent may designate (at Grantors’ sole cost and expense) (i) to examine
and make copies of and abstracts from any Grantor’s Records and books of account, (ii) to visit and inspect its properties, (iii) to
verify materials, leases, Instruments, Accounts, Inventory and other assets of any Grantor from time to time, and (iv) to conduct
audits, physical counts, appraisals, valuations and/or examinations at the locations of any Grantor. Each Grantor shall also permit the
Collateral Agent, or any agent or representatives thereof or such attorneys, accountants or other professionals or other Persons as the
Collateral Agent may designate to discuss such Grantor’s affairs, finances and accounts with any of its directors, officers, managerial
employees, attorneys, independent accountants or any of its other representatives. Without limiting the foregoing, the Collateral Agent
may, at any time, in the Collateral Agent’s own name, in the name of a nominee of the Collateral Agent, or in the name of any Grantor
communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of such Grantor, parties to contracts with such Grantor
and/or obligors in respect of Instruments or Pledged Debt of such Grantor to verify with such Persons, to the Collateral Agent’s
satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Pledged Debt, Chattel Paper, payment
intangibles and/or other receivables.
(m) Future
Subsidiaries. If any Grantor hereafter creates or acquires any Subsidiary, simultaneously with the creation or acquisition of such
Subsidiary, such Grantor shall (i) if such Subsidiary is a Domestic Subsidiary, cause such Subsidiary to become a party to this Agreement
as an additional “Grantor” hereunder, (ii) deliver to the Collateral Agent updated Schedules to this Agreement, as appropriate
(including, without limitation, an updated Schedule IV to reflect the grant by such Grantor of a Lien on and security interest
in all Pledged Debt and Pledged Equity now or hereafter owned by such Grantor), (iii) if such Subsidiary is a Domestic Subsidiary, cause
such Subsidiary to duly execute and deliver a guaranty of the Obligations in favor of the Collateral Agent in form and substance acceptable
to the Collateral Agent, (iv) deliver to the Collateral Agent the stock certificates representing all of the Capital Stock of such
Subsidiary, along with undated stock powers for each such certificates, executed in blank (or, if any such shares of Capital Stock are
uncertificated, confirmation and evidence reasonably satisfactory to the Collateral Agent that the security interest in such uncertificated
securities has been transferred to and perfected by the Collateral Agent, in accordance with Sections 8-313, 8-321 and 9-115 of the Code
or any other similar or local or foreign law that may be applicable), and (v) duly execute and/or cause to be delivered to the Collateral
Agent, in form and substance acceptable to the Collateral Agent, such opinions of counsel and other documents as the Collateral Agent
shall request with respect thereto; provided, however, that no Grantor shall be required to pledge any Excluded Collateral. Each Grantor
hereby authorizes the Collateral Agent to attach such updated Schedules to this Agreement and agrees that all Pledged Equity and Pledged
Debt listed on any updated Schedule delivered to the Collateral Agent shall for all purposes hereunder be considered Collateral. The Grantors
agree that the pledge of the shares of Capital Stock acquired by a Grantor of Foreign Subsidiary may be supplemented by one or more separate
pledge agreements, deeds of pledge, share charges, or other similar agreements or instruments, executed and delivered by the relevant
Grantor in favor of the Collateral Agent, which pledge agreements will provide for the pledge of such shares of Capital Stock in accordance
with the laws of the applicable foreign jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent may, at any time
and from time to time, in its sole discretion, take actions in such foreign jurisdictions that will result in the perfection of the Lien
created in such shares of Capital Stock.
Section
7. Additional Provisions Concerning the Collateral.
(a) To
the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent to execute any such
agreements, instruments or other documents in such Grantor’s name and to file such agreements, instruments or other documents in
such Grantor’s name and in any appropriate filing office, (ii) authorizes the Collateral Agent at any time and from time to time
to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral (including, without limitation,
any such financing statements that (A) describe the Collateral as “all assets” or “all personal property” (or
words of similar effect) or that describe or identify the Collateral by type or in any other manner as the Collateral Agent may determine
regardless of whether any particular asset of such Grantor falls within the scope of Article 9 of the Code or whether any particular asset
of such Grantor constitutes part of the Collateral, and (B) contain any other information required by Part 5 of Article 9 of the Code
for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including, without limitation,
whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor)
and (iii) ratifies such authorization to the extent that the Collateral Agent has filed any such financing or continuation statements,
or amendments thereto, prior to the date hereof. A photocopy or other reproduction of this Agreement or any financing statement covering
the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.
(b) Each Grantor hereby irrevocably appoints the Collateral Agent as its
attorney-in-fact and proxy, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from
time to time in the Collateral Agent’s discretion, to take any action and to execute any instrument which the Collateral Agent may
deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, (i) to obtain and adjust insurance
required to be paid to the Collateral Agent pursuant to Section 6(e) hereof, (ii) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under or in respect of any Collateral, (iii) to receive, endorse,
and collect any drafts or other Instruments, Documents and Chattel Paper in connection with clause (i) or (ii) above, (iv) to file any
claims or take any action or institute any action, suit or proceedings which the Collateral Agent may deem necessary or desirable for
the collection of any Collateral or otherwise to enforce the rights of the Collateral Agent and the Noteholders with respect to any Collateral,
(v) to execute assignments, licenses and other documents to enforce the rights of the Collateral Agent and the Noteholders with respect
to any Collateral, and (vi) to verify any and all information with respect to any and all Accounts. This power is coupled with an interest
and is irrevocable until all of the Obligations are fully performed and Paid in Full.
(c) For the purpose of enabling the Collateral Agent to exercise rights
and remedies hereunder, at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for
no other purpose, each Grantor hereby grants to the Collateral Agent, to the extent assignable, an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to use, assign, license or sublicense any Intellectual Property
in which such Grantor now or hereafter has any right, title or interest, wherever the same may be located, including, without limitation,
in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof. Notwithstanding anything contained herein to the contrary, but subject to the provisions
of the Securities Purchase Agreement that limit the right of any Grantor to dispose of its property, and Section 6(g) and Section
6(h) hereof, so long as no Event of Default shall have occurred and be continuing, any Grantor may exploit, use, enjoy, protect, license,
sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course of its business
and as otherwise expressly permitted by any of the other Transaction Documents. In furtherance of the foregoing, unless an Event of Default
shall have occurred and be continuing, the Collateral Agent shall from time to time, upon the request of any Grantor, execute and deliver
any instruments, certificates or other documents, in the form so requested, which such Grantor shall have certified are appropriate (in
such Grantor’s judgment) to allow it to take any action permitted above (including relinquishment of the license provided pursuant
to this clause (c) as to any Intellectual Property). Further, upon the full performance and Payment in Full of all of the Obligations,
the Collateral Agent (subject to Section 11(e) hereof) shall release and reassign to any Grantor all of the Collateral Agent’s
right, title and interest in and to the Intellectual Property, and the Licenses, all without recourse, representation or warranty whatsoever.
