Exhibit 10.16


 


Securities
Purchase Agreement


 


This
Securities Purchase Agreement (this “Agreement”), dated as of March 17,
2021, is entered into by and between The9 Limited, a Cayman Islands corporation
(“Company”), and Streeterville Capital, LLC, a Utah limited liability
company, its successors and/or assigns (“Investor”).


 


A.       Company
and Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder
by the United States Securities and Exchange Commission (the “SEC”).


 


B.       Investor
desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement: (a) a Convertible
Promissory Note, in the form attached hereto as Exhibit A, in the original principal amount of $20,000,000.00 (the “Note”),
convertible into American Depositary Shares of Company (the “ADSs”), upon the terms and subject to the limitations
and conditions set forth in such Note; and (b) a number ADSs to be calculated in accordance with the terms set forth herein (the
 “Commitment Shares”).


 


C.       This
Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under
or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the
 “Transaction Documents”.


 


D.       For
purposes of this Agreement: “Conversion Shares” means all ADSs issuable upon conversion of all or any portion
of the Note; and “Securities” means the Note, the Conversion Shares and the Commitment Shares.


 


NOW,
THEREFORE, in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Company and Investor hereby agree as follows:


 


1.                  
Purchase and Sale of Securities.


 


1.1.            
Purchase of Securities. Company shall issue and sell to Investor and Investor shall purchase from Company the Note
and the Commitment Shares. In consideration thereof, Investor shall pay the Purchase Price (as defined below) to Company.


 


1.2.            
Form of Payment. On the Closing Date (as defined below), Investor shall pay the Purchase Price to Company via wire
transfer of immediately available funds against delivery of the Note.


 


1.3.            
Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section
6 below, the date of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall
be March 17, 2021, or another mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but shall be deemed for all purposes
to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.


 


1.4.             Transaction
Expense Amount; Issuance Expenses. Company agrees to pay $15,000.00 to Investor to cover Investor’s legal fees,
accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of
the Securities (the “Transaction Expense Amount”), which amount will be reduced from the amount funded
hereunder. The “Purchase Price”, therefore, shall be $19,985,000.00, computed as follows:
$20,000,000.00 initial principal balance, less the Transaction Expense Amount. Company agrees that it will pay for any and
all fees associated with the issuance of the Commitment Shares and Conversion Shares.


 






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2.                  
Investor’s Representations and Warranties. Investor represents and warrants to Company that as of the Closing
Date: (i) Investor is a limited liability company duly established, validly existing and in good standing under the laws of the
State of Utah and has the requisite power to carry on its business as now being conducted; (ii) this Agreement has been duly and
validly authorized; (iii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with
its terms; and (iv) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of
the 1933 Act.


 


3.                   Company’s
Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a
corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has the
requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly
qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary; (iii) Company has registered its ordinary
shares underlying its ADSs under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “1934
Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv)
each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly authorized
by Company and all necessary actions have been taken; (v) the Transaction Documents have been duly executed and delivered by
Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms; (vi) the
execution and delivery of the Transaction Documents by Company, the issuance of Securities in accordance with the terms
hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will
not conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a)
Company’s formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or
other material agreement or instrument to which Company is a party or by which it or any of its properties or assets are
bound, including, without limitation, any listing agreement for the ADSs, or (c) any existing applicable law, rule, or
regulation or any applicable decree, judgment, or order of any court, United States federal, state or foreign regulatory
body, administrative agency, or other governmental body having jurisdiction over Company or any of Company’s properties
or assets; (vii) no further authorization, approval or consent of any court, governmental body, regulatory agency,
self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company is required to be
obtained by Company for the issuance of the Securities to Investor or the entering into of the Transaction Documents; (viii)
none of Company’s filings with the SEC contained, at the time they were filed, any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading; (ix) Company has filed all reports, schedules, forms,
statements and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis or has
received a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document
prior to the expiration of any such extension; (x) there is no action, suit, proceeding, inquiry or investigation before or
by any court, public board or body pending or, to the knowledge of Company, threatened against or affecting Company before or
by any governmental authority or non-governmental department, commission, board, bureau, agency or instrumentality or any
other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect on Company or which
would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations
under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that has not been
disclosed in a periodic filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at
any time in the previous twelve (12) months, a “Shell Company,” as such type of “issuer” is described
in Rule 144(i)(1) under the 1933 Act; (xiii) with respect to any commissions, placement agent or finder’s fees or
similar payments that will or would become due and owing by Company to any person or entity as a result of this Agreement or
the transactions contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full compliance
with all applicable laws and regulations and only to a person or entity that is a registered investment adviser or registered
broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees or with respect to any claims made by
or on behalf of other persons for fees of a type contemplated in this subsection that may be due in connection with the
transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s employees,
officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates, from and against
all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in
respect of any such claimed Broker Fees; (xv) when issued, the Conversion Shares and the Commitment Shares will be duly
authorized, validly issued, fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances;
(xvi) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents or
representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or
representatives except as expressly set forth in the Transaction Documents and, in making its decision to enter into the
transactions contemplated by the Transaction Documents, Company is not relying on any representation, warranty, covenant or
promise of Investor or its officers, directors, members, managers, employees, agents or representatives other than as set
forth in the Transaction Documents; (xvii) Company acknowledges that the State of Utah has a reasonable relationship and
sufficient contacts to the transactions contemplated by the Transaction Documents and any dispute that may arise related
thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section 9.2 below, shall be
applicable to the Transaction Documents and the transactions contemplated therein; and (xviii) Company has performed due
diligence and background research on Investor and its affiliates including, without limitation, John M. Fife, and, to its
satisfaction, has made inquiries with respect to all matters Company may consider relevant to the undertakings and
relationships contemplated by the Transaction Documents including, among other things, the following:
http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC; SEC Civil Case No.
07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D. Ill.); and FINRA Case #2011029203701. In addition, certain
affiliates of Investor are involved in ongoing litigation with the SEC regarding broker-dealer registration (see SEC
Civil Case No. 1:20-cv-05227 (N.D. Ill.)). Company, being aware of the matters described in subsection (xviii) above,
acknowledges and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the
Transaction Documents and covenants and agrees it will not use any such information as a defense to performance of its
obligations under the Transaction Documents or in any attempt to avoid, modify or reduce such obligations.


 






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4.                   Company
Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in
full, or within the timeframes otherwise specifically set forth below, Company will at all times comply with the following
covenants: (i) so long as Investor beneficially owns any of the Securities and for at least twenty (20) Trading Days (as
defined in the Note) thereafter, Company will timely file on the applicable deadline all reports required to be filed with
the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control to
ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933
Act, is publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act even
if the 1934 Act or the rules and regulations thereunder would permit such termination; (ii) when issued, the Conversion
Shares and the Commitment Shares will be duly authorized, validly issued, fully paid for and non-assessable, free and clear
of all liens, claims, charges and encumbrances; (iii) the ADSs shall be listed or quoted for trading on Nasdaq; (iv) trading
in the ADSs will not be suspended, halted, chilled, frozen, reach zero bid or otherwise cease trading on Company’s
principal trading market; (v) within two (2) months of filing its Form 20-F for the fiscal year ended December 31, 2020,
Company will be eligible to file an automatic shelf registration statement (as defined under the 1934 Act) and will file such
automatic shelf registration statement on Form F-3ASR (the “Registration Statement”) to register the
Commitment Shares and the 50,000 ADSs issued to Investor on February 2, 2021; and (vi) Company will deliver the Commitment
Shares to Lender within five (5) Trading Days of the Pricing Date (as defined below). The term “Commitment Share
Value” means $2,200,000.00. The term “Pricing Date” means the date that is the earlier of (a)
the effective date of the Registration Statement; and (b) the date that is six (6) months from the Purchase Price Date. The
number of Commitment Shares required to be delivered will be determined based on the following formula: (a) the Commitment
Shares Value divided by (b) the lower of (1) the average of the Closing Trade Prices (as defined in the Note) during the five
(5) Trading Days immediately preceding the Pricing Date, and (2) the Closing Trade Price on the Trading Day immediately
preceding the Pricing Date.


 






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5.                  
Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities
to Investor at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:


 


5.1.            
Investor shall have executed this Agreement and delivered the same to Company.


 


5.2.            
Investor shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.


 


6.                  
Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities
at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that
these conditions are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:


 


6.1.            
Company shall have executed this Agreement and the Note and delivered the same to Investor.


 


6.2.            
Company shall have delivered to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA
Letter”) substantially in the form attached hereto as Exhibit B acknowledged and agreed to in writing by Company’s
transfer agent (the “Transfer Agent”).


