Exhibit 10.2


 


EXHIBIT A


 


lion
group holding ltd.


 


CERTIFICATE OF DESIGNATION OF PREFERENCES, 


RIGHTS AND LIMITATIONS


OF


SERIES B CONVERTIBLE PREFERRED SHARES


 


The undersigned, Wang Jian
and Chunning Wang, do hereby certify that:


 


1. They are the Chairman
of the Board of Directors and Chief Executive Officer and Director, respectively, of Lion Group Holding Ltd., a Cayman Islands exempted
company (the “Corporation”).


 


2. The Corporation is authorized
to issue 50,000,000 shares of preferred shares, 7,000 of which have been issued.


 


3. The following resolutions
were duly adopted by the board of directors of the Corporation (the “Board of Directors”):


 


WHEREAS, the memorandum and
articles of association of the Corporation provides for a class of its authorized shares known as preferred shares, consisting of 50,000,000
shares, $0.0001 par value per share, issuable from time to time in one or more series;


 


WHEREAS, the Board of Directors
is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation
preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof,
of any of them; and


 


WHEREAS, it is the desire
of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating
to a series of the preferred stock, which shall consist of, except as otherwise set forth in the Purchase Agreement, up to 4,000 shares
of the preferred stock which the Corporation has the authority to issue, as follows:


 






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NOW, THEREFORE, BE IT RESOLVED,
that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities,
rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of
preferred stock as follows:





 


TERMS OF PREFERRED STOCK


 


Section 1.  Definitions.
For the purposes hereof, the following terms shall have the following meanings:


 


“ADSs”
means the Corporation’s ADSs, par value $0.0001 per share, and stock of any other class of securities into which such securities
may hereafter be reclassified or changed.


 


“ADSs Equivalents”
means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time ADSs, including,
without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, ADSs.


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.


 


“Alternate
Consideration” shall have the meaning set forth in Section 7(e).


 


“Bankruptcy
Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Corporation or any
Significant Subsidiary thereof, (b) there is commenced against the Corporation or any Significant Subsidiary thereof any such case or
proceeding that is not dismissed within 60 days after commencement, (c) the Corporation or any Significant Subsidiary thereof is adjudicated
insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Corporation or any
Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that
is not discharged or stayed within 60 calendar days after such appointment, (e) the Corporation or any Significant Subsidiary thereof
makes a general assignment for the benefit of creditors, (f) the Corporation or any Significant Subsidiary thereof calls a meeting of
its creditors with a view to arranging a composition, adjustment or restructuring of its debts, or (g) the Corporation or any Significant
Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing
or takes any corporate or other action for the purpose of effecting any of the foregoing.


 


“Base Conversion
Price” shall have the meaning set forth in Section 7(b).


 






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“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.


 


“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).


 


“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital shares of the Corporation, by contract or otherwise) of in excess of 33% of
the voting securities of the Corporation (other than by means of conversion or exercise of Preferred Stock and the Securities issued together
with the Preferred Stock), (b) the Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates
with the Corporation and, after giving effect to such transaction, the shareholders of the Corporation immediately prior to such transaction
own less than 66% of the aggregate voting power of the Corporation or the successor entity of such transaction, (c) the Corporation sells
or transfers all or substantially all of its (and all of its Subsidiaries, taken as a whole) assets to another Person and the shareholders
of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately
after the transaction, (d) a replacement at one time or within a one year period of more than one-half of the members of the Board of
Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date
(or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was
approved by a majority of the members of the Board of Directors who are members on the Original Issue Date), or (e) the execution by the
Corporation of an agreement to which the Corporation is a party or by which it is bound, providing for any of the events set forth in
clauses (a) through (d) above.


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1 of the Purchase Agreement.


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto and all conditions precedent to (i) each Holder’s obligations to pay the Subscription Amount and (ii) the Corporation’s
obligations to deliver the Securities have been satisfied or waived.


 


“Commission”
means the United States Securities and Exchange Commission.


 


“Conversion
Amount” means the sum of the Stated Value at issue.


 






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“Conversion
Date” shall have the meaning set forth in Section 6(a).


 


“Conversion
Price” shall have the meaning set forth in Section 6(b).


 


“Conversion
Shares” means, collectively, the ADSs are issuable upon conversion of the shares of Preferred Stock in accordance with the terms
hereof.


 


“Conversion
Shares Registration Statement” means a registration statement that registers the resale of all of the Conversion Shares by the
Holders, which shall be named as “selling shareholders” therein, and meets the requirements of the Registration Rights Agreement.


 


“Dilutive
Issuance” shall have the meaning set forth in Section 7(b).


 


“Dilutive
Issuance Notice” shall have the meaning set forth in Section 7(b).


