UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2025
Commission file number: 001-39109
Fangdd Network Group Ltd.
Room 1501, Shangmei Technology Building
No. 15 Dachong Road
Nanshan District, Shenzhen, 518072
People’s Republic of China
Phone: +86 755 2699 8968
(Address and Telephone Number of Principal Executive
Offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form
40-F ☐
EXHIBIT INDEX
INCORPORATION BY REFERENCE
Exhibits 1.1, 5.1, 8.1, 10.1, 10.2 and 23.2 to this report on Form
6-K are hereby incorporated by reference into the registration statement of Fangdd Network Group Ltd. on Form F-3 (No. 333-267397) to
the extent not superseded by documents or reports subsequently filed.
Signature
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Fangdd Network Group Ltd. |
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By: |
/s/ Xi Zeng |
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Name: |
Xi Zeng |
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Title: |
Chief Executive Officer and Chairman of the Board of Directors |
Date: March 14, 2025
2
Exhibit 1.1
March 13, 2025
Fangdd Network Group Ltd.
Xi Zeng
Room 1501, Shangmei Technology Building
15 Dachong Road
Nanshan District, Shenzhen, 518072
People’s Republic of China
| Re: | Exclusive Placement Agent Agreement |
Dear Mr. Zeng,
The purpose of this letter agreement (this “Engagement
Letter” or this “Agreement”) is to set forth the terms and conditions pursuant to which MM Global Securities,
Inc. (“MM”), as the “Placement Agent”, shall serve as the Exclusive Placement Agent during the Term
(as defined below) for Fangdd Network Group Ltd., NASDAQ: [DUO] (the “Company”), on a “best efforts” basis,
in connection with any public or private offering or other financing or capital-raising transaction of any kind (each, a “Placement”)
of unregistered or registered securities (the “Securities”) of the Company, which may include ordinary shares (the
“Shares”) of the Company or securities convertible into Shares, pursuant to a private placement or, if registered,
pursuant to a registration statement.
This Agreement shall become effective as of the
date first written above (the “Effective Date”). The terms of such Placement(s) and the Securities shall be mutually
agreed upon by the Company and the investors (each, an “Investor” and collectively, the “Investors”)
and nothing herein enables the Placement Agent to bind the Company or any Investor. This Agreement and the documents executed and delivered
by the Company and the Investors in connection with the Placement(s) shall be collectively referred to herein as the “Transaction
Documents.” The date of each of the closings of the Placement(s) shall be referred to herein as the “Closing Date.”
The Company expressly acknowledges and agrees that the Placement Agent’s obligations hereunder are on a reasonable “best efforts”
basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase or to sell any
Securities and does not ensure the successful placement of any Securities or any portion thereof. The identities of the investors to which
the Placement Agent introduces the Company shall be proprietary information of the Placement Agent and shall not be divulged to third
parties by the Company, nor used by the Company outside the scope of the Placement Agent’s engagement as described herein, other
than as required by applicable law.
SECTION 1. COMPENSATION AND OTHER FEES.
As compensation for the Placement Agent’s
services hereunder, the Company shall pay to the Placement Agent a cash placement fee upon each Closing, in an amount equal to eight and
a half percent (8.5%) of the total amount of cash proceeds received by the Company from the sale of its Securities from such Closing during
the term of this Agreement (the “Placement Agent Fee”) to Investor(s) procured by the Placement Agent. Notwithstanding
anything to the contrary in this Agreement, the compensation provided for in this Agreement shall be subject to such reduction as may
be necessary for the compensation to comply with Financial Industry Regulatory Authority (“FINRA”) Rule 5110. The Company
agrees to reimburse the Placement Agent for its legal expense in an amount of $15,000.
SECTION 2. COMPANY REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to, and agrees
with, the Placement Agent on the Effective Date and on each date on which any Securities are offered that (Sections (A)-(D) shall only
be applicable to any Placement completed on a registered basis pursuant to the Securities Act (as defined below)):
(A) The Company will file with the Securities
and Exchange Commission (the “Commission”) a registration statement on Form F-3 under the Securities Act of 1933, as
amended (the “Securities Act”), which will become effective on prior to the Placement, for the registration under the
Securities Act of the Securities. At the time of such filing and on the Effective Date, or if the Company has an existing useable F-3
shelf registration, the Company will have met the requirements of Form F-3 under the Securities Act. Such registration statement meets
the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule. The Company will file with the Commission
pursuant to Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the
Commission promulgated thereunder, a supplement to the form of prospectus included in such registration statement relating to the placement
of the Securities and the plan of distribution thereof and has advised the Placement Agent of all further information (financial and other)
with respect to the Company required to be set forth therein. Such registration statement, including the exhibits thereto, as amended
from time to time, is hereinafter called the “Registration Statement”; such prospectus in the form in which it appears
in the Registration Statement is hereinafter called the “Base Prospectus”; and the supplemented form of prospectus,
in the form in which it will be filed with the Commission pursuant to Rule 424(b) (including the Base Prospectus as so supplemented) is
hereinafter called the “Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the
Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein (the
“Incorporated Documents”) pursuant to Item 12 of Form F-3 which were filed under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), on or before the Effective Date, or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Effective Date, or the issue date of the Base Prospectus or the Prospectus Supplement,
as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements and schedules
and other information that is “contained,” “included,” “described,” “referenced,” “set
forth” or “stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement (and all other references
of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is or is deemed
to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, as the case may be. No
stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus Supplement has
been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company’s knowledge, is threatened by
the Commission. For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under
the Securities Act and the “Time of Sale Prospectus” means the preliminary prospectus, if any, together with the free
writing prospectuses, if any, used in connection with the Placement, including any documents incorporated by reference therein.
(B) The Registration Statement (and any further
documents to be filed with the Commission) will contain all exhibits and schedules as required by the Securities Act. Each of the Registration
Statement and any post-effective amendment thereto, at the time it becomes effective, will comply in all material respects with the Securities
Act and the Exchange Act and the applicable Rules and Regulations and did not and, as amended or supplemented, if applicable, will not,
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Base Prospectus, the Time of Sale Prospectus, if any, and the Prospectus Supplement, each as of
its respective date, will comply in all material respects with the Securities Act and the Exchange Act and the applicable Rules and Regulations.
Each of the Base Prospectus, the Time of Sale Prospectus, if any, and the Prospectus Supplement, as amended or supplemented, will not
contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. The Incorporated Documents, when they are
filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable Rules and
Regulations, and none of such documents, when they were filed with the Commission, will contain any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference
in the Base Prospectus or Prospectus Supplement), in light of the circumstances under which they were made not misleading; and any further
documents so filed and incorporated by reference in the Base Prospectus, the Time of Sale Prospectus, if any, or Prospectus Supplement,
when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the
applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. No post-effective
amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or
in the aggregate, a fundamental change in the information set forth therein will be required to be filed with the Commission. There are
no documents required to be filed with the Commission in connection with the transaction contemplated hereby that will not be filed pursuant
to the Securities Act within the requisite time period. There are no contracts or other documents required to be described in the Base
Prospectus, the Time of Sale Prospectus, if any, or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration
Statement, that will not be described or filed as required.
(C) The Company is currently eligible to use free
writing prospectuses in connection with the Placement pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus
that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission
in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each
free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities
Act and the applicable rules and regulations of the Commission thereunder. The Company will not, without the prior consent of the Placement
Agent, prepare, use or refer to, any free writing prospectus.
(D) The Company will as promptly as practicable
deliver to the Placement Agent complete conformed copies of the Registration Statement and of each consent and certificate of experts,
as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Base Prospectus, the
Time of Sale Prospectus, if any, and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the
Placement Agent reasonably request. Neither the Company nor any of its directors and officers has distributed and none of them will distribute,
prior to the Closing Date, any offering material in connection with the offering and sale of the Securities other than the Base Prospectus,
the Time of Sale Prospectus, if any, the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference
therein and any other materials permitted by the Securities Act.
(E) There are no affiliations with any FINRA member
firm among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or greater stockholder of
the Company.
(F) The Placement Agent shall have received on
each Closing Date a comfort letter dated the Closing Date and addressed to the Placement Agent in form and substance satisfactory to the
Placement Agent; and a written opinion of counsel for the Company, dated the Closing Date and addressed to the Placement Agent in form
and substance satisfactory to the Placement Agent, which shall include, without limitation, opinions related to (i) the corporate existence
of the Company and power to operate its business; (ii) the corporate power and authority of the Company to execute all agreements and
perform its obligations related to the Placement; (iii) the ability of the Company to enter into all agreements and perform its obligations
related to the Placement without contravening or violating (or causing the triggering of any anti-dilution or similar provisions in) its
charter documents, any other agreements or any applicable law, regulation or rule; (iv) that any Securities (and any Shares underlying
such Securities) will be duly authorized, fully paid, validly issued and non-assessable, as applicable; (v) that no approval, consent,
order, filing or notice is required to complete the Placement and for the Company to perform its obligations in the Placement; and (vi)
if the Placement is being completed pursuant to a Registration Statement, the effectiveness of the Registration Statement and that all
filings required by the Securities Act of 1933, as amended, have been made.
(G) The Placement Agent shall be entitled to rely
upon any and all representations and warranties of the Company included in the purchase agreements entered into by the Company and the
Investors in connection with the Placement, subject to the qualifications and limitations therein, including, but not limited to, any
disclosure set forth on an applicable schedule.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF
PLACEMENT AGENT.
The Placement Agent represents and warrants to
the Company that: (i) it will comply with all applicable federal laws regarding trading in securities of the Company, (ii) it will not
disclose any non-public material information of the Company without the prior written consent of the Company during the Term for a period
of one (1) year from the termination date of this Agreement, and (iii) that it is a registered broker-dealer in good standing with the
relevant regulatory agencies.
SECTION 4. ENGAGEMENT TERM & SURVIVAL.
The term of this Agreement shall be for a period
of the earlier of one (1) month from the Effective Date or the completion of the Placement (the “Term”). The Placement
Agent shall be entitled to a Placement Agent Fee, calculated in the manner provided in Section 1, with respect to any Closing during the
Term to the extent that such financing or capital is provided to the Company by investors whom the Placement Agent had contacted on behalf
of the Company, or investors “wall-crossed” by the Placement Agent in connection with the Placement during the Term. The provisions
of Sections 1, 2, 3, 4, 5, 6, 7, 9, 10 and 11 of this Agreement and Appendix A shall survive this Agreement’s expiration or termination.
SECTION 5. PLACEMENT AGENT INFORMATION.
The Company agrees that any information or advice
rendered by the Placement Agent in connection with this engagement is for the confidential use of the Company only in its evaluation of
the Placement and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information
in any manner without prior written consent of the Placement Agent.
SECTION 6. NO FIDUCIARY RELATIONSHIP; THIRD
PARTY BENEFICIARIES.
This Agreement does not create, and shall not
be construed as creating rights enforceable by any person or entity that is not a party hereto, except those entitled hereto by virtue
of the indemnification provisions hereof. The Company acknowledges and agrees that the Placement Agent is not and shall not be construed
as a fiduciary of the Company and that the Placement Agent shall not have any duties or liabilities to the equity holders or the creditors
of the Company or to any other person by virtue of this Agreement or the retention of the Placement Agent hereunder, all of which are
hereby expressly waived.
SECTION 7. INDEMNIFICATION.
The parties agree to the terms of the Placement
Agent’s standard indemnification agreement, which is attached hereto as Appendix A and incorporated herein by reference.
SECTION 8 ANNOUNCEMENTS.
The Company grants to the Placement Agent the
right to place customary announcement(s) of the Placement in certain newspapers and to mail announcement(s) to persons and firms selected
by Placement Agent, at the Placement Agent’s expense, subject to the Company’s prior approval, which shall not be unreasonably
withheld.
SECTION 9. GOVERNING LAW.
This Agreement will be governed by, and construed
in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State. This Agreement
may not be assigned by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to
any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived. Any dispute arising under this
Agreement may be brought into the courts of the State of New York located in New York County or into the Federal Court located in New
York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions
of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
SECTION 10. ENTIRE AGREEMENT/MISC.
This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof.
If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such
provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may
not be amended or otherwise modified or waived except by an instrument in writing signed by each of the Placement Agent and the Company.
The representations, warranties, agreements and covenants contained herein shall survive the closing of the Placement and delivery and/or
exercise of the Securities, as applicable. This Agreement may be executed in two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original
thereof.
SECTION 11. NOTICES.
Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest
of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified on the signature
pages attached hereto prior to 6:30 p.m. (New York, New York time) on a business day, (b) the next business day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number on the signature pages attached hereto on a day that
is not a business day or later than 6:30 p.m. (New York, New York time) on any business day, (c) the business day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.
Please confirm that the foregoing correctly sets
forth our agreement by signing and returning an executed copy of this Agreement to us.
| MM Global Securities, Inc. |
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| By: |
/s/ Peng Zhang |
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| Name: |
Peng Zhang |
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| Title: |
Principal/CCO |
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| Address for notice: |
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| 575 Lexington Ave, Unit 12-111 |
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| New York, NY 10022 |
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| USA |
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| Accepted and Agreed to as of |
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| the Effective Date: |
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| March 13, 2025 |
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| Fangdd Network Group Ltd. |
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| By: |
/s/ Xi Zeng |
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| Name: |
Xi Zeng |
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| Title: |
CEO |
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| Address for notice: |
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| Room 1501, Shangmei Technology Building |
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| 15 Dachong Road |
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| Nanshan District, Shenzhen, 518072 |
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| People’s Republic of China |
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| Accepted and Agreed to as of |
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| the Effective Date: |
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| March 13, 2025 |
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APPENDIX A - - INDEMNIFICATION PROVISIONS
(A) The Company agrees to indemnify and hold harmless the Placement
Agent and its affiliates and their respective officers, directors, employees, agents, counsel, advisers and consultants, and any persons
controlling the Placement Agent or any of its affiliates within the meaning of Section 15 of the Securities Act of 1933 or Section 20
of the Securities Exchange Act of 1934 (the Placement Agent and each such other person or entity being referred to herein as an “Indemnified
Person”), from and against all claims, liabilities, losses or damages (or actions in respect thereof) or other expenses (and
further agrees to advance all expenses) which (A) are related to or arise out of (i) actions taken or omitted to be taken (including any
untrue statements made or any statements omitted to be made) by the Company or its respective affiliates in connection with this Agreement,
the Placement or which affect the Placement or (ii) actions taken or omitted to be taken by an Indemnified Person with the consent or
in conformity with the actions or omissions of the Company or their respective affiliates in connection with this Agreement, the Placement
or which affect the Placement or (iii) any investigation, litigation, or inquiry by a regulatory or self-regulatory agency or authority
involving the Company or any transaction arising under any agreements between the Company and the Placement Agent or (B) are otherwise
related to or arise out of the Placement Agents’ activities on behalf of the Company or its respective affiliates pursuant to this
Agreement or (C) in any way involving or alleged to involve the Company, any Placement or any Securities. The Company will not be responsible,
however, for any losses, claims, damages, liabilities or expenses pursuant to clause (B) of the preceding sentence which are finally judicially
determined to have resulted solely from such Indemnified Person’s gross negligence or willful misconduct. In addition, the Company
agrees to advance (and in the absence of advancement required hereunder) to promptly reimburse each Indemnified Person for all reasonable
out-of-pocket expenses (including fees and expenses of counsel) as they are incurred by such Indemnified Person in connection with investigating,
preparing, conducting or defending any such action or claim, whether or not in connection with litigation in which any Indemnified Person
is a named party, or in connection with enforcing the rights of such Indemnified Person under this Agreement, including the costs of any
claims asserted by an Indemnified Person against any indispensable party or by way of a counterclaim in any litigation within the scope
of this provision. The Company agrees to advance such expenses incurred by an Indemnified Person pursuant to which indemnity may be sought
hereunder within thirty (30) days after receipt by the Company of a statement requesting such advances from time to time, whether prior
to or after final disposition of any proceeding. Such advances shall be unsecured and interest free and without regard to the Indemnified
Person’s ultimate entitlement to indemnification under the other provisions of this Agreement. Indemnified Persons shall be entitled
to continue to receive advancement of expenses pursuant to this section unless and until the matter of an Indemnified Person’s entitlement
to indemnification hereunder has been finally adjudicated by court order or judgment from which no further right of appeal exists. Each
Indemnified Person undertakes to repay such amounts advanced only if and to the extent that, it ultimately is determined that the Indemnified
Person is not entitled to be indemnified by the Company under the provisions of this Agreement.
(B) Promptly after receipt by the Placement Agent of notice of any
claim or the commencement of any action or proceeding with respect to which the Placement Agent is entitled to indemnity hereunder, the
Placement Agent will notify the Company in writing of such claim or of the commencement of such action or proceeding, and the Company
will assume the defense of such action or proceeding and will employ counsel reasonably satisfactory to the Placement Agent and will pay
the reasonable fees and expenses of such counsel. Notwithstanding the preceding sentence, the Placement Agent will be entitled to employ
counsel separate from counsel for the Company and from any other party in such action if counsel for the Placement Agent determines that
to do so would be in the best interests of the Placement Agent. In such event, the reasonable fees and disbursements of no more than one
such separate counsel will be paid by the Company. The Company will have the exclusive right to settle the claim or proceeding at its
sole expense provided that the Company obtains a full and unconditional release of any claims against the Placement Agent and the Indemnified
Persons from all liability on claims that are the subject matter of such proceeding and does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of Placement Agent or any Indemnified Person.
(C) The Company and the Placement Agent and any Indemnified Persons
agree to notify each other promptly of the assertion of any claim or the commencement of any action or proceeding relating to a transaction
contemplated by this engagement letter.
(D) If for any reason the foregoing indemnity is unavailable to the
Placement Agent or insufficient to hold the Placement Agent harmless, then the Company shall contribute to the amount paid or payable
by the Placement Agent as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not
only the relative benefits received by the Company on the one hand and the Placement Agent on the other, but also the relative fault of
the Company on the one hand and the Placement Agent on the other that resulted in such losses, claims, damages or liabilities, as well
as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees and expenses reasonably incurred in defending any litigation, proceeding
or other action or claim. Notwithstanding the provisions hereof, the Placement Agent’s share of the liability hereunder shall not
be in excess of the amount of fees actually received by Placement Agent under this engagement letter (excluding any amounts received as
reimbursement of expenses incurred by Placement Agent).
(E) These indemnification provisions shall remain in full force and
effect whether or not the transaction contemplated by this Agreement is completed and shall survive the termination of this Agreement,
and shall be in addition to any liability that the Company might otherwise have to any indemnified party under this engagement letter
or otherwise.
Exhibit 5.1
Our ref MCR/747458-000003/31478137v3
Fangdd Network Group Ltd.
Room 1501, Shangmei Technology Building
No. 15 Dachong Road
Nanshan District, Shenzhen, 518072
People’s Republic of China
14 March 2025
Dear Sirs
Fangdd Network Group Ltd.
We have acted as Cayman Islands legal advisers
to Fangdd Network Group Ltd. (the “Company”) in connection with the Company’s registration statement on Form F-3
(Registration No. 333-267397), including all amendments or supplements thereto (the “Registration Statement”), filed
with the Securities and Exchange Commission (the “Commission”) under the U.S. Securities Act of 1933, as amended to date,
relating to securities to be issued and sold by the Company from time to time, and the prospectus supplement to the Registration Statement
dated 14 March 2025 (the “Prospectus Supplement”), relating to (a) issue of US$5,000,000 senior 5% original issue discount
convertible promissory notes (the “Convertible Notes”); (b) the issue of Class A ordinary shares of the Company of
a par value of US$0.0005625 each (the “Conversion Shares”) upon the exercise of the Convertible Notes; and (c) the offering
of an additional 251,890 Class A ordinary shares of the Company of a par value of US$0.0005625 each as commitment shares for the issuance
of the Convertible Notes (the “Commitment Shares”, and together with the Conversion Shares, the “Shares”)
in accordance with the Securities Purchase Agreement dated 13 March 2025 entered into between the Company and the relevant Investor named
therein (the “Securities Purchase Agreement”) and the Placement Agent Agreement dated 13 March 2025 entered into between
the Company and MM Global Securities, Inc. (the “Placement Agent Agreement”).
We are furnishing this opinion as Exhibit 5.1, 8.1 and 23.2 to the
Registration Statement.