The exercise of rights and remedies hereunder by the Collateral Agent shall not terminate the rights of the holders of any licenses or
sublicenses theretofore granted by each Grantor in accordance with the second sentence of this clause (c). Each Grantor hereby releases
the Collateral Agent from any claims, causes of action and demands at any time arising out of or with respect to any actions taken or
omitted to be taken by the Collateral Agent under the powers of attorney granted herein other than actions taken or omitted to be taken
through the Collateral Agent’s gross negligence or willful misconduct, as determined by a final judgment of a court of competent
jurisdiction no longer subject to appeal.
(d) If
any Grantor fails to perform any agreement or obligation contained herein, the Collateral Agent may itself perform, or cause performance
of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the expenses of the Collateral Agent incurred
in connection therewith shall be payable by such Grantor pursuant to Section 9 hereof and such obligation shall be secured by the
Collateral.
(e) The
powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral.
(f) Anything
herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise with respect to any
of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if this Agreement
had not been executed, (ii) the exercise by the Collateral Agent of any of its rights or remedies hereunder shall not release any
Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral Agent
shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any of the other Collateral,
nor shall the Collateral Agent be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
(g) As
long as no Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of Default, until
written notice shall be given to the applicable Grantor:
(i) Each
Grantor shall have the right, from time to time, to vote and give consents with respect to the Pledged Equity, or any part thereof for
all purposes not inconsistent with the provisions of this Agreement, the Securities Purchase Agreement or any other Transaction Document;
provided, however, that no vote shall be cast, and no consent shall be given or action taken, which would have the effect of impairing
the position or interest of the Collateral Agent in respect of the Pledged Equity or which would authorize, effect or consent to (unless
and to the extent expressly permitted by the Securities Purchase Agreement):
(A) the
dissolution or liquidation, in whole or in part, of a Pledged Entity;
(B) the
consolidation or merger of a Pledged Entity with any other Person;
(C) the
sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the Collateral
Agent;
(D) any
change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance of any
additional shares of its Capital Stock; or
(E) the
alteration of the voting rights with respect to the Capital Stock of a Pledged Entity.
(h) (i) Each Grantor shall
be entitled, from time to time, to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged
Equity to the extent not in violation of the Securities Purchase Agreement other than any and all: (A) dividends and interest paid or
payable other than in cash in respect of any Pledged Equity, and instruments and other property received, receivable or otherwise distributed
in respect of, or in exchange for, any Pledged Equity; (B) dividends and other distributions paid or payable in cash in respect of any
Pledged Equity in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in capital of a Pledged Entity; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in
redemption of, or in exchange for, any Pledged Equity; provided, however, that until actually paid all rights to such distributions shall
remain subject to the Lien created by this Agreement; and
(ii) all
dividends and interest (other than such cash dividends and interest as are permitted to be paid to any Grantor in accordance with clause
(i) above) and all other distributions in respect of any of the Pledged Equity, whenever paid or made, shall be delivered to the Collateral
Agent to hold as Pledged Equity and shall, if received by any Grantor, be received in trust for the benefit of the Collateral Agent (for
the ratable benefit of the Collateral Agent and the Noteholders), be segregated from the other property or funds of such Grantor, and
be forthwith delivered to the Collateral Agent as Pledged Equity in the same form as so received (with any necessary endorsement).
Section
8. Remedies Upon Event of Default; Application of Proceeds. If any Event of Default shall have occurred and be continuing:
(a) The
Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein, in any other
Transaction Document or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether
or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without
limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to the extent the Collateral
Agent has not theretofore done so) and thereafter receive, for the ratable benefit of itself and the Noteholders, all payments made thereon,
give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright
owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the Collateral
Agent forthwith, assemble all or part of its respective Collateral as directed by the Collateral Agent and make it available to the Collateral
Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient to both parties, and the Collateral
Agent may enter into and occupy any premises owned or leased by any Grantor where the Collateral or any part thereof is located or assembled
for a reasonable period in order to effectuate the Collateral Agent’s rights and remedies hereunder or under law, without obligation
to any Grantor in respect of such occupation, and (iii) without notice except as specified below and without any obligation to prepare
or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale
(including, without limitation, by credit bid), at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and/or
(B) lease, license or dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially
reasonable. Each Grantor agrees that, to the extent notice of sale or any other disposition of its respective Collateral shall be required
by law, at least ten (10) days’ notice to any Grantor of the time and place of any public sale or the time after which any private
sale or other disposition of its respective Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall
not be obligated to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The Collateral
Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against the
Collateral Agent and the Noteholders arising by reason of the fact that the price at which its respective Collateral may have been sold
at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree,
and waives all rights that any Grantor may have to require that all or any part of such Collateral be marshaled upon any sale (public
or private) thereof. Each Grantor hereby acknowledges that (i) any such sale of its respective Collateral by the Collateral Agent
shall be made without warranty, (ii) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment
or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness
of any such sale of Collateral. In addition to the foregoing, (1) upon written notice to any Grantor from the Collateral Agent after
and during the continuance of an Event of Default, such Grantor shall cease any use of the Intellectual Property or any trademark, patent
or copyright similar thereto for any purpose described in such notice; (2) the Collateral Agent may, at any time and from time to time
after and during the continuance of an Event of Default, upon 10 days’ prior notice to such Grantor, license, whether general, special
or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual Property, throughout the universe for such term
or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (3) the Collateral
Agent may, at any time, pursuant to the authority granted in Section 7 hereof or otherwise (such authority being effective upon
the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of such Grantor, one or more instruments
of assignment of the Intellectual Property (or any application or registration thereof), in form suitable for filing, recording or registration
in any country.
(b) Any
cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale or disposition
of or collection from, or other realization upon, all or any part of the Collateral shall be applied as follows (subject to the provisions
of the Securities Purchase Agreement): first, to pay any fees, indemnities or expense reimbursements then due to the Collateral
Agent (including, without limitation, those described in Section 9 hereof); second, to pay any fees, indemnities or expense
reimbursements then due to the Noteholders, on a pro rata basis; third to pay interest due under the Notes owing to the Noteholders,
on a pro rata basis; fourth, to pay or prepay principal in respect of the Notes, whether or not then due, owing to the Noteholders,
on a pro rata basis; fifth, to pay or prepay any other Obligations, whether or not then due, in such order and manner as the Collateral
Agent shall elect, consistent with the provisions of the Securities Purchase Agreement. Any surplus of such cash or Cash Proceeds held
by the Collateral Agent and remaining after the full performance and Payment in Full of all of the Obligations shall be paid over to whomsoever
shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.
(c) In
the event that the proceeds of any such sale, disposition, collection or realization are insufficient to pay all amounts to which the
Collateral Agent and the Noteholders are legally entitled, each Grantor shall be, jointly and severally, liable for the deficiency, together
with interest thereon at the highest rate specified in the Notes for interest on overdue principal thereof or such other rate as shall
be fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other charges of any attorneys
employed by the Collateral Agent to collect such deficiency.
(d) To
the extent that applicable law imposes duties on the Collateral Agent to exercise rights and remedies in a commercially reasonable manner,
each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses deemed
significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection
or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or
other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies
against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral
is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest
in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that
provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match
buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against
risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of brokers, investment
bankers, consultants, attorneys and other professionals to assist the Collateral Agent in the collection or disposition of any of the
Collateral. Each Grantor acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions
by the Collateral Agent would be commercially reasonable in the Collateral Agent’s exercise of rights and remedies against the Collateral
and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being
indicated in this section. Without limitation of the foregoing, nothing contained in this section shall be construed to grant any rights
to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable
law in the absence of this section.
(e) The
Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited to, this Agreement
and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or
other assurances of payment in any particular order, and all of the Collateral Agent’s rights and remedies hereunder and in respect
of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however
existing or arising. To the extent that any Grantor lawfully may, each Grantor hereby agrees that it will not invoke any law relating
to the marshaling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s rights and remedies
under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations
is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully
may, each Grantor hereby irrevocably waives the benefits of all such laws.
Section
9. Indemnity and Expenses.
(a) Each
Grantor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each of the Noteholders harmless
from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses (including, without
limitation, reasonable legal fees, costs, expenses, and disbursements of such Person’s counsel) to the extent that they arise out
of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except to the extent resulting
from such Person’s gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction
no longer subject to appeal.
(b) Each
Grantor agrees, jointly and severally, to pay to the Collateral Agent upon demand the amount of any and all costs and expenses, including
the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts and agents (including, without
limitation, any collateral trustee which may act as agent of the Collateral Agent), which the Collateral Agent may incur in connection
with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification
or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other
realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights or remedies of the Collateral Agent hereunder,
or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.
Section
10. Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed
(by certified mail, first-class postage prepaid and return receipt requested), telecopied, e-mailed or delivered, if to any Grantor,
to the Company’s address, or if to the Collateral Agent or any Noteholder, to it at its respective address, each as set forth in
Section 9(f) of the Securities Purchase Agreement; or as to any such Person, at such other address as shall be designated by such Person
in a written notice to all other parties hereto complying as to delivery with the terms of this Section 10. All such notices and
other communications shall be effective (a) if sent by certified mail, return receipt requested, when received or five Business Days
after deposited in the mails, whichever occurs first, (b) if telecopied or e-mailed, when transmitted (during normal business hours)
and confirmation is received, and otherwise, the day after the notice or communication was transmitted and confirmation is received,
or (c) if delivered in person, upon delivery. For the avoidance of doubt, all Foreign Subsidiaries, as Grantors, hereby appoint the Company
as its agent for receipt of service of process and all notices and other communications in the United States at the address specified
below.
Section
11. Miscellaneous.
(a) No
amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and the Collateral
Agent (and approved by the Required Holders), and no waiver of any provision of this Agreement, and no consent to any departure by each
Grantor therefrom, shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent (and approved by the
Required Holders), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given. No amendment, modification or waiver of this Agreement shall be effective to the extent that it (1) applies to fewer than all of
the holders of Notes or (2) imposes any obligation or liability on any holder of Notes without such holder’s prior written consent
(which may be granted or withheld in such holder’s sole and absolute discretion).
(b) No
failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right or remedy hereunder or under any of the
other Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude
any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of the Collateral Agent or
any Noteholder provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights and remedies of the Collateral Agent or any Noteholder under any of the other Transaction
Documents against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights or remedies
under any of the other Transaction Documents against such party or against any other Person, including but not limited to, any Grantor.
(c) Any
provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
(d) This
Agreement shall create a continuing Lien on and security interest in the Collateral and shall (i) remain in full force and effect until
the full performance and Payment in Full of the Obligations, and (ii) be binding on each Grantor and all other Persons who become bound
as debtor to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of
the Collateral Agent and the Noteholders hereunder, to the ratable benefit of the Collateral Agent and the Noteholders and their respective
permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, without
notice to any Grantor, the Collateral Agent and the Noteholders may assign or otherwise transfer their rights and obligations under this
Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon become vested with all
of the benefits in respect thereof granted to the Collateral Agent and the Noteholders herein or otherwise. Upon any such assignment or
transfer, all references in this Agreement to the Collateral Agent or any such Noteholder shall mean the assignee of the Collateral Agent
or such Noteholder. None of the rights or obligations of any Grantor hereunder may be assigned, delegated or otherwise transferred without
the prior written consent of the Collateral Agent in its sole and absolute discretion, and any such assignment, delegation or transfer
without such consent of the Collateral Agent shall be null and void.
(e) Upon
the full performance and Payment in Full of the Obligations, (i) this Agreement and the security interests created hereby shall terminate
and all rights to the Collateral shall revert to the respective Grantor that granted such security interests hereunder, and (ii) the Collateral
Agent will, upon any Grantor’s request and at such Grantor’s expense, (A) return to such Grantor such of the Collateral as
shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence such termination, all without any representation, warranty or recourse
whatsoever.
(f) Governing
Law; Jurisdiction; Jury Trial.
(i) All
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 provision or rule of law (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdiction other than the State of New York.
(ii) Each
Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York,
for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction
contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim,
defense or objection 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 Section 9(f) of the Securities Purchase Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Collateral
Agent or the Noteholders from bringing suit or taking other legal action against any Grantor in any other jurisdiction to collect on a
Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.
(iii) WAIVER
OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
(iv) Each
Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred
to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.
(g) Section
headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
(h) This
Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall
be deemed to be an original, but all of which taken together constitute one and the same Agreement. Delivery of any executed counterpart
of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.
(i) This
Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is
rescinded or must otherwise be returned by the Collateral Agent, any Noteholder or any other Person (upon (i) the occurrence of any Insolvency
Proceeding of any of the Company or any Grantor or (ii) otherwise, in all cases as though such payment had not been made).
Section
12. Material Non-Public Information. Upon receipt or delivery by any Grantor of any notice in accordance
with the terms of this Agreement, unless such Grantor has in good faith determined that the matters relating to such notice do not constitute
material, non-public information relating to the Grantor or any of its Subsidiaries, such Grantor shall within one (1) Business Day after
any such receipt or delivery publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In
the event that such Grantor believes that a notice contains material, non-public information relating to such Grantor or any of its Subsidiaries,
such Grantor so shall indicate to the Collateral Agent and any applicable Noteholder contemporaneously with delivery of such notice, and
in the absence of any such indication, the Collateral Agent and each Noteholder shall be allowed to presume that all matters relating
to such notice do not constitute material, non-public information relating to such Grantor or its Subsidiaries. Nothing contained in this
Section 12 shall limit any obligations of any Grantor, or any rights or remedies of the Collateral Agent or any Noteholder, under
Section 4(i) of the Securities Purchase Agreement.
[REMAINDER OF
THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each Grantor
has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written.
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GRANTORS: |
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GOLDEN SUN HEALTH TECHNOLOGY GROUP LIMITED |
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|
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By: |
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Name: |
Xueyuan Weng |
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Title: |
Chief Executive Officer |
[Signature Page to Security
Agreement]
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ACCEPTED BY: |
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Zion Asset Management Limited |
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as Collateral Agent |
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By: |
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Name: |
CHEN, SHIH-CHANG |
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Title: |
Director |
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Brixton
GSH Fund LLC |
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|
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By: Brixton
GSH Capital Management LLC, Manager |
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|
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as Collateral
Agent |
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|
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By: |
|
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|
Name: |
Timothy J. Craddock |
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Title: |
Manager |
[Signature Page to Security
Agreement]
EXHIBIT A
FORM OF INTELLECTUAL
PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY
AGREEMENT (as amended, modified, supplemented, renewed, restated or replaced from time to time, this “IP Security Agreement”),
dated [ , 2024], is made by the Persons listed on the signature pages hereof (collectively, the “Grantors”) in favor
of [ ], in its capacity as collateral agent (the “Collateral Agent”) for the Noteholders. All capitalized terms not
otherwise defined herein shall have the meanings respectively ascribed thereto in the Security Agreement (as defined below).
WHEREAS, Golden Sun Health Technology
Group Limited, a company organized under the laws of Cayman Islands(the “Company”), and each party listed as a “Buyer”
therein (collectively, the “Buyers”) are parties to that certain Securities Purchase Agreement, dated October 28, 2024,
pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes”
(as defined therein) issued pursuant thereto (as such Notes may be amended, modified, supplemented, renewed, restated or replaced from
time to time in accordance with the terms thereof, collectively, the “Notes”);
WHEREAS, it is a condition precedent
to the purchase of the Notes under the Securities Purchase Agreement that each Grantor has executed and delivered that certain Security
and Pledge Agreement, dated October 28, 2024, made by the Grantors to the Collateral Agent (as amended, modified, supplemented, renewed,
restated or replaced from time to time, the “Security Agreement”); and
WHEREAS, under the terms of
the Security Agreement, the Grantors have granted to the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders,
a Lien on and security interest in, among other property, certain intellectual property of the Grantors, and have agreed as a condition
thereof to execute this IP Security Agreement for recording with the U.S. Patent and Trademark Office, the United States Copyright Office
and other governmental authorities.
WHEREAS, the Grantors have determined
that the execution, delivery and performance of this IP Security Agreement directly benefits, and is in the best interest of, the Grantors.
NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Grantor
agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows
SECTION 1. Grant of Security.
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby
pledges and assigns to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors
and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest
in, all of such Grantor’s right, title and interest in, to and under the following (the “Collateral”):
(i) the
Patents and Patent applications set forth in Schedule A hereto;
(ii) the
Trademark and service mark registrations and applications set forth in Schedule B hereto (provided that no security interest
shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period in which, the
grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable
federal law), together with the goodwill symbolized thereby;
(iii) all
Copyrights, whether registered or unregistered, now owned or hereafter acquired by such Grantor, including, without limitation, the copyright
registrations and applications and exclusive copyright licenses set forth in Schedule C hereto;
(iv) all
reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing, all rights
in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world and all other
rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto;
(v) any
and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation, misuse
or breach with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover,
such damages; and
(vi) any
and all Proceeds, including without limitation Cash and Noncash Proceeds of, collateral for, income, royalties and other payments now
or hereafter due and payable with respect to, and Supporting Obligations relating to, any and all of the collateral of or arising from
any of the foregoing.
SECTION 2. Security for Obligations.
The grant of a Lien on and security interest in, the Collateral by each Grantor under this IP Security Agreement constitutes continuing
collateral security for the payment and performance of all Obligations of such Grantor now or hereafter existing under or in respect of
the Notes and the Transaction Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract causes of action, costs, expenses or otherwise.
SECTION 3. Recordation.
Each Grantor authorizes and requests that the Register of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable government officer record this IP Security Agreement.
SECTION 4. Execution in Counterparts.
This IP Security Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement.
SECTION 5. Grants, Rights
and Remedies. This IP Security Agreement has been entered into in conjunction with the provisions of the Security Agreement. Each
Grantor does hereby acknowledge and confirm that the grant of the Lien and security interest hereunder to, and the rights and remedies
of, the Collateral Agent with respect to the Collateral are more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated herein by reference as if fully set forth herein.
SECTION 6. Governing
Law; Jurisdiction; Jury Trial.
(i) All
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 provision or rule of law (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdiction other than the State of New York.
(ii) Each
Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough
of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents
or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim, defense or objection 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 Section 9(f) of the Securities Purchase Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to
preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action against any Grantor in any other jurisdiction
to collect on a Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.
(iii) WAIVER
OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
(iv) Each
Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred
to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.