 


“Dividend
Conversion Rate” means the lesser of (a) the Conversion Price or (b) 90% of the lesser of (i) the average of the VWAPs for the
5 consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable Dividend Payment Date or (ii) the average
of the VWAPs for the 5 consecutive Trading Days ending on the Trading Day that is immediately prior to the date the applicable Dividend
Conversion Shares are issued and delivered if such delivery is after the Dividend Payment Date.


 


“Dividend
Conversion Shares” shall have the meaning set forth in Section 3(a).


 


“Dividend
Notice Period” shall have the meaning set forth in Section 3(a).


 


“Dividend
Payment Date” shall have the meaning set forth in Section 3(a).


 


“Dividend
Share Amount” shall have the meaning set forth in Section 3(a).


 


“Effective
Date” means the date that the Conversion Shares Registration Statement filed by the Corporation pursuant to the Registration
Rights Agreement is first declared effective by the Commission.


 


“Equity
Conditions” means, during the period in question, (a) the Corporation shall have duly honored all conversions and redemptions
scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Corporation shall have paid
all liquidated damages and other amounts owing to the Holder in respect of this Debenture, (c)(i) there
is an effective Registration Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of
the ADSs are issuable pursuant to the Transaction Documents (and the Corporation believes, in good faith, that such effectiveness will
continue uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents
(and shares issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions
or current public information requirements as determined by the counsel to the Corporation as set forth in a written opinion letter to
such effect, addressed and acceptable to the Depositary and the Holder, (d) the ADSs are trading on a Trading Market and all of the shares
issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market (and the Corporation believes,
in good faith, that trading of the ADSs on a Trading Market will continue uninterrupted for the foreseeable future), (e) there is a sufficient
number of authorized but unissued and otherwise unreserved shares of ADSs for the issuance of all of the shares then issuable pursuant
to the Transaction Documents, (f) there is no existing Event of Default and no existing event which, with the passage of time or the giving
of notice, would constitute an Event of Default, (g) the issuance of the shares in question to the Holder would not violate the limitations
set forth in Section 4(d) herein, (h) there has been no public announcement of a pending or proposed Fundamental Transaction or
Change of Control Transaction that has not been consummated, (i) the applicable Holder is not in possession of any information provided
by the Corporation, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates,
that constitutes, or may constitute, material non-public information and (j) for each Trading Day in a period of 20 consecutive Trading
Days prior to the applicable date in question, the daily trading volume for the ADSs on the principal
Trading Market exceeds (i) $100,000 per Trading Day.


 






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“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Exempt
Issuance” means the issuance of (a) ADSs or options to employees, officers or directors of the Corporation pursuant to any stock
or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Corporation or a majority of the
members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion
of any securities issued pursuant to the Purchase Agreement and/or other securities exercisable or exchangeable for or convertible into
ADSs are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date
of the Purchase Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price
of any such securities or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Corporation, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement
in connection therewith during the prohibition period in Section 4.13(a) of the Purchase Agreement, and provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or
an owner of an asset in a business synergistic with the business of the Corporation and shall provide to the Corporation additional benefits
in addition to the investment of funds, but shall not include a transaction in which the Corporation is issuing securities primarily for
the purpose of raising capital or to an entity whose primary business is investing in securities and (d) any ADSs or Ordinary Shares or
securities issued and issuable pursuant to any agreements that the Company has disclosed on Schedule 3.1(g) to the Purchase Agreement.


 






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“Fundamental
Transaction” shall have the meaning set forth in Section 7(e).


 


“GAAP”
means United States generally accepted accounting principles.


 


“Holder”
shall have the meaning given such term in Section 2.


 


“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or
not the same are or should be reflected in the Corporation’s balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, and (c) the present value
of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.


 


“Junior
Securities” means the ADSs and all other ADSs Equivalents of the Corporation other than those securities which are explicitly
senior or pari passu to the Preferred Stock in dividend rights or liquidation preference.


 


“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Liquidation”
shall have the meaning set forth in Section 5.


 


“New York
Courts” shall have the meaning set forth in Section 10(d).


 


“Notice
of Conversion” shall have the meaning set forth in Section 6(a).


 


“Original
Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred
Stock.


 


“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and
by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Corporation) have been established
in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Corporation’s business, such
as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising
in the ordinary course of the Corporation’s business, and which (x) do not individually or in the aggregate materially detract from
the value of such property or assets or materially impair the use thereof in the operation of the business of the Corporation and its
consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing
for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, (c) Liens incurred in connection with
Permitted Indebtedness under clause (a) thereunder, and (d) Liens incurred in connection with Permitted Indebtedness under clause (b)
thereunder, provided that such Liens are not secured by assets of the Corporation or its Subsidiaries other than the assets so acquired
or leased.


 






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“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Preferred
Stock” shall have the meaning set forth in Section 2.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as December 13, 2021, among the Corporation and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the Corporation
and the original Holders, in the form of Exhibit B attached to the Purchase Agreement.