For the purposes of this opinion, we have reviewed
only originals, copies or final drafts of the following documents:
| 1.1 | The certificate of incorporation of the Company dated 19 September 2013 and the certificate of incorporation
on change of name of the Company dated 11 October 2019. |
| 1.2 | The sixth amended and restated memorandum and articles of association adopted by special resolutions dated
11 July 2024 and effective on 12 August 2024 (the “Memorandum and Articles”). |
| 1.3 | The written resolutions of the board of directors of the Company dated 13 March 2025 (the “Board
Resolutions”). |
| 1.4 | A certificate of good standing with respect to the Company issued by the Registrar of Companies dated
7 March 2025 (the “Certificate of Good Standing”). |
| 1.5 | A certificate from a director of the Company a copy of which is attached to this opinion letter (the “Director’s
Certificate”). |
| 1.6 | The Registration Statement. |
| 1.7 | The Prospectus Supplement. |
| 1.8 | The Securities Purchase Agreement, the Convertible Notes and the Placement Agent Agreement (collectively,
the Transaction Documents”). |
The following opinions are given only as to, and
based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to
the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving these opinions we have relied (without
further verification) upon the completeness and accuracy, as of the date of this opinion letter, of the Director’s Certificate and the
Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:
| 2.1 | Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies
of, or in the final forms of, the originals. |
| 2.2 | All signatures, initials and seals are genuine. |
| 2.3 | The Placement Agent Agreement has been or will be authorised and duly executed and unconditionally delivered
by or on behalf of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of the
Cayman Islands). |
| 2.4 | The Placement Agent Agreement is, or will be, legal, valid, binding and enforceable against all relevant
parties in accordance with their terms under the laws of the State of New York and all other relevant laws (other than, with respect to
the Company, the laws of the Cayman Islands). |
| 2.5 | The Company has, or will have, sufficient authorized but unissued Shares in its authorized share capital
to enable the Company to issue the Conversion Shares upon exercise of the Convertible Notes and the Commitment Shares. |
| 2.6 | The Company will receive money or money’s worth in consideration for the issue of the Shares, and none
of such Shares will be issued for less than their par value. |
| 2.7 | The capacity, power, authority and legal right of all parties under all relevant laws and regulations
(other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally deliver
and perform their respective obligations under the Transaction Documents. |
| 2.8 | There is no contractual or other prohibition or restriction (other than as arising under Cayman Islands
law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Transaction Documents. |
| 2.9 | No monies paid to or for the account of any party under the Transaction Documents or any property received
or disposed of by any party to the Transaction Documents in each case in connection with the Transaction Documents or the consummation
of the transactions contemplated thereby represent or will represent proceeds of criminal conduct or criminal property or terrorist property
(as defined in the Proceeds of Crime Act (As Revised) and the Terrorism Act (As Revised), respectively). |
| 2.10 | At the time of the conversion of the Convertible Notes into the Conversion Shares and the issue of the
Commitment Shares in accordance with the terms and provisions of the Transaction Documents (the “Exercise”): |
| (a) | the laws of the Cayman Islands (including the Companies Act (As
Revised) of the Cayman Islands (the “Companies Act”) will not have changed in such way as to materially impact the issue
of the Shares; |
| (b) | the Company will have sufficient authorised but unallotted and unissued
Class A ordinary shares of the Company of a par value of US$0.0005625 each, in each case
to effect the Exercise in accordance with the terms and provisions of the Transaction Documents, then then effective memorandum and articles
of association of the Company and the Companies Act; |
| (c) | the Company will not have been struck off or placed in liquidation;
|
| (d) | the terms and provisions of the Convertible Notes relating to the
Exercise will not have been altered, amended or restated; and |
| (e) | the then effective memorandum and articles of association of the
Company will not contain anything which would or might affect the opinions set out below. |
| 2.11 | There is nothing under any law (other than the laws of the Cayman Islands) which would or might affect
the opinions set out below. |
| 2.12 | There is nothing contained in the minute book or corporate records of the Company (which we have not inspected)
which would or might affect the opinions set out below. |
| 2.13 | The issue of the Shares under the Transaction Documents will be of commercial benefit to the Company. |
| 2.14 | No invitation has been or will be made by or on behalf of the Company to the public in the Cayman Islands
to subscribe for any of the Shares. |
Based upon the foregoing and subject to the qualifications set out
below and having regard to such legal considerations as we deem relevant, we are of the opinion that:
| 3.1 | The Company has been duly incorporated as an exempted company with limited liability and is validly existing
and in good standing with the Registrar of Companies under the laws of the Cayman Islands. |
| 3.2 | The authorised share capital of the Company, is US$5,625,000 divided into 10,000,000,000 shares comprising
of (i) 5,000,000,000 Class A Ordinary Shares of a par value of US$0.0005625 each, (ii) 100,000 Class B Ordinary Shares of a par value
of US$0.0005625 each, (iii) 200,000 Class C Ordinary Shares of a par value of US$0.0005625 each, and (iv) 4,999,700,000 shares of a par
value of US$0.0005625 each of such class or classes (however designated) as the board of directors may determine in accordance with the
Memorandum and Articles. |
| 3.3 | The execution, issue, delivery and performance of the Transaction Documents, including the issue of the
(i) Conversion Shares and (ii) the Commitment Shares, as contemplated by the Registration Statement, have been authorised by and on behalf
of the Company and, upon the execution and unconditional delivery of the Transaction Documents by any director of the Company or Officer
(as defined in the Board Resolutions) for and on behalf of the Company, the Transaction Documents will have been duly executed, issued
and delivered on behalf of the Company and will constitute the legal, valid and binding obligations of the Company enforceable in accordance
with their terms. |
| 3.4 | The issue and allotment of the (i) Conversion Shares upon conversion of the Convertible Notes and (ii)
the Commitment Shares, have been duly authorised and when allotted, issued and paid for as contemplated in the Registration Statement
and the Transaction Documents, such Shares will be legally issued and allotted, fully paid and non-assessable. As a matter of Cayman law,
a share is only issued when it has been entered in the register of members (shareholders). |
| 3.5 | The statements under the caption “Taxation” in the prospectus forming part of the Registration
Statement and the Prospectus Supplement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material
respects and that such statements constitute our opinion. |
The opinions expressed above are subject to the
following qualifications:
| 4.1 | To maintain the Company in good standing under the laws of the Cayman Islands, annual filing fees must
be paid and returns made to the Registrar of Companies within the time frame prescribed by law. |
| 4.2 | The obligations assumed by the Company under the Transaction Documents will not necessarily be enforceable
in all circumstances in accordance with their terms. In particular: |
| (a) | enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts
or moratorium or other laws of general application relating to, protecting or affecting the rights of creditors and/or contributories; |
| (b) | enforcement may be limited by general principles of equity. For example, equitable remedies such as specific
performance may not be available, inter alia, where damages are considered to be an adequate remedy; |
| (c) | some claims may become barred under relevant statutes of limitation or may be or become subject to defences
of set off, counterclaim, estoppel and similar defences; |
| (d) | where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable
in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; |
| (e) | the courts of the Cayman Islands have jurisdiction to give judgment in the currency of the relevant obligation
and statutory rates of interest payable upon judgments will vary according to the currency of the judgment. If the Company becomes insolvent
and is made subject to a liquidation proceeding, the courts of the Cayman Islands will require all debts to be proved in a common currency,
which is likely to be the “functional currency” of the Company determined in accordance with applicable accounting principles.
Currency indemnity provisions have not been tested, so far as we are aware, in the courts of the Cayman Islands; |
| (f) | arrangements that constitute penalties will not be enforceable; |
| (g) | enforcement may be prevented by reason of fraud, coercion, duress, undue influence, misrepresentation,
public policy or mistake or limited by the doctrine of frustration of contracts; |
| (h) | provisions imposing confidentiality obligations may be overridden by compulsion of applicable law or the
requirements of legal and/or regulatory process; |
| (i) | the courts of the Cayman Islands may decline to exercise jurisdiction in relation to substantive proceedings
brought under or in relation to the Transaction Documents in matters where they determine that such proceedings may be tried in a more
appropriate forum; |
| (j) | we reserve our opinion as to the enforceability of the relevant provisions of the Transaction Documents
to the extent that they purport to grant exclusive jurisdiction as there may be circumstances in which the courts of the Cayman Islands
would accept jurisdiction notwithstanding such provisions; |
| (k) | a company cannot, by agreement or in its articles of association, restrict the exercise of a statutory
power and there is doubt as to the enforceability of any provision in the Transaction Documents whereby the Company covenants to restrict
the exercise of powers specifically given to it under the Companies Act, including, without limitation, the power to increase its authorised
share capital, amend its memorandum and articles of association or present a petition to a Cayman Islands court for an order to wind up
the Company; and |
| (l) | enforcement or performance of any provision in the Transaction Documents which relates, directly or indirectly,
to an interest in the Company constituting shares, voting rights or ultimate effective control over management in the Company may be prohibited
or restricted if any such relevant interest is or becomes subject to a restrictions notice issued under the Beneficial Ownership Transparency
Act (As Revised) (the “BOT Act”). |
| 4.3 | Applicable court fees will be payable in respect of the enforcement of the Transaction Documents. |
| 4.4 | We express no opinion as to the meaning, validity or effect of any references to foreign (i.e. non-Cayman
Islands) statutes, rules, regulations, codes, judicial authority or any other promulgations and any references to them in the Transaction
Documents. |
| 4.5 | In this opinion the phrase “non-assessable” means, with respect to ordinary shares of the Company,
that a shareholder shall not, solely by virtue of its status as a shareholder and in absence of a contractual arrangement, or an obligation
pursuant to the memorandum and articles of association, to the contrary, be liable for additional assessments or calls on the ordinary
shares by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship
or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). |
Except as specifically stated herein, we make
no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents
or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions, which are the subject of this
opinion.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the reference to our name under the headings “Enforceability of Civil Liabilities”
and “Legal Matters” and elsewhere in the prospectus included in the Registration Statement and the Prospectus Supplement. In
giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of
the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission thereunder.
Yours faithfully
/s/ Maples and Calder (Hong Kong) LLP
Maples and Calder (Hong Kong) LLP
Director’s Certificate
Exhibit 10.1
SECURITIES PURCHASE
AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of March ___, 2025, between Fangdd
Network Group Ltd., a Cayman Islands exempted company with limited liability (the “Company”), and
the purchasers identified on the signature pages hereto (together with its successors and assigns, each, an “Investor”
and collectively the “Investors”).
Whereas,
subject to the terms and conditions set forth in this Agreement and pursuant to an effective Registration Statement under the Securities
Act (as such terms are defined below), the Company desires to issue and sell to each Investor, and each Investor desires to purchase from
the Company, securities of the Company as more fully described in this Agreement.
Now,
Therefore, In Consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and each Investor agrees as follows:
Article
I
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not descriptive and are otherwise defined
herein have the meanings given to such terms in the Notes (as defined herein), and (b) the following terms have the meanings set forth
in this Section 1.1:
“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.7.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Alternative Conversion
Price” shall have the meaning defined in the Notes.
“Board of Directors”
means the board of directors of the Company.
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in New York, N.Y. are authorized or required by Laws
to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by Law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any Governmental Authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the New York, N.Y. are generally are
open for use by customers on such day.
“Memorandum and
Articles” means the Memorandum and Articles of Association of the Company, as amended.
“Closing”
means the Closing of the sale of Securities pursuant to this Agreement.
“Closing Date”
means the date on which the Closing occurs, which shall be the Trading Day on which all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all conditions precedent to (i) each Investor’s obligations to pay the Subscription
Amount as to the Closing and (ii) the Company’s obligations to deliver the Securities to be issued and sold, in each case, have
been satisfied or waived.
“Common Stock”
means the Class A ordinary shares of the Company, par value $0.0005625 per share.
“Common Stock
Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company Counsel”
means Cooley LLP and Maples and Calder (Hong Kong) LLP respectively.
“Company Intellectual
Property” means all Intellectual Property that is owned or purported to be owned or held for use by the Company.
“Company IP Agreements”
means all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to sue, permissions and
other contracts (including any right to receive or obligation to pay royalties or any other consideration), whether written or oral, relating
to Intellectual Property to which the Company is a party, beneficiary or otherwise bound.
“Company IP Registrations”
means all Company Intellectual Property that is subject to any issuance registration, application or other filing by, to or with any Governmental
Authority or authorized private registrar in any jurisdiction, including registered trademarks, domain names and copyrights, issued and
reissued patents and pending applications for any of the foregoing.
“Company Privacy
Policy” means each external or internal, past or present privacy policy or privacy or data security-related policy of Company,
as well as any representation, obligation or promise of Company under any contract, relating to: (i) the privacy of customers or users
of any Company Products, website, products or services operated by or on behalf of Company; and (ii) the collection, storage, hosting,
disclosure, transmission, transfer, disposal, other processing or security of any Customer Data or Personal Information, each as defined.
“Company Products”
means all proprietary products and services of the Company that are currently being, or at any time since the Company’s inception
have been, offered, licensed, sold, distributed, hosted, maintained, supported or otherwise provided or made available by or on behalf
of Company.
“Company Systems”
means all Software, and computer hardware, servers, networks, platforms, peripherals, data communication lines and other information technology
equipment and related systems, including any outsourced systems and processes, that are owned or used by Company in the conduct of its
business as currently conducted.
“Conversion Price”
shall have the meaning ascribed to such term in the Notes.
“Conversion Shares”
means the shares of Common Stock issuable upon conversion pursuant to the Notes.
“Customer Data”
means all data, text, content, information or other material uploaded or otherwise transmitted by Company’s customers to, or stored
by Company’s customers on or in Company Products or any service of Company.
“Disclosure Schedules”
refer to the Schedules attached to this Agreement.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York, N.Y. time) and before midnight
(New York, N.Y. time) on any Trading Day, 9:01 a.m. (New York, N.Y. time) on the Trading Day immediately following the date hereof, and
(ii) if this Agreement is signed between midnight (New York, N.Y. time) and 9:00 a.m. (New York, N.Y. time) on any Trading Day, no later
than 9:01 a.m. (New York, N.Y. time) on the date hereof.
“Equity Conditions”
has the meaning set forth in the Notes.
“Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(y).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options not to exceed 15% of the shares of Common Stock outstanding at any given time
to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of
the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services
rendered to the Company, (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued hereunder, (ii) any
warrants issued to the Placement Agent in connection with the transactions pursuant to this Agreement and any securities upon exercise
of such warrants so issued to the Placement Agent, (iii) other securities exercisable or exchangeable for or convertible into shares of
Common Stock issued and outstanding on the date of this Agreement (without regard to any vesting requirements), provided that such
securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations or the contemplated
holding company merger) or to extend the term of such securities, (c) issuance of Class C ordinary shares of the Company, and/or (d) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the directors of the Company, provided that
any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business synergistic with the business of the Company and which shall reasonably be expected to provide
to the Company additional benefits, but shall not include a transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Governmental
Authority” means any federal, state, county, local, municipal or other government or political subdivision thereof, whether
domestic or foreign, and any agency, authority, commission, ministry, instrumentality, regulatory body, court, tribunal, arbitrator, central
bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining
to any such government.
“Indebtedness”
means (a) any liabilities of the Company including all Subsidiaries for borrowed money or amounts (other than trade accounts payable incurred
in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations of the Company including all Subsidiaries
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet
(or the footnotes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; (c) the present value of any lease payments of the Company including all Subsidiaries due under leases
required to be capitalized in accordance with GAAP; and (d) transactions relating to the sale of any existing or future sales of accounts
receivables including merchant cash advances or sales of future accounts receivable of the Company including all Subsidiaries;
“Intellectual
Property” means all intellectual property and industrial property rights and assets, and all rights, interests and protections
that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, pursuant to the Laws of
any jurisdiction throughout the world, whether registered or unregistered, including any and all: (a) trademarks, service marks, trade
names, brand names, logos, trade dress, design rights and other similar designations of source, sponsorship, association or origin, together
with the goodwill connected with the use of and symbolized by, and all registrations, applications and renewals for, any of the foregoing;
(b) internet domain names, whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental
Authority, web addresses, web pages, websites and related content, social media accounts, including but not limited to X (formerly Twitter)
and Facebook and the content found thereon and related thereto, and URLs; (c) works of authorship, expressions, designs and design registrations,
whether or not copyrightable, including copyrights, author, performer, moral and neighboring rights, and all registrations, applications
for registration and renewals of such copyrights; (d) inventions, discoveries, trade secrets, business and technical information and know-how,
data, databases, and data collections, and confidential and proprietary information and all rights therein; (e) patents (including all
reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions
thereof), patent applications, and other patent rights and any other Governmental Authority-issued indicia of invention ownership (including
inventor’s certificates, petty patents and patent utility models); and (f ) Software.
“Investor Party”
shall have the meaning ascribed to such term in Section 4.10.
“Key Executives”
means all of the Company’s officers and directors as of the date hereof.
“Laws”
with respect to a Person means any federal, state, local, municipal, or other laws, common law, statutes, constitutions, ordinances, rules,
regulations, codes, orders, or legally enforceable requirements enacted, issued, adopted, promulgated, enforced, ordered, or applied by
any Governmental Authority applicable to such Person or any of its Subsidiaries, including its respective business and operations.
“Lead Investor”
means the Investor indicated as “Lead Investor” on its respective signature page hereto.
“Legend Removal
Date” shall have the meaning ascribed to such term in Section 4.1(b).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material Adverse
Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material Permits”
shall have the meaning ascribed to such term in Section 3.1(n).
“Maximum Rate”
shall have the meaning ascribed to such term in Section 5.17.
“Nason Yeager”
means Nason Yeager Gerson Harris & Fumero, P.A., with offices located at 3001 PGA Boulevard, Suite 305, Palm Beach Gardens, Florida
33410.
“Note”
and “Notes” means the Senior Convertible Notes due, subject to the terms therein, nine months from the date
of issuance, issued by the Company to each Investor hereunder, in the form of Exhibit A attached hereto.
“Open Source Software”
means any Software or Intellectual Property that is distributed as “free” or “open source” or pursuant to any
license identified as an “open source license” by the Open Source Initiative (www.opensource.org/licenses) or other license
that substantially conforms to the Open Source Definition (http://opensource.org/osd) including but not limited to the GNU General Public
License (GPL), GNU Lesser General Public License (LGPL), GNU Affero General Public License (AGPL), MIT License (MIT), Apache License,
Artistic License and BSD Licenses.
“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
exempted company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Personal Information”
means: (i) a natural person’s name, street address, telephone number, email address, photograph, social security number or tax identification
number, driver’s license number, passport number, credit card number, bank information, or customer or account number, biometric
identifiers or any other piece of information that allows the identification of or contact with a natural person and for greater certainty
includes all such information with respect to employees, (ii) data collected from an IP address, unique device identifier or MAC address,
web beacon, pixel tag, ad tag, cookie, local storage object, software, or by any other means, or from a particular computer, web browser,
mobile device, or other device or application, where such data (a) is collected from a particular computer or device regarding online
activities; or (b) is or may be used to identify or contact an individual or device or application, to predict or infer the preferences,
interests, or other characteristics of the device or application or of a user of such device or application, or to target advertisements
or other content to a device or application, or to a user of such device or application, and (iii) any information that is associated,
directly or indirectly (by, for example, records linked via unique keys), to any of the foregoing. Personal Information also includes
any information not listed in (i), (ii) or (iii) above if such information is defined as “personal data”, “personally
identifiable information”, “individually identifiable health information,” “protected health information,”
or “personal information” under any Law.
“Placement Agent”
means MM Global Securities, Inc.
“PRC”
means the People’s Republic of China.
“Prior Notes”
means the Senior 5% Original Issuance Discount Convertible Promissory Notes issued in the Prior Transaction.
“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.12(b).
“Prior Transaction”
means the transactions pursuant to the Securities Purchase Agreement dated February 10, 2025 by and among the Company and the investors
named therein, including the sale and issuance of the Prior Notes and shares of common stock pursuant thereto.
“Principal Amount”
means, as to each Investor, the amounts set forth below such Investor’s signature block on the signature pages hereto next to the
heading “Principal Amount,” in United States Dollars.
“Principal Market”
means The Nasdaq Capital Market.
“Principal Market
Rules” means the rules and regulations of the Principal Market.
“Pro Rata Portion”
has the meaning set forth in Section 4.12.
“Prospectus”
means the final base prospectus filed for the Registration Statement.
“Prospectus Supplement”
means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the SEC and delivered by the
Company to each Investor at the Closing.
“Public Information
Failure” shall have the meaning ascribed to such term in Section 4.3(b).
“Public Information
Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).
“Registration
Statement” means the effective registration statement on Form F-3 (File No. 333-267397) covering the offer, sale and issuance
of the Shares and Underlying Shares.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).
“Required Holders”
means (i) prior to the Closing Date, if no Prior Notes are outstanding, each Investor and (ii) on or after the Closing Date, holders of
at least 66.0% of the aggregate Principal Amount of Notes, Prior Notes and Additional Notes (as such terms are defined in the Notes) then
outstanding.
“Required Minimum”
means, as of any date, the 225% of the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future
pursuant to the Transaction Documents, including any Underlying Shares issuable upon conversion in full of all Notes (including Underlying
Shares issuable as payment of interest on the Notes), ignoring any conversion or exercise limits set forth therein (including, without
limitation, the Floor Price or the Event Market Price (each as defined in the Notes)), and assuming that the Conversion Price is at all
times on and after the date of determination equal to the Floor Price.
“Rule 144”
means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
“Schedule”
refers to the Disclosure Schedules.
“SEC”
means the United States Securities and Exchange Commission.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Notes, the Shares and the Underlying Shares.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shareholder Approval”
means such approval as may be required by the Principal Market Rules and/or applicable Law from the shareholders of the Company with respect
to the transactions contemplated by the Transaction Documents, including the issuance of all of the Shares and Underlying Shares underlying
the Securities in excess of 19.99% of the issued and outstanding Common Stock on the Closing Date.