 


6.3.            
Company shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached
hereto as Exhibit C evidencing Company’s approval of the Transaction Documents.


 


6.4.            
Company shall have delivered to Investor fully executed copies of all other Transaction Documents required to be executed
by Company herein or therein.


 


7.                  
OFAC; Patriot Act.


 


7.1.            
OFAC Certification. Company certifies that (i) it is not acting on behalf of any person, group, entity, or nation
named by any Executive Order or the United States Treasury Department, through its Office of Foreign Assets Control (“OFAC”)
or otherwise, as a terrorist, “Specially Designated Nation”, “Blocked Person”, or other banned or blocked
person, entity, nation, or transaction pursuant to any law, order, rule or regulation that is enforced or administered by OFAC
or another department of the United States government, and (ii) Company is not engaged in this transaction on behalf of, or instigating
or facilitating this transaction on behalf of, any such person, group, entity or nation.


 


7.2.             Foreign
Corrupt Practices. Neither Company, nor any of its subsidiaries, nor any director, officer, agent, employee or other
person acting on behalf of Company or any subsidiary has, in the course of his actions for, or on behalf of, Company, used
any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political
activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended,
or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.


 






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7.3.            
Patriot Act. Company shall not (i) be or become subject at any time to any law, regulation, or list of any government
agency (including, without limitation, the OFAC) that prohibits or limits Investor from making any advance or extension of credit
to Company or from otherwise conducting business with Company, or (ii) fail to provide documentary and other evidence of Company’s
identity as may be requested by Investor at any time to enable Investor to verify Company’s identity or to comply with any
applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.
Company shall comply with all requirements of law relating to money laundering, anti-terrorism, trade embargos and economic sanctions,
now or hereafter in effect. Upon Investor’s request from time to time, Company shall certify in writing to Investor that
Company’s representations, warranties and obligations under this Section 7.3 remain true and correct and have not been breached.
Company shall immediately notify Investor in writing if any of such representations, warranties or covenants are no longer true
or have been breached or if Company has a reasonable basis to believe that they may no longer be true or have been breached. In
connection with such an event, Company shall comply with all requirements of law and directives of governmental authorities and,
at Investor’s request, provide to Investor copies of all notices, reports and other communications exchanged with, or received
from, governmental authorities relating to such an event. Company shall also reimburse Investor any expense incurred by Investor
in evaluating the effect of such an event on the loan secured hereby, in obtaining any necessary license from governmental authorities
as may be necessary for Investor to enforce its rights under the Transaction Documents, and in complying with all requirements
of law applicable to Investor as the result of the existence of such an event and for any penalties or fines imposed upon Investor
as a result thereof.


 


8.                  
Purchase Shares. Beginning on the date of each occurrence of an Event of Default (as defined in the Note) pursuant
to Section 4(a) – (c) of the Note until such time as such Event of Default is cured, Investor shall have the right to sell
those certain 10,000,000 Class A ordinary shares issued by Company in favor of Investor pursuant to that certain Securities Purchase
Agreement by and between Company and Investor dated February 2, 2021 (the “Purchase Shares”) and apply the
proceeds (net of any fees incurred by Investor, except legal costs to comply with applicable securities laws on the part of Investor)
to the outstanding balance of the Note. At such time as the Note and that certain Convertible Promissory Note issued by Company
to Investor on February 2, 2021 in the original principal amount of $5,000,000.00 (the “Prior Note”) are both
repaid in full, Company shall have the right to repurchase any unsold Purchase Shares from Investor at a price of $0.0001 per
share. Investor shall have the right to return any Purchase Shares to Company for cancellation at any time. Upon receipt of returned
Purchase Shares, Company agrees to immediately cancel such Purchase Shares and provide notice of cancellation to Investor. Company
and Investor agree that in the event Investor sells Purchase Shares after the Note and the Prior Note have been paid in full,
then in such event, as Company’s sole and exclusive remedy for doing so, Investor shall pay Company an amount equal to two
(2) times the net proceeds received from the sale of the excess Purchase Shares. For illustration purposes only, if the Note and
the Prior Note had been repaid in full from the sale of Purchase Shares and Investor sold additional Purchase Shares with net
proceeds of $50,000.00, then Investor would be obligated to make a payment to Company in the amount of $100,000.00. If such penalty
amount is not transferred to the Company within three days, interest of 6% per annum shall be calculated from the due date until
the same is paid in full.


 


9.                   Miscellaneous.
The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction Documents as if
these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision set
forth in this Section 9 and any provision in any other Transaction Document, the provision in such other Transaction Document
shall govern.


 






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9.1.            
Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit D) arising under this Agreement
or any other Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the
relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit D attached
hereto (the “Arbitration Provisions”). For the avoidance of doubt, the parties agree that the injunction described
in Section 9.4 below may be pursued in an arbitration that is separate and apart from any other arbitration regarding all other
Claims arising under the Transaction Documents. The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally
binding on the parties hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company
represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel
about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the
expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration
Provisions, and that Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees
that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.


 


9.2.            
Indemnification. Investor shall indemnify, defend and hold harmless Company, its affiliates, subsidiaries and its
and their respective officers, directors and employees from and against any and all costs and expenses, losses, damages, claims,
causes of action and liabilities (including reasonable attorneys’ fees, disbursements and expenses of litigation) arising
from, relating to, or in any way connected with the claims in respect to the matters described in Section 3(xviii) above. In the
event an action brought against Company alleges multiple claims or causes of action, Investor shall only be obligated to indemnify
Company for the amounts directly attributable to the claim related to the matters described in Section 3(xviii) above and not
for any amounts related to any of the other claims asserted in the same action. Notwithstanding anything herein to the contrary,
in no event shall Investor’s indemnification obligation under this Section 9.2 exceed $500,000.00.


 


9.3.             Governing
Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State
of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. Each party
consents to and expressly agrees that the exclusive venue for arbitration of any dispute arising out of or relating to any
Transaction Document or the relationship of the parties or their affiliates shall be in Salt Lake County, Utah. Without
modifying the parties’ obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any
litigation arising in connection with any of the Transaction Documents, each party hereto hereby (i) consents to and
expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt Lake County, Utah,
(ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such
action (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary
restraining order, or otherwise prohibit the Transfer Agent from issuing ADSs to Investor for any reason) outside of any
state or federal court sitting in Salt Lake County, Utah (except for actions involving the Transfer Agent that must be
brought in the Cayman Islands pursuant to the terms of the TA Letter), and (iv) waives any claim of improper venue and any
claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any
such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Finally,
Company covenants and agrees to name Investor as a party in interest in, and provide written notice to Investor in accordance
with Section 9.10 below prior to bringing or filing, any action (including without limitation any filing or action against
any person or entity that is not a party to this Agreement, including without limitation the Transfer Agent) that is related
in any way to the Transaction Documents or any transaction contemplated herein or therein, including without limitation any
action brought by Company to enjoin or prevent the issuance of any ADSs to Investor by the Transfer Agent, and further agrees
to timely name Investor as a party to any such action. Company acknowledges that the governing law and venue provisions set
forth in this Section 9.2 are material terms to induce Investor to enter into the Transaction Documents and that but for
Company’s agreements set forth in this Section 9.2 Investor would not have entered into the Transaction
Documents.


 






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9.4.            
Specific Performance. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that
Company fails to perform any material provision of this Agreement or any of the other Transaction Documents in accordance with
its specific terms. It is accordingly agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches
of the provisions of this Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof
or thereof, this being in addition to any other remedy to which the Investor may be entitled under the Transaction Documents,
at law or in equity. For the avoidance of doubt, in the event Investor seeks to obtain an injunction from a court or an arbitrator
against Company or specific performance of any provision of any Transaction Document, such action shall not be a waiver of any
right of Investor under any Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any
Claim pursuant to the terms of the Transaction Documents, nor shall Investor’s pursuit of an injunction prevent Investor,
under the doctrines of claim preclusion, issues preclusion, res judicata or other similar legal doctrines, from pursuing other
Claims in the future in a separate arbitration.


 


9.5.            
Counterparts. Each Transaction Document may be executed in any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of
another party’s executed counterpart of a Transaction Document (or such party’s signature page thereof) will be deemed
to be an executed original thereof.


 


9.6.            
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect
the interpretation of, this Agreement.


 


9.7.            
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision hereof.