 


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering
the resale of the Underlying Shares by each Holder as provided for in the Registration Rights Agreement.


 


“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.


 


“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.


 


“Securities”
means the Preferred Stock, the Warrants, and the Underlying Shares.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 






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“Share
Delivery Date” shall have the meaning set forth in Section 6(c).


 


“Stated
Value” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.


 


“Subscription
Amount” shall mean, as to each Holder, the aggregate amount to be paid for the Preferred Stock purchased pursuant to the Purchase
Agreement as specified below such Holder’s name on the signature page of the Purchase Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.


 


“Subsidiary”
means any subsidiary of the Corporation as set forth on Schedule 3.1(a) of the Purchase Agreement and shall, where applicable,
also include any direct or indirect subsidiary of the Corporation formed or acquired after the date of the Purchase Agreement.


 


“Successor
Entity” shall have the meaning set forth in Section 7(e).


 


“Three
Year Redemption Amount” means the sum of (a) 100% of the aggregate cash investment (consisting of the Stated Value less closing
fee, equal to $3,800,000) and (b) accrued but unpaid dividends,.


 


“Trading
Day” means a day on which the principal Trading Market is open for business.


 


“Trading
Market” means any of the following markets or exchanges on which the ADSs are listed or quoted for trading on the date in question:
the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange
(or any successors to any of the foregoing).


 


“Transaction
Documents” means this Certificate of Designation, the Purchase Agreement, the Warrants, the Registration Rights Agreement, the
Lock-Up Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the
transactions contemplated pursuant to the Purchase Agreement.


 


“Transfer
Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing address
of 6201 15th Ave, Brooklyn, New York 11219, United States, and any successor transfer agent of the Company.


 


“Underlying
Shares” means the ADSs are issued and issuable upon conversion of the Preferred Stock, upon exercise of the Warrants and issued
and issuable in lieu of the cash payment of dividends on the Preferred Stock in accordance with the terms of this Certificate of Designation.


 






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“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b) of the Purchase Agreement.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADSs are then listed or quoted
on a Trading Market, the daily volume weighted average price of the ADSs for such date (or the nearest preceding date) on the Trading
Market on which the ADSs are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the
ADSs for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs are not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the ADSs are then reported in the “Pink Sheets” published by OTC Markets, Inc.
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the ADSs
so reported, or (d) in all other cases, the fair market value of a share of ADSs as determined by an independent appraiser selected
in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Corporation,
the fees and expenses of which shall be paid by the Corporation.


 


“Warrants”
means, collectively, the ADSs purchase warrants delivered to the Holder at the Closing in accordance with Section 2.2(a) of the Purchase
Agreement.


 


“Warrant
Shares” means the ADSs are issuable upon exercise of the Warrants.


 


Section 2.
 Designation, Amount and Par Value. The series of preferred stock shall be designated as its Series [B] Convertible Preferred
Shares (the “Preferred Stock”) and the number of shares so designated shall be up to 4,000 (which shall not be subject
to increase without the written consent of the holders of a majority of the then outstanding shares of the Preferred Stock (each, a “Holder”
and collectively, the “Holders”)). Each share of Preferred Stock shall have a par value of $0.0001 per share and a
stated value equal to $1,000, subject to increase set forth in Section 3 below (the “Stated Value”).


 


Section 3.
 Dividends.


 


a) Dividends
in Cash or in Kind. The Holders shall be entitled to receive, and the Corporation shall pay, cumulative dividends at the rate per
share (as a percentage of the Stated Value per share) of 8% per annum if paid in cash or 12% per annum if paid in ADSs (subject to increase
pursuant to Section 10(b)), payable quarterly on January 1, April 1, July 1 and October 1, beginning on the first such date after
the Closing Date, and on each Conversion Date (with respect only to Preferred Stock being converted) (each such date, a “Dividend
Payment Date”) (if any Dividend Payment Date is not a Trading Day, the applicable payment shall be due on the next succeeding
Trading Day) in cash, or at the Corporation’s option, in duly authorized, validly issued, fully paid and non-assessable ADSs as
set forth in this Section 3(a), or a combination thereof (the dollar amount to be paid in ADSs, the “Dividend Share Amount”).
The form of dividend payments to each Holder shall be determined in the following order of priority: (i) if funds are legally available
for the payment of dividends and the Equity Conditions have not been met during the 20 consecutive Trading Days immediately prior to the
applicable Dividend Payment Date (the “Dividend Notice Period”), in cash only, (ii) if funds are legally available
for the payment of dividends and the Equity Conditions have been met during the Dividend Notice Period, at the sole election of the Corporation,
in cash or ADSs which shall be valued at the Dividend Conversion Rate, (iii) if funds are not legally available for the payment of dividends
and the Equity Conditions have been met during the Dividend Notice Period, in ADSs which shall be valued at the Dividend Conversion Rate,
(iv) if funds are not legally available for the payment of dividends and the Equity Condition relating to an effective Conversion Shares
Registration Statement has been waived by such Holder, as to such Holder only, in unregistered ADSs which shall be valued at the Dividend
Conversion Rate, and (v) if funds are not legally available for the payment of dividends and the Equity Conditions have not been met during
the Dividend Notice Period, then, at the election of such Holder, such dividends shall accrue to the next Dividend Payment Date or shall
be accreted to, and increase, the outstanding Stated Value. In addition, as a condition to paying dividends in ADSs, as to such Dividend
Payment Date, prior to such Dividend Notice Period (but not more than five (5) Trading Days prior to the commencement of such Dividend
Notice Period), the Corporation shall have delivered to each Holder’s account with The Depository Trust Company a number of ADSs
to be applied against such Dividend Share Amount equal to the quotient of (x) the applicable Dividend Share Amount divided by (y) the
Dividend Conversion Rate, assuming for such purposes that the Dividend Payment Date is the Trading Day immediately prior to the commencement
of the Dividend Notice Period (the “Dividend Conversion Shares”). The Holders shall have the same rights and remedies
with respect to the delivery of any such shares as if such shares were being issued pursuant to Section 6.