“Shares”
means shares of Common Stock issuable to the Investors at the Closing in accordance with Section 2.2(a)(v) of this Agreement; provided,
however, that each Investor may, at its discretion, elect to receive pre-funded warrants in lieu of some or all of the applicable
Shares in form and substance acceptable to the Investor, in which event references to “Shares” hereunder shall be deemed to
include such pre-funded warrants and the shares of Common Stock issuable thereunder.
“Software”
means any and all computer software and code, including all new versions, updates, revisions, improvements and modifications thereof,
whether in source code, object code, or executable code format, including systems software, application software (including mobile apps),
firmware, middleware, programming tools, scripts, routines, interfaces, architecture, schematics, records, libraries, and data, databases
and data collections, and all related specifications and documentation, including developer notes, comments and annotations, user manuals
and training materials relating to any of the foregoing.
“Subscription
Amount” means, as to each Investor, the aggregate amount to be paid for each Note and Shares purchased hereunder as specified
below the Investor’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds, which Subscription Amount shall be 95% of the Principal Amount.
“Subsequent Financing”
shall have the meaning ascribed to such term in Section 4.12(a).
“Subsequent Financing
Notice” shall have the meaning ascribed to such term in Section 4.12(b).
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary
of the Company formed or acquired after the date hereof.
“to the Knowledge of
the Company,” “to the Company’s Knowledge” and similar words and phrases relating to the Company’s “Knowledge”
means the actual knowledge of any of the Key Executives of the Company upon reasonable investigation.
“Trading Day”
means a day on which the principal Trading Market is open for trading.
“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the NYSE American, the New York Stock Exchange the OTCQX,
the OTCQB or the Pink Open Market (or any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Notes, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
“Transfer Agent”
means VStock Transfer LLC, the current transfer agent of the Company, and any successor transfer agent of the Company.
“Underlying Shares”
means the Conversion Shares and shares of Common Stock otherwise issued and issuable pursuant to the terms of the Notes, including without
limitation, shares of Common Stock issued and issuable in lieu of the cash payment of interest on each of the Notes in accordance with
the terms of each of the Notes, in each case without respect to any limitation or restriction on the conversion of the Notes.
“Variable Rate
Transaction” shall have the meaning ascribed to such term in Section 4.13(a).
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York, N.Y. time) to 4:02 p.m. (New York, N.Y. time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Investors and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Article
II
PURCHASE AND SALE
2.1 Closing.
(a) Closing.
On the Closing Date, provided that the Equity Conditions shall be satisfied as of such date, and upon the terms and subject to
the conditions set forth herein, substantially concurrent with or within one Trading Day after the execution and delivery of this Agreement
by the parties hereto, the Company agrees to sell, and each Investor, severally and not jointly, agrees to purchase, an aggregate of $5,000,000
of Principal Amount of the Notes and the Shares. Each Investor shall deliver to the Company, via wire transfer, immediately available
funds equal to such Investor’s Subscription Amount as to the Closing as set forth on the signature page hereto executed by the Investor,
and the Company shall deliver to the Investor the Investor’s Note and Shares, as determined pursuant to Section 2.2(a)(v), and the
Company and each Investor shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Within two days of the satisfaction
of the covenants and conditions set forth in Sections 2.2 and 2.3 and subject to the Equity Conditions, the Closing shall occur at the
offices of Nason Yeager or such other location as the parties shall mutually agree, or shall take place remotely by electronic transfer
of applicable Transaction Documents.
(b) With
respect to the Closing, the obligation of each Investor to purchase the Securities shall be subject to an effective Registration Statement
registering the offer, sale and issuance of the Shares and Underlying Shares to be issued or underlying the Notes issuable in connection
with the Closing.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Investor the following:
(i) this
Agreement duly executed by the Company;
(ii) a
legal opinion of Company Counsel each dated as of the applicable Closing Date, in a form reasonably acceptable to the Investor;
(iii) the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act);
(iv) a
Note registered in the name of the Investor with the Principal Amount reflected on to the Investor’s signature page;
(v) a
number of Shares determined by dividing 2% of the Principal Amount of the applicable Note issued in the Closing by the last sale price
of the Common Stock on the Trading Day immediately prior to the Closing Date, registered in the name of the Investor, together with a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver the Shares free of any restrictive
legend on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”),
or at the Company’s election, an amount in cash equal to 2% of the Principal Amount of the applicable Note;
(vi) the
Company shall have provided the Investor with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive
Officer or Chief Financial Officer;
(vii) a
letter executed by the Company and the Transfer Agent reserving the Required Minimum for the benefit of the Investor;
(viii) an
officer’s certificate certifying that the representations and warranties of the Company in this Agreement are true and correct as
of the applicable Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects
with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the applicable
Closing Date under any Transaction Documents and no Event of Default has occurred;
(ix) a
certificate of good standing of the Company issued by the Registrar of Companies of the Cayman Islands, as of a date not less than 10
days prior to each applicable Closing Date;
(x) a
copy of the Memorandum and Articles (or such equivalent organizational document) of the Company;
(xi) an
officer’s certificate, in the form acceptable to the Investor, executed by an officer of the Company and dated as of the applicable
Closing Date, as to the resolutions adopted by the Company’s Board of Directors authorizing the transactions contemplated hereby
in a form reasonably acceptable to the Investor;
(xii) a
letter from the Transfer Agent certifying the number of Common Stock outstanding on the applicable Closing Date immediately prior to the
applicable Closing;
(xiii) a
copy of the application for the listing of the Shares and Underlying Shares on the Principal Market; and
(b) On
or prior to the applicable Closing Date, each Investor shall deliver or cause to be delivered to the Company, the following:
(i) this
Agreement duly executed by the Investor; and
(ii) the
Investor’s Subscription Amount by wire transfer to the account specified in writing by the Company.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) on the Closing Date of the representations and warranties of the Investor contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Investor is required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by the Investor of the items set forth in Section 2.2(b) of this Agreement.
(b) The
obligations of each Investor hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) from
the date hereof to the Closing Date, as applicable, the SEC has not instituted a preliminary inquiry or issued an Order of Investigation,
trading in the Common Stock shall not have been suspended by the SEC or the Company’s principal Trading Market and, at any time
prior to the applicable Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited,
or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor
shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred
any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Investor, makes it impracticable
or inadvisable to purchase the Securities at each applicable Closing.
(vi) the
Company shall have filed with the Principal Market an application for the listing of the Shares and Underlying Shares on the Principal
Market, a copy of which shall have been provided to the Investor, and the Principal Market shall have raised no objection with respect
thereto;
(vii) no
Laws been enacted, entered, promulgated or endorsed by any court of competent jurisdiction or Governmental Authority that prohibits the
consummation of any of the transactions contemplated hereby; and
(viii) the
Equity Conditions (as defined in the Note) shall have been met.
Article
III
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section
of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Investor which representations
shall be true and correct on each respective Closing Date and shall apply to the Company and its Subsidiaries except where apparent from
the context. Any reference to the Company and its Subsidiaries shall not be construed to modify the prior sentence:
(a) Subsidiaries.
All of the direct and indirect significant subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly or
indirectly, all of the capital stock, shares or other equity interests of each Subsidiary, except as disclosed in Schedule 3.1(a), free
and clear of any Liens, except for Liens created under the Transaction Documents, and all of the issued and outstanding shares of capital
stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe
for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction
Documents shall be disregarded. The contractual arrangements pursuant to which the Company operates its business through variable interest
entities (as such term is described in the Company’s SEC Reports, as defined below) (“VIEs”) in the PRC
and any other applicable jurisdiction are valid and binding obligations on the parties thereto, and sufficient to operate the Company’s
business as presently conducted and contemplated in accordance with applicable Laws, and to the Company’s Knowledge, there has been
no breach or threatened breach of any such contractual arrangement. For purposes of this Agreement, the term “Subsidiaries”
shall be deemed to include VIEs.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity incorporated, validly existing and in good standing under
the Laws of the jurisdiction of its incorporation, registration or organization, with the requisite power and authority to own and use
its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation
nor default of any of the provisions of its respective certificate or articles of incorporation, memorandum and articles of association,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and
is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no Action has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other
than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or
upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable Laws.
(d) No
Conflicts.
(i) The
execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance
and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary,
or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any Law to
which the Company or a Subsidiary is subject (including federal and state securities Laws), or by which any property or asset of the Company
or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected
to result in a Material Adverse Effect.
(ii) Neither
the Company nor any of its Subsidiaries is engaged in, directly or indirectly, and none of the Company’s nor any Subsidiary’s
operations, activities or assets entail or involve, directly or indirectly, a “covered activity” within the meaning of that
certain Final Rule adopted by the United Stated Department of Treasury pursuant to Executive Order 14105 of August 9, 2023 “Addressing
United States Investments in Certain National Security Technologies and Products in Countries of Concern,” (31 CFR Part 850) (the
“Final Rule”), such that the transactions contemplated by this Agreement and the other Transaction Documents
do not and will not constitute a “prohibited transaction” or a “notifiable transaction” within the meaning of
the Final Rule. Neither the Company nor any Subsidiary has any present intention or plan to engage in any such covered activity, and the
Company covenants and agrees not to, and to cause its Subsidiaries not to, engage in any such covered activity.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other Governmental Authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant
to Section 4.6 of this Agreement, (ii) the filings with the SEC pursuant to or in connection with this Agreement and the other Transaction
Documents, and (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and
the listing of the Conversion Shares and the Shares for trading thereon in the time and manner required thereby (collectively, the “Required
Approvals”). The Company is not and will not be required to obtain Shareholder Approval in connection with this Agreement
and the other Transaction Documents and the transactions contemplated hereby and thereby.
(f) Issuance
of the Securities; Registration.
(i) The
Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and
validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents or by Laws. The Shares and Underlying Shares, when issued in accordance with the terms of the
Transaction Documents, will be validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company other
than, with respect to the Notes, restrictions on transfer provided for in the Transaction Documents or by Laws. The Company has reserved
from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the
Required Minimum on the date hereof.
(ii) The
Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which Registration
Statement became effective on September 29, 2022, including the Prospectus, and such amendments and supplements thereto as may have been
required to the date of this Agreement. The Company was at the time of the filing of the Registration Statement eligible to use Form F-3.
The Company is eligible to use Form F-3 under the Securities Act and it meets the transaction requirements with respect to the aggregate
market value of securities being sold pursuant to this offering and during the 12 calendar months prior to this offering, as set forth
in all applicable General Instructions to Form F-3. The Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus and Prospectus
Supplement has been issued by the SEC and no proceedings for that purpose have been instituted or, to the Knowledge of the Company, are
threatened by the SEC. The Registration Statement registers the offer, sale and issuance of all Shares and Underlying Shares contemplated
hereby and by the Notes. The Registration Statement has a sufficient quantity of registered and unsold securities available under it to
cover the offer, sale and issuance of all Shares and Underlying Shares contemplated hereby and by the Notes. The Company, if required
by the rules and regulations of the SEC, shall file the Prospectus Supplement with the SEC pursuant to Rule 424(b) in connection with
the transactions contemplated by this Agreement and the other Transaction Documents. At the time the Registration Statement and any amendments
thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto
conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement
thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading. All references to amendments or
supplements in this Section 3.1(f) include the Prospectus Supplement.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the
number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. The Company has
not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than as disclosed in Schedule
3.1(g) or pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common
Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common
Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right
of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip
rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the
capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or
may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary, other than
as disclosed in the Schedule 3.1(g). The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue
shares of Common Stock or other securities to any Person (other than the Investors). There are no outstanding securities or instruments
of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or
instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the
Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The
Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable, have
been issued in compliance with all federal and state securities Laws, and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the Securities. There are no shareholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the Knowledge
of the Company, between or among any of the Company’s shareholders other than as disclosed in Schedule 3.1(g).
(h) SEC
Reports; Financial Statements. Except as set forth on Schedule 3.1(h), the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a)
or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by Law or regulation
to file such material) together with the Prospectus and Prospectus Supplement (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received or obtained a valid extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i)
under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the
footnotes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the SEC, (iii)
the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or
other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the SEC any request for confidential treatment of information. Except for the issuance
of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their
respective businesses, prospects, properties, operations, assets or financial condition, that would be required to be disclosed by the
Company under applicable securities Laws at the time this representation is made or deemed made that has not been publicly disclosed at
least one Trading Day prior to the date that this representation is made.
(j) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the Knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective properties before or by any Governmental Authority (collectively,
an “Action”) that could be reasonably expected to have a Material Adverse Effect. None of the Actions set forth
on Schedule 3.1(j), (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or
the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities Laws or a claim of breach of fiduciary duty. There has not been, and to
the Knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company or any current
or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the Knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the Knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign Laws relating
to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Company’s Knowledge:
(i) no
allegations of sexual harassment, sexual misconduct or discrimination, whether such discrimination arises from race, ethnic background,
sex, gender status, age or otherwise (“Misconduct”) have been made involving any current or former director,
officer, employee or independent contractor of the Company or any of its Subsidiaries; and
(ii) neither
the Company nor any of its Subsidiaries have entered into any settlement agreements related to allegations of Misconduct by any current
or former director, officer, employee, or independent contractor of the Company or any of its Subsidiaries.
(l) Compliance.
(i) Neither
the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation
has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other Governmental Authority or (iii)
is or has been in violation of any Law of any Governmental Authority, including without limitation all foreign, federal, state and local
Laws relating to taxes, insurance, environmental protection, occupational health and safety, product quality and safety and employment
and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
(ii) Without
limiting the generality of the foregoing, the Company has maintained, and has implemented reasonable policies, measures and infrastructure
to maintain, compliance with Laws related to the administration or involvement in the provision of Company Products and the Company’s
operations and activities generally, and the Company and its Subsidiaries are in compliance with all Laws applicable thereto and have
not otherwise experienced and have no Knowledge of any pending, threatened or potential development with respect to such Laws or the Governmental
Authorities that enact, promulgate and enforce them, that has resulted in or could be reasonably be expected to result in any Material
Adverse Effect, including without limitation: (A) the Telecommunications Regulations of the PRC, the Internet Information Services Administrative
Measures, the Administrative Provisions on Mobile Internet Application Information Services, the Several Provisions on Regulating the
Market Order of Internet Information Services, the Decisions on Preserving Internet Security, the Law of the PRC on Administration of
Urban Real Estate, the Management Methods on the Sale of Commercial Houses, the Administrative Measures for Real Estate Brokerage, and
all other PRC Laws relating or incident to the conduct of business in the telecommunications and real estate industries in China and other
jurisdictions in which the Company operates or is present (including through the Internet), (B) the Laws promulgated or enforced by the
PRC’s National Financial Regulatory Administration, China Securities Regulatory Commission, Cybersecurity Review Office, State Administration
of Foreign Exchange, any and all predecessor Governmental Authorities of any of the foregoing and all other Governmental Authorities of
the PRC, (C) the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors and the Anti-Monopoly Law of the
PRC, the PRC Foreign Investment Law and the Holding Foreign Companies Accountable Act, and (D) the PRC Labor Law and the Labor Contract
Law of the PRC. This Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby do not and will
not result in any violation or non-compliance of any Laws applicable to the Company or any Subsidiary. The Company’s corporate structure
is not outlawed, disallowed, or otherwise regulated in the PRC or any other jurisdiction in which the Company operates or is present in
a manner which could be reasonably expected to have a Material Adverse Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign Laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including Laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii)
have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of Actions relating to the revocation or modification
of any Material Permit.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each
case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal,
state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by
them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance. The Company’s
assets are and will be sufficient to conduct its operations as presently conducted and as proposed to be conducted as of the date hereof
and as of each appliable Closing Date.
(p) Intellectual
Property. Schedule 3.1(p) lists all (i) Company IP Registrations and (ii) Company Intellectual Property, including Software, that
is not registered but that is material to the Company’s business or operations. All required filings and fees related to the Company
IP Registrations have been timely filed with and paid to the relevant Governmental Authorities and authorized registrars, and all Company
IP Registrations are otherwise in good standing. The Company has made available to each Investor true and complete copies of file histories,
documents, certificates, office actions, correspondence and other materials related to all Company IP Registrations. There are no actions
that must be taken by the Company (or any third party on the Company’s behalf) prior to the Closing Date, including the payment
of any registration, maintenance or renewal fees or the filing of any responses to office actions, documents, applications or certificates
for the purposes of obtaining, maintaining, perfecting, preserving or renewing any Company IP Registrations. To the Company’s Knowledge,
there are no facts or circumstances that would render any Company IP Registrations invalid or unenforceable. To the Company’s Knowledge,
there has been no misrepresentation or failure to disclose, any fact or circumstances in any application for any Company IP Registrations
that would constitute fraud or a misrepresentation with respect to such application or that would otherwise affect the validity or enforceability
of any Company IP Registrations. The Company has not claimed a particular status, including “small entity status,” in the
application for any Company IP Registrations, which claim of status was not at the time made, or which has since become, inaccurate or
false or that will no longer be true and accurate as a result of the Closing.
(i) Schedule
3.1(p)(i) lists all Company IP Agreements that are material to the Company’s business as it presently is being conducted. The Company
has made available to each Investor true and complete copies of all such Company IP Agreements, including all modifications, amendments
and supplements thereto and waivers thereunder. Each Company IP Agreement is valid and binding on the Company in accordance with its terms
and is in full force and effect. Neither the Company, nor to the Company’s Knowledge any other party thereto, is in breach of or
default under (or is alleged to be in breach of or default under), or has provided or received any notice of breach or default of or any
intention to terminate, any Company IP Agreement.
(ii) The
Company is the sole and exclusive legal and beneficial, and with respect to the Company IP Registrations, record owner of all right, title
and interest in and to the Company Intellectual Property, or has the valid right to use all other Intellectual Property used in or necessary
for the conduct of the Company’s current business or operations, in each case, free and clear of Liens.
(iii) The
Company has entered into binding, written agreements with every current and former employees since its inception, and with every current
and former independent contractor since its inception, whereby such employees and independent contractors (i) assign to the Company any
ownership interest and right they may have in the Company Intellectual Property; and (ii) acknowledge the Company’s exclusive ownership
of all Company Intellectual Property. The Company has provided each Investor with true and complete copies of all such agreements. For
the purposes of this Section 3.1(p)(iii), current employee or independent contractor includes any Person who or which has performed services
as an employee or independent contractor for the Company or any Subsidiaries during the 24 months prior to the Closing Date.
(iv) The
consummation of the transactions contemplated hereunder will not result in the loss or impairment of or payment of any additional amounts
with respect to, nor require the consent of any other Person in respect of, the Company’s right to own, use or hold for use any
Intellectual Property as owned, used or held for use in the conduct of the Company’s business or operations as currently conducted.
(v) The
Company’s rights in the Company Intellectual Property are, and, since inception, have been, valid, subsisting and enforceable. The
Company has taken all reasonable steps to maintain the Company Intellectual Property and to protect and preserve the confidentiality of
all confidential information and trade secrets included in the Company Intellectual Property, including requiring all Persons having access
thereto to execute written non-disclosure agreements.
(vi) The
conduct of the Company’s business as currently and formerly conducted, and the Company Products and related processes and infrastructure,
have not infringed, misappropriated, diluted or otherwise violated, and do not and will not infringe, dilute, misappropriate or otherwise
violate the Intellectual Property or other rights of any Person. To the Company’s Knowledge, no Person has infringed, misappropriated,
diluted or otherwise violated, or is currently infringing, misappropriating, diluting or otherwise violating, any Company Intellectual
Property.
(vii) There
are no Actions (including any oppositions, interferences or re-examinations) settled, pending or threatened (including in the form of
offers to obtain a license or inquiries regarding the need to obtain a license): (i) alleging any infringement, misappropriation, dilution
or violation of the Intellectual Property of any Person by the Company; (ii) challenging the validity, enforceability, registrability
or ownership of any Company Intellectual Property or the Company’s rights with respect to any Company Intellectual Property; or
(iii) by the Company or any other Person alleging any infringement, misappropriation, dilution or violation by any Person of the Company
Intellectual Property. The Company is not subject to any outstanding or prospective governmental order (including any motion or petition
therefor) that does or would restrict or impair the use of any Company Intellectual Property.
(q) Company
Products; Proprietary Software.
(i) Schedule
3.1(q)(i) contains a correct, current and complete list of all currently distributed Company Products, identifying for each item all previous
major releases. Since inception, as used in this Agreement, the term “major release” means any change embodied by the phrase
“Version 1 to Version 2” etc. in contrast to changes labeled “Version 1.1 to Version 1.2”
or “8.3.29” etc.
(ii) For
all of the Company Products identified in Schedule 3.1(q)(ii), Schedule 3.1(q)(ii) identifies all Company Intellectual Property and all
Intellectual Property licensed to the Company under a Company IP Agreement and that are (A) used in the development, maintenance, use
or support of such Company Product, (B) incorporated in or distributed or licensed with such Company Product in any manner for use in
connection with such Company Product, or (C) used to deliver, host or otherwise provide services with respect to such Company Product,
and in each case (except for non-customized, off-the-shelf Software that is commercially available pursuant to shrink-wrap, click-through
or other standard form agreements or with an annual license fee or replacement value of less than $10,000), the Company IP Agreement relating
to Company’s use of such item.