[The remainder of the page is
intentionally left blank]
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date first above written.
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GOLDEN SUN HEALTH TECHNOLOGY GROUP LIMITED |
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Address for Notices: |
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[Signature Page to IP Agreement]
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date first above written.
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[GRANTOR] |
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[Signature Page to IP Agreement]
Schedule A
Patents
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Country | |
Title | |
Application or
Patent No. | |
Application or Registration Date | |
Assignees |
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Schedule B
Trademarks
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Country | |
Trademark | |
Application or
Registration No. | |
Application or Registration Date | |
Assignees |
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Schedule C
Copyrights
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Country | |
Title | |
Type of Work | |
Application or
Registration No. | |
Issue Date | |
Assignees |
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SCHEDULE I
Legal Names; Organizational Identification
Numbers;
States or Jurisdiction of Organization
Grantor’s
Name | |
State of Organization | |
Federal
Employer I.D. | |
Organizational I.D. |
| Golden Sun Health Technology Group Limited | |
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| Grantor’s Name | |
State of Organization | |
Federal Employer I.D. | |
Organizational I.D. |
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SCHEDULE II
Intellectual Property
Patents
| Grantor | |
Country | |
Title | |
Application or
Patent No. | |
Application or Registration Date | |
Assignees |
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Trademarks
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Country | |
Trademark | |
Application or
Registration No. | |
Application or Registration Date | |
Assignees |
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Copyrights
| Grantor | |
Country | |
Title | |
Type of Work | |
Application or Registration No. | |
Issue Date | |
Assignees |
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Licenses
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Licensee | |
Type | |
Scope | |
Term |
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SCHEDULE III
Locations
| Grantor’s Name | |
Chief Executive Office | |
Chief Place of Business | |
Books and Records | |
Inventory,
Equipment, Etc. |
Golden Sun Health Technology
Group Limited | |
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SCHEDULE IV
Promissory Notes, Securities, Deposit Accounts,
Securities Accounts and Commodities Accounts
Securities
| Grantor | |
Name of Issuer /
Pledged Entity | |
Number
of Shares | |
Class | |
Certificate
No.(s) |
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Deposit Accounts, Securities Accounts and Commodities Accounts
| Grantor | |
Name and Address of Institution | |
Purpose of the Account | |
Account No. |
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Foreign Currency Controlled Accounts
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Name and Address of
Institution | |
Amount Held in Account |
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Pledged Equity
SCHEDULE V
Financing Statements
| Grantor | |
Jurisdiction for Filing Financing Statement |
| Golden Sun Health Technology Group Limited | |
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SCHEDULE VI
Commercial Tort Claims
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SCHEDULE VII
Permitted Liens
Exhibit 10.6
GUARANTY
This GUARANTY, dated as of October
28 2024 (this “Guaranty”), is made by each of the undersigned (each a “Guarantor”,
and collectively, the “Guarantors”), in favor of Zion
Asset Management Limited and Brixton GSH Fund LLC, in its capacity as collateral agent (in such capacity, the “Collateral Agent”
as hereinafter further defined) for the “Buyers” party to the Securities Purchase Agreement (each as defined below).
W
I T N E S S E T H:
WHEREAS, Golden Sun Health Technology
Group Limited, a company organized under the laws of Cayman Islands, with principal executive office located at Room 503, Building C2,
No. 1599 Xinjinqiao Road, Pudong New Area, Shanghai, China (the “Company”),
and each party listed as a “Buyer” on the Schedule
of Buyers attached thereto (collectively, the “Buyers”)
are parties to the Securities Purchase Agreement, dated as of October 28, 2024 (as amended, restated, extended, replaced or otherwise
modified from time to time, the “Securities Purchase Agreement”),
pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Note”
issued pursuant thereto (as such Note may be amended, restated, extended, replaced or otherwise modified from time to time in accordance
with the terms thereof the “Note”);
WHEREAS, the Securities Purchase
Agreement requires that the Guarantors execute and deliver to the Collateral Agent, (i) a guaranty guaranteeing all of the obligations
of the Company under the Securities Purchase Agreement, the Notes and the other Transaction Documents (as defined below); and (ii) a Security
and Pledge Agreement, dated as of the date hereof, granting the Collateral Agent a lien on and security interest in all of their assets
and properties (the “Security Agreement”); and
WHEREAS, each Guarantor has
determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best interest of, such Guarantor.
NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Guarantor
hereby agrees with each Buyer as follows:
SECTION 1. Definitions.
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used in
this Guaranty and the recitals hereto which are defined in the Securities Purchase Agreement or the Notes, and which are not
otherwise defined herein shall have the same meanings herein as set forth therein. In addition, the following terms when used in the
Guaranty shall have the meanings set forth below:
“Bankruptcy Code”
means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency
or similar laws).
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to
remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain
closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders
or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic
funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers
on such day.
“Buyer”
or “Buyers” shall have the meaning set forth in the recitals hereto.
“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities
exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any Person that is not a corporation,
any and all partnership, membership or other equity interests of such Person.
“Collateral”
means all assets and properties of the Company and each Guarantor, wherever located and whether now or hereafter existing and whether
now owned or hereafter acquired, of every kind and description, tangible or intangible, including, without limitation, the collateral
described in Section 3(a) of the Security Agreement.
“Collateral Agent”
shall have the meaning set forth in the recitals hereto.
“Company”
shall have the meaning set forth in the recitals hereto.
“Governmental Authority”
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.
“Guaranteed Obligations”
shall have the meaning set forth in Section 2 of this Guaranty.
“Guarantor”
or “Guarantors” shall have the meaning set forth in the recitals hereto.
“Indemnified Party”
shall have the meaning set forth in Section 13(a) of this Guaranty.
“Insolvency Proceeding”
means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency
law, assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
“Notes”
shall have the meaning set forth in the recitals hereto.
“Obligations”
shall have the meaning set forth in Section 4 of the Security Agreement.
“Other Taxes”
shall have the meaning set forth in Section 12(a)(iv) of this Guaranty.
“Paid in Full”
or “Payment in Full” means the indefeasible payment in full in cash of all of the Guaranteed Obligations.
“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization,
joint venture or other enterprise or entity or Governmental Authority.
“Securities Purchase
Agreement” shall have the meaning set forth in the recitals hereto.
“Security Agreement”
shall have the meaning set forth in the recitals hereto.
“Subsidiary”
means any Person in which a Guarantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity or
similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person,
and all of the foregoing, collectively, “Subsidiaries”.
“Taxes”
shall have the meaning set forth in Section 12(a) of this Guaranty.
“Transaction Party”
means the Company and each Guarantor, collectively, “Transaction Parties”.
SECTION 2. Guaranty.
(a) The
Guarantors, jointly and severally, hereby unconditionally and irrevocably, guaranty to the Collateral Agent, for the benefit of the Collateral
Agent and the Buyers, the punctual payment, as and when due and payable, by stated maturity or otherwise, of all Obligations, including,
without limitation, all interest, make-whole and other amounts that accrue after the commencement of any Insolvency Proceeding of the
Company or any Guarantor, whether or not the payment of such interest, make-whole and/or other amounts are enforceable or are allowable
in such Insolvency Proceeding, and all fees, interest, premiums, penalties, causes of actions, costs, commissions, expense reimbursements,
indemnifications and all other amounts due or to become due under any of the Transaction Documents (all of the foregoing collectively
being the “Guaranteed Obligations”), and agrees to
pay any and all costs and expenses (including counsel fees and expenses) incurred by the Collateral Agent in enforcing any rights under
this Guaranty or any other Transaction Document. Without limiting the generality of the foregoing, each Guarantor’s liability hereunder
shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Company to the Collateral Agent
or any Buyer under the Securities Purchase Agreement and the Notes but for the fact that they are unenforceable or not allowable due to
the existence of an Insolvency Proceeding involving any Transaction Party.
(b) Each
Guarantor, and by its acceptance of this Guaranty, the Collateral Agent and each Buyer, hereby confirms that it is the intention of all
such Persons that this Guaranty and the Guaranteed Obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance
for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign,
federal, provincial, state, or other applicable law to the extent applicable to this Guaranty and the Guaranteed Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Collateral Agent, the Buyers and the Guarantors hereby irrevocably agree that the
Guaranteed Obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the
Guaranteed Obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.
SECTION 3. Guaranty Absolute;
Continuing Guaranty; Assignments.
(a) The
Guarantors, jointly and severally, guaranty that the Guaranteed Obligations will be paid strictly in accordance with the terms of the
Transaction Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Collateral Agent or any Buyer with respect thereto. The obligations of each Guarantor under this Guaranty are
independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against any Guarantor to enforce
such obligations, irrespective of whether any action is brought against any Transaction Party or whether any Transaction Party is joined
in any such action or actions. The liability of any Guarantor under this Guaranty shall be as a primary obligor (and not merely as a surety)
and shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives, to the extent permitted
by law, any defenses it may now or hereafter have in any way relating to, any or all of the following:
(i) any
lack of validity or enforceability of any Transaction Document;
(ii) any
change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any Transaction Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to any Transaction Party or extension of the maturity of any Guaranteed
Obligations or otherwise;
(iii) any
taking, exchange, release or non-perfection of any Collateral;
(iv)
any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;
(v) any
change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Transaction
Party;
(vi) any
manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any
manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other
Obligations of any Transaction Party under the Transaction Documents or any other assets of any Transaction Party or any of its Subsidiaries;
(vii) any
failure of the Collateral Agent or any Buyer to disclose to any Transaction Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of any other Transaction Party now or hereafter known to the
Collateral Agent or any Buyer (each Guarantor waiving any duty on the part of the Collateral Agent or any Buyer to disclose such information);
(viii) taking
any action in furtherance of the release of any Guarantor or any other Person that is liable for the Obligations from all or any part
of any liability arising under or in connection with any Transaction Document without the prior written consent of the Collateral Agent;
or
(ix) any
other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by
the Collateral Agent or any Buyer that might otherwise constitute a defense available to, or a discharge of, any Transaction Party or
any other guarantor or surety.
(b) This
Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations
is rescinded or must otherwise be returned by the Collateral Agent, any Buyer, or any other Person upon the insolvency, bankruptcy or
reorganization of any Transaction Party or otherwise, all as though such payment had not been made.
(c) This
Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed Obligations (other
than inchoate indemnity obligations) and shall not terminate for any reason prior to the respective Maturity Date of each Note (other
than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective successors and assigns.
This Guaranty shall inure to the benefit of and be enforceable by the Collateral Agent, the Buyers, and their respective successors, and
permitted pledgees, transferees and assigns. Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer
may pledge, assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of any Transaction
Document to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to
the Collateral Agent or such Buyer (as applicable) herein or otherwise, in each case as provided in the Securities Purchase Agreement
or such Transaction Document.
SECTION 4. Waivers. To
the extent permitted by applicable law, each Guarantor hereby waives promptness, diligence, protest, notice of acceptance and any other
notice or formality of any kind with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Collateral
Agent exhaust any right or take any action against any Transaction Party or any other Person or any Collateral. Each Guarantor acknowledges
that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in
this Section 4 is knowingly made in contemplation of such
benefits. The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future. Without limiting the foregoing, to the extent permitted
by applicable law, each Guarantor hereby unconditionally and irrevocably waives (a) any defense arising by reason of any claim or
defense based upon an election of remedies by the Collateral Agent or any Buyer that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights
of such Guarantor to proceed against any of the other Transaction Parties, any other guarantor or any other Person or any Collateral,
and (b) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor
hereunder. Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of the Collateral Agent or any Buyer to
disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Transaction Party or any of its Subsidiaries now or hereafter known by the Collateral Agent or a
Buyer.
SECTION 5. Subrogation.
No Guarantor may exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that
arise from the existence, payment, performance or enforcement of any Guarantor’s obligations under this Guaranty, including,
without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Collateral Agent or any Buyer against any Transaction Party or any other guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from any Transaction Party or any other guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and
until there has been Payment in Full of the Guaranteed Obligations. If any amount shall be paid to a Guarantor in violation of the
immediately preceding sentence at any time prior to Payment in Full of the Guaranteed Obligations and all other amounts payable
under this Guaranty, such amount shall be held in trust for the benefit of the Collateral Agent and shall forthwith be paid to the
Collateral Agent to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Transaction Document, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising. If (a) any Guarantor shall make payment to the
Collateral Agent of all or any part of the Guaranteed Obligations, and (b) there has been Payment in Full of the Guaranteed
Obligations, the Collateral Agent will, at such Guarantor’s request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.
SECTION 6. Representations,
Warranties and Covenants.
(a) Each
Guarantor hereby represents and warrants as of the date first written above as follows:
(i) such
Guarantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization as set forth on the signature pages hereto, (B) has all requisite corporate, limited
liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and
to execute, deliver and perform its obligations under this Guaranty and each other Transaction Document to which such Guarantor is a party,
and to consummate the transactions contemplated hereby and thereby and (C) is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such
qualification necessary except where the failure to be so qualified (individually or in the aggregate) would not result in a Material
Adverse Effect.
(ii) The
execution, delivery and performance by such Guarantor of this Guaranty and each other Transaction Document to which such Guarantor is
a party (A) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (B) do not
and will not contravene its charter, articles, certificate of formation or by-laws, its limited liability company or operating agreement
or its certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding
on such Guarantor or its properties do not and will not result in or require the creation of any lien, security interest or encumbrance
(other than pursuant to any Transaction Document) upon or with respect to any of its properties, and (C) do not and will not result in
any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization
or approval applicable to it or its operations or any of its properties.
(iii) No
authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required
in connection with the due execution, delivery and performance by such Guarantor of this Guaranty or any of the other Transaction Documents
to which such Guarantor is a party (other than expressly provided for in any of the Transaction Documents).
(iv) This
Guaranty has been duly executed and delivered by each Guarantor and is, and each of the other Transaction Documents to which such Guarantor
is or will be a party, when executed and delivered, will be, a legal, valid and binding obligation of such Guarantor, enforceable against
such Guarantor in accordance with its terms, except as may be limited by the Bankruptcy Code or other applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, suretyship or similar laws and equitable principles (regardless of whether enforcement
is sought in equity or at law).
(v) There
is no pending or, to the best knowledge of such Guarantor, threatened action, suit or proceeding against such Guarantor or to which any
of the properties of such Guarantor is subject, before any court or other Governmental Authority or any arbitrator that (A) if adversely
determined, could reasonably be expected to have a Material Adverse Effect or (B) relates to this Guaranty or any of the other Transaction
Documents to which such Guarantor is a party or any transaction contemplated hereby or thereby.
(vi) Such
Guarantor (A) has read and understands the terms and conditions of the Securities Purchase Agreement and the other Transaction Documents,
and (B) now has and will continue to have independent means of obtaining information concerning the affairs, financial condition
and business of the Company and the other Transaction Parties, and has no need of, or right to obtain from the Collateral Agent or any
Buyer, any credit or other information concerning the affairs, financial condition or business of the Company or the other Transaction
Parties.
(vii) There
are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived.
(b) Each
Guarantor covenants and agrees that until Payment in Full of the Guaranteed Obligations, it will comply with each of the covenants (except
to the extent applicable only to a public company) which are set forth in Section 4 of the Securities Purchase Agreement as if such
Guarantor were a party thereto.
SECTION 7. Right of
Set-off. Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent and any Buyer may,
and is hereby authorized to, at any time and from time to time, without notice to the Guarantors (any such notice being expressly
waived by each Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Collateral Agent or any Buyer
to or for the credit or the account of any Guarantor against any and all obligations of the Guarantors now or hereafter existing
under this Guaranty or any other Transaction Document, irrespective of whether or not the Collateral Agent or any Buyer shall have
made any demand under this Guaranty or any other Transaction Document and although such obligations may be contingent or unmatured.
The Collateral Agent and each Buyer agrees to notify the relevant Guarantor promptly after any such set-off and application made by
the Collateral Agent or such Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Collateral Agent or any Buyer under this Section 7
are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent or
such Buyer may have under this Guaranty or any other Transaction Document in law or otherwise.
Section
8. Limitation on Guaranteed Obligations.
(a) Notwithstanding
any provision herein contained to the contrary, each Guarantor’s liability hereunder shall be limited to an amount not to exceed
as of any date of determination the greater of:
(i) the
amount of all Guaranteed Obligations, plus interest thereon at the applicable Interest Rate as specified in the Note; and
(ii) the
amount which could be claimed by the Collateral Agent from any Guarantor under this Guaranty without rendering such claim voidable or
avoidable under the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or
similar statute or common law after taking into account, among other things, Guarantor’s right of contribution and indemnification.
(b) Each
Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guaranty hereunder or affecting the rights and remedies of the Collateral Agent or any Buyer hereunder
or under applicable law.
(c) No
payment made by the Company, any Guarantor, any other guarantor or any other Person or received or collected by the Collateral Agent or
any other Buyer from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or any payment received or collected
from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability
of such Guarantor hereunder until after all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have
been Paid in Full.
SECTION 9. Notices,
Etc. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Guaranty
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) Business Day after deposit with an nationally recognized overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. All notices and other communications provided for
hereunder shall be sent, if to any Guarantor, to the Company’s address and/or facsimile number, or if to the Collateral Agent
or any Buyer, to it at its respective address and/or facsimile number, each as set forth in Section 9(f) of the Securities Purchase
Agreement.
Section
10. Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of
this Guaranty 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 jurisdictions) that would cause the application of the laws of
any jurisdiction other than the State of New York. Each Guarantor hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or under
any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim, obligation or defense 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 Section 9(f) of the
Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained
herein shall be deemed or operate to preclude the Collateral Agent or the Buyers from bringing suit or taking other legal action against
any Guarantor in any other jurisdiction to collect on a Guarantor’s obligations or to enforce a judgment or other court ruling
in favor of the Collateral Agent or a Buyer.
SECTION 11. WAIVER OF
JURY TRIAL, ETC. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR
THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS
GUARANTY, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
SECTION 12. Taxes.
(a) All
payments made by any Guarantor hereunder or under any other Transaction Document shall be made in accordance with the terms of the respective
Transaction Document and shall be made without set-off, counterclaim, withholding, deduction or other defense. Without limiting the foregoing,
all such payments shall be made free and clear of and without deduction or withholding for any present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of the Collateral Agent or any Buyer by the jurisdiction in which the Collateral Agent or such Buyer is
organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities, collectively or individually, “Taxes”).
If any Guarantor shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any
other Transaction Document:
(i) the
amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings (including
Taxes on amounts payable to the Collateral Agent or any Buyer pursuant to this sentence) the Collateral Agent or each Buyer receives an
amount equal to the sum it would have received had no such deduction or withholding been made,
(ii) such
Guarantor shall make such deduction or withholding,
(iii) such
Guarantor shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law, and
(iv) as
promptly as possible thereafter, such Guarantor shall send the Collateral Agent or each Buyer an official receipt (or, if an official
receipt is not available, such other documentation as shall be satisfactory to the Collateral Agent, as the case may be) showing payment.
In addition, each Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise
with respect to, this Guaranty or any other Transaction Document (collectively, “Other
Taxes”).
(b) Each
Guarantor hereby indemnifies and agrees to hold each Indemnified Party harmless from and against Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 12)
paid by any Indemnified Party as a result of any payment made hereunder or from the execution, delivery, registration or enforcement
of, or otherwise with respect to, this Guaranty or any other Transaction Document, and any liability (including penalties, interest and
expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall be paid within thirty (30) days from the date on which the Collateral
Agent or such Buyer makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other Taxes.
(c) If
any Guarantor fails to perform any of its obligations under this Section 12,
such Guarantor shall indemnify the Collateral Agent and each Buyer for any taxes, interest or penalties that may become payable as a result
of any such failure. The obligations of the Guarantors under this Section 12
shall survive the termination of this Guaranty and the payment of the Obligations and all other amounts payable hereunder.
Section
13. Indemnification.
(a) Without
limitation of any other obligations of any Guarantor or remedies of the Collateral Agent or the Buyers under this Guaranty or applicable
law, except to the extent resulting from such Indemnified Party’s gross negligence or willful misconduct, as determined by a final
judgment of a court of competent jurisdiction no longer subject to appeal, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Collateral Agent and each Buyer and each of their affiliates and their respective officers,
directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand,
any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel)
that may be incurred by or asserted or awarded against any Indemnified Party in connection with or as a result of any failure of any Guaranteed
Obligations to be the legal, valid and binding obligations of any Transaction Party enforceable against such Transaction Party in accordance
with their terms.
(b) Each
Guarantor hereby also agrees that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort
or otherwise) or any fiduciary duty or obligation to any of the Guarantors or any of their respective affiliates or any of their respective
officers, directors, employees, agents and advisors, and each Guarantor hereby agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential, incidental or punitive damages arising out of or otherwise relating
to the facilities, the actual or proposed use of the proceeds of the advances, the Transaction Documents or any of the transactions contemplated
by the Transaction Documents.
SECTION 14. Miscellaneous.
(a) Each
Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to the Collateral
Agent or each Buyer, at such address specified by the Collateral Agent or such Buyer from time to time by notice to the Guarantors.
(b) No
amendment or waiver of any provision of this Guaranty and no consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by each Guarantor, the Collateral Agent and each Buyer, and then such waiver
or consent shall be effective only in the specific instance and for the specific purpose for which given.
(c) No
failure on the part of the Collateral Agent or any Buyer to exercise, and no delay in exercising, any right or remedy hereunder or under
any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder or under
any Transaction Document preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies
of the Collateral Agent and the Buyers provided herein and in the other Transaction Documents are cumulative and are in addition to, and
not exclusive of, any rights or remedies provided by law. The rights and remedies of the Collateral Agent and the Buyers under any Transaction
Document against any party thereto are not conditional or contingent on any attempt by the Collateral Agent or any Buyer to exercise any
of their respective rights or remedies under any other Transaction Document against such party or against any other Person.
(d) Any
provision of this Guaranty that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(e) This
Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed Obligations (other
than inchoate indemnity obligations) and shall not terminate for any reason prior to the respective Maturity Date of each Note (other
than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective successors and assigns.
This Guaranty shall inure, together with all rights and remedies of the Collateral Agent hereunder, to the benefit of and be enforceable
by the Collateral Agent, the Buyers, and their respective successors, and permitted pledgees, transferees and assigns. Without limiting
the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge, assign or otherwise transfer all or any portion
of its rights and obligations under and subject to the terms of the Securities Purchase Agreement or any other Transaction Document to
any other Person in accordance with the terms thereof, and such other Person shall thereupon become vested with all the benefits in respect
thereof granted to the Collateral Agent or such Buyer (as applicable) herein or otherwise, in each case as provided in the Securities
Purchase Agreement or such Transaction Document. None of the rights or obligations of any Guarantor hereunder may be assigned or otherwise
transferred without the prior written consent of each Buyer.
(f) This
Guaranty and the other Transaction Documents reflect the entire understanding of the transaction contemplated hereby and shall not be
contradicted or qualified by any other agreement, oral or written, entered into before the date hereof.
(g) Section
headings herein are included for convenience of reference only and shall not constitute a part of this Guaranty for any other purpose.
Section
15. Currency Indemnity.
If, for the purpose of obtaining
or enforcing judgment against Guarantor in any court in any jurisdiction, it becomes necessary to convert into any other currency (such
other currency being hereinafter in this Section 15 referred to as the “Judgment Currency”) an amount due under
this Guaranty in any currency (the “Obligation Currency”) other than the Judgment Currency, the conversion shall be
made at the rate of exchange prevailing on the Business Day immediately preceding (a) the date of actual payment of the amount due, in
the case of any proceeding in the courts of courts of the jurisdiction that will give effect to such conversion being made on such date,
or (b) the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable
date as of which such conversion is made pursuant to this Section 15 being hereinafter in this Section 15 referred to as
the “Judgment Conversion Date”).
If, in the case of any proceeding
in the court of any jurisdiction referred to in the preceding paragraph, there is a change in the rate of exchange prevailing between
the Judgment Conversion Date and the date of actual receipt of the amount due in immediately available funds, the Guarantors shall pay
such additional amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount actually received
in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of the Judgment Currency stipulated in the judgment or judicial order at the
rate of exchange prevailing on the Judgment Conversion Date. Any amount due from the Guarantors under this Section 15 shall be
due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Guaranty.
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IN WITNESS WHEREOF, each Guarantor
has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.
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GUARANTORS: |
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GOLDEN SUN HEALTH TECHNOLOGY GROUP LIMITED |
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By: |
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Name: |
Xueyuan Weng |
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Title: |
Chief Executive Officer |
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ACCEPTED BY: |
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Zion Asset Management Limited |
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as Collateral Agent |
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By: |
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Name: |
CHEN, SHIH-CHANG |
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Title: |
Director |
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Brixton GSH Fund LLC |
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By: Brixton GSH Capital Management LLC, Manager |
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as Collateral Agent |
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By: |
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Name: |
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Title: |
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Golden Sun Health Techno... (NASDAQ:GSUN)
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Golden Sun Health Techno... (NASDAQ:GSUN)
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