 






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b) Corporation’s
Ability to Pay Dividends in Cash or Kind. On the Closing Date, the Corporation shall have notified the Holders whether or not it may
legally pay cash dividends as of the Closing Date. The Corporation shall promptly notify the Holders at any time the Corporation shall
become able or unable, as the case may be, to legally pay cash dividends. If at any time the Corporation has the right to pay dividends
in cash or ADSs, the Corporation must provide the Holders with at least 20 Trading Days’ notice of its election to pay a regularly
scheduled dividend in ADSs (the Corporation may indicate in such notice that the election contained in such notice shall continue for
later periods until revised by a subsequent notice). If at any time the Corporation delivers a notice to the Holders of its election to
pay the dividends in ADSs, the Corporation shall timely file a prospectus supplement pursuant to Rule 424 disclosing such election. The
aggregate number of ADSs otherwise issuable to a Holder on a Dividend Payment Date shall be reduced by the number of ADSs previously issued
to such Holder in connection with such Dividend Payment Date. If any Dividend Conversion Shares are issued to a Holder in connection with
a Dividend Payment Date and are not applied against a Dividend Share Amount, then such Holder shall promptly return such excess shares
to the Corporation.


 


c) Dividend
Calculations. Dividends on the Preferred Stock shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar
day periods, and shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue from such date whether or not
earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of
dividends. Payment of dividends in ADSs shall otherwise occur pursuant to Section 6(c)(i) herein and, solely for purposes of the payment
of dividends in shares, the Dividend Payment Date shall be deemed the Conversion Date. Dividends shall cease to accrue with respect to
any Preferred Stock converted, provided that, the Corporation actually delivers the Conversion Shares within the time period required
by Section 6(c)(i) herein. Except as otherwise provided herein, if at any time the Corporation pays dividends partially in cash and partially
in shares, then such payment shall be distributed ratably among the Holders based upon the number of shares of Preferred Stock held by
each Holder on such Dividend Payment Date.


 






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d) Late
Fees. Any dividends, whether paid in cash or ADSs, that are not paid within three Trading Days following a Dividend Payment Date shall
continue to accrue and shall entail a late fee, which must be paid in cash, at the rate of 18% per annum or the lesser rate permitted
by applicable law which shall accrue daily from the Dividend Payment Date through and including the date of actual payment in full.


 


e) Other
Securities. So long as any Preferred Stock shall remain outstanding, neither the Corporation nor any Subsidiary thereof shall redeem,
purchase or otherwise acquire directly or indirectly any Junior Securities. So long as any Preferred Stock shall remain outstanding, neither
the Corporation nor any Subsidiary thereof shall directly or indirectly pay or declare any dividend or make any distribution upon (other
than a dividend or distribution described in Section 6 or dividends due and paid in the ordinary course on preferred stock of the Corporation
at such times when the Corporation is in compliance with its payment and other obligations hereunder), nor shall any distribution be made
in respect of, any Junior Securities as long as any dividends due on the Preferred Stock remain unpaid, nor shall any monies be set aside
for or applied to the purchase or redemption (through a sinking fund or otherwise) of any Junior Securities or shares pari passu
with the Preferred Stock.


 


Section 4.  Voting
Rights. Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall have no voting rights. However,
as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a
majority of the then outstanding shares of the Preferred Stock, (a) alter or change adversely the powers, preferences or rights given
to the Preferred Stock or alter or amend this Certificate of Designation, (b) authorize or create any class of stock ranking as to dividends,
redemption or distribution of assets upon a Liquidation (as defined in Section 5) senior to, or otherwise pari passu with, the
Preferred Stock, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights
of the Holders, (d) increase the number of authorized shares of Preferred Stock, or (e) enter into any agreement with respect to any of
the foregoing.