(iii) All
Company Products are fully transferable, alienable or licensable by the Company without restriction and without payment of any kind to
any third party. The Company has not transferred ownership of, or granted any exclusive license of (or exclusive right to use), or authorized
the retention of any exclusive rights to use or joint ownership of, any Company Product or any related Software or other Intellectual
Property to any other Person. The Company is not subject to any Company IP Agreement (other than with respect to current customers pursuant
to the Company’s standard form of customer agreement entered into in the ordinary course of business) that includes any unperformed
obligations that require the Company to develop any Software or other Intellectual Property, including any enhancements or customizations
that are part of or used in connection with the Company Products (collectively, “Customizations”), and the Company
owns and will continue to own all right, title and interest in and to all such Customizations developed by the Company.
(iv) Schedule
3.1(q)(iv) identifies all Company Intellectual Property that was developed under a contract with a Governmental Authority using any government
or university funding, resources or staff, and identifies all Company Intellectual Property to which any government entity or university
has any rights (other than non-exclusive license rights granted to current customers to use Company Products pursuant to the Company’s
form of customer agreement entered into and as modified in the ordinary course of business).
(r) Source
Code.
(i) The
Company is in actual possession of and has exclusive control over a complete and correct copy of the source code for all Software included
in the Company Intellectual Property.
(ii) Except
for application programming interfaces and other interface code that is generally available to customers, the Company has not disclosed,
delivered, licensed or otherwise made available, and does not have a duty or obligation (whether present, contingent or otherwise) to
disclose, deliver, license or otherwise make available, any source code for any Company Product to any escrow agent or any other Person,
other than an independent contractor or consultant of the Company pursuant to a valid and enforceable written agreement prohibiting use
or disclosure except in the performance of services for the Company. Without limiting the foregoing, neither the execution of this Agreement
nor the consummation of any of the transactions contemplated by this Agreement will, or would reasonably be expected to, result in the
release from escrow or other delivery to any Person of any source code for any Company Product.
(iii) As
of the date hereof, there has been no unauthorized theft, reverse engineering, decompiling, disassembling or other unauthorized disclosure
of or access to any source code for any Company Product.
(s) Open
Source Software.
(i) Schedule
3.1(s)(i) sets forth a true and complete list of each item of open source software that is or has been used by or on behalf Company, in
the development of or that is incorporated into, combined with, linked with, distributed with, provided to any Person as a service, provided
via a network as a service or application, or otherwise made available with, any Company Product, and for each such item of Open Source
Software, (A) the applicable Company Product, and (B) the name and version number of the applicable license agreement.
(ii) The
Company has complied in all material respects with all notice, attribution and other requirements of each license applicable to the Open
Source Software required to be disclosed in Schedule 3.1(s)(ii).
(iii) The
Company has not used any Open Source Software in a manner that does, will or would reasonably be expected to, require the Company or any
other Person to (A) disclose or distribute the source code of the Software of any Company Product, (B) license or otherwise offer or distribute
any Company Product on a royalty-free basis, or (C) grant any patent license, non-assertion covenant or, rights to modify, make derivative
works based on, decompile, disassemble or reverse engineer or any other rights to any Company Product or Company Intellectual Property.
(t) Conformance
with Specifications; Defects; Malicious Code.
(i) All
Company Products conform in all material respects to all applicable warranties in all contracts with customers.
(ii) To
the Company’s Knowledge, none of the Company Products contain any bug, defect or error that materially adversely affects the functionality
or performance of such Company Product against its applicable specifications.
(iii) To
the Company’s Knowledge, none of the Company Products, and no other Software used in the provision of any Company Product or otherwise
in the operation of its business, contains any “time bomb,” “Trojan horse,” “back door,”
“worm,” virus, malware, spyware, or other device or code (“Malicious Code”) designed or intended
to, or that could reasonably be expected to, (A) disrupt, disable, harm or otherwise impair the normal and authorized operation of, or
provide unauthorized access to, any computer system, hardware, firmware, network or device on which any Company Product or such other
Software is installed, stored or used, or (B) damage, destroy or prevent the access to or use of any data or file without the user’s
consent. The Company has taken reasonable steps designed to prevent the introduction of Malicious Code into the Company Products.
(u) IT
Systems.
(i) To
the Company’s Knowledge, the Company Systems are reasonably sufficient for the needs of the Company’s business as currently
conducted, including as to capacity, scalability, and ability to process current and anticipated peak volumes in a timely manner. The
Company Systems are in sufficiently good working condition to perform all information technology operations and include sufficient licensed
capacity (whether in terms of authorized sites, units, users, seats or otherwise) for all Software, in each case as necessary for the
conduct of the Company’s business as currently conducted.
(ii) Since
its inception, there has been no unauthorized access, use, intrusion or breach of security, or material failure, breakdown, performance
reduction or other adverse event affecting any Company Systems, that has resulted in or could reasonably be expected to result in any:
(A) substantial disruption of or interruption in or to the use of such Company Systems or the conduct of the Company’s business;
(B) material loss, destruction, damage or harm of or to Company or its operations, personnel, property or other assets; or (C) material
liability of any kind to the Company. The Company has taken reasonable actions, consistent with applicable industry best practices in
the Company’s industry, to protect the integrity and security of the Company Systems and the data and other information stored thereon.
(iii) The
Company maintains commercially reasonable back-up and data recovery, disaster recovery and business continuity plans, procedures and facilities,
has acted in material compliance therewith, and has tested such plans and procedures on a regular basis, and such plans and procedures
have been proven effective in all material respects upon such testing.
(v) Data
Privacy and Protection; Cybersecurity.
(i) The
Company has complied with all Company Privacy Policies and with all applicable Laws and contracts to which it is a party relating to:
(A) the privacy of customers or users of the Company Products, any website, product or service operated by or on behalf of the Company;
and (B) the collection, storage, hosting, disclosure, transmission, transfer, disposal, other processing or security of any Customer Data
or Personal Information by the Company or by third parties having authorized access to the records of the Company, with respect to each
of (A) and (B) in all material respects. No claims have been asserted or, are threatened against the Company alleging a violation of any
person’s privacy, confidentiality or other rights under any Company Privacy Policy, under any contract, or under any Law relating
to any Customer Data or Personal Information. With respect to any Customer Data and Personal Information, the Company has taken commercially
reasonable measures (including implementing and monitoring compliance with respect to technical and physical security) designed to safeguard
such data against loss and against unauthorized access, use, modification, disclosure or other misuse. There has been no unauthorized
access to or other misuse of any Customer Data and Personal Information. The Company has not received any complaint from any Person (including
any action letter or other inquiry from any Governmental Authority) regarding the Company’s collection, storage, hosting, disclosure,
transmission, transfer, disposal, other processing or security of Customer Data or Personal Information. There have been no facts or circumstances
that would require Company to give notice to any customers, suppliers, consumers or other similarly situated Persons of any actual or
perceived data security breaches pursuant to an applicable Laws requiring notice of such a breach.
(ii) Without
limiting the generality of the foregoing, the Company is compliant with all Laws relating to data privacy and data protection, and the
collection, storage, maintenance and transmission of personal data and health information, including, without limitation, the (A) the
PRC’s Cybersecurity Review Measures, Cybersecurity Law, Data Security Law and Personal Information Protection Law and the Outbound
Data Transfer Security Assessment Measures of the Cyberspace Administration of China, (B) the European General Data Protection Regulation,
and (C) all other applicable Laws relating to cybersecurity, data privacy and protection and/or Customer Data or Personal Information.
The Company is compliant with the agreements, terms and policies of, and has not reason to believe that it will not continue to have access
to, the third party data hosting and transmission services and infrastructure it utilizes or anticipates utilizing in its operations as
presently conducted or planned, including without limitation, Amazon Web Services, Google Cloud and Microsoft Azure Cloud.
(iii) The
Company has complied with the SEC’s rules related to cybersecurity risks and related disclosures.
(w) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(x) Transactions
with Affiliates and Employees. Except as set forth on Schedule 3.1(x), none of the officers, directors, or 5% beneficial owners of
the Company or any Subsidiary and, to the Knowledge of the Company, none of the employees of the Company or any Subsidiary is presently
a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal
property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer,
director or such employee or, to the Knowledge of the Company, any entity in which any officer, director, 5% beneficial owner or any such
employee has a substantial interest or is an officer, director, trustee, shareholder, member or partner of (“Related Party
Transactions”). Any Related Party Transactions reflect market terms and rates which would reasonably be expected to be obtained
in an equivalent arms-length transaction with a third party, and were negotiated in good faith and on an arms-length basis.
(y) Sarbanes-Oxley;
Internal Accounting Controls. Except as disclosed in the SEC Reports and Schedule 3.1(y), the Company and the Subsidiaries are in
compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any
and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof and as of the Closing
Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required
to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC’s rules and forms. The Company’s certifying officers have evaluated the effectiveness
of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its
most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in
the internal control over financial reporting (as such term is defined in the Exchange Act) that have materially affected, or is reasonably
likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries. All material weaknesses
in the Company’s prior internal control over financial reporting have been remedied as of the date of this Agreement.
(z) Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents other than the fee payable to the Placement Agent. The Investors shall have no obligation with respect to
any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.1(z) that
may be due in connection with the transactions contemplated by the Transaction Documents.
(aa) Trading Market Compliance.
The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(bb) Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate
of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct
its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company
Act of 1940, as amended.
(cc) Registration Rights.
Other than the Investors, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities
Act of any securities of the Company or any Subsidiaries.
(dd) Listing and Maintenance
Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no
action designed to, or which to the Company’s Knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.
Except as set forth on Schedule 3.1(dd), the Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market. The Company is and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic
transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the
fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(ee) Application of Takeover
Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company’s Memorandum and Articles (or similar charter documents) or the Laws of the Cayman Islands that is or
could become applicable to the Investors as a result of the Investors and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and
the Investors’ ownership of the Securities.
(ff) Disclosure. Except
with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any Investor or its agents or counsel with any information that
it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Investor will
rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on
behalf of the Company to the Investors regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, is true and correct in all material respects and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made and when made, not misleading. The Company acknowledges and agrees that no Investor makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(gg) No Integrated Offering.
Assuming the accuracy of each Investor’s representations and warranties set forth in Section 3.2, neither the Company, nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the
Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company
are listed or designated.
(hh) Solvency. Based
on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that
will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities)
as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted
by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the
Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). The Company has no Knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from
the Closing Date. Schedule 3.1(hh) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness in excess of 50%
of the Company’s net assets in the aggregate of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.
None of the Indebtedness is secured by any Lien or similar restrictions under applicable Laws. Neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.
(ii) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all
foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such
claim.
(jj) No General Solicitation.
Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation
or general advertising. The Company has offered the Securities for sale only to the Investors and certain other “accredited investors”
within the meaning of Rule 501 under the Securities Act.
(kk) Foreign Corrupt Practices.
Neither the Company nor any Subsidiary, nor to the Knowledge of the Company or any Subsidiary, any agent or other person acting on behalf
of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which
is in violation of law or (iv) violated in any material respect any provision of FCPA or any applicable PRC or other foreign Laws which
relate to bribery or political contributions.
(ll) Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(ll) of the Disclosure Schedules. Such accounting firm (i) is a public
accounting firm registered with the Public Company Accounting Oversight Board (the “PCAOB”) as required by the
Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s annual
report on Form 20-F for the fiscal year ending December 31, 2024. To the Company’s Knowledge, such accounting firm has not been
subject to any disciplinary actions or other adverse Actions from the PCAOB or any Governmental Authority adversely impacting the ability
of such accounting firm to conduct its audit and review and related accounting services for which it was engaged by the Company, nor does
the Company have any Knowledge that the PCAOB or any Governmental Authority is conducting any investigation or inquiry, however termed,
which may lead to disciplinary action against such accounting firm or which would otherwise limit or preclude the Company’s ability
to continue to use such accounting firm in the future.
(mm) Seniority. As
of the Closing Date, other than the Prior Notes which shall rank pari passu with the Notes in right of payment, no Indebtedness or other
claim against the Company is or will be senior to any of the Notes in right of payment, whether with respect to interest or upon liquidation
or dissolution, or otherwise. As of the Closing Date, neither the Company nor any Subsidiary has outstanding any secured Indebtedness
or has otherwise granted any security interests on its assets in any jurisdiction, including without limitation the PRC, except as disclosed
in Schedule 3.1(mm).
(nn) No Disagreements
with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company
to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current
with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations
under any of the Transaction Documents.
(oo) Acknowledgment
Regarding Investor’s Purchase of Securities. The Company acknowledges and agrees that each Investor is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company
further acknowledges that each Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the Investor or any of its
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental
to the Investor’s purchase of the Securities. The Company further represents to each Investor that the Company’s decision
to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(pp) Acknowledgment Regarding
each Investor’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding, it is understood
and acknowledged by the Company that: (i) each Investor has not been asked by the Company to agree, nor has the Investor agreed, to desist
from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued
by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions by each Investor,
specifically including, “derivative” transactions, before or after the closing of this or future private placement transactions,
may negatively impact the market price of the Company’s publicly-traded securities, (iii) each Investor, and counter-parties in
“derivative” transactions to which the Investor is a party, directly or indirectly, may presently have a “short”
position in the Common Stock and (iv) each Investor shall not be deemed to have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) each Investor may
engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during
the periods that the value of the Shares and Underlying Shares deliverable with respect to Securities are being determined, and (z) such
hedging activities (if any) could reduce the value of the existing shareholders’ equity interests in the Company at and after the
time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute
a breach of any of the Transaction Documents. The Company further (A) represents and warrants and acknowledges and agrees that (i) to
the Company’s Knowledge, each Investor is participating in the offering of Securities contemplated hereby separately and independently
of the other Investor(s), (ii) to the Company’s Knowledge, none of the Investors have communicated directly with one another, and
all communications by the Investors concerning the Transaction Documents and the transactions contemplated thereby and any matters related
thereto were solely conducted separately and independently with the Placement Agent without the involvement or inclusion of any other
Investor, and (iii) to the Company’s Knowledge, the Investors do not constitute a “group” as that term is used under
Section 13(d) of the Exchange Act, and (B) covenants and agrees not to take a position to the contrary to the foregoing.
(qq) Regulation M Compliance.
The Company has not, and to the Company’s Knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities,
or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement
of the Securities.
(rr) Stock Plans.
Each stock option granted by the Company under the Company’s stock option plan or equity incentive plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable Law. No stock option granted under the
Company’s stock option plan or equity incentive plan has been backdated. The Company has not knowingly granted, and there is no
and has been no Company policy or practice to knowingly grant, stock options or other equity securities or rights to equity securities
including restricted stock units prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public
announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(ss) Office of Foreign
Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any director, officer, agent, employee
or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).
(tt) U.S. Real Property
Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Investor’s request.
(uu) Bank Holding Company
Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended
(the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, 5% or
more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity
that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises
a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal
Reserve.
(vv) Money Laundering.
The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes
and applicable rules and regulations thereunder and all other applicable money laundering Laws including in the PRC and the Cayman Islands
(collectively, the “Money Laundering Laws”), and no Action by or before any court, arbitrator or other Governmental
Authority any involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the Knowledge of the
Company or any Subsidiary, threatened.
(ww) Other Covered Persons.
Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(xx) Notice
of Disqualification Events. The Company will notify each Investor and the Placement Agent in writing, prior to the Closing Date of
(i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a
Disqualification Event relating to any Issuer Covered Person.
3.2 Representations
and Warranties of the Investor. Each Investor, severally and not jointly, hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such
date):
(a) Organization;
Authority. The Investor is either an individual or an entity duly incorporated or formed, validly existing and in good standing under
the Laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company, exempted
company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance
by the Investor of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of the Investor. Each Transaction Document to which it is a party
has been duly executed by the Investor, and when delivered by the Investor in accordance with the terms hereof, will constitute the valid
and legally binding obligation of the Investor, enforceable against it in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable Law.
(b) Experience
of the Investor. The Investor, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. The Investor is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.
(c) General
Solicitation. The Investor is not, to the Investor’s knowledge, purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or, to the knowledge of the Investor, any other general solicitation or general advertisement.
(d) Access
to Information. The Investor acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. The Investor acknowledges and agrees that neither the Placement
Agent nor any Affiliate of the Placement Agent has provided the Investor with any information or advice with respect to the Securities
nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation
as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information
with respect to the Company which the Investor agrees need not be provided to it. In connection with the issuance of the Securities to
the Investor, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to the Investor.
The Company acknowledges and
agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Investor’s right to rely on
the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any
other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation
of the transactions contemplated hereby.
Article
IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) Free
Trading. The Shares and Underlying Shares shall be issued pursuant to the Registration Statement, and a Prospectus Supplement thereto
and free of all restrictive legends. The Company shall pay all costs associated with any legal opinions or other documents requested or
required by the Transfer Agent in connection with the preceding sentence.
(b) Without
limiting the generality of the foregoing or any other provisions of the Transaction Documents, certificates evidencing the Underlying
Shares (or other documentation or evidence of the Underlying Shares, including for issuances in book-entry form) shall not contain any
legend: (i) while a Registration Statement covering the sale and issuance of such Underlying Shares is effective under the Securities
Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144, when available, or (iii) if such legend is not required under
applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC).
For the avoidance of doubt the Company shall pay all costs associated with such opinions. If all or any portion of a Note is converted
at a time when there is an effective Registration Statement to cover the sale and issuance of the Underlying Shares or an exemption from
such registration is available, or if such Underlying Shares may be sold under Rule 144 without the requirement for the Company to be
in compliance with the current public information requirements of Rule 144(c) and without volume or manner of sale restrictions or if
such legend is not otherwise required under applicable requirements of the Securities Act (including Sections 4(a)(1) or 4(a)(7), judicial
interpretations and pronouncements issued by the staff of the SEC including what is known as Section 4(a)(1½)) then such Underlying
Shares shall be issued free of all legends. For avoidance of doubt, the Company agrees that after the requisite holding period to comply
with Rule 144, the legend may be removed under Rule 144 of the Securities Act, assuming the holder satisfies the requirements of Rule
144. The Company agrees that at such time as such legend is not required, it will, no later than the earlier of (i) two Trading Days and
(ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by any Investor to
the Company or the Transfer Agent of a certificate (or stock power if issued in book entry form) representing Underlying Shares, as applicable,
issued without a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered
to the Investor a certificate representing such shares that is free from all restrictive and other legends (or provide evidence of such
issuance in book entry form). The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section 4. Certificates for Underlying Shares subject to legend removal hereunder shall
be transmitted by the Transfer Agent to the Investor by crediting the account of the Investor’s prime broker with the Depository
Trust Company System as directed by the Investor. As used herein, “Standard Settlement Period” means the standard
settlement period, expressed in a number of Trading Days, on the Company’s Principal Market with respect to the Common Stock as
in effect on the date of delivery of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend. Certificates
for the Underlying Shares subject to legend removal hereunder shall be transmitted by the transfer agent to the Investor by crediting
the account of the Investor’s prime broker with the Depository Trust Company System as directed by the Investor. For avoidance of
doubt, as of the date of this Agreement the Standard Settlement Period is one Trading Day.
(c) The
Company acknowledges and agrees that any Investor may from time-to-time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Shares and Underlying Shares to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, the Investor
may transfer pledged or secured Shares and Underlying Shares to the pledgees or secured parties. Such a pledge or transfer would not be
subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in
connection therewith. Further, no notice shall be required of such pledge. At the Investor’s expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party of the Shares and Underlying Shares may reasonably request, including,
if the Shares and Underlying Shares have been registered for sale and issuance pursuant to a Registration Statement, the preparation and
filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities
Act to appropriately amend the list of selling shareholders thereunder.
(d) The
Company acknowledges that if any Investor converts any Notes, Section 3(a)(9) of the Securities Act shall apply and the holding period
of the Conversion Shares issued as a result shall be the Closing Date on which the Notes were issued. The Company covenants and agrees
that it shall not challenge or take a position contrary to the preceding sentence.
4.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under
the Transaction Documents, including, without limitation, its obligation to issue the Shares and Underlying Shares pursuant to the Transaction
Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the
effect of any such dilution or any claim the Company may have against an Investor and regardless of the dilutive effect that such issuance
may have on the ownership of the other shareholders of the Company.
4.3 Furnishing
of Information; Public Information.
(a) Registration
Requirements. Until no Investor holds any Securities, the Company covenants and agrees to (A) if for any reason the Registration Statement
does not result in the issuance to the Investors of Shares and Underlying Shares (including upon conversions of the Notes) which are registered
and freely tradable in accordance with the Securities Act, maintain the effectiveness of the Registration Statement and take all action
necessary, including without limitation filing and causing to be declared effective with the SEC an amendment thereto or a replacement
Registration Statement on Form F-3, or on Form F-1 if not then eligible for use of Form F-3, to register and maintain sufficient capacity
thereon for purposes of enabling the Investors to sell all Shares and Underlying Shares; (B) refrain from conducting or registering any
sales of securities under the Registration Statement or any other registration statement in a manner which reduces, limits or precludes,
or which could have the effect of reducing, limiting or precluding, the Investors’ ability to sell all Shares and Underlying Shares
issuable or potentially issuable pursuant to the Transaction Documents thereon, and (C) maintain the registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by an issuer required to file reports under Section 12(g) of the Exchange Act after the
date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
(b) At
any time during the period commencing from the six-month anniversary of the date hereof, and ending at such time that all of the Securities
may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c)
or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy
any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to any Investor’s
other available remedies, the Company shall pay to the Investor, in cash, as partial liquidated damages and not as a penalty, by reason
of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to 2% of the aggregate Subscription Amount
of the Investor’s Securities on the day of a Public Information Failure and on every 30th day (pro-rated for periods totaling less
than 30 days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public
information is no longer required for the Investor to transfer the Shares and Underlying Shares pursuant to Rule 144. The payments to
which the Investor shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure
Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during
which such Public Information Failure Payments are incurred and (ii) the third Business Day after the event or failure giving rise to
the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely
manner, such Public Information Failure Payments shall bear interest at the rate of one and one-half percent per month (prorated for partial
months) until paid in full. Nothing herein shall limit the Investor’s right to pursue actual damages for the Public Information
Failure, and the Investor shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief.
4.4 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.5 Conversion
and Exercise Procedures. The form of Notice of Conversion included in the Notes set forth the totality of the procedures required
of an Investor in order to convert any of the Notes. Without limiting the preceding sentences, no ink-original Notice of Conversion shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required
in order to convert any of the Notes. No additional legal opinion, other information or instructions shall be required of the Investor
to convert its Notes. The Company shall honor conversions of the Notes and shall deliver Underlying Shares in accordance with the terms,
conditions and time periods set forth in the Transaction Documents.
4.6 Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms (which
shall include the name of the Placement Agent) of the transactions contemplated hereby, (b) file a Current Report on Form 6-K, including
the Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange Act and the Securities Act, and (c)
file a Prospectus Supplement with the SEC within the time required under the Securities Act and comply with all other requirements of
the Securities Act in connection therewith and the transactions contemplated by the Transaction Documents. From and after the issuance
of such press release, the Company represents and warrants to each Investor that it shall have publicly disclosed all material, non-public
information delivered to the Investor by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such
press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether
written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates
on the one hand, and any of the Investor or any of their Affiliates on the other hand, shall terminate. The Company and each Investor
shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the
Company nor the Investor shall issue any such press release nor otherwise make any such public statement without the prior consent of
the Company, with respect to any press release of the Investor, or without the prior consent of the Investor, with respect to any press
release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by Law, in
which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of the Investor, or include the name of the Investor in any filing with
the SEC or any regulatory agency or Trading Market, without the prior written consent of the Investor, except (a) as required by federal
securities Law in connection with (i) the Registration Statement contemplated by this Agreement and any replacement or supplemental registration
statement or other documents in connection herewith, and (ii) the filing of final Transaction Documents with the SEC and (b) to the extent
such disclosure is required by Law or Principal Market Rules, in which case the Company shall provide the Investor with prior notice of
such disclosure permitted under this clause (b).
4.7 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that an Investor
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or
that the Investor could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and the Investor.
4.8 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.6, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide each Investor or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto the Investor shall have consented to the receipt of such information and agreed
with the Company to keep such information confidential. The Company understands and confirms that each Investor shall be relying on the
foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company, any of its Subsidiaries, or
any of their respective officers, director, agents, employees or Affiliates delivers any material, non-public information to an Investor
without the Investor’s consent, the Company hereby covenants and agrees that the Investor shall not have any duty of confidentiality
to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to
the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the
basis of, such material, non-public information, provided that the Investor shall remain subject to applicable Law. To the extent
that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the
Company or any Subsidiaries, the Company shall simultaneously file such notice with the SEC pursuant to a Current Report on Form 6-K.
The Company understands and confirms that each Investor shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.
4.9 Use
of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital and general corporate purposes and shall not use such proceeds for any other purpose.
4.10 Indemnification
of Investor. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Investor and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Investor (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners
or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a “Investor Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court
costs and reasonable attorneys’ fees and costs of investigation that any such Investor Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any action instituted by the Company or its affiliates or representatives or agents against
the Investor Parties in any capacity, or any of them or their respective Affiliates, with respect to any of the transactions contemplated
by the Transaction Documents (unless such action is solely based upon a material breach of such Investor Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such Investor Party may have with any such
stockholder or any violations by such Investor Party of state or federal securities Laws or any conduct by such Investor Party which is
finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any
Investor Party in respect of which indemnity may be sought pursuant to this Agreement, such Investor Party shall promptly notify the Company
in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable
to the Investor Party. Any Investor Party shall have the right to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of such Investor Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any
material issue between the position of the Company and the position of such Investor Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Investor Party under
this Agreement (y) for any settlement by the Investor Party effected without the Company’s prior written consent, which shall not
be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable
to any Investor Party’s breach of any of the representations, warranties, covenants or agreements made by such Investor Party in
this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.10 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or similar right of any Investor Party against the Company or
others and any liabilities the Company may be subject to pursuant to Law.
4.11 Reservation
and Listing of Securities.
(a) The
Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant to the
Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.
(b) If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or articles
of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time,
as soon as possible and in any event not later than the 75th day after such date.
(c) The
Company shall, if applicable: (i) in the time and manner required by the Principal Market, prepare and file with such Principal Market
an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date
of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation on such
Principal Market as soon as possible thereafter, (iii) provide to each Investor evidence of such listing or quotation and (iv) maintain
the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Principal Market.
4.12 Participation
in Future Financing.
(a) From
the date hereof until the 9-month anniversary of the date of this Agreement, upon any issuance by the Company or any of its Subsidiaries
of Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a combination of units thereof (a “Subsequent
Financing”), the Investors shall have the right to participate in aggregate up to an amount of the Subsequent Financing
equal to 25% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price
provided for in the Subsequent Financing.
(b) At
least five Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Investor a written notice
of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the Investor if
it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of an Investor, and only upon a request by an Investor, for a Subsequent Financing Notice, the Company shall promptly,
but no later than one Trading Day after such request, deliver a Subsequent Financing Notice to such Investor. The Subsequent Financing
Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised
thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term
sheet or similar document relating thereto as an attachment.
(c) Each
Investor desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New
York, N.Y. time) on the fifth Trading Day after all of the Investor have received the Pre-Notice that the Investor is willing to participate
in the Subsequent Financing, the amount of the Investor’s participation, and representing and warranting that such Investor has
such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives
no such notice from any Investor as of such fifth Trading Day, the Investors shall be deemed to have notified the Company that it does
not elect to participate.
(d) If
by 5:30 p.m. (New York, N.Y. time) on the fifth Trading Day after each Investor has received the Pre-Notice, notification by an Investor
of its willingness to participate in the Subsequent Financing (or to cause its designees to participate) has been provided, then the Company
may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing
Notice.
(e) If
by 5:30 p.m. (New York, N.Y. time) on the fifth Trading Day after the Investors have received the Pre-Notice, the Company receives responses
to a Subsequent Financing Notice from one or more Investors seeking to purchase more than the aggregate amount of the Participation Maximum,
each such Investor shall have the right to purchase up to its Pro Rata Portion of the Participation Maximum. “Pro Rata Portion”
means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by an Investor participating under this Section
4.12 and (y) the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by all Investors participating
under this Section 4.12.
(f) The
Company must provide each Investor with a second Subsequent Financing Notice, and each Investor will again have the right of participation
set forth above in this Section 4.12, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on the terms set forth in such Subsequent Financing Notice within 30 Trading Days after the date of the initial Subsequent
Financing Notice.
(g) The
Company and each Investor agree that if any Investor elects to participate in the Subsequent Financing, the transaction documents related
to the Subsequent Financing shall not include any term or provision that, directly or indirectly, will, or is intended to, exclude one
or more of the Investors from participating in a Subsequent Financing, including, but not limited to, provisions whereby any Investor
shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment
to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written
consent of each such Investor.
(h) Notwithstanding
anything to the contrary in this Section 4.12 and unless otherwise agreed to by each Investor, the Company shall either confirm in writing
to each Investor that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention
to issue the securities in the Subsequent Financing, in either case in such a manner such that each Investor will not be in possession
of any material, non-public information, by the 10th Business Day following delivery of the Subsequent Financing Notice. If by such 10th
Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding
the abandonment of such transaction has been received by each Investor, such transaction shall be deemed to have been abandoned and each
Investor shall not be deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.
(i) This
Section 4.12 shall not apply in respect of an Exempt Issuance.
4.13 Subsequent
Equity Sales.
(a) From
the date hereof until the earlier of (i) the five-month anniversary of the Closing Date (which shall be extended to such time as no Investor
holds any Notes if an Event of Default (as defined in the Notes) has occurred and is continuing) and (ii) such time as no Investor holds
any Notes, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of
its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock
either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices
of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a
conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity
security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the
market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity
line of credit, whereby the Company may issue securities at a future determined price. Each Investor shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding
the foregoing, no Exempt Issuance shall be deemed to be a Variable Rate Transaction.
(b) While
any Note is outstanding, if the Company issues any equity option, warrant or similar instrument which contains an “alternative cashless
exercise” provision that provides for the exercise of such security without payment of the exercise price in cash and does not require
the security to be “in the money,” each Investor shall be entitled to obtain injunctive relief against the Company to preclude
any such issuance, which remedy shall be in addition to any right to collect damages.
4.14 Blue
Sky Filings. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Investor at the Closing under applicable securities or “blue sky” Laws
of the states of the United States and shall provide evidence of such actions promptly upon request of any Investor.
4.15 Capital
Changes. From the date hereof until such time as no Investor holds any of the Notes, the Company shall not undertake a reverse or
forward stock split or reclassification of the Common Stock without the prior written consent of the Required Holders.
4.16 Maintenance
of DTC Eligibility. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository
Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository
Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.17 Compliance
With Negative Covenants. The Company agrees that it shall not take any action to or cause any of its Subsidiaries to breach the negative
covenants contained in the Notes, and any other Transaction Documents.
Article
V
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by the Company or an Investor, as to such Investor’s obligations hereunder only and without any
effect whatsoever on the obligations between the Company and any other Investor, by written notice to the other parties, if the Closing
has not been consummated on or before the fifth Trading Day following the date hereof, provided, however, that no such termination
will affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. At the Closing, the Company has agreed to reimburse the Lead Investor up to $10,000 for its legal fees and expenses.
The Company shall deliver to each Investor, prior to the First Closing, a completed and executed copy of the Closing Statement, attached
hereto as Annex A. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any conversion or exercise
notice delivered by any Investor), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to
the Investor and costs necessary to provide the Investor with a lien on all of the assets of the Company.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile
at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York, N.Y. time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (New York, N.Y. time) on any Trading Day, (c) the second Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and each Investor or, in the case of a waiver, by the party against whom enforcement of any such
waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of
any such right. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Investor and holder of Securities
and the Company. Such amendment provision shall not be construed to mean that the Beneficial Ownership Limitation of the Notes may be
amended.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Investor (other
than by merger). Any Investor may assign any or all of its rights under this Agreement to any Person to whom the Investor assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the
provisions of the Transaction Documents that apply to the Investor.
5.8 No
Third-Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of each Investor in Section 3.2. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.10 and this Section 5.8.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the Laws of the Cayman Islands without regard to the principles of conflicts of Law thereof,
except where expressly provided otherwise in a Transaction Document. Each party agrees that all legal Actions concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (except where expressly
provided otherwise in a Transaction Document) (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be commenced exclusively in the courts located in George Town, Cayman Islands.
Each party hereby irrevocably submits to the exclusive jurisdiction of the courts located in George Town, Cayman Islands for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action, any claim
that it is not personally subject to the jurisdiction of any such court, that such Action is improper or is an inconvenient venue for
such Action. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by Law. If any party shall commence an Action to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.10, the prevailing party in such Action shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action.
5.10 Survival.
The representations and warranties contained herein shall survive for twelve (12) months after the Closing and the delivery of the Securities
solely as to the Notes issued in the Closing.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then the Investor may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of a conversion
of a Note, the Investor shall be required to return any shares of Common Stock subject to any such rescinded conversion notice concurrently
with the return to the Investor of the aggregate Conversion Price converted for such shares to the Principal Amount of the Note and the
restoration of the Investor’s right to acquire such shares pursuant to the Investor’s Note (including, issuance of a replacement
warrant certificate evidencing such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by Law, including recovery of damages, each of the Company
and each Investor will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at Law would
be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction Document or the
Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or
any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any Law (including,
without limitation, any bankruptcy Law, state or federal Law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury Laws wherever enacted, now or at any time hereafter
in force, in connection with any Action that may be brought by an Investor in order to enforce any right or remedy under any Transaction
Document. In furtherance of this agreement and covenant, the Company shall not take any position that any Laws of any state of the United
States relating to usury are applicable. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly
agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest
shall not exceed the maximum lawful rate authorized under applicable Law (the “Maximum Rate”), and, without
limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums
in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed
that if the maximum contract rate of interest allowed by Law and applicable to the Transaction Documents is increased or decreased by
statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by Law will
be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded
by applicable Law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to an Investor
with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by the Investor to the unpaid principal
balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Investor’s election.
5.18 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
5.19 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken, or such right may be exercised on the next succeeding Business Day.
5.20 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.21 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
In
Witness Whereof, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.
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Fangdd Network Group Ltd. |
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By: |
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Name: |
Zeng Xi |
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Title: |
Chief Executive Officer |
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Address for Notice: |
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With a copy to (which shall not constitute notice): |
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[Remainder
of Page Intentionally Left Blank
Signature Page for Investor Follows]
Signature
Page to Securities Purchase Agreement
In
Witness Whereof, the undersigned has caused this Securities Purchase Agreement to be duly executed by its authorized signatory
as of the date first indicated above.
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LEAD INVESTOR: |
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Name of Investor: |
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Signature of Authorized Signatory of Investor: |
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Name of Authorized Signatory: |
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Email Address of Authorized Signatory: |
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Address for Notice to Investor: |
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Address for Delivery of Securities to Investor |
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(if not same as address for notice): |
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Principal Amount for the Closing: $____________ |
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Subscription Amount for the Closing: $______ |
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Shares: |
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EIN Number: |
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Wire Instructions to Investor for Interest Payments or Note Repayment: |
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Bank Name: |
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Routing No.: |
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Account No: |
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SWIFT |
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Bank Address: |
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Phone Number: |
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[Investor
Signature Page to Securities Purchase Agreement]
In
Witness Whereof, the undersigned has caused this Securities Purchase Agreement to be duly executed by its authorized signatory
as of the date first indicated above.
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Name of Investor: |
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Signature of Authorized Signatory of Investor: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Email Address of Authorized Signatory: |
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Address for Notice to Investor: |
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Address for Delivery of Securities to Investor |
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(if not same as address for notice): |
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Principal Amount for the Closing: $__________ |
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Subscription Amount for the Closing: $_______ |
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Shares: |
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EIN Number: |
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Wire Instructions to Investor for Interest Payments or Note Repayment: |
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[Investor Signature Page to
Securities Purchase Agreement]
Exhibit 10.2
Fangdd
Network Group Ltd.
Senior 5% Original Issue Discount Convertible Promissory Note
| Original Issuance Date: March ___, 2025 | |
Principal: $ |
| Maturity Date: December ___, 20251 | |
Loan Amount: $ |
For
Value Received, Fangdd Network Group Ltd., a Cayman Islands exempted
company with limited liability (the “Maker” or the “Company”), hereby promises to
pay to the order of _______________, or its assigns (the “Holder”) the principal sum of $ (the “Principal”)
pursuant to the terms of this Senior Original Issue 5% Discount Convertible Promissory Note (this “Note”).
In exchange for delivery of this Note on the Original Issuance Date referred to above, the Holder shall lend the Maker $ in
United States dollars net of an original issuance discount of $ .
Unless earlier converted
pursuant to the terms of Article 3, the Maturity Date of this Note shall be 9 months from the Original Issuance Date of this Note, which
is specified above, unless the Holder has given notice to the Maker that it elects to accelerate the Maturity Date to the extent explicitly
permitted by this Note (the “Maturity Date”). The Maturity Date is the date upon which the Principal and other
amounts shall be due and payable unless earlier due or prepaid or converted. This Note may not be repaid in whole or in part except as
otherwise explicitly set forth herein.
Article
1
1.1 Purchase Agreement.
This Note has been executed and delivered pursuant to, and is issued pursuant to, the Securities Purchase Agreement entered into by and
between the Company and the Holder on March ___, 2025 (the “Purchase Agreement”), and is subject to, and incorporates,
the provisions of the Purchase Agreement.
1.2 Interest.
This Note has been issued with an original issue discount and no interest shall accrue hereunder prior to the occurrence of an Event
of Default. From and after the occurrence and during the continuance of any Event of Default, interest shall accrue hereunder at a rate
equal to 15% per annum or, if less, the highest amount permitted by law (such interest upon an Event of Default shall be referred to
as “Interest” or “Default Interest”), shall compound monthly based upon a 360-day
year, and shall be due and payable on the first Trading Day of each month during the continuance of such Event of Default (a “Default
Interest Payment Date”). In the event that such Event of Default is subsequently cured and no other Event of Default then
exists (including, without limitation, for the Company’s failure to pay such Default Interest on the applicable Default Interest
Payment Date), the Default Interest shall cease to accrue hereunder as of the day immediately following the date of such cure; provided
that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue
to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure
of such Event of Default.
| 1 | Nine
months after issuance date |
1.3 Company’s
Prepayment Election. Provided that no Event of Default shall have occurred and all Equity Conditions are satisfied, the Maker may
elect to prepay all, but not less than all, of the Principal and accrued and unpaid Interest and other fees, as applicable, then outstanding
under this Note at the Voluntary Prepayment Premium by giving the Holder 30 Trading Days’ prior written notice of such election.
During such 30 Trading Day period, the Holder may, in its sole discretion, convert up to 40% of the outstanding Principal and accrued
and unpaid Interest and other fees, as applicable, then outstanding under this Note. After the expiration of such 30 Trading Day period,
the Company shall prepay the remaining balance of the Note by paying to the Holder the Voluntary Prepayment Premium in cash. For purposes
of this Note, the “Voluntary Prepayment Premium” is 105%.
1.4 Replacement.
Upon receipt of a duly executed Affidavit of Loss and Indemnity Agreement in customary form from the Holder with respect to the loss,
theft or destruction of this Note (or any replacement hereof), or, in the case of a mutilation of this Note, upon surrender and cancellation
of such Note, the Maker shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.
The Holder shall not be required to post a bond or other security.
1.5 Status of Note.
The obligations of the Maker under this Note shall rank senior to all other existing Indebtedness and equity of the Company, other than
the Prior Notes and any Other Notes and Additional Note(s) including Additional Notes held by any holder of Other Notes issued pursuant
to the Purchase Agreement with which the obligations under this Note shall rank pari passu pursuant to the terms of the Transaction
Documents. Upon any Liquidation Event (as hereinafter defined), but subject in all cases to the Purchase Agreement, the Holder will be
entitled to receive, before any distribution or payment is made upon, or set apart with respect to, any Indebtedness of the Maker ranking
junior to this Note in right of payment, an amount equal to the outstanding Principal, Interest and any other sums due. For purposes
of this Note, “Liquidation Event” means merger or consolidation of the Company with another entity in which
the Company is not the surviving entity (except where the sole purpose is to change the domicile of the Company), the sale of all or
substantially all of the assets of the Company in one or more related transactions, a liquidation pursuant to a filing of a petition
for bankruptcy under applicable law or any other insolvency or debtor’s relief, an assignment for the benefit of creditors, a determination
by a Governmental Authority that the Company (which includes its Subsidiaries) cannot carry on its business substantially consistent
with the prior ordinary course of its business, or a voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Maker.
Article
2
2.1 Events of Default.
An “Event of Default” under this Note shall mean the following (unless the Event of Default is waived in writing
by the Holder):
(a) Any default
in the payment of the Principal, Interest or other sums due under this Note, any Other Note(s) or any Additional Note(s) when due (whether
on the Maturity Date or by acceleration or otherwise) or as the result of a non-monetary default;
(b) (i) The issuance
of any Indebtedness or the imposition of a Lien upon any of the assets of the Maker or any Subsidiary, except for Permitted Indebtedness
or Permitted Liens, respectively, (ii) any failure of the Registration Statement to adequately cover the offer, sale and issuance of
all Shares and Underlying Shares in accordance with the Purchase Agreement which failure remains uncured for a period of ten (10) days
from the date such failure commenced, or (iii) any other breach of any covenant or obligation set forth in Sections 3.2 and 4.1
of this Note or Sections 4.1, 4.3, 4.9, 4.11, 4.12, 4.13, 4.15 and 4.16 of the Purchase Agreement;
(c) the Maker’s
notice to the Holder, including by way of public announcement at any time of its inability to comply (including for any of the reasons
described in Section 3.2(c) hereof) or its intention not to comply with proper requests for conversion of this Note into Common
Stock;
(d) if Shareholder
Approval is required and is not received and effective (including in accordance with all SEC Rules) within 60 days of the date on which
it is determined that such Shareholder Approval is required in.
(e) the Maker shall
fail to timely deliver the Common Stock as and when required under this Note within the Standard Settlement Period, provided that, if
such failure results solely from an action or inaction of the Transfer Agent or a third party and not any action or inaction by the Company,
such failure shall not constitute an Event of Default. As used herein, “Standard Settlement Period” means the
standard settlement period, expressed in a number of Trading Days, on the Company’s Trading Market with respect to the Common Stock
as in effect on the date of delivery of a Conversion Notice or other trigger event requiring the issuance of Underlying Shares, as applicable.
For avoidance of doubt, (i) as of the Original Issuance Date the Standard Settlement Period is one Trading Day, and (ii) the Company
shall undertake all efforts to cause the Transfer Agent or other third party to deliver Common Stock in accordance with this Note within
the Standard Settlement Period, and any failure to undertake such efforts shall be deemed to be an “action or inaction by the Company”;
(f) at any time
the Maker shall fail to have the Required Minimum of Common Stock authorized, reserved and available for issuance to satisfy the potential
conversion in full (disregarding for this purpose any and all limitations of any kind including beneficial ownership limitations on such
conversion) of this Note and any Additional Note(s);
(g) any representation
or warranty made by the Maker or any of its Subsidiaries in the Purchase Agreement, this Note or any other Transaction Document shall
prove to have been false or misleading or breached in a material respect on the date as of which made;
(h) the Maker or
any of its Subsidiaries shall: (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property or assets; (ii) make a general assignment for the benefit
of its creditors; (iii) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic); (iv) file a petition seeking to take advantage of any bankruptcy, insolvency,
moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally; (v) acquiesce in writing
to any petition filed against it in an involuntary case under United States Bankruptcy Code (as now or hereafter in effect) or under
the comparable laws of any jurisdiction (foreign or domestic); (vi) issue a notice of bankruptcy or winding down of its operations or
issue a press release regarding same; or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous
to any of the foregoing;
(i) a proceeding
or case shall be commenced in respect of the Maker or any of its Subsidiaries, without its application or consent, in any court of competent
jurisdiction, seeking: (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its
debts; (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its
assets in connection with the liquidation or dissolution of the Maker or any of its Subsidiaries; or (iii) similar relief in respect
of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue
undismissed, or unstayed and in effect, for a period of 30 days or any order for relief shall be entered in an involuntary case under
United States Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or domestic)
against the Maker or any of its Subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the
foregoing shall be taken with respect to the Maker or any of its Subsidiaries and shall continue undismissed, or unstayed and in effect
for a period of 30 days;
(j) the Company
fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming delinquent in the filing of
any report required to be filed under the Exchange Act including any extension permitted by Rule 12b-25 under the Exchange Act) or ceases
to be subject to the reporting requirements of the Exchange Act. For avoidance of doubt, a failure to timely file any Exchange Act report
shall be deemed to be an Event of Default hereunder;
(k) the Company
files a Form 6-K or other SEC Report with the SEC disclosing, or otherwise publicly announces, that it intends to restate any financial
statements it previously filed with the SEC or it restates any financial statements it previously filed with the SEC;
(l) the Maker’s
Common Stock ceases to be listed on the Principal Market, a delisting of the Common Stock by the Principal Market is otherwise threatened
or reasonably likely to occur as evidenced by a writing issued by the Principal Market, or the Maker fails to list the Shares and Underlying
Shares on the Principal Market;
(m) after the six-month
anniversary of the Original Issuance Date, any Common Stock including Underlying Shares may not be immediately resold under Rule 144
without restriction on the number of shares to be sold or manner of sale, unless (i) the Holder is then deemed to be an “affiliate”
as such term is defined under the Securities Act; (ii) such restriction or prohibition is as a result of any actions or inactions on
the part of the Holder and not in any way on the part of the Company, or (iii) such Common Stock has been registered for resale under
the Securities Act and may be sold without restriction;
(n) the Maker consummates
a “going private” transaction and as a result its Common Stock is no longer registered under Sections 12(b) of the Exchange
Act;
(o) there shall
be any SEC stop order with respect to any Registration Statement, a trading suspension by the SEC or the Trading Market of the Common
Stock, or any restriction in place with the Transfer Agent for the Common Stock restricting the trading of such Common Stock;
(p) the current
Registration Statement on Form F-3 or any subsequent Registration Statement ceases to be effective or if the Shares and Underlying Shares
cannot be sold under any Registration Statement or pursuant to an exemption from registration without any restrictive or trading legend;
(q) the electronic
transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing corporation is
no longer available or is subject to a “chill”;
(r) the Company
replaces its Transfer Agent, and the Company fails to instruct the new Transfer Agent to provide prior to the effective date of such
replacement, a fully executed irrevocable transfer agent instructions (including but not limited to the provision to irrevocably reserve
the Required Minimum) signed by the successor Transfer Agent and the Company;
(s) the Company
or a Subsidiary enters into a Variable Rate Transaction at any time that this Note is outstanding;
(t) any provision
of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and
binding on or enforceable against the Company or any of its Subsidiaries, or the validity or enforceability thereof shall be contested
by any party thereto and it is finally determined by a court of competent jurisdiction that any such Transaction Document is not valid
or enforceable against the Company or any of its Subsidiaries, or a proceeding shall be commenced by the Company or any Subsidiary or
any Governmental Authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof against
the Company or any of its Subsidiaries, or the Company or any Subsidiary shall deny in writing that it has any liability or obligation
purported to be created under any Transaction Document;
(u) any strike,
lockout, labor dispute, embargo, condemnation, act of god or public enemy, or other casualty which causes, for more than 15 consecutive
days, the cessation or substantial curtailment of the Company’s current operations or revenue producing activities at any facility
of the Company or any Subsidiary, if any such event or circumstance could reasonably expected to have a Material Adverse Effect; or
(v) The Company
loses any material license issued by the PRC or any agency or instrumentality of the PRC or any other jurisdiction in which the Company
conducts its business.
2.2 Remedies Upon
an Event of Default.
(a) Upon the occurrence
of any Event of Default that has not been remedied or waived within five (5) Trading Days, provided, however, that there
shall be no cure period for an Event of Default described in Section 2.1(h) or 2.1(i), the Maker shall be obligated to pay to the
Holder the Mandatory Default Amount, which Mandatory Default Amount shall be immediately due and payable to the Holder, except as otherwise
set forth in Section 3.2(c). In the event this Note shall be converted whenever an Event of Default has occurred and is continuing
without cure, the Holder shall have the option to convert the Mandatory Default Amount at the Conversion Price then in effect.
(b) Upon the occurrence
of any Event of Default, the Maker shall, as promptly as possible but in any event within five (5) Trading Days after the occurrence
of such Event of Default, notify the Holder of the occurrence of such Event of Default, describing the event or factual situation giving
rise to the Event of Default and specifying the relevant subsection or subsections of Section 2.1 hereof under which such Event
of Default has occurred.
(c) Subject to
Section 2.2(a), upon the occurrence of any Event of Default, the Holder may at any time at its option declare, by written notice
to the Maker, the Mandatory Default Amount due and payable, and thereupon, the same shall be accelerated and so due and payable within
ten (10) Trading Days of receipt of such notice. Upon the failure of the Maker to cure an Event of Default within the time permitted
by this Note, or if the Event of Default is not capable of being cured, the remedies provided in this Note shall continue and not be
affected by any cure.
(d) The provisions
of Section 3.2(b) shall also apply upon any Events of Default relating to Conversion Shares in addition to the remedies under this
Section 2.2.
(e) Any Event of
Default hereunder may be waived upon the mutual agreement of the Company and the Holder.
Article
3
3.1 Conversion.
(a) Conversion.
At any time after the Original Issuance Date, this Note shall be convertible (in whole or in part) at the option of the Holder into such
number of fully paid and non-assessable shares of Common Stock as is determined by dividing (x) that portion of the outstanding Principal
and any accrued and unpaid Interest thereon that the Holder elects to convert (the “Conversion Amount”) by
(y) the Applicable Conversion Price then in effect on the date on which the Holder delivers to the Maker a notice of conversion in substantially
the form attached hereto as Exhibit A (the “Conversion Notice”) in accordance with Section 5.1.
The Holder shall deliver this Note to the Maker at the address designated in the Purchase Agreement at such time that this Note is fully
converted. With respect to partial conversions of this Note, the Maker shall keep written records of the amount of this Note converted
as of the date of delivery of the Conversion Notice for, and giving effect to, each such conversion (each, a “Conversion
Date”).
(b) Conversion
Price. The “Conversion Price” means the lower of (A) $[__]2 (the
“Fixed Conversion Price”) as such Fixed Conversion Price may be adjusted as provided herein, and (B) the Alternative
Conversion Price provided, however, that if any Conversion Price under the foregoing definition results in a fractional
amount, the fractional amount shall be rounded down to the nearest whole cent, and provided further that in no event shall the Conversion
Price be lower than, or be reduced to lower than, the Floor Price. For avoidance of doubt, all references in this Note to the Fixed Conversion
Price or any other Conversion Price including the Alternative Conversion Price shall be construed to include adjustments as provided
in this Note.
| 2 | The
Fixed Conversion Price will equal 130% of the lowest daily VWAP on the Trading Day immediately
prior to the applicable Closing Date. |
(c) If the Company
receives a Conversion Notice at a time at which the Conversion Price then in effect (as applicable, the “Applicable Conversion
Price”) (without regard to the Floor Price) is less than the Floor Price then in effect (unless such Floor Price is lowered
with the written consent of the Company and the Holder, which may be by e-mail), the Company shall issue a number of shares equal to
the Conversion Amount divided by such Floor Price and by prompt written notice to the Holders elect to (i) pay in cash or (ii) add to
the Principal, in either case, the economic difference between the Applicable Conversion Price (without regard to the Floor Price) and
such Floor Price. For further clarification, the economic difference shall be equal to (A) the number of shares that would have been
delivered using the Applicable Conversion Price, minus (B) the number of shares delivered using the Floor Price, multiplied by (C) the
daily VWAP of the Common Stock on the Conversion Date ((A-B)*C). For the avoidance of doubt, the Company shall register any additional
shares of Common Stock underlying this Note resulting from the foregoing on the Registration Statement or otherwise pursuant to the Purchase
Agreement if and as necessary for any such additional shares to be free of any restrictive or trading legend when issued.
(d) Voluntary Adjustment
of Fixed Conversion Price. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term
of this Note, with the prior written consent of the Holder, reduce the then current Conversion Price of the Note to any amount and for
any period of time deemed appropriate by the Board of Directors of the Company.
3.2 Delivery of Conversion
Shares.
(a) As soon as
practicable after any conversion or payment of any amount due hereunder in the form of shares of Common Stock in accordance with this
Note, and in any event within the Standard Settlement Period thereafter (such date, the “Share Delivery Date”),
the Maker shall, at its expense, cause to be issued in the name of and delivered to the Holder, or as the Holder may direct, a certificate
or certificates evidencing the number of shares of fully paid and non-assessable Common Stock to which the Holder shall be entitled on
such conversion or payment (the “Conversion Shares”), in the applicable denominations based on the applicable
conversion or payment, which certificate or certificates shall be free of any restrictive or trading legend. In lieu of delivering physical
certificates for the Common Stock issuable upon any conversion of this Note, provided the Company’s transfer agent (the “Transfer
Agent”) is participating in the Depository Trust Company (“DTC”) DTC Fast Automated Securities
Transfer Program (“FAST”) or a similar program, upon request of the Holder, the Company shall cause the Transfer
Agent to electronically transmit such Conversion Shares issuable upon conversion of this Note to the Holder (or its designee), by crediting
the account of the Holder’s (or such designee’s) broker with DTC through its Deposit Withdrawal At Custodian system (provided
that the same time periods herein as for stock certificates shall apply) as instructed by the Holder (or its designee).
(b) Obligation Absolute.
The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation
to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance
which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided,
however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder.
In the event the Holder of this Note shall elect to convert any or all of the outstanding Principal and any accrued and unpaid Interest
thereon (if any) hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated
with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice
to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts
a surety bond for the benefit of the Holder in the amount of 120% of the outstanding Principal and any accrued and unpaid Interest thereon
(if any) of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of litigation of the
underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such
injunction, the Company shall issue the Conversion Shares or, if applicable, cash, upon delivery of a Conversion Notice.
(c) The Company’s
Failure to Timely Convert.
(i) If the Company
shall fail, on or prior to the applicable Share Delivery Date, if the Transfer Agent is not participating in FAST, to issue and deliver
to the Holder (or its designee) a certificate for the number of Conversion Shares to which the Holder is entitled and register such Conversion
Shares on the Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the
Holder or the Holder’s designee with DTC for such number of Conversion Shares to which the Holder is entitled upon the Holder’s
conversion of this Note (as the case may be) (a “Conversion Failure”), then the Holder may by notice to the
Company (in lieu of receiving such Conversion Shares subject to such Conversion Failure), require the Company to prepay, in cash, the
Conversion Amount in such Conversion Failure at a prepayment price equal to the higher of (i) Mandatory Default Amount with respect to
such Conversion Amount arising from such Conversion Failure and (ii) the number of shares of Common Stock that the Maker is unable to
issue multiplied by the higher of (A) the Fixed Conversion Price and (B) the VWAP as of the date of the Conversion Notice (the “Mandatory
Prepayment Price”), provided that, if such failure results solely from an action or inaction of the Transfer Agent or another
third party and not any action or inaction by the Company (a “Non-Company Failure,” and together with a Conversion
Failure, each, as applicable, a “Failure”), such Failure shall not constitute a Conversion Failure as long
as the Company has undertaken all efforts to cause the Transfer Agent or other third party to deliver Common Stock in accordance with
this Note within the Standard Settlement Period. Any failure to undertake such efforts shall be deemed to be an “action or inaction
by the Company,” shall not constitute a Non-Company Failure and shall constitute a Conversion Failure. With respect to any Failure
and consequences and remedies in favor of the Holder in connection therewith, the following shall apply:
(1) With respect
to a Non-Company Failure:
(a) if within
two Trading Days of such Non-Company Failure the Company issues the Conversion Shares (as applicable, an “Issuance Event”)
with respect to the applicable Non-Company Failure, then no remedies under this Note (including the Mandatory Prepayment Price, Buy-In
Price, Buy-In Payment Amount and Liquidated Damages) shall apply in connection with such Non-Company Failure;
(b) if the Issuance
Event does not occur within two Trading Days following such Non-Company Failure but the Buy-In Payment Amount (as defined below) is not
triggered, then the Company shall not be required to pay such Buy-In Payment Amount; and
(c) if the Issuance
Event does not occur within two Trading Days following such Non-Company Failure and the Buy-In Payment Amount (as defined below) is triggered,
then the Company shall be required to pay such Buy-In Payment Amount.
(2) With respect
to a Conversion Failure:
(a) if within
two Trading Days of the Conversion Failure the Company pays the Holder good funds equal to the Mandatory Prepayment Price (as applicable,
a “Payment Event”), then any Event of Default which would have otherwise resulted from such Conversion Failure
shall have been cured and the Default Interest and Mandatory Default Amount shall not apply, and the Liquidated Damages under this Section 3.2(c)
shall cease to accrue or apply effective at the time of such Payment Event, provided that the Company shall remain responsible for the
Liquidated Damages, as applicable, which accrued or became payable pursuant to this Section 3.2(c) through the occurrence of the
Payment Event; and provided further that:
(i) If following
the event described in Section 3.2(c)(i)(2)(a) above, an Issuance Event occurs within two Trading Days of the Conversion Failure,
then the Buy-In Payment Amount shall not apply; and
(ii) If following
the event described in Section 3.2(c)(i)(2)(a) above, an Issuance Event does not occur within two Trading Days of the Conversion
Failure, then the Buy-In Payment Amount shall apply.
(b) If the Payment
Event does not occur within two Trading Days of the Conversion Failure, then an Event of Default shall have occurred, and all remedies
and consequences provided for under this Note in connection therewith shall apply, accrue and continue, as applicable, including the
Mandatory Default Amount, Default Interest, Buy-In Payment Amount, Liquidated Damages, requirement to issue the Conversion Shares and
requirement to pay the Mandatory Prepayment Price.
(i) In addition
to the foregoing, if on or prior to the Share Delivery Date, if the Transfer Agent is not participating in FAST, the Company shall fail
to issue and deliver to the Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s share
register or, if the Transfer Agent is participating in FAST, the Transfer Agent shall fail to credit the balance account of the Holder
or the Holder’s designee with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s
conversion hereunder or pursuant to the Company’s obligation pursuant to clause (II) below, and if on or after such Share Delivery
Date the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any
portion of the number of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from the Company
and has not received from the Company in connection with such failure, as applicable (a “Buy-In”), then, in
addition to all other remedies available to the Holder, the Company shall, within two Trading Days after receipt of the Holder’s
request and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and/or markups, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common
Stock so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In
Price”), at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares
of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number
of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) (and to issue
such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate
or certificates representing such shares of Common Stock or credit the balance account of such Holder or such Holder’s designee,
as applicable, with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder
(as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x)
such number of shares of Common Stock multiplied by (y) the lowest closing sale price of the Common Stock on any Trading Day during the
period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause
(II) (the “Buy-In Payment Amount”). For the avoidance of doubt, subject to Section 3.2(c)(i), the Holder’s
right to the Buy-In Payment Amount shall apply regardless of whether the applicable failure constitutes a Conversion Failure.
(ii) In the event
of a Conversion Failure, the Maker shall pay to the Holder, in cash, (i) as partial liquidated damages and not as a penalty, for each
$1,000 of the Conversion Amount, $10 per Trading Day (increasing to $20 per Trading Day five Trading Days after such damages have begun
to accrue) for each Trading Day after the Share Delivery Date until the number of shares of Common Stock the Holder shall be entitled
on such conversion has been issued and delivered to the Holder. Nothing shall limit the Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically
deliver such shares of Common Stock) upon the conversion of this Note as required pursuant to the terms hereof. The liquidated damages
hereunder are referred to as the “Liquidated Damages.”
(iii) For the avoidance
of doubt, the Company is deemed to have satisfied its share delivery obligations if it has instructed the Transfer Agent to issue Conversion
Shares in accordance with this Note (including for purposes of this Section 3.2), and the Transfer Agent has processed such instruction
and such Conversion Shares are posted for delivery in accordance with applicable DWAC and DTC procedures and within the timeframes provided
for under this Note.
(iv) Notwithstanding
anything herein to the contrary, the Company shall in all cases use its best efforts to timely meet its share delivery obligations in
accordance with this Note as soon as possible and within the Standard Settlement Period, and to cause the Transfer Agent and other third
parties to deliver Common Stock in accordance with this Note as soon as possible and within the Standard Settlement Period.
(d) Conversion Priority.
In the event that the Company receives a Conversion Notice from the Holder and any holders of Prior Notes, Other Notes and Additional
Notes held by such holder, Options or other Convertible Securities for the same Conversion Date and the Company can effect the conversion
and exercise of some, but not all, of such portions of the Note, Options or other Convertible Securities submitted for conversion and
exercise, the Company, subject to this Section 3.2(d), shall (i) first effect the conversion of the entire Conversion Amount submitted
for conversion on such date by the Holder and the Holder of Prior Notes and Other Notes (including any Additional Notes), and (ii) shall
thereafter effect the exercise and conversion from each holder of Options or other Convertible Securities electing to have Options or
other Convertible Securities exercised or converted on such date (other than the Notes).
(e) Beneficial Ownership
Limitation. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right to convert
any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void and treated
as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution Parties collectively
would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding
immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the
Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion of this Note with respect
to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A)
conversion of the remaining, non-converted portion of this Note beneficially owned by the Holder or any of the other Attribution Parties
and (B) exercise or conversion of the unexercised or non-converted portion of any other securities of the Company (including, without
limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by the Holder or any other Attribution
Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 3.2(e). For purposes
of this Section 3.2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For
purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the conversion of this Note without
exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent Annual Report on Form 20-F, Current Report on Form 6-K or other public filing with the SEC, as the case may be, (y) a more
recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth
the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company
receives a Conversion Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the
Reported Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding
and, to the extent that such Conversion Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant
to this Section 3.2(e), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common
Stock to be issued pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder,
the Company shall within one Trading Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Note, by the Holder and any other Attribution Party since the
date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to
the Holder upon conversion of this Note results in the Holder and the other Attribution Parties being deemed to beneficially own, in
the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d)
of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial
ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled
ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Furthermore, the Company shall indemnify
the Holder in accordance with the Purchase Agreement, if the Holder suffers any damages or claims as a result of Excess Shares being
issued. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective
until the 61st day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess
of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the 61st
day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the
other Attribution Parties. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess
of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d)
or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to convert this Note pursuant to this Section 3.2(e) shall have any
effect on the applicability of the provisions of this Section 3.2(e) with respect to any subsequent determination of convertibility.
The provisions of this Section 3.2(e) shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this Section 3.2(e) to the extent necessary to correct any provision which may be defective or inconsistent with the intended
beneficial ownership limitation contained in this Section 3.2(e) or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitation contained in this Section 3.2(e) may not be waived and shall apply to a successor
holder of this Note.
(f) If shares of
Common Stock are not delivered within the Standard Settlement Period in accordance with this Note as a result of any action or inaction
by the Company’s Transfer Agent, then the Holder shall have the right, by giving 30 days’ advance written notice, to require
the Company to terminate the Transfer Agent and hire a replacement Transfer Agent, and the Company shall use its best efforts to effect
such replacement as soon as possible and by the end of such 30-day period.