 


9.8.            
Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding
of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein,
neither Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the
avoidance of doubt, all prior term sheets or other documents between Company and Investor, or any affiliate thereof, related to
the transactions contemplated by the Transaction Documents (collectively, “Prior Agreements”), that may have
been entered into between Company and Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in
their entirety by the Transaction Documents. To the extent there is a conflict between any term set forth in any Prior Agreement
and the term(s) of the Transaction Documents, the Transaction Documents shall govern.


 


9.9.            
Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed
by both parties hereto.


 






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9.10.         
 Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein)
and shall be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against
written receipt therefor or by email to an executive officer named below or such officer’s successor, or by facsimile (with
successful transmission confirmation which is kept by sending party), (ii) the earlier of the date delivered or the third Trading
Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (iii) the earlier of the date delivered
or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case, addressed to each
of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by
five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):


 


If to Company:


 


The9
Limited


Attn:
George Lai


17
Floor, No. 130, Wu Song Road


Hong
Kou District,


Shanghai
200080, PRC


 


If to Investor:


 


Streeterville Capital,
LLC


Attn: John Fife


303 East Wacker Drive,
Suite 1040


Chicago, Illinois
60601


 


With a copy to (which
copy shall not constitute notice):


 


Hansen Black Anderson
Ashcraft PLLC


Attn: Jonathan Hansen


3051 West Maple Loop
Drive, Suite 325


Lehi, Utah 84043


 


9.11.         
Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of
or to be performed by Investor hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in
part, without the need to obtain Company’s consent thereto. Company may not assign its rights or obligations under this
Agreement or delegate its duties hereunder without the prior written consent of Investor.


 


9.12.         
Survival. The representations and warranties of Company and the agreements and covenants set forth in this Agreement
shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company
agrees to indemnify and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage
arising as a result of or related to any breach or alleged breach by Company of any of its representations, warranties and covenants
set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as
they are incurred.


 


9.13.          Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.


 






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9.14.         
Investor’s Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and
the Transaction Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every
other right, power, and remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction
Document, or existing at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to
time and as often and in such order as Investor may deem expedient.


 


9.15.         
Attorneys’ Fees and Cost of Collection. In the event of any arbitration or action at law or in equity to enforce
or interpret the terms of this Agreement or any of the other Transaction Documents, the parties agree that the party who is awarded
the most money (which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees,
or other charges awarded to any party) shall be deemed the prevailing party for all purposes and shall therefore be entitled to
an additional award of the full amount of the attorneys’ fees, deposition costs, and expenses paid by such prevailing party
in connection with arbitration or litigation without reduction or apportionment based upon the individual claims or defenses giving
rise to the fees and expenses. Nothing herein shall restrict or impair an arbitrator’s or a court’s power to award
fees and expenses for frivolous or bad faith pleading. If (i) the Note is placed in the hands of an attorney for collection
or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal
proceeding, or Investor otherwise takes action to collect amounts due under the Note or to enforce the provisions of the Note,
or (ii) there occurs any bankruptcy, reorganization, receivership of Company or other proceedings affecting Company’s
creditors’ rights and involving a claim under the Note; then Company shall pay the costs incurred by Investor for such collection,
enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without
limitation, attorneys’ fees, expenses, deposition costs, and disbursements.


 


9.16.         
Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed
by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of
any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a
continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically
set forth in writing.


 


9.17.         
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO
DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL
BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT
SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.


 


9.18.         
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement
and the other Transaction Documents.


 


9.19.         
 Voluntary Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has
asked any questions needed for Company to understand the terms, consequences and binding effect of this Agreement and each of
the other Transaction Documents and fully understand them. Company has had the opportunity to seek the advice of an attorney of
Company’s choosing, or has waived the right to do so, and is executing this Agreement and each of the other Transaction
Documents voluntarily and without any duress or undue influence by Investor or anyone else.


 


[Remainder
of page intentionally left blank; signature page follows]


 






    9


     


    

 


IN
WITNESS WHEREOF, the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above
written.


 


SUBSCRIPTION AMOUNT:


 


	Principal Amount of Note:	$20,000,000.00
	 	 
	Purchase Price:	$19,985,000.00




 


	 	INVESTOR:
	 	 
	 	Streeterville Capital, LLC
	 	 
	 	By:	 /s/ John M. Fife
	 	 	John M. Fife, President



 


	 	 
	 	COMPANY:
	 	 
	 	The9 Limited
	 	 
	 	By:	/s/ George Lai



 


	 	Printed Name:	George Lai



 


	 	Title:	Chief Financial Officer




 


[Signature
Page to Securities Purchase Agreement] 


 






     


     


    

 


ATTACHED EXHIBITS:


 


	Exhibit A	Note
	Exhibit B	Irrevocable
Transfer Agent Instructions
	Exhibit C	Secretary’s Certificate
	Exhibit D	Arbitration Provisions



 






     


     


    

 


Exhibit
A


 






     


     


    

 


CONVERTIBLE
PROMISSORY NOTE 


 


	Effective Date: March 17, 2021	 	U.S. $20,000,000.00




 


FOR
VALUE RECEIVED, The9 Limited, a Cayman Islands corporation (“Borrower”),
promises to pay to Streeterville Capital, LLC, a Utah limited liability company,
or its successors or assigns (“Lender”), $20,000,000.00 and any interest, fees, charges, and late fees accrued
hereunder on the date that is twelve (12) months after the Purchase Price Date (the “Maturity Date”) in accordance
with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of six percent (6%) per annum from
the Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the basis of
a 360-day year comprised of twelve (12) thirty (30) day months and shall be payable in accordance with the terms of
this Note. This Convertible Promissory Note (this “Note”) is issued and made effective as of March 17, 2021
(the “Effective Date”). This Note is issued pursuant to that certain Securities Purchase Agreement dated March
17, 2021, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”).
Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.


 


Borrower
agrees to pay $15,000.00 to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction
costs incurred in connection with the purchase and sale of this Note (the “Transaction Expense Amount”), which
will be deducted from the amount funded. The purchase price for this Note shall be $19,985,000.00 (the “Purchase Price”),
computed as follows: $20,000,000.00 original principal balance, less the Transaction Expense Amount. The Purchase Price shall
be payable by Lender by wire transfer of immediately available funds.


 


10.              
Payment; Prepayment.


 


10.1.         
Payment. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares
(as defined below), as provided for herein, and delivered to Lender at the address or bank account furnished to Borrower for that
purpose. All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to
(c) accrued and unpaid interest, and thereafter, to (d) principal.


 


10.2.         
Prepayment. Notwithstanding the foregoing, Borrower shall have the right to prepay all or any portion of the Outstanding
Balance (less such portion of the Outstanding Balance for which Borrower has received a Lender Conversion Notice (as defined below)
or a Redemption Notice (as defined below) from Lender where the applicable Conversion Shares have not yet been delivered). If
Borrower exercises its right to prepay this Note, Borrower shall make payment to Lender of an amount in cash equal to 115% multiplied
by the portion of the Outstanding Balance Borrower elects to repay.


 


11.              
[Reserved].


 


12.              
Lender Optional Conversion.


 


12.1.          Lender
Conversions. Lender has the right at any time after six (6) months have elapsed since the Purchase Price Date until the
Outstanding Balance has been paid in full, at its election, to convert (“Lender Conversion”) all or any
portion of the Outstanding Balance into fully paid and non-assessable American Depositary Shares (“ADSs”)
of Borrower (each instance of conversion is referred to herein as a “Lender Conversion Shares”) as per the
following conversion formula: the number of Lender Conversion Shares equals the amount being converted (the
 “Conversion Amount”) divided by the Lender Conversion Price (as defined below). Conversion notices in the
form attached hereto as Exhibit A (each, a “Lender Conversion Notice”) may be effectively delivered
to Borrower by any method set forth in the “Notices” Section of the Purchase Agreement, and all Lender
Conversions shall be cashless and not require further payment from Lender. Borrower shall deliver the Lender Conversion
Shares from any Lender Conversion to Lender in accordance with Section 9 below. Lender shall also deliver a legal
opinion (or legal opinions for each conversion or sale, as the case may be) with respect to compliance with applicable
securities laws with each Lender Conversion Notice.


 


[Signature
Page to Securities Purchase Agreement] 


 






     


     


    

 


12.2.         
Lender Conversion Price. Subject to adjustment as set forth in this Note, the price at which Lender has the right
to convert all or any portion of the Outstanding Balance into ADSs is ninety percent (90%) of the lower of (a) the average of
the Closing Trade Prices during the five (5) Trading Days immediately preceding the date of the Lender Conversion Notice, and
(b) the Closing Trade Price on the Trading Day immediately preceding the date of the Lender Conversion Notice (the “Lender
Conversion Price”).


 


13.              
Defaults and Remedies.


 


13.1.         
Defaults. The following are events of default under this Note (each, an “Event of Default”):
(a) Borrower fails to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) Borrower
fails to deliver any Lender Conversion Shares in accordance with the terms hereof; (c) Borrower fails to deliver any Redemption
Conversion Shares (as defined below) in accordance with the terms hereof; (d) a receiver, trustee or other similar official shall
be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days
or shall not be dismissed or discharged within sixty (60) days; (e) Borrower becomes insolvent or generally fails to pay, or admits
in writing its inability to pay, its debts as they become due; (f) Borrower makes a general assignment for the benefit of creditors;
(g) Borrower files a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); (h) an involuntary
bankruptcy proceeding is commenced or filed against Borrower; (i) Borrower or any pledgor, trustor, or guarantor of this Note
defaults or otherwise fails to observe or perform any covenant, obligation, condition or agreement of Borrower or such pledgor,
trustor, or guarantor contained herein or in any other Transaction Document (as defined in the Purchase Agreement), other than
those specifically set forth in this Section 4.1 and Section 4 of the Purchase Agreement; (j) any representation, warranty or
other statement made or furnished by or on behalf of Borrower or any pledgor, trustor, or guarantor of this Note to Lender herein,
in any Transaction Document, or otherwise in connection with the issuance of this Note is false, incorrect, incomplete or misleading
in any material respect when made or furnished; (k) the occurrence of a Fundamental Transaction without Lender’s prior written
consent, which shall not be unreasonably withheld; (l) Borrower effectuates a reverse split of its ADSs without twenty (20) Trading
Days prior written notice to Lender; (m) any money judgment, writ or similar process is entered or filed against Borrower or any
subsidiary of Borrower or any of its property or other assets for more than $100,000.00, and shall remain unvacated, unbonded
or unstayed for a period of twenty (20) calendar days unless otherwise consented to by Lender; (n) Borrower fails to be DWAC Eligible;
(o) Borrower fails to observe or perform any covenant set forth in Section 4 of the Purchase Agreement; or (p) Borrower, any affiliate
of Borrower, or any pledgor, trustor, or guarantor of this Note breaches any covenant or other term or condition contained in
any Other Agreements. Notwithstanding the foregoing, on up to two (2) separate occasions, Borrower shall have ten (10) Trading
Days instead of five (5) Trading Days to deliver Lender Conversion Shares or Redemption Conversion without an Event of Default
pursuant to Section 4.1(b) or (c) above occurring.


 


13.2.          Remedies.
At any time and from time to time after Lender becomes aware of the occurrence of any Event of Default, Lender may accelerate
this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the
Mandatory Default Amount. Notwithstanding the foregoing, at any time following the occurrence of any Event of Default, Lender
may, at its option, elect to increase the Outstanding Balance by applying the Default Effect (subject to the limitation set
forth below) via written notice to Borrower without accelerating the Outstanding Balance, in which event the Outstanding
Balance shall be increased as of the date of the occurrence of the applicable Event of Default pursuant to the Default
Effect, but the Outstanding Balance shall not be immediately due and payable unless so declared by Lender (for the avoidance
of doubt, if Lender elects to apply the Default Effect pursuant to this sentence, it shall reserve the right to declare the
Outstanding Balance immediately due and payable at any time and no such election by Lender shall be deemed to be a waiver of
its right to declare the Outstanding Balance immediately due and payable as set forth herein unless otherwise agreed to by
Lender in writing). Notwithstanding the foregoing, upon the occurrence of any Event of Default described in clauses (d), (e),
(f), (g) or (h) of Section 4.1, the Outstanding Balance as of the date of acceleration shall become immediately and
automatically due and payable in cash at the Mandatory Default Amount, without any written notice required by Lender. At any
time following the occurrence of any Event of Default, upon written notice given by Lender to Borrower, interest shall accrue
on the Outstanding Balance beginning on the date the applicable Event of Default occurred at an interest rate equal to the
lesser of fifteen percent (15%) per annum or the maximum rate permitted under applicable law (“Default
Interest”). For the avoidance of doubt, Lender may continue making Lender Conversions and Redemption Conversions
(as defined below) at any time following an Event of Default until such time as the Outstanding Balance is paid in full. In
connection with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand,
protest or other notice of any kind, and Lender may immediately and without expiration of any grace period enforce any and
all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may
be rescinded and annulled by Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of
the Note until such time, if any, as Lender receives full payment pursuant to this Section 4.2. No such rescission or
annulment shall affect any subsequent Event of Default or impair any right consequent thereon. Nothing herein shall limit
Lender’s right to pursue any other remedies available to it at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to Borrower’s failure to timely deliver Conversion Shares
upon Conversion of the Note as required pursuant to the terms hereof.


 






    2


     


    

 


14.              
Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and
enforceable obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights
of offset it now has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions
called for herein in accordance with the terms of this Note. Notwithstanding the foregoing, any sale of Purchase Shares (as defined
in the Purchase Agreement) as per Section 8 of the Purchase Agreement shall be offset against the outstanding balance of this
Note and/or the Prior Note (as defined in the Purchase Agreement).


 


15.              
Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed
by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of
any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a
continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically
set forth in writing.


 


16.               Adjustment
of Lender Conversion Price upon Subdivision or Combination of ADSs. Without limiting any provision hereof, if Borrower at
any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or
more classes of its outstanding ADSs into a greater number of shares, the Lender Conversion Price in effect immediately prior
to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Borrower at any time on or
after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding
ADSs into a smaller number of shares, the Lender Conversion Price in effect immediately prior to such combination will be
proportionately increased. Any adjustment pursuant to this Section 7 shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an adjustment under this Section 7 occurs during the period
that a Redemption Conversion Price is calculated hereunder, then the calculation of such Redemption Conversion Price shall be
adjusted appropriately to reflect such event.


 






    3


     


    

 


17.              
Borrower Redemptions.


 


17.1.         
Redemption Conversion Price. Subject to the adjustments set forth herein, the conversion price for each Redemption
Conversion (the “Redemption Conversion Price”) shall be the lesser of (a) the Lender Conversion Price, and
(b) the Market Price.


 


17.2.         
Redemption Conversions. Beginning on the date that is six (6) months from the Purchase Price Date, Lender shall
have the right, exercisable at any time in its sole and absolute discretion, to redeem any portion of the Note up to $3,360,000.00
per calendar month (such amount, the “Redemption Amount”) by providing Borrower with a notice substantially
in the form attached hereto as Exhibit B (each, a “Redemption Notice”, and each date on which Lender
delivers a Redemption Notice, a “Redemption Date”). For the avoidance of doubt, Lender may submit to Borrower
one (1) or more Redemption Notices in any given calendar month so long as the aggregate amount redeemed in such calendar month
does not exceed $3,360,000.00. Payments of each Redemption Amount may be made (a) in cash, or (b) by converting such Redemption
Amount into ADSs (“Redemption Conversion Shares”, and together with the Lender Conversion Shares, the “Conversion
Shares”) in accordance with this Section 8.2 (each, a “Redemption Conversion”) per the following
formula: the number of Redemption Conversion Shares equals the portion of the applicable Redemption Amount being converted divided
by the Redemption Conversion Price, or (c) by any combination of the foregoing, so long as the cash is delivered to Lender on
the third (3rd) Trading Day immediately following the applicable Redemption Date and the Redemption Conversion Shares
are delivered to Lender on or before the applicable Delivery Date (as defined below). Notwithstanding the foregoing, Borrower
will not be entitled to elect a Redemption Conversion with respect to any portion of any applicable Redemption Amount and shall
be required to pay the Redemption Amount in cash, if on the applicable Redemption Date there is an Equity Conditions Failure,
and such failure is not waived in writing by Lender. Notwithstanding that failure to repay this Note in full by the Maturity Date
is an Event of Default, the Redemption Dates shall continue after the Maturity Date pursuant to this Section 8.2 until the
Outstanding Balance is repaid in full. Once Borrower has redeemed an amount equal to half of the original principal amount of
this Note in cash, any subsequent Redemptions it makes in cash will be subject to a ten percent (10%) premium.


 


17.3.         
Allocation of Redemption Amounts. Following its receipt of a Redemption Notice, Borrower may either ratify Lender’s
proposed allocation in the applicable Redemption Notice or elect to change the allocation by written notice to Lender by email
or fax within twenty-four (24) hours of its receipt of such Redemption Notice, so long as the sum of the cash payments and the
amount of Redemption Conversions equal the applicable Redemption Amount. If Borrower fails to notify Lender of its election to
change the allocation prior to the deadline set forth in the previous sentence, it shall be deemed to have ratified and accepted
the allocation set forth in the applicable Redemption Notice prepared by Lender. Borrower acknowledges and agrees that the amounts
and calculations set forth thereon are subject to correction or adjustment because of error, mistake, or any adjustment resulting
from an Event of Default or other adjustment permitted under the Transaction Documents (an “Adjustment”). Furthermore,
no error or mistake in the preparation of such notices, or failure to apply any Adjustment that could have been applied prior
to the preparation of a Redemption Notice may be deemed a waiver of Lender’s right to enforce the terms of any Note, even
if such error, mistake, or failure to include an Adjustment arises from Lender’s own calculation. Borrower shall deliver
the Redemption Conversion Shares from any Redemption Conversion to Lender in accordance with Section 9 below on or before each
applicable Delivery Date.


 






    4


     


    

 


18.               Method
of Conversion Share Delivery. On or before the close of business on the fifth (5th) Trading Day following each
Redemption Date or the fifth (5th) Trading Day following the date of delivery of a Lender Conversion Notice, as
applicable (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such time and such
Conversion Shares are eligible for delivery via DWAC, deliver or cause its depositary to deliver the applicable Conversion
Shares electronically via DWAC to the account designated by Lender in the applicable Lender Conversion Notice or Redemption
Notice. If Borrower is not DWAC Eligible or such Conversion Shares are not eligible for delivery via DWAC, it shall deliver
to Lender or its broker (as designated in the Lender Conversion Notice or Redemption Notice), via reputable overnight
courier, a certificate representing the number of ADSs equal to the number of Conversion Shares to which Lender shall be
entitled, registered in the name of Lender or its designee. For the avoidance of doubt, Borrower has not met its obligation
to deliver Conversion Shares by the Delivery Date unless Lender or its broker, as applicable, has actually received the
certificate representing the applicable Conversion Shares no later than the close of business on the relevant Delivery Date
pursuant to the terms set forth above. Moreover, and notwithstanding anything to the contrary herein or in any other
Transaction Document, in the event Borrower or its depositary refuses to deliver any Conversion Shares without a restrictive
securities legend to Lender on grounds that such issuance is in violation of Rule 144 under the Securities Act of 1933, as
amended (“Rule 144”), Borrower shall deliver or cause its depositary to deliver the applicable Conversion
Shares to Lender with a restricted securities legend, but otherwise in accordance with the provisions of this Section 9. In
conjunction therewith, Borrower will also deliver to Lender a written explanation from its counsel or its depositary’s
counsel opining as to why the issuance of the applicable Conversion Shares violates Rule 144.


 


19.              
Conversion Delays. If Borrower fails to deliver Conversion Shares in accordance with the timeframe stated in
Section 9, Lender may at any time prior to receiving the applicable Conversion Shares rescind in whole or in part such Conversion,
with a corresponding increase to the Outstanding Balance (any returned amount will tack back to the Purchase Price Date for purposes
of determining the holding period under Rule 144). In addition, for each Lender Conversion, in the event that Lender Conversion
Shares are not delivered by the fifth (5th) Trading Day (inclusive of the day of the Conversion) (unless Borrower exercises
it rights to deliver within ten (10) Trading Days as set forth in Section 4.1 above), a late fee equal to 2% of the applicable
Conversion Share Value rounded to the nearest multiple of $100.00 but with a floor of $500.00 per day (but in any event the cumulative
amount of such late fees for each Conversion shall not exceed 200% of the applicable Conversion Share Value) will be assessed
for each day after the fifth (5th) Trading Day (inclusive of the day of the Conversion) until Lender Conversion Share
delivery is made; and such late fee will be added to the Outstanding Balance (such fees, the “Conversion Delay Late Fees”).


 


20.              
Issuance Fees. Borrower shall be solely responsible for any fees that must be paid in order to issue any Conversion
Shares to Lender.


 


21.              
Ownership Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents,
Borrower shall not effect any conversion of this Note to the extent that after giving effect to such conversion would cause Lender
(together with its affiliates) to beneficially own a number of shares exceeding 4.99% of the number of ADSs outstanding on such
date (including for such purpose the ADSs issuable upon such issuance) (the “Maximum Percentage”). For purposes
of this section, beneficial ownership of ADSs will be determined pursuant to Section 13(d) of the 1934 Act. Notwithstanding the
forgoing, the term “4.99%” above shall be replaced with “9.99%” at such time as the Market Capitalization
is less than $10,000,000.00. Notwithstanding any other provision contained herein, if the term “4.99%” is replaced
with “9.99%” pursuant to the preceding sentence, such increase to “9.99%” shall remain at 9.99% until
increased, decreased or waived by Lender as set forth below. By written notice to Borrower, Lender may increase, decrease or waive
the Maximum Percentage as to itself but any such waiver will not be effective until the 61st day after delivery thereof. The foregoing
61-day notice requirement is enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Lender.


 






    5


     


    

 


22.              
 Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender
has the right to have any such opinion provided by its counsel. Lender shall be responsible to cover costs of all legal opinions
and representation letters from its brokers, as may be required to do ADS conversion and sale.


 


23.              
Governing Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of
Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. The provisions set
forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.


 


24.              
Arbitration of Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration
Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.


 


25.              
Cancellation. After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in
full, shall automatically be deemed canceled, and shall not be reissued.


 


26.              
Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this
Note.


 


27.              
Assignments. Borrower may not assign this Note without the prior written consent of Lender. Any ADSs issued upon
conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent of Borrower. This Note may
be offered, sold, assigned or transferred by Lender to any of its affiliates without the consent of Borrower. This Note may not
be offered, sold, assigned or transferred by Lender to an unaffiliated third party without the consent of Borrower, which consent
will not be unreasonably withheld.


 


28.              
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice
shall be given in accordance with the subsection of the Purchase Agreement titled “Notices.”


 


29.              
Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or
provisions of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because
of the parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant
factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed
under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under
Lender’s and Borrower’s expectations that any such liquidated damages will tack back to the Purchase Price Date for
purposes of determining the holding period under Rule 144). Therefore, no additional penalty claims, lost profits or liquidated
damages shall be claimed in excess of agreed liquidated damage amounts under this Note.


 


30.              
Severability. If any part of this Note is construed to be in violation of any law, such part shall be modified to
achieve the objective of Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain
in full force and effect.


 


[Remainder
of page intentionally left blank; signature page follows]


 






    6


     


    

 


IN
WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Effective Date.


 


	 	BORROWER:
	 	 
	 	The9 Limited
	 	 
	 	By:	      
	 	Name:	 
	 	Title:	 




 


ACKNOWLEDGED, ACCEPTED AND
AGREED:


LENDER:


 


Streeterville
Capital, LLC


 


	By:	 	 
	 	John M. Fife, President	 




 


[Signature Page to Convertible
Promissory Note] 


 






     


     


    

 


ATTACHMENT
1


DEFINITIONS


 


For
purposes of this Note, the following terms shall have the following meanings:


 


A1.             
“Closing Bid Price” and “Closing Trade Price” means the last closing bid price and
last closing trade price, respectively, for the ADSs on its principal market, as reported by Bloomberg, or, if its principal market
begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case
may be) then the last bid price or last trade price, respectively, of the ADSs prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if its principal market is not the principal securities exchange or trading market for the ADSs, the last closing
bid price or last trade price, respectively, of the ADSs on the principal securities exchange or trading market where the ADSs
is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price,
respectively, of the ADSs in the over-the-counter market on the electronic bulletin board for the ADSs as reported by Bloomberg,
or, if no closing bid price or last trade price, respectively, is reported for the ADSs by Bloomberg, the average of the bid prices,
or the ask prices, respectively, of any market makers for the ADSs as reported by OTC Markets Group, Inc., and any successor thereto.
If the Closing Bid Price or the Closing Trade Price cannot be calculated for the ADSs on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Trade Price (as the case may be) of the ADSs on such date shall be the fair market
value as mutually determined by Lender and Borrower. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.


 


A2.             
“Conversion” means a Lender Conversion under Section 3 or a Redemption Conversion under Section 8.


 


A3.             
“Conversion Factor” means 80%.


 


A4.             
“Conversion Share Value” means the product of the number of Lender Conversion Shares deliverable pursuant
to any Lender Conversion Notice multiplied by the Closing Trade Price of the ADSs on the Delivery Date for such Lender Conversion.


 


A5.             
“Deemed Issuance” means an issuance of ADSs that shall be deemed to have occurred on the latest possible
permitted date pursuant to the terms hereof in the event Borrower fails to deliver Conversion Shares as and when required pursuant
to Section 9 of this Note. For the avoidance of doubt, if Borrower has elected or is deemed under Section 8.3 to have elected
to pay a Redemption Amount in Redemption Conversion Shares and fails to deliver such Redemption Conversion Shares, such failure
shall be considered a Deemed Issuance hereunder even if an Equity Conditions Failure exists at that time or other relevant date
of determination.


 


A6.             
“Default Effect” means multiplying the Outstanding Balance as of the date the applicable Event of Default
occurred (after giving effect to any opportunity to cure) by (a) fifteen percent (15%) for each occurrence of any Major Default,
or (b) five percent (5%) for each occurrence of any Minor Default, and then adding the resulting product to the Outstanding Balance
as of the date the applicable Event of Default occurred, with the sum of the foregoing then becoming the Outstanding Balance under
this Note as of the date the applicable Event of Default occurred.


 


A7.             
“DTC” means the Depository Trust Company or any successor thereto.


 


A8.             
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer program.


 


A9.             
“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.


 


A10.          
“DWAC Eligible” means that (a) Borrower’s ADSs is eligible at DTC for full services pursuant to
DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system; (b) Borrower has
been approved (without revocation) by DTC’s underwriting department; (c) Borrower’s transfer agent is approved as
an agent in the DTC/FAST Program; (d) the Conversion Shares are otherwise eligible for delivery via DWAC; and (e) Borrower’s
transfer agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.


 


A11.           “Equity
Conditions Failure” means that any of the following conditions has not been satisfied on any given Redemption Date:
(a) with respect to the applicable date of determination all of the Conversion Shares would be freely tradable under an
effective registration statement or Rule 144 or without the need for registration under any applicable federal or state
securities laws (in each case, disregarding any limitation on conversion of this Note); and (b) no Event of Default
shall have occurred or be continuing hereunder.


 


Attachment 1 to Convertible Promissory Note, Page 1 


 






     


     


    

 


A12.          
“Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly
or indirectly, in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries
is the surviving corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or
substantially all of its respective properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries
shall, directly or indirectly, in one or more related transactions, allow any other person or entity to make a purchase, tender
or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of Borrower (not
including any shares of voting stock of Borrower held by the person or persons making or party to, or associated or affiliated
with the persons or entities making or party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions, consummate a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding shares of voting
stock of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities making or party
to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement
or other business combination), or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more
related transactions, reorganize, recapitalize or reclassify the ADSs, other than an increase in the number of authorized shares
of Borrower’s ADSs, or (b) any “person” or “group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder shall, after the Purchase Price
Date, become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding voting stock of Borrower.


 


A13.          
“Major Default” means any Event of Default occurring under Sections 4.1(a), 4.1(c), or 4.1(o).


 


A14.          
“Mandatory Default Amount” means the Outstanding Balance following the application of the Default Effect.


 


A15.          
“Market Capitalization” means a number equal to (a) the average VWAP of the ADSs for the immediately
preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of outstanding ADSs as reported on Borrower’s
most recent annual or quarterly filing with the SEC.


 


A16.          
“Market Price” means the Conversion Factor multiplied by the lowest Closing Trade Price during the ten
(10) Trading Days immediately preceding the applicable measurement date.


 


A17.          
“Minor Default” means any Event of Default that is not a Major Default.


 


A18.          
“Other Agreements” means, collectively, (a) all existing and future agreements and instruments between,
among or by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (b) any financing
agreement or a material agreement that affects Borrower’s ongoing business operations.


 


A19.          
“Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased,
as the case may be, pursuant to the terms hereof for payment, Conversion, offset, or otherwise, plus the Transaction Expense Amount,
accrued but unpaid interest, collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer,
stamp, issuance and similar taxes and fees related to Conversions, and any other fees or charges (including without limitation
Conversion Delay Late Fees) incurred under this Note.


 


A20.          
“Purchase Price Date” means the date the Purchase Price is delivered by Lender to Borrower.


 


A21.          
“Trading Day” means any day on which the New York Stock Exchange (or such other principal market for
the ADSs) is open for trading.


 


A22.          
“VWAP” means the volume weighted average price of the ADSs on the principal market for a particular
Trading Day or set of Trading Days, as the case may be, as reported by Bloomberg.


 


[Remainder
of page intentionally left blank]


 


Attachment 1 to Convertible Promissory Note, Page 2


 






     


     


    

 


EXHIBIT
A


 


Streeterville
Capital, LLC


303 East
Wacker Drive, Suite 1040


Chicago,
Illinois 60601


 


	The9 Limited	 	Date:                                                             




Attn: George Lai


Building No. 3


690 Bibo Road


Shanghai 210203, China


 


LENDER
CONVERSION NOTICE


 


The above-captioned Lender hereby
gives notice to The9 Limited, a Cayman Islands corporation (the “Borrower”), pursuant to that certain Convertible
Promissory Note made by Borrower in favor of Lender on March 17, 2021 (the “Note”), that Lender elects to convert
the portion of the Note balance set forth below into fully paid and non-assessable ADSs of Borrower as of the date of conversion
specified below. Said conversion shall be based on the Lender Conversion Price set forth below. In the event of a conflict between
this Lender Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole
discretion, Lender may provide a new form of Lender Conversion Notice to conform to the Note. Capitalized terms used in this notice
without definition shall have the meanings given to them in the Note.


 


		A.	Date of Conversion:          ____________
		B.	Lender Conversion #:       ____________
		C.	Conversion Amount:        ____________
		D.	Lender Conversion Price: _______________
		E.	Lender Conversion Shares: _______________
                                         (C divided by D)
		F.	Remaining Outstanding Balance
                                         of Note: ____________*



 


* Subject to adjustments for
corrections, defaults, interest and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement),
the terms of which shall control in the event of any dispute between the terms of this Lender Conversion Notice and such Transaction
Documents.


 


Please transfer the Lender
Conversion Shares electronically (via DWAC) to the following account:


 


	Broker:	 	 	Address:	 
	DTC#:	 	 	 	 
	Account #:	 	 	 	 
	Account Name:	 	 	 	 




 


To the extent
the Lender Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated
shares to Lender via reputable overnight courier after receipt of this Lender Conversion Notice (by facsimile transmission or
otherwise) to:


_____________________________________


_____________________________________


_____________________________________


 


[Signature
Page Follows]


 


Exhibit A to Convertible Promissory Note, Page 1 


 






     


     


    

 


Sincerely,


 


Lender:


 


Streeterville
Capital, LLC


 


	By:	 	 
	 	John M. Fife, President	 




 


Exhibit A to Convertible Promissory Note, Page 2 


 






     


     


    

 


EXHIBIT
B


 


Streeterville
Capital, LLC


303 East
Wacker Drive, Suite 1040


Chicago,
Illinois 60601


 


	The9 Limited	 	Date:                                                         




Attn: George Lai


Building No. 3


690 Bibo Road


Shanghai 210203, China


 


REDEMPTION
NOTICE


 


The above-captioned Lender hereby
gives notice to The9 Limited, a Cayman Islands corporation (the “Borrower”), pursuant to that certain Convertible
Promissory Note made by Borrower in favor of Lender on March 17, 2021 (the “Note”), that Lender elects to redeem
a portion of the Note in Redemption Conversion Shares or in cash as set forth below. In the event of a conflict between this Redemption
Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole discretion, Lender may
provide a new form of Redemption Notice to conform to the Note. Capitalized terms used in this notice without definition shall
have the meanings given to them in the Note.


 


REDEMPTION
INFORMATION 


 


		A.	Redemption Date: ____________,
                                         201_
		B.	Redemption Amount:     ____________
		C.	Portion of Redemption Amount
                                         to be Paid in Cash: ____________
		D.	Portion of Redemption Amount
                                         to be Converted into ADSs: ____________ (B minus C)
		E.	Redemption Conversion Price:
                                         _______________ (lower of (i) Lender Conversion Price in effect and (ii) Market Price
                                         as of Redemption Date)
		F.	Redemption Conversion Shares:
                                         _______________ (D divided by E)
		G.	Remaining Outstanding Balance
                                         of Note: ____________ *



 


* Subject to adjustments for
corrections, defaults, interest and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement),
the terms of which shall control in the event of any dispute between the terms of this Redemption Notice and such Transaction
Documents.


 


Please transfer the Redemption
Conversion Shares, if applicable, electronically (via DWAC) to the following account:


 


	Broker:	 	 	Address:	 
	DTC#:	 	 	 	 
	Account #:	 	 	 	 
	Account Name:	 	 	 	 


 


To the extent
the Redemption Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated
shares to Lender via reputable overnight courier after receipt of this Redemption Notice (by facsimile transmission or otherwise)
to:


_____________________________________


_____________________________________


_____________________________________


 


Exhibit B to Convertible Promissory Note, Page 1 


 






     


     


    

 


Sincerely,


 


Lender:


 


Streeterville
Capital, LLC


 


	By:	 	 
	 	John M. Fife, President	 


 


Exhibit B to Convertible Promissory Note, Page 2 


 






     


     


    

 


Exhibit
B


 






     


     


    

 


Exhibit
C


 






     


     


    

 


Exhibit
D


 


ARBITRATION
PROVISIONS


 


1.       Dispute
Resolution. For purposes of this Exhibit D, the term “Claims” means any disputes, claims, demands,
causes of action, requests for injunctive relief, requests for specific performance, liabilities, damages, losses, or controversies
whatsoever arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications
between the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation,
failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission,
and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement (or these Arbitration
Provisions (defined below)) or any of the other Transaction Documents. For the avoidance of doubt, Investor’s pursuit of
an injunction or other Claim pursuant to these Arbitration Provisions or with a court will not later prevent Investor under the
doctrines of claim preclusion, issue preclusion, res judicata or other similar legal doctrines from pursuing other Claims in a
separate arbitration in the future. The parties to this Agreement (the “parties”) hereby agree that the Claims
may be arbitrated in one or more Arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions and
a separate one for all other Claims). The term “Claims” specifically excludes a dispute over Calculations. The parties
to the Agreement hereby agree that the arbitration provisions set forth in this Exhibit D (“Arbitration Provisions”)
are binding on each of them. As a result, any attempt to rescind the Agreement (or these Arbitration Provisions) or declare the
Agreement (or these Arbitration Provisions) or any other Transaction Document invalid or unenforceable for any reason is subject
to these Arbitration Provisions. These Arbitration Provisions shall also survive any termination or expiration of the Agreement.
Any capitalized term not defined in these Arbitration Provisions shall have the meaning set forth in the Agreement.


 


2.       Arbitration.
Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted
exclusively in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration
appeal right provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the
arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding
upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented
or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect
to monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred
in connection with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against
the party resisting such enforcement. The Arbitration Award shall include default interest (as defined or otherwise provided for
in the Note, “Default Interest”) (with respect to monetary awards) at the rate specified in the Note for Default
Interest both before and after the Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any
state or federal court sitting in Salt Lake County, Utah.


 


3.       The
Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration
Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”).
Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the
event of conflict or variation between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the
terms of these Arbitration Provisions shall control and the parties hereby waive or otherwise agree to vary the effect of all
requirements of the Arbitration Act that may conflict with or vary from these Arbitration Provisions.


 


4.       Arbitration
Proceedings. Arbitration between the parties will be subject to the following:


 


4.1       Initiation
of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration
by giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is
permitted under Section 9.10 of the Agreement; provided, however, that the Arbitration Notice may not be given by
email or fax. Arbitration will be deemed initiated as of the date that the Arbitration Notice is deemed delivered to such
other party under Section 9.10 of the Agreement (the “Service Date”). After the Service Date, information
may be delivered, and notices may be given, by email or fax pursuant to Section 9.10 of the Agreement or any other method
permitted thereunder. The Arbitration Notice must describe the nature of the controversy, the remedies sought, and the
election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent with the Utah
Rules of Civil Procedure.


 






     


     


    

 


4.2       Selection
and Payment of Arbitrator.


 


(a)
Within ten (10) calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com)
(such three (3) designated persons hereunder are referred to herein as the “Proposed Arbitrators”). For the
avoidance of doubt, each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within five
(5) calendar days after Investor has submitted to Company the names of the Proposed Arbitrators, Company must select, by written
notice to Investor, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions.
If Company fails to select one of the Proposed Arbitrators in writing within such 5-day period, then Investor may select the arbitrator
from the Proposed Arbitrators by providing written notice of such selection to Company.


 


(b)
If Investor fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant
to subparagraph (a) above, then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the
names of three (3) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written
notice to Investor. Investor may then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators
to Investor, select, by written notice to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties
under these Arbitration Provisions. If Investor fails to select in writing and within such 5-day period one (1) of the three (3)
Proposed Arbitrators selected by Company, then Company may select the arbitrator from its three (3) previously selected Proposed
Arbitrators by providing written notice of such selection to Investor.


 


(c)
If a Proposed Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party
that selected such Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar
days of the date the chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If
all three (3) Proposed Arbitrators decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process
shall begin again in accordance with this Paragraph 4.2.


 


(d)
The date that the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered
to both parties to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”.
If an arbitrator resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with
this Paragraph 4.2 to continue the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there
is no successor thereto, then the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association.


 


(e)
Subject to Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below,
if one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject
to the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration
Award.


 


4.3       Applicability
of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules
of Civil Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation,
to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah
Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing,
it is the parties’ intent that the incorporation of such rules will in no event supersede these Arbitration Provisions.
In the event of any conflict between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions,
these Arbitration Provisions shall control.


 


4.4       Answer
and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating
the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the
required deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a
default award against such party if such party does not file an answer within five (5) calendar days of receipt of such notice.
If an answer is not filed within the five (5) day extension period, the arbitrator must render a default award, consistent with
the relief requested in the Arbitration Notice, against a party that fails to submit an answer within such time period.


 






     


     


    

 


4.5       Related
Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent
legal proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”),
subject to the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth
in the Arbitration Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b)
so long as the other party files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice,
the Litigation Proceedings will be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable)
hereunder, (c) if the other party fails to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings,
then the party initiating Arbitration shall be entitled to a default judgment consistent with the relief requested, to be entered
in the Litigation Proceedings, and (d) any legal or procedural issue arising under the Arbitration Act that requires a decision
of a court of competent jurisdiction may be determined in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal
Panel (defined below)) may be entered in such Litigation Proceedings pursuant to the Arbitration Act.


 


4.6       Discovery.
Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:


 


(a)
Written discovery will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense
thereof, and the written discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense
already pleaded in the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the
standards and limitations set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings
shall also be limited as follows:


 


(i)       To
facts directly connected with the transactions contemplated by the Agreement.


 


(ii)       To
facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome
or less expensive than in the manner requested.


 


(b)
No party shall be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15)
requests for admission (including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts),
or (iv) more than three (3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs
associated with depositions will be borne by the party taking the deposition. The party defending the deposition will submit a
notice to the party taking the deposition of the estimated attorneys’ fees that such party expects to incur in connection
with defending the deposition. If the party defending the deposition fails to submit an estimate of attorneys’ fees within
five (5) calendar days of its receipt of a deposition notice, then such party shall be deemed to have waived its right to the
estimated attorneys’ fees. The party taking the deposition must pay the party defending the deposition the estimated attorneys’
fees prior to taking the deposition, unless such obligation is deemed to be waived as set forth in the immediately preceding sentence.
If the party taking the deposition believes that the estimated attorneys’ fees are unreasonable, such party may submit the
issue to the arbitrator for a decision. All depositions will be taken in Utah.


 


(c)
All discovery requests (including document production requests included in deposition notices) must be submitted in writing
to the arbitrator and the other party. The party submitting the written discovery requests must include with such discovery
requests a detailed explanation of how the proposed discovery requests satisfy the requirements of these Arbitration
Provisions and the Utah Rules of Civil Procedure. The receiving party will then be allowed, within five (5) calendar days of
receiving the proposed discovery requests, to submit to the arbitrator an estimate of the attorneys’ fees and costs
associated with responding to such written discovery requests and a written challenge to each applicable discovery request.
After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to one or more discovery requests,
consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding as to the likely
attorneys’ fees and costs associated with responding to the discovery requests and issue an order that (i) requires the
requesting party to prepay the attorneys’ fees and costs associated with responding to the discovery requests, and (ii)
requires the responding party to respond to the discovery requests as limited by the arbitrator within twenty-five (25)
calendar days of the arbitrator’s finding with respect to such discovery requests. If a party entitled to submit an
estimate of attorneys’ fees and costs and/or a challenge to discovery requests fails to do so within such 5-day period,
the arbitrator will make a finding that (A) there are no attorneys’ fees or costs associated with responding to such
discovery requests, and (B) the responding party must respond to such discovery requests (as may be limited by the
arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests.
Any party submitting any written discovery requests, including without limitation interrogatories, requests for production
subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs,
before the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as
set forth above.


 






     


     


    

 


(d)
In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set
forth in these Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards.
If a discovery request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil
Procedure, the arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request
in whole or in part.


 


(e)
Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days
of the Arbitration Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the
following: (i) a complete statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the
expert’s name and qualifications, including a list of all the expert’s publications within the preceding ten (10)
years, and a list of any other cases in which the expert has testified at trial or in a deposition or prepared a report within
the preceding ten (10) years; and (iii) the compensation to be paid for the expert’s report and testimony. The parties are
entitled to depose any other party’s expert witness one (1) time for no more than four (4) hours. An expert may not testify
in a party’s case-in-chief concerning any matter not fairly disclosed in the expert report.


 


4.6       Dispositive
Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil
Procedure (a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to,
deliver to the arbitrator and to the other party a memorandum in support (the “Memorandum in Support”) of the
Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to
the arbitrator and to the other party a memorandum in opposition to the Memorandum in Support (the “Memorandum in Opposition”).
Within seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum
in Support shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition (“Reply
Memorandum”). If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the
other party fails to deliver the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver
the same, and the Dispositive Motion shall proceed regardless.


 


4.7       Confidentiality.
All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation
information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature.
Each party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration
process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure
such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving
party or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such
receiving party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order
from a court of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party’s
agents, representatives and legal counsel on a need to know basis who each agree in writing not to disclose such information to
any third party. Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue
a protective order to prevent the disclosure of privileged information and confidential information upon the written request of
either party.


 


4.8       Authorization;
Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and
direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for
the Arbitration proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby
agree that an Arbitration Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement
Date. The arbitrator is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the
Arbitration Commencement Date in order to establish a scheduling order with various binding deadlines for discovery, expert testimony,
and the submission of documents by the parties to enable the arbitrator to render a decision prior to the end of such 120-day
period.


 






     


     


    

 


4.9       Relief.
The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which
the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief,
provided that the arbitrator may not award exemplary or punitive damages.


 


4.10       Fees
and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to
any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and
fees of the Arbitration, and (b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and
fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing
party in connection with the Arbitration.


 


5.       Arbitration
Appeal.


 


5.1       Initiation
of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period
of thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant
elects to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”)
to a panel of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee
is referred to herein as the “Appeal Date”. The Appeal Notice must be delivered to the Appellee in accordance
with the provisions of Paragraph 4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery
of the Appeal Notice to the Appellee, the Appellant must also pay for (and provide proof of such payment to the Appellee together
with delivery of the Appeal Notice) a bond in the amount of 110% of the sum the Appellant owes to the Appellee as a result of
the Arbitration Award the Appellant is appealing. In the event an Appellant delivers an Appeal Notice to the Appellee (together
with proof of payment of the applicable bond) in compliance with the provisions of this Paragraph 5.1, the Appeal will occur as
a matter of right and, except as specifically set forth herein, will not be further conditioned. In the event a party does not
deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline prescribed
in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an Appeal Notice
(along with proof of payment of the applicable bond) to the other party within the deadline described in this Paragraph 5.1, the
Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’
agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.


 


5.2       Selection
and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment
of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person
arbitration panel (the “Appeal Panel”).


 


(a)
Within ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5)
arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com)
(such five (5) designated persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For
the avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and
shall not be the arbitrator who rendered the Arbitration Award being appealed (the “Original Arbitrator”).
Within five (5) calendar days after the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators,
the Appellant must select, by written notice to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members
of the Appeal Panel. If the Appellant fails to select three (3) of the Proposed Appeal Arbitrators in writing within such 5-day
period, then the Appellee may select such three (3) arbitrators from the Proposed Appeal Arbitrators by providing written notice
of such selection to the Appellant.


 


(b) If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within
ten (10) calendar days after the Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to
the Appellee so designating the Proposed Appeal Arbitrators, identify the names of five (5) arbitrators that are designated
as “neutrals” or qualified arbitrators by Utah ADR Service (none of whom may be the Original Arbitrator) by
written notice to the Appellee. The Appellee may then, within five (5) calendar days after the Appellant has submitted notice
of its selected arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such selected
arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of
the arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant may select the
three (3) members of the Appeal Panel from the Appellant’s list of five (5) arbitrators by providing written notice of
such selection to the Appellee.


 






     


     


    

 


(c)
If a selected Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed
Appeal Arbitrator may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days
of the date a chosen Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator.
If at least three (3) of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the
Proposed Appeal Arbitrator selection process shall begin again in accordance with this Paragraph 5.2; provided, however,
that any Proposed Appeal Arbitrators who have already agreed to serve shall remain on the Appeal Panel.


 


(d)
The date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including
via email) delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to
herein as the “Appeal Commencement Date”. No later than five (5) calendar days after the Appeal
Commencement Date, the Appellee shall designate in writing (including via email) to the Appellant and the Appeal Panel the
name of one (1) of the three (3) members of the Appeal Panel to serve as the lead arbitrator in the Appeal proceedings. Each
member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration Provisions and the Arbitration
Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon the approval or vote
of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal Panel. If
an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings, a replacement arbitrator shall be
chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel. If Utah ADR
Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected under
the then prevailing rules of the American Arbitration Association.


 


(d)
Subject to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.


 


5.3       Appeal
Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel
shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing
and all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers
appropriate for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and
may review all previous evidence and discovery, together with all briefs, pleadings and other documents filed with the Original
Arbitrator (as well as any documents filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing,
in connection with the Appeal, the Appeal Panel shall not permit the parties to conduct any additional discovery or raise any
new Claims to be arbitrated, shall not permit new witnesses or affidavits, and shall not base any of its findings or determinations
on the Original Arbitrator’s findings or the Arbitration Award.


 


5.4       Timing.



 


(a)       Within
seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal
Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other
documents filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary),
and (ii) may, but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s
arguments concerning or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the
Arbitration. Within seven (7) calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the
Appellee shall deliver to the Appeal Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within
seven (7) calendar days of the Appellee’s delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver
to the Appeal Panel and to the Appellee a Reply Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially
comply with the requirements of clause (i) of this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration
Award, and the Arbitration Award shall be final. If the Appellee shall fail to deliver the Memorandum in Opposition as required
above, or if the Appellant shall fail to deliver the Reply Memorandum as required above, then the Appellee or the Appellant, as
the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed regardless.


 






     


     


    

 


(b)
        Subject to subparagraph (a) above, the parties hereby agree that the Appeal must be
heard by the Appeal Panel within thirty (30) calendar days of the Appeal Commencement Date, and that the Appeal Panel must render
its decision within thirty (30) calendar days after the Appeal is heard (and in no event later than sixty (60) calendar days after
the Appeal Commencement Date).


 


5.5       Appeal
Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator
on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety
and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator
shall remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the
sole and exclusive remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded
in the Arbitration, and (d) be promptly payable in United States dollars free of any tax, deduction or offset (with respect to
monetary awards). Any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident
to enforcing the Appeal Panel Award shall, to the maximum extent permitted by law, be charged against the party resisting such
enforcement. The Appeal Panel Award shall include Default Interest (with respect to monetary awards) at the rate specified in
the Note for Default Interest both before and after the Arbitration Award. Judgment upon the Appeal Panel Award will be entered
and enforced by a state or federal court sitting in Salt Lake County, Utah.


 


5.6       Relief.
The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems
proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal
Panel may not award exemplary or punitive damages.


 


5.7       Fees
and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to
any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and
fees of the Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount
of money by the Appeal Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties,
fees, or other charges awarded to any part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees,
deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party
in connection with the Arbitration (including without limitation in connection with the Appeal).


 


6.
        Miscellaneous.


 


6.1       Severability.
If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall
be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the
Arbitration Provisions shall remain unaffected and in full force and effect.


 


6.2       Governing
Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws
principles therein.


 


6.3       Interpretation.
The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation
of, these Arbitration Provisions.


 


6.4       Waiver.
No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by
the party granting the waiver.


 


6.5       Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.


 


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