 






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Section 5.  Liquidation.
Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”),
the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to 100% of
the cash investment (consisting of the Stated Value less closing fee, equal to $3,800,000), plus any accrued and unpaid dividends thereon
and any other fees or liquidated damages then due and owing thereon under this Certificate of Designation, for each share of Preferred
Stock before any distribution or payment shall be made to the holders of any Junior Securities, and if the assets of the Corporation shall
be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among
the Holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in
full.


 


Section 6.  Conversion.


 


a) Conversions
at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original
Issue Date at the option of the Holder thereof, into that number of ADSs (subject to the limitations set forth in Section 6(d)) determined
by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. Holders shall effect conversions by providing the
Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice
of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior
to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which
such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by facsimile such Notice of
Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of
Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No
ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of
any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence
of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the
certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby
are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following
the Conversion Date at issue. Shares of Preferred Stock converted into ADSs or redeemed in accordance with the terms hereof shall be canceled
and shall not be reissued.


 


b) Conversion
Price. The conversion price for the Preferred Stock shall be the lesser of (i) $1.75, subject to adjustment herein (the “Conversion
Price”), or (ii) 90% of the lowest daily VWAP during the 10 consecutive Trading Days prior to the Conversion Date (the “Variable
Conversion Price”).


 






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 c) Mechanics of Conversion.




 


i. Delivery
of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery Date”), the Corporation
shall deliver, or cause to be delivered, to the converting Holder (A) the number of Conversion Shares being acquired upon the conversion
of the Preferred Stock (including, if the Corporation has given continuous notice pursuant to Section 3(b) for payment of dividends in
ADSs at least 20 Trading Days prior to the date on which the Notice of Conversion is delivered to the Corporation, ADSs representing the
payment of accrued dividends otherwise determined pursuant to Section 3(a) but assuming that the Dividend Notice Period is the 20 Trading
Days period immediately prior to the date on which the Notice of Conversion is delivered to the Corporation and excluding for such issuance
the condition that the Corporation deliver the Dividend Share Amount as to such dividend payment prior to the commencement of the Dividend
Notice Period) which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date,
shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement),
and (B) a bank check in the amount of accrued and unpaid dividends (if the Corporation has elected or is required to pay accrued dividends
in cash). On or after the earlier of (i) the six-month anniversary of the Original Issue Date or (ii) the Effective Date, the Corporation
shall deliver the Conversion Shares required to be delivered by the Corporation under this Section 6 electronically through the Depository
Trust Company or another established clearing corporation performing similar functions. As used herein, “Standard Settlement
Period” means the standard settlement period, expressed in a number of Trading Days, on the Corporation’s primary Trading
Market with respect to the ADSs as in effect on the date of delivery of the Notice of Conversion.


 


ii. Failure
to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed
by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any
time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Corporation shall promptly return
to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the Corporation
the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.


 






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iii. Obligation
Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion
of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder
to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such
Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other
person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection
with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the
Corporation of any such action that the Corporation may have against such Holder. In the event a Holder shall elect to convert any or
all of the Stated Value of its Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or any one
associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction
from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall
have been sought and obtained, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated
Value of Preferred Stock which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence
of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If the
Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) by the second (2nd) Trading Day
following the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages
and not as a penalty, for each $5,000 of Stated Value of Preferred Stock being converted, $50 per Trading Day (increasing to $100 per
Trading Day on the 5th Trading Day after such damages begin to accrue) for each Trading Day after the Share Delivery Date until
such Conversion Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual
damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have
the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any
other Section hereof or under applicable law.


 


iv. Compensation
for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to the Holder,
if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the second (2nd) Trading
Day following the Share Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its
brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, ADSs
to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition
to any other remedies available to or elected by such Holder) the amount, if any, by which (x) such Holder’s total purchase price
(including any brokerage commissions) for the ADSs so purchased exceeds (y) the product of (1) the aggregate number of ADSs that such
Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise
to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if
surrendered) the shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which case, such
conversion shall be deemed rescinded) or deliver to such Holder the number of ADSs that would have been issued if the Corporation had
timely complied with its delivery requirements under Section 6(c)(i). For example, if a Holder purchases ADSs having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the actual
sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall
provide the Corporation written notice indicating the amounts payable to such Holder in respect of the Buy-In and, upon request of the
Corporation, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect
to the Corporation’s failure to timely deliver the Conversion Shares upon conversion of the shares of Preferred Stock as required
pursuant to the terms hereof.