3.3 Adjustment of
Fixed Conversion Price.
(a) Until this
Note has been paid in full or converted in full, the Fixed Conversion Price shall be subject to adjustment from time-to-time, and the
Floor Price shall be subject to adjustment solely as to Section 3.3(a) (but in either case shall not be increased, other than pursuant
to a combination) as follows:
(i) Adjustments for
Stock Splits, Subdivision and Combinations. If the Maker shall at any time or from time-to-time after the Original Issuance Date
effect a forward stock split or subdivision of the outstanding Common Stock or pays a dividend in Common Stock to holders of its Common
Stock, the applicable Fixed Conversion Price in effect immediately prior to such event shall be proportionately decreased. If the Maker
shall at any time or from time-to-time after the Original Issuance Date, effect a combination or reverse stock split or subdivision of
the outstanding Common Stock, the applicable Fixed Conversion Price in effect immediately prior to such event shall be proportionately
increased. Any adjustments under this Section 3.3(a)(i) shall be effective at the close of business on the date the applicable event
occurs. If at any time or from time-to-time after the Original Issuance Date the Maker effects a forward stock split or subdivision,
stock dividend, stock combination, reverse stock split or subdivision, recapitalization or other similar transaction and the Event Market
Price (as defined below) is less than the Fixed Conversion Price then in effect (after giving effect to the adjustment in this Section 3.3(a)(i)
above), then on the fifth Trading Day immediately following such event, the Fixed Conversion Price then in effect on such fifth Trading
Day (after giving effect to the adjustment in this Section 3.3(a)(i) above) shall be reduced (but in no event increased) to the
Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an
increase in the Fixed Conversion Price hereunder, no adjustment shall be made. “Event Market Price” means,
with respect to any event described in this Section 3.3(a)(i), the quotient determined by dividing (x) the sum of the VWAP of the
shares of Common Stock for each of the five Trading Days following such event divided by (y) five. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination, reverse stock split, recapitalization or other similar transaction during
such period.
(ii) Adjustments
for Certain Dividends and Distributions. If the Maker shall at any time or from time to time after the Closing Date (but whether
before or after the Original Issuance Date) make or issue or set a record date for the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in Common Stock, then, and in each event, the applicable Fixed Conversion Price in
effect immediately prior to such event shall be decreased as of the time of such issuance or, in the event such record date shall have
been fixed, as of the close of business on such record date, by multiplying the applicable Fixed Conversion Price then in effect by a
fraction:
(1) the numerator
of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or
the close of business on such record date; and
(2) the denominator
of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or
the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.
(iii) Adjustment
for Other Dividends and Distributions. If the Maker shall at any time or from time to time after the Closing Date (but whether before
or after the Original Issuance Date) make or issue or set a record date for the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in other Common Stock, then, and in each event, an appropriate revision to the applicable
Fixed Conversion Price shall be made and provision shall be made (by adjustments of the Fixed Conversion Price or otherwise) so that
the Holder of this Note shall receive upon conversions thereof, in addition to the number of shares of Common Stock receivable thereon,
the number of securities of the Maker or other issuer (as applicable) or other property that it would have received had this Note been
converted into Common Stock in full (without regard to any conversion limitations herein) on the date of such event and had thereafter,
during the period from the date of such event to and including the Conversion Date, retained such securities (together with any distributions
payable thereon during such period) or assets, giving application to all adjustments called for during such period under this Section 3.3(a)(iii)
with respect to the rights of the holders of this Note; provided, however, that if such record date shall have been fixed
and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Fixed Conversion Price
shall be adjusted pursuant to this Section 3.3(a)(iii) as of the time of actual payment of such dividends or distributions.
(iv) Adjustments
for Reclassification, Exchange or Substitution. If the Common Stock at any time or from time to time after the Closing Date (but
whether before or after the Original Issuance Date) shall be changed to the same or different number of shares or other securities of
any class or classes of stock or other property, whether by reclassification, exchange, substitution or otherwise (other than by way
of a stock split or combination of shares or stock dividends provided for in Sections 3.3(a)(i), (ii) and (iii) hereof), then, and
in each event, an appropriate revision to the Fixed Conversion Price shall be made and provisions shall be made (by adjustments of the
Fixed Conversion Price or otherwise) so that the Holder shall have the right thereafter to convert this Note into the kind and amount
of shares of stock or other securities or other property receivable upon reclassification, exchange, substitution or other change, by
holders of the number of shares of Common Stock into which such Note might have been converted immediately prior to such reclassification,
exchange, substitution or other change, all subject to further adjustment as provided herein.
(v) Rights Upon Issuance
of Other Securities.
(1) Adjustment of Fixed
Conversion Price upon Issuance of Common Stock. If and whenever on or after the Original Issuance Date the Company issues or sells,
or in accordance with this Section 3.3(a)(v) is deemed to have issued or sold, any shares of Common Stock (including the issuance
or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Exempt Issuance (other than clause
(c) of the definition of Exempt Issuance in the Purchase Agreement which shall not be deemed to be an Exempt Issuance for purposes of
this Section 3.3(a)(v) issued or sold or deemed to have been issued or sold) for a consideration per share (the “Dilutive
Issuance Price”) less than a price equal to the Fixed Conversion Price in effect immediately prior to such issuance or
sale or deemed issuance or sale (such Fixed Conversion Price then in effect is referred to herein as the “Applicable Price”)
(the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Fixed Conversion
Price then in effect shall be reduced to an amount equal to the Dilutive Issuance Price. For all purposes of the foregoing (including,
without limitation, determining the adjusted Fixed Conversion Price and the Dilutive Issuance Price under this Section 3.3(a)(v)),
the following shall be applicable:
(2) Issuance of Options.
If the Company in any manner grants or sells any options or rights to acquire Common Stock or Convertible Securities (“Options”)
(other than pursuant to any Exempt Issuance) and the lowest price per share for which one share of Common Stock is at any time issuable
upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such
price per share, excluding any transactions involving an Exempt Issuance. For purposes of this Section 3.3(a)(v) the “lowest
price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof or
(y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable (or may become issuable assuming
all possible market conditions) upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option or otherwise pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable
to the holder of such Option (or any other Person) with respect to any one share of Common Stock (on a fully-diluted basis) upon the
granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable
upon exercise of such Option or otherwise pursuant to the terms thereof plus the value of any other consideration received or receivable
by, or benefit conferred on, the holder of such Option (or any other Person) with respect to any one share of Common Stock (on a fully-diluted
basis). Except as contemplated below, no further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such
share of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof
or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(3) Issuance of Convertible
Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one
share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof
is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this
Section 3.3(a)(v), the “lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the
lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance
or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant to the
terms thereof and (y) the lowest conversion price set forth in such Convertible Security for which one share of Common Stock is issuable
(or may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant
to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person)
with respect to any one share of Common Stock (on a fully-diluted basis) upon the issuance or sale of such Convertible Security plus
the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person) with respect to any one share of Common Stock (on a fully-diluted basis). Except as contemplated below, no further
adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of the Fixed Conversion Price has been or is to be made pursuant
to other provisions of this Section 3.3(a)(v), except as contemplated below, no further adjustment of the Fixed Conversion Price
shall be made by reason of such issuance or sale.
(4) Change in Option
Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration, if any,
payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exercisable or exchangeable for shares of Common Stock decreases at any time (other than proportional changes
in connection with an event referred to Section 3.3(a)(i) above), the Fixed Conversion Price in effect at the time of such decrease
shall be adjusted to the Fixed Conversion Price which would have been in effect at such time had such Options or Convertible Securities
provided for such decreased purchase price, additional consideration or decreased conversion rate (as the case may be) at the time initially
granted, issued or sold. For purposes of this Section 3.3(a)(v), if the terms of any Option or Convertible Security that was outstanding
as of the Original Issuance Date are decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued
as of the date of such decrease. No adjustment pursuant to this Section 3.3(a)(v) shall be made if such adjustment would result
in an increase of the Fixed Conversion Price then in effect.
(5) Issuances of Units.
If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance or sale or deemed issuance
or sale of any other securities of the Company (as determined by the Holder, the “Primary Security”, and such
Option and/or Adjustment Right, the “Secondary Securities”), together comprising one integrated transaction
(or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the Company either (A) have at
least one investor or purchaser in common, (B) are consummated in reasonable proximity to each other and/or (C) are consummated under
the same plan of financing), the “lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof” with respect to such Primary Security shall be deemed
to be equal to (1) the lowest price per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to
this Section 3.3(a)(v), as applicable) in such integrated transaction solely with respect to such Primary Security, minus (2) with
respect to such Secondary Securities, the sum of (x) the VWAP of the number of shares of Common Stock underlying each such Secondary
Security which accompanies one share of Common Stock in respect of the Primary Security on a fully-diluted basis, if any, (y) the fair
market value (as mutually determined by the Holder and the Company in good faith), of such Adjustment Right which accompanies one share
of Common Stock in respect of the Primary Security on a fully-diluted basis, if any, and (z) the fair market value (as mutually determined
by the Holder and the Company) of such Convertible Security, if any, in each case, as determined on a per share basis in accordance with
this Section 3.3(a)(v). If any shares of Common Stock, Options (other than exempt issuances) or Convertible Securities are issued
or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining the consideration
paid for such Common Stock, Option or Convertible Security) will be deemed to be the net amount of consideration received by the Company
therefor. If any shares of Common Stock, Options (other than exempt issuances) or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for
such Common Stock, Option or Convertible Security) will be the fair value of such consideration, except where such consideration consists
of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic
average of the VWAPs of such security for each of the five Trading Days immediately preceding the date of receipt. If any shares of Common
Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining the consideration paid for
such Common Stock, Option ) will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity
as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration
other than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to
reach agreement within 10 days after the occurrence of an event requiring valuation (the “Valuation Event”)
in this Section 3.3(a)(v)(5), the fair value of such consideration will be determined within five Trading Days after the 10th day
following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall
be borne by the Company. For the avoidance of doubt, in the event of a transaction provided in this Section 3.3(a)(v)(5), the calculation
of the consideration per share for the Secondary Securities shall be as provided in Section 3.3(a)(v)(2) and/or (3), as applicable.
(6) Record Date.
If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be); provided, however, that, if
the Company shall at any time set a record date for the determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in shares of Common Stock, Options or in Convertible Securities or to subscribe for or purchase shares of Common
Stock, Options or in Convertible Securities and (A) such dividend is not fully paid or if such distribution is not fully made, or the
subscription rights are not fully granted, on the date fixed therefor, the Fixed Conversion Price shall be adjusted pursuant to this
Section 3.3(a)(v) as of the time of actual payment of such dividends or distributions or the effectiveness of such subscription
rights or (B) the Company shall subsequently rescind or otherwise cancel or determine not to make such dividend or distribution or to
grant such subscription rights, then any adjustment to the Fixed Conversion Price made pursuant to this Section 3.3(a)(v) with respect
to the fixing of such record date shall be reversed and of no further force or effect as of the date of the Company’s public announcement
that it is rescinding or otherwise canceling or determining not making such dividend or distribution or the grant of such subscription
rights.
(b) Fractional Shares.
The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance
of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.
If any adjustments to the Fixed Conversion Price under this Section 3.3 result in a fractional amount, the fractional amount shall
be rounded down to the nearest whole cent.
(c) No Impairment.
The Maker shall not, by amendment of its Memorandum and Articles or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Maker, but will at all times in good faith assist in the carrying out of all the
provisions of this Section 3.3 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion
rights of the Holder against impairment. In the event the Holder shall elect to convert this Note as provided herein, the Maker cannot
refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation
of law, violation of an agreement to which the Holder is a party or for any reason whatsoever, unless, an injunction from a court on
prior notice, enjoining conversion of this Note shall have issued and the Maker posts a surety bond for the benefit of the Holder in
an amount equal to 150% of the Principal of the Note which the Holder has elected to convert, which bond shall remain in effect until
the completion of litigation of the dispute and the proceeds of which shall be payable to the Holder (as liquidated damages) in the event
it obtains judgment.
(d) Certificates as
to Adjustments. Upon occurrence of each adjustment or readjustment of the Fixed Conversion Price or number of shares of Common Stock
issuable upon conversion of this Note pursuant to this Section 3.3, the Maker at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment and readjustment,
showing in detail the facts upon which such adjustment or readjustment is based. The Maker shall, upon written request of the Holder,
at any time, furnish or cause to be furnished to the Holder a like certificate setting forth such adjustments and readjustments, the
applicable Fixed Conversion Price in effect at the time, and the number of shares of Common Stock and the amount, if any, of other securities
or property which at the time would be received upon the conversion of this Note. Notwithstanding the foregoing, the Maker shall not
be obligated to deliver a certificate unless such certificate would reflect an increase or decrease of at least one percent of such adjusted
amount.
(e) Issuance Taxes.
The Maker shall pay any and all issuance and other taxes, excluding federal, state or local income taxes, that may be payable in respect
of any issue or delivery of Common Stock on conversion of this Note pursuant thereto; provided, however, that the Maker
shall not be obligated to pay any transfer taxes resulting from any transfer requested by the Holder in connection with any such conversion.
(f) Reservation of
Common Stock. The Maker shall at all times while this Note shall be outstanding, reserve and keep available out of its authorized
but unissued Common Stock the Required Minimum of Common Stock (disregarding for this purpose any and all limitations of any kind on
such conversion). The Maker shall, from time-to-time, increase the authorized number of shares of Common Stock or take other effective
action if at any time the unissued number of authorized shares shall not be sufficient to satisfy the Maker’s obligations under
this Section 3.3(f).
(g) Regulatory Compliance.
If any Common Stock to be reserved for the purpose of conversion of this Note requires registration or listing with or approval of any
Governmental Authority, national securities exchange or other regulatory body under any federal or state law or regulation or otherwise
before such shares may be validly issued or delivered upon conversion, the Maker shall, at its sole cost and expense, in good faith and
as expeditiously as possible, secure such registration, listing or approval, as the case may be.
3.4 Rights Upon Fundamental
Transaction.
(a) Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Person (which may be the Company) formed
by, resulting from or surviving any Fundamental Transaction or the Person with which such Fundamental Transaction shall have been entered
into (the “Successor Entity”) assumes in writing all of the obligations of the Company under this Note and
the other Transaction Documents in accordance with the provisions of this Section 3.4(a) pursuant to written agreements in form
and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver
to the Holder in exchange for the Note a security of the Successor Entity evidenced by a written instrument substantially similar in
form and substance to the Note, including, without limitation, having Principal and Interest equal to the Principal then outstanding
and any accrued and unpaid Interest thereon (if any) of the Note held by the Holder, having similar conversion rights as the Note and
having similar ranking and security to the Note, and satisfactory to the Holder and (ii) the Successor Entity (including its parent
entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on any eligible market listed in the definition
of Trading Market in the Purchase Agreement. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other
Transaction Documents referring to the “Company” or the “Maker” shall refer instead
to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company
under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon
consummation of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
conversion or prepayment of this Note at any time after the consummation of such Fundamental Transaction, in lieu of the shares of Common
Stock issuable upon the conversion or prepayment of the Note prior to such Fundamental Transaction, such shares of the publicly traded
common stock (or their equivalent) of the Successor Entity (including its parent entity) which the Holder would have been entitled to
receive upon the happening of such Fundamental Transaction had this Note been converted immediately prior to such Fundamental Transaction
(without regard to any limitations on the conversion of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding
the foregoing, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 3.4(a)
to permit the Fundamental Transaction without the assumption of this Note. The provisions of this Section 3.4(a) shall apply
similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion
of this Note.
(b) Other Corporate
Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange
for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure that
the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option, (i) in addition to
the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled
with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate
Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the shares
of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common
Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had
this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a
conversion price for such consideration commensurate with the Conversion Price. Provision made pursuant to the preceding sentence shall
be in a form and substance satisfactory to the Holder. The provisions of this Section 3.4(b) shall apply similarly and equally
to successive Corporate Events and shall be applied without regard to any limitations on the conversion or prepayment of this Note.
(c) Prepayment Following
a Change of Control. No later than 15 days following the entry by the Company into an agreement for a Change of Control but in no
event prior to the public announcement of such Change of Control, the Maker shall deliver written notice describing the entry into such
agreement (“Notice of Change of Control”) to the Holder. Within fifteen (15) days after receipt of a Notice
of Change of Control, the Holder may require the Maker to prepay, effective immediately prior to the consummation of such Change of Control,
an amount equal to 120% of the sum of (x) the outstanding Principal of this Note and (y) and any accrued and unpaid Interest thereon
(if any) (the “COC Repayment Price”), by delivering written notice thereof (“Notice of Prepayment
at Option of Holder Upon Change of Control”) to the Maker.
(d) Payment of COC
Repayment Price. Upon the Maker’s receipt of a Notice(s) of Prepayment at Option of Holder Upon Change of Control from the
Holder, the Maker shall deliver the COC Repayment Price to the Holder immediately prior to the consummation of the Change of Control;
provided, that the Holder’s original Note shall have been so delivered to the Maker.
3.5 Purchase Rights.
If at any time the Company grants, issues or sells any Options, other Convertible Securities or rights to purchase stock, warrants, securities
or other property pro rata to all or substantially all of the record holders of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note
(without taking into account any limitations or restrictions on the convertibility of this Note and assuming for such purpose that the
Note was converted at the Applicable Conversion Price as of the applicable record date) immediately prior to the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however,
that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of
the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase
Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance (and,
if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number of
days held in abeyance, if applicable) for the benefit of the Holder until such time or times, if ever, as its right thereto would not
result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted
such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly
in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended
by such number of days held in abeyance, if applicable)) to the same extent as if there had been no such limitation).
3.6 No Rights as
Shareholder. Nothing contained in this Note shall be construed as conferring upon the Holder, prior to the conversion of this Note,
the right to vote or to receive dividends or to consent or to receive notice as a shareholder of the Company in respect of any meeting
of shareholders for the election of directors of the Maker or of any other matter, or any other rights as a shareholder of the Maker.
Article
4
4.1 Covenants.
For so long as any Principal of this Note remains outstanding, unless Holder has otherwise given prior written consent, the Company shall
be bound by the following covenants:
(a) Rank. All payments
due under this Note shall rank senior to all other Indebtedness of the Company and its Subsidiaries, except for the Prior Notes, Other
Notes, and Additional Note(s) (including those held by the holder of Other Notes) upon issuance with which payments under this Note shall
rank pari passu.
(b) Incurrence of Indebtedness.
The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, incur or guarantee or assume
any Indebtedness, other than Permitted Indebtedness.
(c) Existence of Liens.
The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, allow or suffer to exist
any mortgage, lien, pledge, charge, security interest, deed of trust, or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other
than Permitted Liens.
(d) Restricted Payments.
Except as otherwise provided for in this Note or the other Transaction Documents, the Company shall not, and the Company shall cause
each of its Subsidiaries to not, directly or indirectly, prepay, defease, repurchase, repay or make any payments having a total value
of more than 50% of the Company’s net assets in respect of, by the payment of cash or cash equivalents (in whole or in part, whether
by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other than
the Note and the Additional Note(s)) whether by way of payment in respect of principal of (or premium, if any) or Interest on, such Indebtedness
if at the time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event of
Default has occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute an Event
of Default has occurred and is continuing.
(e) Restriction on
Prepayment and Cash Dividends. At any time that an Event of Default exists and is continuing under this Note, the Company shall not,
and the Company shall cause each of its Subsidiaries to not, directly or indirectly, prepay, repurchase or declare or pay any cash dividend
or other distribution on any of its capital stock excluding any intercompany transfers.
(f) Restriction on
Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, sell,
lease, license, assign, transfer, spin-off, split-off, convey or otherwise dispose of any assets or rights which have a total value of
more than 50% of the Company’s net assets of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction
or a series of related transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions
of such assets or rights by the Company and its Subsidiaries in the ordinary course of business consistent with its past practice, (ii)
sales of inventory and products in the ordinary course of business, and (iii) sales of unwanted or obsolete assets.
(g) Preservation of
Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing
in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes
such qualification necessary.
(h) Maintenance of
Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its
properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and
tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is
a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(i) Maintenance of
Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable to maintain
all of the rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, original
works of authorship, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets
and other intellectual property rights and all applications and registrations therefor of the Company and/or any of its Subsidiaries,
in each case that are necessary or material to the conduct of its business in full force and effect.
(j) Maintenance of
Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance)
with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering such
risks as is required by any Governmental Authority having jurisdiction with respect thereto or as is carried generally by companies in
similar businesses similarly situated.
(k) Transactions with
Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to, any
transaction or series of related transactions having a total value of more than 50% of the Company’s net assets (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind)
with any Affiliate, except in the ordinary course of business in a manner and to an extent consistent with past practice and necessary
or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries
than would be obtainable in a comparable arm’s length transaction with a Person that is not an Affiliate thereof.
(l) Dividends.
The Company shall not, nor shall it permit any of its Subsidiaries to, pay dividends and other distributions.
(m) Use of Proceeds.
The Maker shall use the proceeds of this Note as set forth in the Purchase Agreement.
(n) Operation of Business.
The Company shall operate its business in the ordinary course consistent with past practices.
(o) Compliance with
Transaction Documents. The Maker shall, and shall cause its Subsidiaries to, comply with its obligations under this Note and the
other Transaction Documents.
(p) Payment of Taxes,
Etc. The Maker shall, and shall cause each of its Subsidiaries to, promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or
business of the Maker and the Subsidiaries, except for such failures to pay that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Material Adverse Effect; provided, however, that any such tax, assessment, charge or
levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Maker
or such Subsidiaries shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Maker
and such Subsidiaries will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose
any lien which may have attached as security therefor.
(q) Variable Rate Transactions.
The Company shall not enter into any Variable Rate Transactions, except as otherwise expressly permitted under the Purchase Agreement.
4.2 Option of the
Holder. In connection with the number of Trading Days referred to in Sections 3.13.1(b), 3.1(c) 3.3(a)(i), 5.11(e) and 5.11(ww)
of this Note, the Holder shall have the option to add the number of Trading Days for which a temporary “chill” has been in
effect as specified in the Purchase Agreement. This Section 4.2 and any election by the Holder shall not be deemed to modify the
Events of Default.
Article
5
5.1 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email
at the email address specified in this Section 5.1 prior to 5:00 p.m. (New York, N.Y. time) on a Trading Day, (b) the next Trading
Day after the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section 5.1
on a day that is not a Trading Day or later than 5:00 p.m. (New York, N.Y. time) on any date and earlier than 11:59 p.m. (New York, N.Y.
time) on such date, (c) the Trading Day following the date of delivery to a carrier, if sent by U.S. nationally recognized overnight
courier service next Trading Day delivery, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses
for notice shall be as set forth in the Purchase Agreement.
5.2 Governing Law.
This Note shall be governed by and construed in accordance with the laws of the Cayman Islands. This Note shall not be interpreted or
construed with any presumption against the party causing this Note to be drafted.
5.3 Headings.
Article and Section headings in this Note are included herein for purposes of convenience of reference only and shall not constitute
a part of this Note for any other purpose.
5.4 Remedies, Characterizations,
Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all
other remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance and/or
other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy
and nothing herein shall limit the Holder’s right to pursue actual damages for any failure by the Maker to comply with the terms
of this Note. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof)
shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation
of the Maker (or the performance thereof). The Maker acknowledges that a breach by it of its obligations hereunder will cause irreparable
and material harm to the Holder and that the remedy at law for any such breach would be inadequate. Therefore, the Maker agrees that,
in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available rights and remedies,
at law or in equity, to seek equitable relief, including but not limited to an injunction restraining any such breach or threatened breach,
without the necessity of pleading and proving irreparable harm or lack of an adequate remedy at law and without any bond or other security
being required.
5.5 Binding Effect.
The obligations of the Maker set forth herein shall be binding upon its successors and assigns, whether or not such successors or assigns
are permitted by the terms herein.
5.6 Amendments; Waivers.
Except for Section 3.2(e), which may not be amended, modified or waived by the Company or the Holder except as expressly set forth
therein, no provision of this Note may be waived or amended except in a written instrument signed by the Company and the Holder. No waiver
of any default with respect to any provision, condition or requirement of this Note shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of the Holder to exercise any right hereunder in any manner impair the exercise of any such right.
5.7 Compliance with
Securities Laws. The Holder of this Note acknowledges that this Note is being acquired solely for the Holder’s own account
and not as a nominee for any other party, and for investment, and that the Holder shall not offer, sell or otherwise dispose of this
Note in violation of applicable securities laws.
5.8 Exclusive Jurisdiction;
Venue. Any action, proceeding or claim arising out of, or relating in any way to, this Agreement shall be brought and enforced as
provided in the Purchase Agreement.
5.9 Failure or Indulgence
Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege.
5.10 Maker Waivers.
Except as otherwise specifically provided herein, the Maker and all others that may become liable for all or any part of the obligations
evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands’ and notices in connection
with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions
of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without
affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability
of the other persons, firms or Maker liable for the payment of this Note, and do hereby waive the right to a trial by jury.
5.11 Definitions.
Capitalized words and phrases used herein and not defined and which are not descriptive shall have the meanings set forth in the Purchase
Agreement. For the purposes hereof, the following terms shall have the following meanings.
(a) “Additional
Note(s)” means the any other promissory note(s) that may be issued to the Holder and/or the holder(s) of Other Notes upon
the Holder and such holder(s) lending the Maker additional funds on substantially the same terms as are in, and subject to the other
terms and conditions of, the Purchase Agreement.
(b) “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance
or sale (or deemed issuance or sale in accordance with Sections 3.3(a)) of Common Stock (other than rights of the type described in Section
3.4) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities
(including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(c) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(d) “Alternative
Conversion Price” means 90% of the lowest daily VWAP in the 10 Trading Days immediately preceding the applicable Conversion
Date, provided, however, that if any Alternative Conversion Price under this definition results in a fractional amount, the fractional
amount shall be rounded down to the nearest whole cent.
(e) “Applicable
Conversion Price” has the meaning contained in Section 3.1(c).
(f) “Applicable
Price” has he meaning contained in Section 3.3(a)(v).
(g) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Original Issuance Date, directly or indirectly managed or advised
by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder
or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the
foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with
the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(h) “Buy-In”
has the meaning contained in Section 3.2(c).
(i) “Buy-In
Price” has the meaning contained in Section 3.2(c).
(j) “Buy-In
Payment Amount” has the meaning contained in Section 3.2(c).
(k) “Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect,
wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of
the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the
authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such
entity or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected
solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(l) “COC
Repayment Price” has the meaning contained in Section 3.4(c).
(m) “Common
Stock” shall have the meaning as defined in the Purchase Agreement, and for the purposes of this Note, shall also refer
to Conversion Shares unless otherwise apparent from the context.
(n) “Company”
has the meaning contained on page 1 of this Note.
(o) “Conversion
Amount” has the meaning contained in Section 3.1(a).
(p) “Conversion
Date” has the meaning contained in Section 3.1(a).
(q) “Conversion
Failure” has the meaning contained in Section 3.2(c).
(r) “Conversion
Notice” has the meaning contained in Section 3.1(a).
(s) “Conversion
Price” has the meaning contained in Section 3.1(b).
(t) “Conversion
Shares” has the meaning contained in Section 3.2(a). In this Note, the use of Common Stock shall also refer to Conversion
Shares unless otherwise apparent from the context.
(u) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(v) “Corporate
Event” has the meaning contained in Section 3.4(b).
(w) “Default
Interest” has the meaning contained in Section 1.2.
(x) “Default
Interest Payment Date” has the meaning contained in Section 1.2.
(y) “Dilutive
Issuance” has the meaning contained in Section 3.3(a)(v).
(z) “Dilutive
Issuance Price” has the meaning contained in Section 3.3(a)(v).
(aa) “DTC”
has the meaning contained in Section 3.2(a).
(bb) “Equity
Conditions” means, as of any given date of determination, all of the following have been met: (a) the Company has complied
with all of the conversion and other provisions of the Notes and related Transaction Documents; (b) the Company shall be current in filing
required reports with the SEC and there is no pending extension under Rule 12b-25 of the Exchange Act; (c) the Notes shall not be in
default and an Event of Default shall not have otherwise occurred; (d) the Common Stock has not been subject to a trading suspension
by the SEC or the Trading Market or been delisted by the Trading Market nor shall delisting or suspension by the Trading Market have
been threatened or reasonably likely to occur or pending as evidenced by a writing issued by the Trading Market, nor shall the Company
have received notice from its Trading Market of delisting or non-compliance with the rules, regulations and continued listing standards
thereof even if subject to cure; (e) the Company’s Common Stock must be DWAC Eligible; (f) the Common Stock shall have not been
subject to a “chill” or similar event imposed by The Depository Trust Co.; (g) the Company has met each delivery deadline
in connection with prior conversions of the Notes; (h) the Company has complied with all Transaction Documents in all respects; (i) the
Company shall not have engaged in the sale of any securities under Section 3(a)(10) of the Securities Act; (j) no Investor shall
be in possession of any material, non-public information provided to any of them by the Company, any of its Subsidiaries or any of their
respective affiliates, employees, officers, representatives, agents or attorneys (except, with respect to a closing hereunder, where
such material, non-public information that will be disclosed to the public no later than 9:00 a.m. New York, N.Y. time on the Trading
Day immediately following the date of such closing); (k) the Registration Statement covering the Shares and Underlying Shares, has been
filed and declared effective within the timeframe provided for in the Agreement and the Prospectus contained in such Registration Statement
complies with Sections 5(b) and 10 of the Securities Act (and the Company shall have no knowledge of any fact that would reasonably be
expected to cause such Prospectus thereunder to not be true and correct or to contain any untrue statement of a material fact or to omit
to state a material fact required to be stated therein or necessary to make the statements therein not misleading); (l) any shares of
Common Stock underlying the Notes to be issued in connection with the event requiring determination may be issued in full without violating
the rules or regulations of the Trading Market; (m) the Company has available shares of Common Stock as necessary to issue all Shares
and Underlying Shares; (n) no bona fide material dispute shall exist by and between any of holder of the Notes and/or Other Notes and
the Company, the Trading Market and/or the Financial Industry Regulatory Authority with respect to any term or provision of any Note
or any other Transaction Document; and (o) the Company shall be in compliance with all SEC regulations and rules and all listing requirements
of the Trading Market.
(cc) “Event
Market Price” has the meaning contained in Section 3.3(a)(i).
(dd) “Event
of Default” has the meaning contained in Section 2.1.
(ee) “Excess
Shares” has the meaning contained in Section 3.2(e).
(ff) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(gg) “FAST”
has the meaning contained in Section 3.2(a).
(hh) “Fixed
Conversion Price” has the meaning contained in Section 3.1(b).
(ii) “Floor
Price” means $0.10; provided that in any event where the Floor Price applies so as to limit or reduce the number of shares
of Common Stock issuable upon a conversion of this Note, the Maker shall pay the Holder the economic difference between the Applicable
Conversion Price and the Floor Price as to all such shares, as provided in Section 3.1(c); and provided further that for the avoidance
of doubt, the Company shall register any additional shares of Common Stock underlying this Note resulting from the foregoing on the Registration
Statement or otherwise pursuant to the Purchase Agreement if and as necessary for any such additional shares to be free of any restrictive
or trading legend when issued.
(jj) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Persons,
or (iii) make, or allow one or more Persons to make, or allow the Company to be subject to or have its Common Stock be subject to or
party to one or more Persons making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50%
of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock
held by all Persons making or party to, or Affiliated with any Person or group of Persons making or party to, such purchase, tender or
exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Persons making or party to, or Affiliated
with any Person making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in
Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more Persons whereby all such Persons, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding
shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by
all the Persons making or party to, or Affiliated with any Person making or party to, such stock purchase agreement or other business
combination were not outstanding; or (z) such number of shares of Common Stock such that the Persons become collectively the beneficial
owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize,
recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates
or otherwise, in one or more related transactions, allow any Person individually or the Persons in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by
all such Persons as of the date of this Note calculated as if any shares of Common Stock held by all such Persons were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Persons to effect a statutory short form merger or other transaction requiring other
shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C) directly
or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering
into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in
which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this
definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent
with the intended treatment of such instrument or transaction.
(kk) “Governmental
Authority” means the government of the United States, or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to government.
(ll) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(mm) “Holder”
has the meaning contained on page 1 of this Note.
(nn) “Indebtedness”
shall have the meaning contained in the Purchase Agreement.
(oo) “Interest”
has the meaning contained in Section 2.1.
(pp) “Liens”
has the meaning contained in Section 4.1(c).
(qq) “Liquidation
Event” has the meaning contained in Section 1.5.
(rr) “Maker”
has the meaning contained on page 1 of this Note.
(ss) “Mandatory
Default Amount” means an amount equal to 115% of the sum of (x) the outstanding Principal of this Note on the date on which
the first Event of Default has occurred hereunder and (y) any accrued and unpaid Interest thereon, if any.
(tt) “Mandatory
Prepayment Price” have the meaning contained in Section 3.2(c)(i).
(uu) “Maturity
Date” has the meaning contained on page 1 of this Note.
(vv) “Maximum
Percentage” has the meaning contained in Section 3.2(e).
(ww) “Note”
has the meaning contained on page 1 of this Note.
(xx) “Notes”
means this Note and the Other Note(s), Prior Note(s) and Additional Note(s) (if and when issued), as applicable.
(yy) “Notice
of Change of Control” has the meaning contained in Section 3.4(c).
(zz) “Notice
of Prepayment at Option of Holder Upon Change of Control” has the meaning contained in Section 3.4(c).
(aaa) “Other
Note(s)” means any Note(s) issued to other Investors under the Purchase Agreement or their permitted assigns.
(bbb) “Permitted
Indebtedness” means the Indebtedness having a total value of no more than 50% of the Company’s net assets.
(ccc) “Permitted
Liens” means (i) Liens under the Transaction Documents, (ii) Liens incurred in connection with Permitted Indebtedness and
having a total value of no more than 50% of the Company’s net assets.
(ddd) “Primary
Security” has the meaning contained in Section 3.3(a)(v)(5).
(eee) “Principal”
has the meaning contained on page 1 of this Note.
(fff) “Purchase
Agreement” has the meaning contained in Section 1.1.
(ggg) “Purchase
Rights” has the meaning contained in Section 3.5.
(hhh) “Reported
Outstanding Share Number” has the meaning contained in Section 3.2(e).
(iii) “Required
Minimum” shall have the meaning contained in the Purchase Agreement.
(jjj) “SEC”
means the United States Securities and Exchange Commission or the successor thereto.
(kkk) “Secondary
Securities” has the meaning contained in Section 3.3(a)(v)(5).
(lll) “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(mmm) “Share
Delivery Date” has the meaning contained in Section 3.2(a).
(nnn) “Shareholder
Approval” shall have the meaning contained in the Purchase Agreement.
(ooo) “Shares”
has the meaning contained in the Purchase Agreement.
(ppp) “Standard
Settlement Period” has the meaning contained in Section 2.1(e).
(qqq) “Subsidiary”
shall have the meaning contained in the Purchase Agreement.
(rrr) “Successor
Entity” has the meaning contained in Section 3.4(a).
(sss) “Trading
Day” means a day on which the shares of Common Stock are traded on a Trading Market for at least 4.5 hours.
(ttt) “Trading
Market” has the meaning contained in the Purchase Agreement.
(uuu) “Transaction
Documents” has the meaning contained in the Purchase Agreement.
(vvv) “Transfer
Agent” has the meaning contained in Section 3.2(a).
(www) “Underlying
Shares” has the meaning contained in the Purchase Agreement.
(xxx) “Variable
Rate Transactions” has the meaning contained in the Purchase Agreement.
(yyy) “Voluntary
Prepayment Premium” has the meaning set forth in Section 1.3.
(zzz) “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on the Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
from 9:30 a.m. (New York, N.Y. time) to 4:02 p.m. (New York, N.Y. time)), (b) if the Common Stock is traded on OTCQB or OTCQX, the volume
weighted average sales price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if
the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock is then reported in the
“Pink Open Market” or successor operated by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent broker-dealer selected in good faith by the Holder and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
(aaaa) “$”
means United States dollars.
[Signature
Page Follows]
In
Witness Whereof, the Maker has caused this Note to be duly executed by its duly authorized officer as of the date first above
indicated.
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Fangdd Network Group Ltd. |
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By: |
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Name: |
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Title: |
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Signature Page to Note
Exhibit
A
FORM OF CONVERSION NOTICE
(To be Executed by the Holder
in order to Convert the Note)
The undersigned hereby irrevocably
elects to convert $ ________________ of the Principal of Note No. ___ into shares of Common Stock of Fangdd Network Group Ltd. (the “Maker”)
according to the terms and conditions set forth in the aforementioned Note, as of the date written below.
Date
of Conversion:
Conversion Amount:
Applicable
Conversion Price:
Number of shares of Common
Stock beneficially owned or deemed beneficially owned by the Holder on the Conversion Date:
Number of shares of Common
Stock to be issued:
| |
[Holder] |
| |
|
| |
By: |
|
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Name: |
| |
Title: |
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Address: |
Exhibit A
Exhibit
99.1
FANGDD
ANNOUNCES US$5,000,000 SENIOR CONVERTIBLE NOTES OFFERING
SHENZHEN,
China, March 14, 2025 (GLOBE NEWSWIRE) -- Fangdd Network Group Ltd. (Nasdaq: DUO) (“FangDD” or the “Company”),
a customer-oriented property technology company in China, today announced that it has entered into a securities purchase agreement with
certain investors (the “Purchase Agreement”) for the offering by the Company of (i) senior 5% original issue discount convertible
promissory notes in an aggregate principal amount of US$5,000,000 (the “Notes”), (ii) Class A ordinary shares, par value
US$0.0005625 per share, issuable from time to time upon conversion under the Notes, and (iii) additional 251,890 Class A ordinary shares
in connection with the issuance of the Notes.
The
Notes carry a 5% original issue discount, and have a term of nine months from the original issuance date. No interest accrues during
the term of the Notes unless an event of default occurs, in which case interest will accrue at a rate of 15% per annum or, if less,
the highest amount permitted by law. The Company’s obligations under these Notes and those issued to certain investors on
February 11, 2025 rank senior to all other existing indebtedness and equity, with the Notes issued under the Purchase Agreement and
the February 2025 notes treated equally.
Holders
can convert their Notes into Class A ordinary shares by providing a conversion notice. The number of shares issuable upon conversion
is calculated by dividing (i) the portion of the principal and any accrued interest the holder chooses to convert by (ii) the conversion
price on the date of the conversion notice. The conversion price is the lower of (i) the fixed conversion price, set at 130% of the lowest
daily VWAP on the trading day immediately before the closing date of the Purchase Agreement, and (ii) the alternative conversion price,
set at 90% of the lowest daily VWAP over the ten trading days immediately before the date of the conversion notice. Any fractional amounts
resulting from these calculations will be rounded down to the nearest cent, and the conversion price cannot fall below the floor price,
which is set at US$0.10 per share. If the conversion price is lower than the floor price at the time a conversion notice is received,
shares will be issued based on the floor price, and the Company will need to compensate the holder for any economic difference. The difference
is determined as (i) the number of shares that would have been delivered using the conversion price, minus (ii) the number of shares
delivered using the floor price, multiplied by (iii) the daily VWAP of the Company’s Class A ordinary shares on the date of the
conversion notice. VWAP for any date is defined as the daily volume weighted average price of the Company’s Class A ordinary shares
for such date or the nearest preceding date as reported by Bloomberg L.P.
The
Purchase Agreement and the Notes contain representations, warranties and other provisions customary for transactions of this nature.
The offering is expected to close on or about March 14, 2025, subject to the satisfaction of customary closing conditions. FangDD
intends to use the net proceeds from this offering for general corporate purposes.
The
Company has engaged MM Global Securities, Inc. as its exclusive placement agent in connection with this offering.
The
securities described above will be offered by the Company pursuant to an effective “shelf” registration statement on Form
F-3 (File No. 333-267397) previously filed with the United States Securities and Exchange Commission (the “SEC”) on September
13, 2022 and declared effective by the SEC on September 29, 2022. The securities may be offered only by means of a written prospectus
and prospectus supplement that form a part of the registration statement. The prospectus supplement and accompanying base prospectus
contain important information relating to the Class A ordinary shares to be sold in the offering. The prospectus supplement will be filed
with the SEC and will be available on the SEC’s website at http://www.sec.gov, or may be obtained, when available, by contacting
us at Room 1501, Shangmei Technology Building, No. 15 Dachong Road, Nanshan District, Shenzhen, the PRC, or by email at ir@fangdd.com.
The foregoing description of the Purchase Agreement and the Notes is qualified in its entirety by reference to the full text of such
agreements furnished as exhibits to a current report on Form 6-K to be furnished by the Company to the SEC.
This
press release shall not constitute an offer to sell nor the solicitation of an offer to buy, nor shall there be any sale of these securities
in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under
the securities laws of any such state or jurisdiction.
About
FangDD
Fangdd
Network Group Ltd. (Nasdaq: DUO) is a customer-oriented property technology company in China, focusing on providing real estate transaction
digitalization services. Through innovative use of mobile internet, cloud, big data, artificial intelligence, among others, FangDD has
fundamentally revolutionized the way real estate transaction participants conduct their business through a suite of modular products
and solutions powered by SaaS tools, products and technology. For more information, please visit http://ir.fangdd.com.
Safe
Harbor Statement
This
announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “aim,”
“anticipate,” “believe,” “estimate,” “expect,” “hope,” “going forward,”
“intend,” “ought to,” “plan,” “project,” “potential,” “seek,”
“may,” “might,” “can,” “could,” “will,” “would,” “shall,”
“should,” “is likely to” and the negative form of these words and other similar expressions. Among other things,
statements that are not historical facts, including statements about the Company’s beliefs and expectations are or contain forward-looking
statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ
materially from those contained in any forward-looking statement. All information provided in this press release is as of the date of
this press release and is based on assumptions that the Company believes to be reasonable as of this date, and the Company does not undertake
any obligation to update any forward-looking statement, except as required under applicable law.
Investor
Relations Contact
Ms. Linda
Li
Director,
Capital Markets Department
Phone: +86-0755-2699-8968
E-mail: ir@fangdd.com
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