 






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v. Reservation
of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized
and unissued Ordinary Shares for the sole purpose of issuance upon conversion of the Preferred Stock and payment of dividends on the Preferred
Stock, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder
(and the other holders of the Preferred Stock), not less than such aggregate number of shares of the ADSs as shall (subject to the terms
and conditions set forth in the Purchase Agreement) be required for the issuance of the ADSs (taking into account the adjustments and
restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred Stock and payment of dividends hereunder. The
Corporation covenants that all ADSs that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable
and, if the Conversion Shares Registration Statement is then effective under the Securities Act, shall be registered for public resale
in accordance with such Conversion Shares Registration Statement (subject to such Holder’s compliance with its obligations under
the Registration Rights Agreement).


 


vi. Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred Stock. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion
Price or round up to the next whole share. Notwithstanding anything to the contrary contained herein, but consistent with the provisions
of this subsection with respect to fractional Conversion Shares, nothing shall prevent any Holder from converting fractional shares of
Preferred Stock.


 


vii. Transfer
Taxes and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge to any Holder
for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided
that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and
delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Preferred Stock and
the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation
that such tax has been paid; provided further that the Holder shall pay any one-time initial issuance fee charged by Deutsche Bank in
an amount up to $0.03 per ADS. The Corporation shall pay all Depository fees required for same-day processing of any Notice of Conversion
and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.


 






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d) Beneficial
Ownership Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right
to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice
of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a group together with such Holder
or any of such Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of ADSs beneficially
owned by such Holder and its Affiliates and Attribution Parties shall include the number of ADSs are issuable upon conversion of the Preferred
Stock with respect to which such determination is being made, but shall exclude the number of ADSs which are issuable upon (i) conversion
of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder or any of its Affiliates or Attribution
Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation subject to
a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, the Preferred Stock
or the Warrants) beneficially owned by such Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding
sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 6(d) applies, the
determination of whether the Preferred Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates
and Attribution Parties) and of how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and
the submission of a Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Preferred Stock
may be converted (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and how many
shares of the Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with
this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such Notice
of Conversion has not violated the restrictions set forth in this paragraph and the Corporation shall have no obligation to verify or
confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section
6(d), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares as stated
in the most recent of the following: (i) the Corporation’s most recent periodic or annual report filed with the Commission, as the
case may be, (ii) a more recent public announcement by the Corporation or (iii) a more recent written notice by the Corporation or the
Transfer Agent setting forth the number of Ordinary Shares outstanding.  Upon the written or oral request of a Holder, the Corporation
shall within one Trading Day confirm orally and in writing to such Holder the number of Ordinary Shares then outstanding.  In any
case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of
the Corporation, including the Preferred Stock, by such Holder or its Affiliates or Attribution Parties since the date as of which such
number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon
election by a Holder prior to the issuance of any shares of Preferred Stock, 9.99%) of the number of shares of the Ordinary Shares outstanding
immediately after giving effect to the issuance of ADSs are issuable upon conversion of Preferred Stock held by the applicable Holder.
A Holder, upon notice to the Corporation, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 6(d)
applicable to its Preferred Stock provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares
of the Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon conversion of this Preferred
Stock held by the Holder and the provisions of this Section 6(d) shall continue to apply. Any such increase in the Beneficial Ownership
Limitation will not be effective until the 61st day after such notice is delivered to the Corporation and shall only apply
to such Holder and no other Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of Preferred Stock.


 






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Section 7.  Certain
Adjustments.


 


a) Stock
Dividends and Stock Splits.


 


(i) If
the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions payable in ADSs and/or Ordinary Shares on Ordinary Shares or any other Ordinary Shares Equivalents (which, for avoidance
of doubt, shall not include any ADSs are issued by the Corporation upon conversion of, or payment of a dividend on, this Preferred Stock),
(ii) subdivides outstanding ADSs and/or Ordinary Shares into a larger number of shares, (iii) combines (including by way of a reverse
stock split) outstanding ADSs and/or Ordinary Shares into a smaller number of shares, or (iv) issues, in the event of a reclassification
of ADSs and/or shares of the Ordinary Shares, any shares of capital stock of the Corporation (each, a “Share Combination Event”,
and such date thereof, the “Share Combination Event Date”), then the Conversion Price shall be multiplied by a fraction
of which the numerator shall be the number of Ordinary Shares (excluding any treasury shares of the Corporation) outstanding immediately
before such event, and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event. Any adjustment
made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.


 


(ii) Share
Dividend and Split Adjustment. If at any time and from time to time there occurs any Share Combination Event and the Event Market
Price (as defined below) is less than the Conversion Price then in effect (after giving effect to the adjustment in clause (i) above),
then on the sixteenth (16th) Trading Day immediately following such Share Combination Event, the Conversion Price then in effect on such
sixteenth (16th) Trading Day (after giving effect to the adjustment in clause (i) above) shall be reduced (but in no event increased)
to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result
in an increase in the Conversion Price hereunder, no adjustment shall be made. “Event Market Price” means, with respect
to any Share Combination Event Date, the quotient determined by dividing (x) the sum of the VWAP of the ADSs for each of the five (5)
lowest Trading Days during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately preceding the
sixteenth (16th) Trading Day after such Share Combination Event Date, divided by (y) five (5).


 






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b) Subsequent
Equity Sales. If, at any time while this Preferred Stock is outstanding, the Corporation or any Subsidiary, as applicable sells or
grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant
or any option to purchase or other disposition), including but not limited to an exchange for other equity, including warrants and options
with a lower exercise price, of the Company) any ADSs, ADSs, Ordinary Shares or Ordinary Shares Equivalents entitling any Person to acquire
ADSs, ADSs at an effective price per share (taking into consideration the ratio of ADSs to Ordinary Shares) that is lower than the then
Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive
Issuance”) (if the holder of the ADSs, Ordinary Shares or Ordinary Shares Equivalents so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants,
options or rights per share which are issued in connection with such issuance, be entitled to receive ADSs and/or Ordinary Shares at an
effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion
Price on such date of the Dilutive Issuance), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive
Issuance the Conversion Price shall be reduced to equal the Base Conversion Price. Notwithstanding the foregoing, no adjustment will be
made under this Section 7(b) in respect of an Exempt Issuance. If the Corporation enters into a Variable Rate Transaction, despite the
prohibition set forth in the Purchase Agreement, the Corporation shall be deemed to have issued ADSs, Ordinary Shares and/or Ordinary
Shares Equivalents at the lowest possible conversion price at which such securities may be converted or exercised. The Corporation shall
notify the Holders in writing, no later than the Trading Day following the issuance of any ADSs, Ordinary Shares or Ordinary Shares Equivalents
subject to this Section 7(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion
price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether
or not the Corporation provides a Dilutive Issuance Notice pursuant to this Section 7(b), upon the occurrence of any Dilutive Issuance,
the Holders are entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive
Issuance, regardless of whether a Holder accurately refers to the Base Conversion Price in the Notice of Conversion.


 


c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or
sells any Ordinary Shares Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of Ordinary Shares acquirable upon complete conversion of such Holder’s Preferred Stock (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary
Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result
of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 






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d) Pro
Rata Distributions. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes any other distribution
of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or options by way of spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Preferred
Stock, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would
have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete conversion of this Preferred Stock
(without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders
of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, to the extent that
the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then
the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares
as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


e) Fundamental
Transaction. If, at any time while this Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation (and all
of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or
other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of
ADSs and/or Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been
accepted by the holders of 50% or more of the outstanding Ordinary Shares, (iv) the Corporation, directly or indirectly, in one or more
related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange
pursuant to which the ADSs are effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation,
directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such
other Person acquires more than 50% of the outstanding ADSs and/or Ordinary Shares (not including any Ordinary Shares held by the other
Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion
of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such
conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 6(d) on the
conversion of this Preferred Stock), the number of Ordinary Shares of the successor or acquiring corporation or of the Corporation, if
it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result
of such Fundamental Transaction by a holder of the number of ADSs for which this Preferred Stock is convertible immediately prior to such
Fundamental Transaction (without regard to any limitation in Section 6(d) on the conversion of this Preferred Stock). For purposes of
any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of ADSs in such Fundamental Transaction, and the Corporation
shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Ordinary Shares are given any choice as to the securities, cash or property to
be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives
upon any conversion of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation
with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing
the Holders’ right to convert such preferred stock into Alternate Consideration. The Corporation shall cause any successor entity
in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”) to assume in writing
all of the obligations of the Corporation under this Certificate of Designation and the other Transaction Documents (as defined in the
Purchase Agreement) in accordance with the provisions of this Section 7(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at
the option of the holder of this Preferred Stock, deliver to the Holder in exchange for this Preferred Stock a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Preferred Stock which is convertible for
a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable
and receivable upon conversion of this Preferred Stock (without regard to any limitations on the conversion of this Preferred Stock) prior
to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock
(but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares
of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value
of this Preferred Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in
form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation
and the other Transaction Documents referring to the “Corporation” shall refer instead to the Successor Entity), and may exercise
every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.


 






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f) Change
in ADS Ratio. If, after the date of issuance, the ADS ratio is increased or reduced, then the number of Conversion Shares to be provided
on conversion of Preferred Stock will be reduced or increased (respectively) in inverse proportion to the change in the ADS ratio of ADSs
per ADS.


 


g) Calculations.
All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 7, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number
of Ordinary Shares (excluding any treasury shares of the Corporation) issued and outstanding.


 


h) Notice
to the Holders.


 


i. Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation shall
promptly deliver to each Holder by facsimile or email a notice setting forth the Conversion Price after such adjustment and setting forth
a brief statement of the facts requiring such adjustment.


 


ii. Notice
to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the
Ordinary Shares, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C)
the Corporation shall authorize the granting to all holders of the Ordinary Shares of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Corporation shall be required in
connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Corporation is a party, any sale
or transfer of all or substantially all of the assets of the Corporation (and all of its Subsidiaries, taken as a whole), or any compulsory
share exchange whereby the ADSs are converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause
to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered
by facsimile or email to each Holder at its last facsimile number or email address as it shall appear upon the stock books of the Corporation,
at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record
shall be entitled to exchange their shares of the Ordinary Shares for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in
the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that
any notice provided hereunder constitutes, or contains, material, non-public information regarding the Corporation or any of the Subsidiaries,
the Corporation shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the 20-day period commencing on the date
of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.


 


Section 8.  Optional
Redemption at Election of the Holder. On the third anniversary of the Original Issue Date (the “Three Year Redemption Date”),
the Corporation shall redeem, at the option of the Holder, all of the then outstanding Preferred Stock, for an amount in cash equal to
the Three Year Redemption Amount (such redemption, the “Three Year Redemption”). The Corporation covenants and agrees
that it will honor all Notices of Conversion tendered up until the Three Year Redemption Amount paid in full. Subject to the discretion
of the Holder, the payment of cash pursuant to a Three Year Redemption shall be made on the Three Year Redemption Date. If any portion
of the cash payment for a Three Year Redemption has not been paid by the Corporation within 3 business days following the Three Year Redemption
Date, interest shall accrue thereon until such amount is paid in full at a rate equal to the lesser of 18% per annum or the maximum rate
permitted by applicable law.


 






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 Section 9. Miscellaneous.


 


a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Conversion, shall be in writing and delivered personally, by facsimile or e-mail attachment, or sent by a nationally recognized overnight
courier service, addressed to the Corporation, at the address set forth above Attention: _________________, facsimile number _______________,
e-mail address _____________, or such other facsimile number, e-mail address or address as the Corporation may specify for such purposes
by notice to the Holders delivered in accordance with this Section 10. Any and all notices or other communications or deliveries to be
provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile or e-mail attachment, or sent by a nationally
recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing
on the books of the Corporation, or if no such facsimile number, e-mail address or address appears on the books of the Corporation, at
the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or e-mail attachment at the e-mail address set forth in this Section prior to 5:30 p.m. (New York
City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number or e-mail attachment at the e-mail address set forth in this Section on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.


 


b) Absolute
Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation
of the Corporation, which is absolute and unconditional, to pay liquidated damages, accrued dividends and accrued interest, as applicable,
on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.


 


c) Lost
or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed,
the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu
of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost,
stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof
reasonably satisfactory to the Corporation.


 


d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated
by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New
York Courts”). The Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New
York Courts are improper or inconvenient venue for such proceeding. The Corporation and each Holder hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. The Corporation
and each Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If the Corporation
or any Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.


 






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e) Waiver.
Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver
by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation
on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist
upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation
or a Holder must be in writing.


 


f) Severability.
If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation
shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to
all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the
applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable law.


 


g) Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day.


 


h) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed
to limit or affect any of the provisions hereof.


 


i) Status
of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement. If any
shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized
but unissued shares of preferred stock and shall no longer be designated as Series [B] Convertible Preferred Shares.


 


*********************


 






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RESOLVED, FURTHER, that the Chairman and any of
the directors, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of
Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Cayman Islands______ law.


 






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IN WITNESS WHEREOF, the undersigned
have executed this Certificate this 10th day of December, 2021.


 


	 	 	 
	
    Name:

    Title: 
	 	
    Name:

    Title: 




 






     


     


    

 


ANNEX A


 


NOTICE OF CONVERSION


 


(To be
Executed by the Registered Holder in order to Convert Shares of Preferred Stock)


 


The undersigned hereby elects to convert the number
of shares of Series [B] Convertible Preferred Shares indicated below into ADSs, par value $0.0001 per share (the “ADSs”),
of Lion Group Holding Ltd., a Cayman Islands exempted company (the “Corporation”), according to the conditions hereof,
as of the date written below. If ADSs are to be issued in the name of a Person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation
in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.


 


Conversion calculations:


 	
    Date to Effect Conversion: _____________________________________________ 

	 
	
    Number of shares of Preferred Stock owned
prior to Conversion: _______________ 

	 
	
    Number of shares of Preferred Stock to be
Converted: ________________________ 

	 
	
    Stated Value of shares of Preferred Stock
to be Converted: ____________________ 

	 
	
    Number of ADSs to be Issued: ___________________________ 

	 
	
    Applicable Conversion
    Price:____________________________________________  

	 
	
    Number of shares of Preferred Stock subsequent
to Conversion: ________________ 

	 
	
    Address for Delivery: ______________________



    or

    DWAC Instructions:

    Broker no: _________

    Account no: ___________ 




 


	 	[HOLDER]
	 	 
	 	By:	                      
	 	 	Name:
	 	 	Title: