Document:

Exhibit
10.3

  

REGISTRATION
RIGHTS AGREEMENT

 

This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of January 25, 2021, is by and among Vinco
Ventures, Inc., a Nevada corporation with offices located at 1 West Broad Street, Suite 1004, Bethlehem, Pennsylvania (the “Company”),
and the undersigned buyers (each, a “Buyer,” and collectively, the “Buyers”).

 

RECITALS

 

A.
In connection with the Securities Purchase Agreement by and among the parties hereto, dated as of January 21, 2021 (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase
Agreement, to issue and sell to each Buyer (i) the Notes (as defined in the Securities Purchase Agreement) which will be convertible
into Conversion Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of the Notes and (ii) the
Warrants (as defined in the Securities Purchase Agreement) which will be exercisable to purchase Warrant Shares (as defined in
the Securities Purchase Agreement) in accordance with the terms of the Warrants.

 

B.
To induce the Buyers to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has agreed
to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder,
or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:

 

1.
Definitions.

 

Capitalized
terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.
As used in this Agreement, the following terms shall have the following meanings:

 

(a)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay
at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions
or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds
transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers
on such day.

 

(b)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.

 

    	 

    	 

    

 

(c)
“Effective Date” means the date that the applicable Registration Statement has been declared effective by the
SEC.

 

(d)
“Effectiveness Deadline” means (i) with respect to the initial Registration Statement required to be filed
pursuant to Section 2(a), the earlier of the (A) 60th calendar day after the Closing Date (or 75 calendar days after
the Closing if subject to a review by the SEC) and (B) 2nd Business Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review
and (ii) with respect to any additional Registration Statements that may be required to be filed by the Company pursuant to this
Agreement, the earlier of the (A) 60th calendar day following the date on which the Company was required to file such
additional Registration Statement (or 75 calendar days after following the date on which the Company was required to file such
additional Registration Statement if subject to a review by the SEC) and (B) 2nd Business Day after the date the Company
is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will
not be subject to further review.

 

(e)
“Filing Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant
to Section 2(a), the 30th calendar day after the Closing Date and (ii) with respect to any additional Registration
Statements that may be required to be filed by the Company pursuant to this Agreement, the date on which the Company was required
to file such additional Registration Statement pursuant to the terms of this Agreement.

 

(f)
“Investor” means a Buyer or any transferee or assignee of any Registrable Securities, Notes or Warrants, as
applicable, to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement
in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee of any Registrable Securities,
Notes or Warrants, as applicable, assigns its rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.

 

(g)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization or a government or any department or agency thereof.

 

(h)
“register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415
and the declaration of effectiveness of such Registration Statement(s) by the SEC.

 

(i)
“Registrable Securities” means (i) the Conversion Shares, (ii) the Warrant Shares and (iii) any capital stock
of the Company issued or issuable with respect to the Conversion Shares, the Warrant Shares, the Notes or the Warrants, including,
without limitation, (1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise
and (2) shares of capital stock of the Company into which the shares of Common Stock (as defined in the Notes) are converted or
exchanged and shares of capital stock of a Successor Entity (as defined in the Warrants) into which the shares of Common Stock
are converted or exchanged, in each case, without regard to any limitations on conversion of the Notes or exercise of the Warrants.

 

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(j)
“Registration Statement” means a registration statement or registration statements of the Company filed under
the 1933 Act covering Registrable Securities.

 

(k)
“Required Holders” shall have the meaning as set forth in the Securities Purchase Agreement.

 

(l)
“Required Registration Amount” means the sum of (i) the maximum number of Conversion Shares issuable upon conversion
of the Notes (assuming for purposes hereof that (x) the Notes are convertible at the initial Conversion Price (as defined in the
Notes), (y) interest on the Notes shall accrue through the second anniversary of the Closing Date and will be converted in shares
of Common Stock at an interest conversion price equal to the Interest Conversion Price (as defined in the Notes) assuming an Interest
Date (as defined in the Note) as of the date hereof and (z) any such conversion shall not take into account any limitations on
the conversion of the Notes set forth in the Notes) and (ii) the maximum number of Warrant Shares issuable upon exercise of the
Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein), all subject to adjustment
as provided in Section 2(d) and/or Section 2(f).

 

(m)
“Rule 144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time
to time, or any other similar or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities
of the Company to the public without registration.

 

(n)
“Rule 415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time
to time, or any other similar or successor rule or regulation of the SEC providing for offering securities on a continuous or
delayed basis.

 

(o)
“SEC” means the United States Securities and Exchange Commission or any successor thereto.

 

2.
Registration.

 

(a)
Mandatory Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline,
file with the SEC an initial Registration Statement on Form S-3 covering the resale of all of the Registrable Securities, provided
that such initial Registration Statement shall register for resale at least the number of shares of Common Stock equal to the
Required Registration Amount as of the date such Registration Statement is initially filed with the SEC; provided further that
if Form S-3 is unavailable for such a registration, the Company shall use such other form as is required by Section 2(c). Such
initial Registration Statement, and each other Registration Statement required to be filed pursuant to the terms of this Agreement,
shall contain (except if otherwise directed by the Required Holders) the “Selling Stockholders” and “Plan
of Distribution” sections in substantially the form attached hereto as Exhibit B. The Company shall use its best
efforts to have such initial Registration Statement, and each other Registration Statement required to be filed pursuant to the
terms of this Agreement, declared effective by the SEC as soon as practicable, but in no event later than the applicable Effectiveness
Deadline for such Registration Statement.

 

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(b)
Legal Counsel. Subject to Section 5 hereof, Kelley Drye & Warren LLP, counsel solely to the lead investor (“Legal
Counsel”) shall review and oversee any registration, solely on behalf of the lead investor, pursuant to this Section
2.

 

(c)
Ineligibility to Use Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate
form reasonably acceptable to the Required Holders and (ii) undertake to register the resale of the Registrable Securities on
Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of all Registration Statements
then in effect until such time as a Registration Statement on Form S-3 covering the resale of all the Registrable Securities has
been declared effective by the SEC and the prospectus contained therein is available for use.

 

(d)
Sufficient Number of Shares Registered. In the event the number of shares available under any Registration Statement is
insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s
allocated portion of the Registrable Securities pursuant to Section 2(h), the Company shall amend such Registration Statement
(if permissible), or file with the SEC a new Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover at least the Required Registration Amount as of the Trading Day (as defined in the Notes) immediately preceding
the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event
not later than fifteen (15) days after the necessity therefor arises (but taking account of any Staff position with respect to
the date on which the Staff will permit such amendment to the Registration Statement and/or such new Registration Statement (as
the case may be) to be filed with the SEC). The Company shall use its best efforts to cause such amendment to such Registration
Statement and/or such new Registration Statement (as the case may be) to become effective as soon as practicable following the
filing thereof with the SEC, but in no event later than the applicable Effectiveness Deadline for such Registration Statement.
For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient
to cover all of the Registrable Securities” if at any time the number of shares of Common Stock available for resale under
the applicable Registration Statement is less than the product determined by multiplying (i) the Required Registration Amount
as of such time by (ii) 0.90. The calculation set forth in the foregoing sentence shall be made without regard to any limitations
on conversion, amortization and/or redemption of the Notes ir exercise of the Warrants (and such calculation shall assume (A)
that the Notes are then convertible in full into shares of Common Stock at the then prevailing Conversion Rate (as defined in
the Notes), (B) the initial outstanding principal amount of the Notes remains outstanding through the scheduled Maturity Date
(as defined in the Notes) and no redemptions of the Notes occur prior to the scheduled Maturity Date and (C) the Warrants are
then exercisable in full into shares of Common Stock at the then prevailing Exercise Price (as defined in the Warrants)).

 

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(e)
Effect of Failure to File and Obtain and Maintain Effectiveness of any Registration Statement. If (i) a Registration Statement
covering the resale of all of the Registrable Securities required to be covered thereby (disregarding any reduction pursuant to
Section 2(f)) and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the
Filing Deadline for such Registration Statement (a “Filing Failure”) (it being understood that if the Company
files a Registration Statement without affording each Investor and Legal Counsel the opportunity to review and comment on the
same as required by Section 3(c) hereof, the Company shall be deemed to not have satisfied this clause (i)(A) and such event shall
be deemed to be a Filing Failure) or (B) not declared effective by the SEC on or before the Effectiveness Deadline for such Registration
Statement (an “Effectiveness Failure”) (it being understood that if on the Business Day immediately following
the Effective Date for such Registration Statement the Company shall not have filed a “final” prospectus for such
Registration Statement with the SEC under Rule 424(b) in accordance with Section 3(b) (whether or not such a prospectus is technically
required by such rule), the Company shall be deemed to not have satisfied this clause (i)(B) and such event shall be deemed to
be an Effectiveness Failure), (ii) other than during an Allowable Grace Period (as defined below), on any day after the Effective
Date of a Registration Statement sales of all of the Registrable Securities required to be included on such Registration Statement
(disregarding any reduction pursuant to Section 2(f)) cannot be made pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective, a failure to disclose such information as is necessary
for sales to be made pursuant to such Registration Statement, a suspension or delisting of (or a failure to timely list) the shares
of Common Stock on the Principal Market (as defined in the Securities Purchase Agreement) or any other limitations imposed by
the Principal Market, or a failure to register a sufficient number of shares of Common Stock or by reason of a stop order) or
the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”), or (iii)
if a Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for any
reason, and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation,
the failure to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been an issuer
described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) (a “Current Public Information Failure”) as a result of which any of the Investors
are unable to sell Registrable Securities without restriction under Rule 144 (including, without limitation, volume restrictions),
then, as partial relief for the damages to any holder by reason of any such delay in, or reduction of, its ability to sell the
underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in equity, including,
without limitation, specific performance), the Company shall pay to each holder of Registrable Securities relating to such Registration
Statement an amount in cash equal to one percent (1%) of such Investor’s original principal amount stated in such Investor’s
Note on the Closing Date (1) on the date of such Filing Failure, Effectiveness Failure, Maintenance Failure or Current Public
Information Failure, as applicable, and (2) on every thirty (30) day anniversary of (I) a Filing Failure until such Filing Failure
is cured; (II) an Effectiveness Failure until such Effectiveness Failure is cured; (III) a Maintenance Failure until such Maintenance
Failure is cured; and (IV) a Current Public Information Failure until the earlier of (i) the date such Current Public Information
Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule 144 (in each case, pro
rated for periods totaling less than thirty (30) days). The payments to which a holder of Registrable Securities shall be entitled
pursuant to this Section 2(e) are referred to herein as “Registration Delay Payments.” Following the initial
Registration Delay Payment for any particular event or failure (which shall be paid on the date of such event or failure, as set
forth above), without limiting the foregoing, if an event or failure giving rise to the Registration Delay Payments is cured prior
to any thirty (30) day anniversary of such event or failure, then such Registration Delay Payment shall be made on the third (3rd)
Business Day after such cure. In the event the Company fails to make Registration Delay Payments in a timely manner in accordance
with the foregoing, such Registration Delay Payments shall bear interest at the rate of one percent (1%) per month (prorated for
partial months) until paid in full. Notwithstanding the foregoing, no Registration Delay Payments shall be owed to an Investor
(other than with respect to a Maintenance Failure resulting from a suspension or delisting of (or a failure to timely list) the
shares of Common Stock on the Principal Market) with respect to any period during which all of such Investor’s Registrable
Securities may be sold by such Investor without restriction under Rule 144 (including, without limitation, volume restrictions)
and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable).

 

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(f)
Offering. Notwithstanding anything to the contrary contained in this Agreement, but subject to the payment of the Registration
Delay Payments pursuant to Section 2(e), in the event the staff of the SEC (the “Staff”) or the SEC seeks to
characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of
securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such Registration
Statement to become effective and used for resales in a manner that does not constitute such an offering and that permits the
continuous resale at the market by the Investors participating therein (or as otherwise may be acceptable to each Investor) without
being named therein as an “underwriter,” then the Company shall reduce the number of shares to be included in such
Registration Statement by all Investors until such time as the Staff and the SEC shall so permit such Registration Statement to
become effective as aforesaid. In making such reduction, the Company shall reduce the number of shares to be included by all Investors
on a pro rata basis (based upon the number of Registrable Securities otherwise required to be included for each Investor) unless
the inclusion of shares by a particular Investor or a particular set of Investors are resulting in the Staff or the SEC’s
“by or on behalf of the Company” offering position, in which event the shares held by such Investor or set of Investors
shall be the only shares subject to reduction (and if by a set of Investors on a pro rata basis by such Investors or on such other
basis as would result in the exclusion of the least number of shares by all such Investors); provided, that, with respect to such
pro rata portion allocated to any Investor, such Investor may elect the allocation of such pro rata portion among the Registrable
Securities of such Investor. In addition, in the event that the Staff or the SEC requires any Investor seeking to sell securities
under a Registration Statement filed pursuant to this Agreement to be specifically identified as an “underwriter”
in order to permit such Registration Statement to become effective, and such Investor does not consent to being so named as an
underwriter in such Registration Statement, then, in each such case, the Company shall reduce the total number of Registrable
Securities to be registered on behalf of such Investor, until such time as the Staff or the SEC does not require such identification
or until such Investor accepts such identification and the manner thereof. Any reduction pursuant to this paragraph will first
reduce all Registrable Securities other than those issued pursuant to the Securities Purchase Agreement. In the event of any reduction
in Registrable Securities pursuant to this paragraph, an affected Investor shall have the right to require, upon delivery of a
written request to the Company signed by such Investor, the Company to file a registration statement within twenty (20) days of
such request (subject to any restrictions imposed by Rule 415 or required by the Staff or the SEC) for resale by such Investor
in a manner acceptable to such Investor, and the Company shall following such request cause to be and keep effective such registration
statement in the same manner as otherwise contemplated in this Agreement for registration statements hereunder, in each case until
such time as: (i) all Registrable Securities held by such Investor have been registered and sold pursuant to an effective Registration
Statement in a manner acceptable to such Investor or (ii) all Registrable Securities may be resold by such Investor without restriction
(including, without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff position with respect to
“affiliate” status) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or (iii) such Investor agrees to be named as an underwriter in any such Registration Statement in a manner acceptable
to such Investor as to all Registrable Securities held by such Investor and that have not theretofore been included in a Registration
Statement under this Agreement (it being understood that the special demand right under this sentence may be exercised by an Investor
multiple times and with respect to limited amounts of Registrable Securities in order to permit the resale thereof by such Investor
as contemplated above).

 

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(g)
Piggyback Registrations. Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement,
if there is not an effective Registration Statement covering all of the Registrable Securities or the prospectus contained therein
is not available for use and the Company shall determine to prepare and file with the SEC a registration statement or offering
statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities
(other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with
the Company’s stock option or other employee benefit plans), then the Company shall deliver to each Investor a written notice
of such determination and, if within fifteen (15) days after the date of the delivery of such notice, any such Investor shall
so request in writing, the Company shall include in such registration statement or offering statement all or any part of such
Registrable Securities such Investor requests to be registered; provided, however, the Company shall not be required to register
any Registrable Securities pursuant to this Section 2(g) that are eligible for resale pursuant to Rule 144 without restriction
(including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or that are the subject of a then-effective Registration Statement.

 

(h)
Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement
and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based
on the number of Registrable Securities held by each Investor at the time such Registration Statement covering such initial number
of Registrable Securities or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise
transfers any of such Investor’s Registrable Securities, each transferee or assignee (as the case may be) that becomes an
Investor shall be allocated a pro rata portion of the then-remaining number of Registrable Securities included in such Registration
Statement for such transferor or assignee (as the case may be). Any shares of Common Stock included in a Registration Statement
and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement
shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors
which are covered by such Registration Statement.

 

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(i)
No Inclusion of Other Securities. The Company shall in no event include any securities other than Registrable Securities
on any Registration Statement filed in accordance herewith without the prior written consent of the Required Holders. Until the
Applicable Date (as defined in the Securities Purchase Agreement), the Company shall not enter into any agreement providing any
registration rights to any of its security holders, except as otherwise permitted under the Securities Purchase Agreement.

 

3.
Related Obligations.

 

The
Company shall use its best efforts to effect the registration of the Registrable Securities in accordance with the intended method
of disposition thereof, and, pursuant thereto, the Company shall have the following obligations:

 

(a)
The Company shall promptly prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities
(but in no event later than the applicable Filing Deadline) and use its best efforts to cause such Registration Statement to become
effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline). Subject to Allowable
Grace Periods, the Company shall keep each Registration Statement effective (and the prospectus contained therein available for
use) pursuant to Rule 415 for resales by the Investors on a delayed or continuous basis at then-prevailing market prices (and
not fixed prices) at all times until the earlier of (i) the date as of which all of the Investors may sell all of the Registrable
Securities required to be covered by such Registration Statement (disregarding any reduction pursuant to Section 2(f)) without
restriction pursuant to Rule 144 (including, without limitation, volume restrictions) and without the need for current public
information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (ii) the date on which the Investors shall have sold
all of the Registrable Securities covered by such Registration Statement (the “Registration Period”). Notwithstanding
anything to the contrary contained in this Agreement, the Company shall ensure that, when filed and at all times while effective,
each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including,
without limitation, all amendments and supplements thereto) used in connection with such Registration Statement (1) shall not
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading
and (2) will disclose (whether directly or through incorporation by reference to other SEC filings to the extent permitted) all
material information regarding the Company and its securities. The Company shall submit to the SEC, within one (1) Business Day
after the later of the date that (i) the Company learns that no review of a particular Registration Statement will be made by
the Staff or that the Staff has no further comments on a particular Registration Statement (as the case may be) and (ii) the consent
of Legal Counsel is obtained pursuant to Section 3(c) (which consent shall be immediately sought), a request for acceleration
of effectiveness of such Registration Statement to a time and date not later than twenty-four (24) hours after the submission
of such request. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon
as practicable, but in no event later than fifteen (15) days after the receipt of comments by or notice from the SEC that an amendment
is required in order for a Registration Statement to be declared effective.

 

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(b)
Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including, without
limitation, post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with
each such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
be necessary to keep each such Registration Statement effective at all times during the Registration Period for such Registration
Statement, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company required to be covered by such Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth
in such Registration Statement; provided, however, by 8:30 a.m. (New York time) on the Business Day immediately following each
Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under the 1933 Act the final prospectus to
be used in connection with sales pursuant to the applicable Registration Statement (whether or not such a prospectus is technically
required by such rule). In the case of amendments and supplements to any Registration Statement which are required to be filed
pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report
on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934
Act”), the Company shall, if permitted under the applicable rules and regulations of the SEC, have incorporated such
report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC
on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such
Registration Statement.

 

(c)
The Company shall (A) permit Legal Counsel and legal counsel for each other Investor to review and comment upon (i) each Registration
Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to each Registration
Statement (including, without limitation, the prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable number of days prior
to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which
Legal Counsel or any legal counsel for any other Investor reasonably objects. The Company shall not submit a request for acceleration
of the effectiveness of a Registration Statement or any amendment or supplement thereto or to any prospectus contained therein
without the prior consent of Legal Counsel, which consent shall not be unreasonably withheld. The Company shall promptly furnish
to Legal Counsel and legal counsel for each other Investor, without charge, (i) copies of any correspondence from the SEC or the
Staff to the Company or its representatives relating to each Registration Statement, provided that such correspondence shall not
contain any material, non-public information regarding the Company or any of its Subsidiaries (as defined in the Securities Purchase
Agreement), (ii) after the same is prepared and filed with the SEC, one (1) copy of each Registration Statement and any amendment(s)
and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein
by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one
(1) copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall
reasonably cooperate with Legal Counsel and legal counsel for each other Investor in performing the Company’s obligations
pursuant to this Section 3.

 

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(d)
The Company shall promptly furnish to each Investor whose Registrable Securities are included in any Registration Statement, without
charge, (i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration Statement and any amendment(s)
and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein
by reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each Registration
Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto
(or such other number of copies as such Investor may reasonably request from time to time) and (iii) such other documents, including,
without limitation, copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such Investor.

 

(e)
The Company shall use its best efforts to (i) register and qualify, unless an exemption from registration and qualification applies,
the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue
sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments
(including, without limitation, post-effective amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however,
the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel, legal counsel for each other Investor and each Investor who holds Registrable Securities of the receipt by the
Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities
for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual
notice of the initiation or threatening of any proceeding for such purpose.

 

(f)
The Company shall notify Legal Counsel, legal counsel for each other Investor and each Investor in writing of the happening of
any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration
Statement, as then in effect, may include an untrue statement of a material fact or omission to state a material fact required
to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made,
not misleading (provided that in no event shall such notice contain any material, non-public information regarding the Company
or any of its Subsidiaries), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement
and such prospectus contained therein to correct such untrue statement or omission and deliver ten (10) copies of such supplement
or amendment to Legal Counsel, legal counsel for each other Investor and each Investor (or such other number of copies as Legal
Counsel, legal counsel for each other Investor or such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel, legal counsel for each other Investor and each Investor in writing (i) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, when a Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel, legal counsel for each other Investor and each Investor
by facsimile or e-mail on the same day of such effectiveness and by overnight mail), and when the Company receives written notice
from the SEC that a Registration Statement or any post-effective amendment will be reviewed by the SEC, (ii) of any request by
the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, (iii) of the Company’s
reasonable determination that a post-effective amendment to a Registration Statement would be appropriate; and (iv) of the receipt
of any request by the SEC or any other federal or state governmental authority for any additional information relating to the
Registration Statement or any amendment or supplement thereto or any related prospectus. The Company shall respond as promptly
as practicable to any comments received from the SEC with respect to each Registration Statement or any amendment thereto (it
being understood and agreed that the Company’s response to any such comments shall be delivered to the SEC no later than
fifteen (15) Business Days after the receipt thereof).

 

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(g)
The Company shall (i) use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of each
Registration Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the loss of
an exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension
is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and (ii) notify Legal Counsel,
legal counsel for each other Investor and each Investor who holds Registrable Securities of the issuance of such order and the
resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

(h)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, at the request of any Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of such Registration Statement and thereafter from time to time on such dates as an
Investor may reasonably request (i) a letter, dated such date, from the Company’s independent certified public accountants
in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public
offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed
to the Investors.

 

(i)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, upon the written request of such Investor, the Company shall make
available for inspection by (i) such Investor, (ii) legal counsel for such Investor and (iii) one (1) firm of accountants or other
agents retained by such Investor (collectively, the “Inspectors”), all pertinent financial and other records,
and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be
reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all information
which any Inspector may reasonably request; provided, however, each Inspector shall agree in writing to hold in strict confidence
and not to make any disclosure (except to such Investor) or use of any Record or other information which the Company’s board
of directors determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (1)
the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (2) the release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (3) the information in such Records has been made generally
available to the public other than by disclosure in violation of this Agreement or any other Transaction Document (as defined
in the Securities Purchase Agreement). Such Investor agrees that it shall, upon learning that disclosure of such Records is sought
in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and
allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for,
the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and such Investor,
if any) shall be deemed to limit any Investor’s ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.

 

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(j)
The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required
to be disclosed in such Registration Statement pursuant to the 1933 Act, (iii) the release of such information is ordered pursuant
to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information
has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction
Document. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought
in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor
and allow such Investor, at such Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

 

(k)
Without limiting any obligation of the Company under the Securities Purchase Agreement, the Company shall use its best efforts
either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each securities exchange
on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, (ii) secure designation and quotation of all of the Registrable
Securities covered by each Registration Statement on an Eligible Market (as defined in the Securities Purchase Agreement), or
(iii) if, despite the Company’s best efforts to satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in
satisfying the preceding clauses (i) or (ii), without limiting the generality of the foregoing, to use its best efforts to arrange
for at least two market makers to register with the Financial Industry Regulatory Authority (“FINRA”) as such
with respect to such Registrable Securities. In addition, the Company shall cooperate with each Investor and any broker or dealer
through which any such Investor proposes to sell its Registrable Securities in effecting a filing with FINRA pursuant to FINRA
Rule 5110 as requested by such Investor. The Company shall pay all fees and expenses in connection with satisfying its obligations
under this Section 3(k).

 

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(l)
The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts (as the
case may be) as the Investors may reasonably request from time to time and registered in such names as the Investors may request.

 

(m)
If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor and subject to
Section 3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor
and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings
of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement or prospectus contained
therein if reasonably requested by an Investor holding any Registrable Securities.

 

(n)
The Company shall use its best efforts to cause the Registrable Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such
Registrable Securities.

 

(o)
The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal
quarter next following the applicable Effective Date of each Registration Statement.

 

(p)
The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.

 

(q)
Within one (1) Business Day after a Registration Statement which covers Registrable Securities is declared effective by the SEC,
the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation
that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.

 

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(r)
Notwithstanding anything to the contrary herein (but subject to the last sentence of this Section 3(r)), at any time after the
Effective Date of a particular Registration Statement, the Company may delay the disclosure of material, non-public information
concerning the Company or any of its Subsidiaries the disclosure of which at the time is not, in the good faith opinion of the
board of directors of the Company, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise
required (a “Grace Period”), provided that the Company shall promptly notify the Investors in writing of the
(i) existence of material, non-public information giving rise to a Grace Period (provided that in each such notice the Company
shall not disclose the content of such material, non-public information to any of the Investors) and the date on which such Grace
Period will begin and (ii) date on which such Grace Period ends, provided further that (I) no Grace Period shall exceed ten (10)
consecutive days and during any three hundred sixty five (365) day period all such Grace Periods shall not exceed an aggregate
of thirty (30) days, (II) the first day of any Grace Period must be at least five (5) Trading Days after the last day of any prior
Grace Period and (III) no Grace Period may exist during the sixty (60) Trading Day period immediately following the Effective
Date of such Registration Statement (provided that such sixty (60) Trading Day period shall be extended by the number of Trading
Days during such period and any extension thereof contemplated by this proviso during which such Registration Statement is not
effective or the prospectus contained therein is not available for use) (each, an “Allowable Grace Period”).
For purposes of determining the length of a Grace Period above, such Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) above and shall end on and include the later of the date the Investors receive the
notice referred to in clause (ii) above and the date referred to in such notice. The provisions of Section 3(g) hereof shall not
be applicable during the period of any Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again be
bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary contained in this Section 3(r), the Company shall
cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms
of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which such Investor
has entered into a contract for sale, and delivered a copy of the prospectus included as part of the particular Registration Statement
to the extent applicable, prior to such Investor’s receipt of the notice of a Grace Period and for which the Investor has
not yet settled.

 

(s)
The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investors of its
Registrable Securities pursuant to each Registration Statement.

 

(t)
Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure
or filing with the SEC, the Principal Market or any Eligible Market (as defined in the Notes)and any Buyer being deemed an underwriter
by the SEC shall not relieve the Company of any obligations it has under this Agreement or any other Transaction Document (as
defined in the Securities Purchase Agreement); provided, however, that the foregoing shall not prohibit the Company from including
the disclosure found in the “Plan of Distribution” section attached hereto as Exhibit B in the Registration Statement.

 

(u)
Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Buyers in this Agreement or otherwise conflicts with the provisions hereof.

 

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4.
Obligations of the Investors.

 

(a)
At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such Investor with respect to such Registration Statement.
It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held
by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the Company may reasonably request.

 

(b)
Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

 

(c)
Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant
to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that
no supplement or amendment is required. Notwithstanding anything to the contrary in this Section 4(c), the Company shall cause
its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of
the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which such Investor has
entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event
of the kind described in Section 3(g) or the first sentence of Section 3(f) and for which such Investor has not yet settled.

 

5.
Expenses of Registration.

 

All
reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees,
printers and accounting fees, FINRA filing fees (if any) and fees and disbursements of counsel for the Company shall be paid by
the Company. The Company shall reimburse Legal Counsel for its fees and disbursements in connection with registration, filing
or qualification pursuant to Sections 2 and 3 of this Agreement which amount shall be limited to $10,000 for each such registration,
filing or qualification.

 

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6.
Indemnification.

 

(a)
To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and
each of its directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other
title) and each Person, if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the
directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such
controlling Persons (each, an “Indemnified Person”), against any losses, obligations, claims, damages, liabilities,
contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’
fees and costs of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken
from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether
pending or threatened, whether or not an Indemnified Person is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered
(“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained
in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the
SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation
by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule
or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv)
any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”).
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due
and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any
such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section
6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance
upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person
expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of any of the Registrable Securities by any of the
Investors pursuant to Section 9.

 

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(b)
In connection with any Registration Statement in which an Investor is participating, such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company,
each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified
Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified
Damages arise out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation
occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and, subject to Section 6(c) and the below provisos in this Section 6(b), such
Investor will reimburse an Indemnified Party any legal or other expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending any such Claim; provided, however, the indemnity agreement contained in this Section 6(b) and
the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld
or delayed, provided further that such Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the applicable sale of Registrable Securities pursuant
to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of any of the Registrable Securities by any of the Investors
pursuant to Section 9.

 

(c)
Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of the
commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Person or the Indemnified Party (as the case may be); provided, however, an Indemnified
Person or Indemnified Party (as the case may be) shall have the right to retain its own counsel with the fees and expenses of
such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses;
(ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory
to such Indemnified Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to any such
Claim (including, without limitation, any impleaded parties) include both such Indemnified Person or Indemnified Party (as the
case may be) and the indemnifying party, and such Indemnified Person or such Indemnified Party (as the case may be) shall have
been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified
Person or such Indemnified Party and the indemnifying party (in which case, if such Indemnified Person or such Indemnified Party
(as the case may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall
be at the expense of the indemnifying party, provided further that in the case of clause (iii) above the indemnifying party shall
not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnified Person
or Indemnified Party (as the case may be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate
with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party
and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person
(as the case may be) which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person (as the case may be) reasonably apprised at all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without
its prior written consent; provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent.
No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person (as the case may
be), consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person (as the case may be) of a
release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault
on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated
to all rights of the Indemnified Party or Indemnified Person (as the case may be) with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party (as the case may be) under this Section 6, except to the extent that the indemnifying
party is materially and adversely prejudiced in its ability to defend such action.

 

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(d)
The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages are incurred.

 

(e)
The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of
the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.

 

7.
Contribution.

 

To
the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however: (i) no contribution shall be made under circumstances where the maker would not have been
liable for indemnification under the fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the
sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities
shall be limited in amount to the amount of net proceeds received by such seller from the applicable sale of such Registrable
Securities pursuant to such Registration Statement. Notwithstanding the provisions of this Section 7, no Investor shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Investor
from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that such Investor
has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or alleged
untrue statement or omission or alleged omission.

 

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8.
Reports Under the 1934 Act.

 

With
a view to making available to the Investors the benefits of Rule 144, the Company agrees to:

 

(a)
make and keep public information available, as those terms are understood and defined in Rule 144;

 

(b)
file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements (it being understood and agreed that nothing herein shall limit any
obligations of the Company under the Securities Purchase Agreement) and the filing of such reports and other documents is required
for the applicable provisions of Rule 144; and

 

(c)
furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement
by the Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act
and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents
so filed by the Company with the SEC if such reports are not publicly available via EDGAR, and (iii) such other information as
may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

 

9.
Assignment of Registration Rights.

 

All
or any portion of the rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee
(as the case may be) of all or any portion of such Investor’s Registrable Securities, Notes or Warrants if: (i) such Investor
agrees in writing with such transferee or assignee (as the case may be) to assign all or any portion of such rights, and a copy
of such agreement is furnished to the Company within a reasonable time after such transfer or assignment (as the case may be);
(ii) the Company is, within a reasonable time after such transfer or assignment (as the case may be), furnished with written notice
of (a) the name and address of such transferee or assignee (as the case may be), and (b) the securities with respect to which
such registration rights are being transferred or assigned (as the case may be); (iii) immediately following such transfer or
assignment (as the case may be) the further disposition of such securities by such transferee or assignee (as the case may be)
is restricted under the 1933 Act or applicable state securities laws if so required; (iv) at or before the time the Company receives
the written notice contemplated by clause (ii) of this sentence such transferee or assignee (as the case may be) agrees in writing
with the Company to be bound by all of the provisions contained herein; (v) such transfer or assignment (as the case may be) shall
have been made in accordance with the applicable requirements of the Securities Purchase Agreement, the Notes and the Warrants
(as the case may be); and (vi) such transfer or assignment (as the case may be) shall have been conducted in accordance with all
applicable federal and state securities laws.

 

    	19

    	 

    

 

10.
Amendment of Registration Rights.

 

Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Required Holders; provided that any such
amendment or waiver that complies with the foregoing, but that disproportionately, materially and adversely affects the rights
and obligations of any Investor relative to the comparable rights and obligations of the other Investors shall require the prior
written consent of such adversely affected Investor. Any amendment or waiver effected in accordance with this Section 10 shall
be binding upon each Investor and the Company, provided that no such amendment shall be effective to the extent that it (1) applies
to less than all of the holders of Registrable Securities or (2) imposes any obligation or liability on any Investor without such
Investor’s prior written consent (which may be granted or withheld in such Investor’s sole discretion). No waiver
shall be effective unless it is in writing and signed by an authorized representative of the waiving party. No consideration shall
be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the
same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.

 

11.
Miscellaneous.

 

(a)
Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns,
or is deemed to own, of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections
from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from such record owner of such Registrable Securities.

 

(b)
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending
party and the sending party does not receive an automatically generated message from the recipient’s email server that such
e-mail could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with a nationally recognized overnight
delivery service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses,
facsimile numbers and email addresses for such communications shall be:

 

    	20

    	 

    

 

If
to the Company:

 

Vinco
Ventures, Inc.1 West Broad Street, Suite 1004

Bethlehem,
Pennsylvania

Telephone:
(866) 900-0992

Facsimile:
(908) 235-4373

Attention:
Chief Executive Officer

E-Mail:
cferguson@edisonnation.com

 

With
a copy (for informational purposes only) to:

 

Lucosky
Brookman LLP

101
Wood Avenue South, 5th Floor

Woodbridge,
NJ 08830

Telephone:
(732) 395-4400

Facsimile:
(732) 395-4401

Attention:
Joseph Lucosky, Esq.

E-Mail:
jlucosky@lucbro.com

 

If
to the Transfer Agent:

 

Nevada
Agency and Transfer Company

50
W. Liberty Street, Suite 880

Reno,
NV 89501

Telephone:
(775) 322-0626

Facsimile:
(775) 322-5623

Attention:
Tiffany Baxter

E-Mail:
stocktransfer@natco.com

 

If
to Legal Counsel:

 

Kelley
Drye & Warren LLP

101
Park Avenue

New
York, NY 10178

Telephone:
(212) 808-7540

Facsimile:
(212) 808-7897

Attention:
Michael A. Adelstein, Esq.

Email:
madelstein@kelleydrye.com

 

If
to a Buyer, to its address, facsimile number and/or email address set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other
address, facsimile number, and/or email address and/or to the attention of such other Person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye
& Warren LLP shall only be provided notices sent to the lead investor. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile
machine or email containing the time, date, recipient facsimile number or email address and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt
by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

    	21

    	 

    

 

(c)
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof. The Company and each Investor acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions
to prevent or cure breaches of the provisions of this Agreement by any other party hereto and to enforce specifically the terms
and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required),
this being in addition to any other remedy to which any party may be entitled by law or equity.

 

(d)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than
the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(e)
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

    	22

    	 

    

 

(f)
This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced
herein and therein constitute the entire agreement among the parties hereto and thereto solely with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and
the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto solely
with respect to the subject matter hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction
Document shall (or shall be deemed to) (i) have any effect on any agreements any Investor has entered into with the Company or
any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Investor in the Company, (ii)
waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries or any rights of or benefits
to any Investor or any other Person in any agreement entered into prior to the date hereof between or among the Company and/or
any of its Subsidiaries and any Investor and all such agreements shall continue in full force and effect or (iii) limit any obligations
of the Company under any of the other Transaction Documents.

 

(g)
Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision hereof be
enforced by, any Person, other than the parties hereto, their respective permitted successors and assigns and the Persons referred
to in Sections 6 and 7 hereof.

 

(h)
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter,
singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

(i)
This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original, but all of which
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and
delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an email which contains
a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page
were an original thereof.

 

    	23

    	 

    

 

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

 

(k)
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and
no rules of strict construction will be applied against any party. Notwithstanding anything to the contrary set forth in Section
10, terms used in this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms
on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by each Investor.

 

(l)
All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders, determined as if all of the outstanding Notes then held by the Investors
have been converted for Registrable Securities without regard to any limitations on redemption, amortization and/or conversion
of the Notes and the outstanding Warrants then held by Investors have been exercised for Registrable Securities without regard
to any limitations on exercise of the Warrants.

 

(m)
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(n)
The obligations of each Investor under this Agreement and the other Transaction Documents are several and not joint with the obligations
of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor
under this Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges
that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity,
or create a presumption that the Investors are in any way acting in concert or as a group or entity with respect to such obligations
or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Investors
are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or
the transactions contemplated by this Agreement or any of the other the Transaction Documents. Each Investor shall be entitled
to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in
any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained herein
was solely in the control of the Company, not the action or decision of any Investor, and was done solely for the convenience
of the Company and not because it was required or requested to do so by any Investor. It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction Document is between the Company and an Investor, solely,
and not between the Company and the Investors collectively and not between and among Investors.

 

[signature
page follows]

 

    	24

    	 

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	COMPANY:
	 	 
	 	VINCO
    VENTURES INC.
	 	 	         
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	BUYERS:
	 	 	 
	 	HUDSON
    BAY MASTER FUND LTD
	 	 	      
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

EXHIBIT
A

 

FORM
OF NOTICE OF EFFECTIVENESS

OF
REGISTRATION STATEMENT

 

	 	 
	 	 
	 	 
	Attention:
    _____________	 

 

	 	Re:	Vinco
    Ventures Inc.

 

Ladies
and Gentlemen:

 

[We
are][I am] counsel to Vinco Ventures Inc., a Nevada corporation (the “Company”), and have represented the Company
in connection with that certain Securities Purchase Agreement (the “Securities Purchase Agreement”) entered
into by and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to which
the Company issued to the Holders senior secured convertible notes (the “Notes”) convertible into the Company’s
shares of common stock, $0.001 par value per share (the “Common Stock”), and warrants exercisable for shares
of Common Stock (the “Warrants”). Pursuant to the Securities Purchase Agreement, the Company also has entered
into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant to which
the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement),
including the shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants, under the Securities
Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on ____________ ___, 20__, the Company filed a Registration Statement on Form [S-1][S-3] (File No. 333-_____________)
(the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating
to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.

 

In
connection with the foregoing, [we][I] advise you that [a member of the SEC’s staff has advised [us][me] by telephone that
[the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS]
on [ENTER DATE OF EFFECTIVENESS]] [an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] has been posted on the web site of the SEC at www.sec.gov] and [we][I] have no
knowledge, after a review of information posted on the website of the SEC at http://www.sec.gov/litigation/stoporders.shtml, that
any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened
by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

 

    	 

    	 

    

 

This
letter shall serve as our standing opinion to you that the shares of Common Stock underlying the Notes and Warrants are freely
transferable by the Holders pursuant to the Registration Statement. You need not require further letters from us to effect any
future legend-free issuance or reissuance of such shares of Common Stock to the Holders as contemplated by the Company’s
Irrevocable Transfer Agent Instructions dated _________ __, 20__.

 

	 	Very
    truly yours,
	 	 	 
	 	[ISSUER’S
    COUNSEL]
	 	 	         
	 	By:	

 

	CC:	Hudson
    Bay Master Fund Ltd	 

 

    	 

    	 

    

 

EXHIBIT
B

 

SELLING
STOCKHOLDERS

 

The
shares of common stock being offered by the selling stockholders are those issuable to the selling stockholders upon conversion
of the notes and exercise of the warrants. For additional information regarding the issuance of the notes and the warrants, see
“Private Placement of Notes and Warrants” above. We are registering the shares of common stock in order to permit
the selling stockholders to offer the shares for resale from time to time. Except for the ownership of the notes and the warrants
issued pursuant to the Securities Purchase Agreement, the selling stockholders have not had any material relationship with us
within the past three years.

 

The
table below lists the selling stockholders and other information regarding the beneficial ownership (as determined under Section
13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock
held by each of the selling stockholders. The second column lists the number of shares of common stock beneficially owned by the
selling stockholders, based on their respective ownership of shares of common stock, notes and warrants, as of ________, 202_,
assuming conversion of the notes and exercise of the warrants held by each such selling stockholder on that date but taking account
of any limitations on conversion and exercise set forth therein.

 

The
third column lists the shares of common stock being offered by this prospectus by the selling stockholders and does not take in
account any limitations on (i) conversion of the notes set forth therein or (ii) exercise of the warrants set forth therein.

 

In
accordance with the terms of a registration rights agreement with the holders of the notes and the warrants, this prospectus generally
covers the resale of the sum of (i) the maximum number of shares of common stock issued or issuable pursuant to the Notes, including
payment of interest on the notes through the maturity date of the notes, and (ii) the maximum number of shares of common stock
issued or issuable upon exercise of the warrants, in each case, determined as if the outstanding notes (including interest on
the notes through the maturity date of the notes) and warrants were converted or exercised (as the case may be) in full (without
regard to any limitations on conversion or exercise contained therein solely for the purpose of such calculation) at a conversion
price or exercise price (as the case may be) calculated as of the trading day immediately preceding the date this registration
statement was initially filed with the SEC. Because the conversion price of the notes and the exercise price of the warrants may
be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by
this prospectus. The fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to this
prospectus.

 

Under
the terms of the notes and the warrants, a selling stockholder may not convert the notes or exercise the warrants to the extent
(but only to the extent) such selling stockholder or any of its affiliates would beneficially own a number of shares of our common
stock which would exceed 4.99% of the outstanding shares of the Company. The number of shares in the second column reflects these
limitations. The selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

 

	Name of Selling Stockholder	 	Number of Shares of Common Stock Owned Prior to Offering	 	 	Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus	 	 	Number of Shares of Common Stock of Owned After Offering	 
	Hudson Bay Master Fund Ltd (1)	 	 		 	 	 	       	 	 	 	     	 
	 	 	 	          	 	 	 		 	 	 		 
	 	 	 		 	 	 		 	 	 		 
	 	 	 		 	 	 		 	 	 		 
	 	 	 		 	 	 		 	 	 		 
	 	 	 		 	 	 		 	 	 		 
	 	 	 		 	 	 	 	 	 	 	 	 
	 	 	 		 	 	 		 	 	 		 
	 	 	 	 	 	 	 	 	 	 	 		 

 

	(1)	[              ]

 

    	 

    	 

    

 

PLAN
OF DISTRIBUTION

 

We
are registering the shares of common stock issuable upon conversion of the notes and exercise of the warrants to permit the resale
of these shares of common stock by the holders of the notes and warrants from time to time after the date of this prospectus.
We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock, although we will
receive the exercise price of any Warrants not exercised by the selling stockholders on a cashless exercise basis. We will bear
all fees and expenses incident to our obligation to register the shares of common stock.

 

The
selling stockholders may sell all or a portion of the shares of common stock held by them and offered hereby from time to time
directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters
or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions.
The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of
the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions,
which may involve crosses or block transactions, pursuant to one or more of the following methods:

 

	 	●	on
    any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
	 	 	 
	 	●	in
    the over-the-counter market;
	 	 	 
	 	●	in
    transactions otherwise than on these exchanges or systems or in the over-the-counter market;
	 	 	 
	 	●	through
    the writing or settlement of options, whether such options are listed on an options exchange or otherwise;
	 	 	 
	 	●	ordinary
    brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	 	 	 
	 	●	block
    trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block
    as principal to facilitate the transaction;
	 	 	 
	 	●	purchases
    by a broker-dealer as principal and resale by the broker-dealer for its account;
	 	 	 
	 	●	an
    exchange distribution in accordance with the rules of the applicable exchange;
	 	 	 
	 	●	privately
    negotiated transactions;
	 	 	 
	 	●	short
    sales made after the date the Registration Statement is declared effective by the SEC;

 

    	 

    	 

    

 

	 	●	broker-dealers
    may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share;
	 	 	 
	 	●	a
    combination of any such methods of sale; and
	 	 	 
	 	●	any
    other method permitted pursuant to applicable law.

 

The
selling stockholders may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended,
if available, rather than under this prospectus. In addition, the selling stockholders may transfer the shares of common stock
by other means not described in this prospectus. If the selling stockholders effect such transactions by selling shares of common
stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions
in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares
of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions
as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved).
In connection with sales of the shares of common stock or otherwise, the selling stockholders may enter into hedging transactions
with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions
they assume. The selling stockholders may also sell shares of common stock short and deliver shares of common stock covered by
this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders
may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.

 

The
selling stockholders may pledge or grant a security interest in some or all of the notes, warrants or shares of common stock owned
by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell
the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer
and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this prospectus.

 

To
the extent required by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer
participating in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning
of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed
to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common
stock is made, a prospectus supplement, if required, will be distributed, which will set forth the aggregate amount of shares
of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any
discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions
or concessions allowed or re-allowed or paid to broker-dealers.

 

    	 

    	 

    

 

Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed
brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered
or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

 

There
can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the
registration statement, of which this prospectus forms a part.

 

The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable,
Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the
selling stockholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability
of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to
the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of
any person or entity to engage in market-making activities with respect to the shares of common stock.

 

We
will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated
to be $[ ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance
with state securities or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts
and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities under
the Securities Act in accordance with the registration rights agreements or the selling stockholders will be entitled to contribution.
We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act that
may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in
accordance with the related registration rights agreements or we may be entitled to contribution.

 

Once
sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable
in the hands of persons other than our affiliates.Exhibit 10.1

 

STANDBY EQUITY DISTRIBUTION AGREEMENT

 

THIS STANDBY EQUITY DISTRIBUTION AGREEMENT dated as of January 25, 2021 (this “Agreement”) is made by and between YA II PN, LTD., a Cayman Islands exempt limited partnership (the “Investor”), and COOTEK (CAYMAN) INC., a company incorporated under the laws of the Cayman Islands, with principal executive offices located at 9-11 Floors, No.16, Lane 399, Xinlong Road, Minhang District, Shanghai 201101, Peoples Republic of China (the “Company”).

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to $20,000,000 of the Company’s American Depositary Shares (“ADSs”) each ADS representing 50 Class A ordinary shares of the Company (the “Ordinary Shares”); and

 

WHEREAS, the ADSs are listed for trading on the New York Stock Exchange under the symbol “CTK;” and

 

WHEREAS, the offer and sale of the ADSs representing Ordinary Shares hereunder shall be registered on the Company’s registration statement on Form F-3 (File No. 333-251355) under Section 5 of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”).

 

NOW, THEREFORE, the parties hereto agree as follows:

 

Article I. Certain Definitions

 

Section 1.01                             “Additional Amount” shall have the meaning set forth in Section 2.01(d)(ii).

 

Section 1.02                             “Adjusted Advance Amount” shall have the meaning set forth in Section 2.01(d)(i).

 

Section 1.03                             “Advance Date” shall mean the 1st Trading Day after expiration of the applicable Pricing Period for each Advance.

 

Section 1.04                             “Advance Notice” shall mean a written notice in the form of Exhibit A attached hereto to the Investor executed by an officer of the Company and setting forth the Advance amount that the Company requests from the Investor.

 

Section 1.05                             “Advance Notice Date” shall mean each date the Company delivers (in accordance with Section 2.01(b) of this Agreement) to the Investor an Advance Notice requiring the Investor to advance funds to the Company, subject to the terms of this Agreement.

 

Section 1.06                             “Advances” shall mean any issuance and sale from the Company to the Investor pursuant to Article II hereof.

 

Section 1.07                             “Agreement” shall have the meaning set forth in the preamble of this Agreement.

 

 

Section 1.08                             “Affiliate” shall have the meaning set forth in Section 3.07.

 

Section 1.09                             “Applicable Laws” shall mean all applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws.

 

Section 1.10                             “Base Prospectus” shall mean the Company’s prospectus accompanying the Registration Statement.

 

Section 1.11                             “Closing” shall have the meaning set forth in Section 2.02

 

Section 1.12                             “Commitment Amount” shall mean the aggregate amount of up to $20,000,000.

 

Section 1.13                             “Commitment Period” shall mean the period commencing on the date hereof and expiring upon the date of termination of this Agreement in accordance with Section 11.02.

 

Section 1.14                             “Company Indemnitees” shall have the meaning set forth in Section 5.02.

 

Section 1.15                             “Condition Satisfaction Date” shall have the meaning set forth in Section 7.01.

 

Section 1.16                             “Consolidation Event” shall have the meaning set forth in Section 6.08.

 

Section 1.17                             “Daily Value Traded” in respect of a particular day means the product obtained by multiplying the daily trading volume of the ADSs for that day on the Principal Market by the VWAP for such day.

 

Section 1.18                             “Environmental Laws” shall have the meaning set forth in Section 4.08.

 

Section 1.19                             “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Section 1.20                             “Exchange Cap” shall have the meaning set forth in Section 2.01(e).

 

Section 1.21                             “Excluded Day” shall have the meaning set forth in Section 2.01(d).

 

Section 1.22                             “Indemnified Liabilities” shall have the meaning set forth in Section 5.01.

 

Section 1.23                             “Initial Registration Statement” shall have the meaning set forth in 6.01.

 

Section 1.24                             “Investor Indemnitees” shall have the meaning set forth in Section 5.01.

 

Section 1.25                             “Market Price” shall mean the lowest daily VWAP of the ADSs during the relevant Pricing Period, other than the daily VWAP on any Excluded Days.

 

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Section 1.26                             “Material Adverse Effect” shall mean any condition, circumstance, or situation that may result in, or would reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its Subsidiary, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement.

 

Section 1.27                             “Maximum Advance Amount” in respect of each Advance Notice means 100% of the average Daily Value Traded of the ADSs on the Principal Market during the ten Trading Days immediately prior to the date of each Advance Notice, or such other amount as may be agreed by the parties.

 

Section 1.28                             “Minimum Acceptable Price” or “MAP” shall mean the minimum price notified by the Company to the Investor in each Advance Notice, if applicable.

 

Section 1.29                             “OFAC” shall mean the U.S. Department of Treasury’s Office of Office of Foreign Asset Control.

 

Section 1.30                             “Ordinary Shares” shall have meaning set forth in the Recitals.

 

Section 1.31                             “Ownership Limitation” shall have the meaning set forth in Section 2.01(c)(i).

 

Section 1.32                             “Person” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

Section 1.33                             “Plan of Distribution” shall mean the section of a Registration Statement disclosing the plan of distribution of the Shares.

 

Section 1.34                             “Pricing Period” shall mean the 5 consecutive Trading Days commencing on the Trading Day immediately following the Advance Notice Date.

 

Section 1.35                             “Principal Market” shall mean the New York Stock Exchange.

 

Section 1.36                             “Prospectus” shall mean the Base Prospectus, as supplemented by any Prospectus Supplement.

 

Section 1.37                             “Prospectus Supplement” shall mean any prospectus supplement to the Base Prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act, including, without limitation, the Prospectus Supplement to be filed in accordance with Section 6.01 hereof.

 

Section 1.38                             “Purchase Price” shall mean the price per ADS obtained by multiplying the Market Price by 90%.

 

Section 1.39                             “Registration Limitation” shall have the meaning set forth in Section 2.01(c)(ii).

 

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Section 1.40                             “Registration Period” shall mean the Initial Registration Statement or another registration statement on a form promulgated by the SEC for which the Company then qualifies for the registration of the offer and sale of the Shares to be offered and sold by the Company to the Investor and the resale of such Shares by the Investor, as the same may be amended and supplemented from time to time and including any information deemed to be a part thereof pursuant to Rule 430B under the Securities Act and any successor registration statement filed by the Company with the SEC under the Securities Act on a form promulgated by the SEC for which the Company then qualifies and which form shall be available for the registration of the transactions contemplated hereunder.

 

Section 1.41          “Registration Statement” shall have the meaning set forth in Section 6.01.

 

Section 1.42                             “Regulation D” shall mean Regulation D promulgated under the Securities Act.

 

Section 1.43                             “Sanctions” means any sanctions administered or enforced by OFAC, the U.S. State Department, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority.

 

Section 1.44                             “Sanctions Programs” means any OFAC economic sanction program (including, without limitation, programs related to Crimea, Cuba, Iran, North Korea, Sudan and Syria).

 

Section 1.45                             “SEC” shall mean the U.S. Securities and Exchange Commission.

 

Section 1.46                             “SEC Documents” shall have the meaning set forth in Section 4.04.

 

Section 1.47                             “Securities Act” shall have the meaning set forth in the recitals of this Agreement.

 

Section 1.48                             “Settlement Document” shall have the meaning set forth in Section 2.02(a).

 

Section 1.49                             “Shares” shall mean the Ordinary Shares to be issued from time to time hereunder pursuant to Advances.

 

Section 1.50                             “Trading Day” shall mean any day during which the Principal Market shall be open for business.

 

Section 1.51                             “VWAP” means, for any Trading Day, the daily volume weighted average price of the ADSs for such Trading Day on the Principal Market as reported by Bloomberg L.P. during regular trading hours.

 

Article II. Advances

 

Section 2.01                             Advances; Mechanics. Subject to the terms and conditions of this Agreement (including, without limitation, the provisions of Article VII hereof), the Company, at its sole and exclusive option, may sell to the Investor, and the Investor shall purchase from the Company, ADSs representing Ordinary Shares on the following terms:

 

(a)              Advance Notice.  At any time during the Commitment Period the Company may require the Investor to purchase ADSs representing Ordinary Shares by delivering an Advance Notice to the Investor, subject to the conditions set forth in Section 7.01, and in accordance with the following provisions;

 

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(i)                                    The Company shall, in its sole discretion, select the Advance amount it desires to request in each Advance Notice and the time it desires to deliver each Advance Notice, which amount shall not exceed the Maximum Advance Amount, provided however, the Company acknowledges and agrees that the total Advance amount that the Company will receive in connection with each Advance Notice may be less than the Advance amount requested in the Advance Notice due to reductions to the Advance amount in accordance with Section 2.01(c)-2.01(e).

 

(ii)                                 There shall be no mandatory minimum Advances and no non-usages fee for not utilizing the Commitment Amount or any part thereof.

 

(b)              Date of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with the instructions set forth on the bottom of Exhibit A. An Advance Notice shall be deemed delivered on (i) the day it is received by the Investor if such notice is received by email prior to 6:00 p.m. Eastern Time in accordance with the instructions set forth on the bottom of Exhibit A, or (ii) the immediately succeeding day if it is received by email after 6:00 p.m. Eastern Time, in each case in accordance with the instructions set forth on the bottom of Exhibit A.

 

(c)               Advance Limitations. Regardless of the Advance amount requested by the Company in the Advance Notice, the final amount of the Advance shall be reduced in accordance with each of the following limitations:

 

(i)                                    Ownership Limitation; Commitment Amount. In no event shall the number of Ordinary Shares (whether or not in the form of ADSs) issuable to the Investor pursuant to an Advance cause the aggregate number of Ordinary Shares beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act) by the Investor and its affiliates to exceed 4.99% of the then outstanding share capital of the Company (the “Ownership Limitation”). In connection with each Advance Notice delivered by the Company, any portion of an Advance that would (i) cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate amount of Advances to exceed the Commitment Amount shall automatically be withdrawn with no further action required by the Company, and such Advance Notice shall be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such withdrawn portion.

 

(ii)                                 Registration Limitation. In no event shall an Advance exceed the amount registered under the Registration Statement then in effect (the “Registration Limitation”).  In connection with each Advance Notice, any portion of an Advance that would exceed the Registration Limitation shall automatically be withdrawn with no further action required by the Company and such Advance Notice shall be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such withdrawn portion in respect of each Advance Notice.

 

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(d)              Minimum Acceptable Price.

 

(i)                                    With respect to each Advance Notice, the Company may notify the Investor of the MAP with respect to such Advance by indicating a MAP on such Advance Notice. If no MAP is specified in an Advance Notice, then no MAP shall be in effect in connection with such Advance. With respect to each Advance Notice each Trading Day during a Pricing Period for which (A) the VWAP of the Ordinary Shares (represented by ADSs) is below the Minimum Acceptable Price in effect with respect to such Advance Notice, or (B) there is no VWAP (each such day, an “Excluded Day”), shall result in an automatic reduction to the amount of the Advance set forth in such Advance Notice by 20% (the resulting amount of each Advance being the “Adjusted Advance Amount”), and each Excluded Day shall be excluded from the Pricing Period for purposes of determining the Market Price.

 

(ii)                                 The total amount of each Advance (after reductions have been made to arrive at the Adjusted Advance Amount) shall be increased at the option of the Investor by an amount (the “Additional Amount”) equal to the product of (A) the number of Shares sold by the Investor on such Excluded Day, if any, and (B) a price per share equal to the MAP in effect with respect to such Advance Notice (without any further discount), provided that this increase shall not cause the total Advance amount to exceed the amount set forth in the original Advance Notice or any limitations set forth in Section 2.01(c).

 

(e)               The Company shall not affect any sales under this Agreement and the Investor shall not have the obligation to purchase Ordinary Shares under this Agreement to the extent (but only to the extent) that after giving effect to such purchase and sale the aggregate number of Ordinary Shares issued under this Agreement, together with any Ordinary Shares issued in connection with any related transactions with the Investor that may be considered part of the same series of transactions, would exceed 606,745,027 (which is 19.99% of the Company’s outstanding share capital as of the date of this Agreement and shall be referred to as the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the NYSE for issuances of shares in excess of such amount or (B) invokes the home country exemption, and obtains a written opinion from outside counsel to the Company, to the extent required by the NYSE, that it may follow its home country practice, and therefore, such approval is not required. In addition, without the prior consent of the Investor, the Company shall not request an Advance hereunder at any time when total number of Ordinary Shares that would be issuable to the Investor assuming the full conversion by the Investor at the conversion price in effect at such time (without taking into account any ownership limitations) would exceed 50% of the shares remaining under the Exchange Cap, unless the Exchange Cap no longer applies.

 

(f)                Notwithstanding any other provision in this Agreement, the Company and the Investor acknowledge and agree that upon the Investor’s receipt of a valid Advance Notice the parties shall be deemed to have entered into an unconditional contract binding on both parties for the purchase and sale of Shares pursuant to such Advance Notice in accordance with the terms of this Agreement and subject to Section 3.08, the Investor may sell ADSs representing Ordinary Shares during the Pricing Period.

 

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Section 2.02                             Closings. The closing of each Advance and each sale and purchase of the Ordinary Shares (whether or not in the form of ADSs) under each Advance (each, a “Closing”) shall take place as soon as practicable on or after each Advance Date in accordance with the procedures set forth below. In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth below:

 

(a)              On each Advance Date, the Investor shall deliver to the Company a written document, in the form attached hereto as Exhibit B (each a “Settlement Document”), setting forth the final amount of the Advance (taking into account any adjustments pursuant to Section 2.01), the Market Price, the Purchase Price, the number of ADSs representing Ordinary Shares to be purchased by the Investor, the number of ADSs to be issued representing the Ordinary Shares, and a report by Bloomberg, L.P. indicating the VWAP for each of the Trading Days during the Pricing Period (or, if not reported on Bloomberg, L.P., another reporting service reasonably agreed to by the parties), in each case in accordance with the terms and conditions of this Agreement. The number of ADSs to be purchased by the Investor at the Closing for such Advance shall equal the sum of (i) the Adjusted Advance Amount divided by the Purchase Price, rounded to the nearest whole number of ADSs, plus (ii) the aggregate number of ADSs sold by the Investor on Excluded Days during such Pricing Period (as contemplated by Section 2.01(d)(ii)), and the underlying Ordinary Shares to be issued shall be determined by multiplying the resulting number of ADSs by the then applicable Ordinary Share-to-ADS conversion ratio, which is set at one (1) ADS representing fifty (50) Ordinary Shares as of the date hereof..

 

(b)              Promptly after receipt of the Settlement Document with respect to each Advance (and, in any event, not later than one Trading Day after such receipt), the Company will deposit such number of Ordinary Shares to be purchased by the Investor (as set forth in the Settlement Document) with the Deutsche Bank Trust Company Americas (the “Depositary”) and instruct the Depositary to credit such aggregate number of ADSs to which the Investor shall be entitled to the Investor’s or its designee’s balance account with DTC through its Deposit Withdrawal and Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto, and transmit notification to the Investor that such share transfer has been requested.  Promptly upon receipt of such notification, the Investor shall pay to the Company of the aggregate amount of the Advance (as set forth in the Closing Statement) in cash in immediately available funds to an account designated by the Company in writing and transmit notification to the Company that such funds transfer has been requested. No fractional shares shall be issued, and any fractional amounts shall be rounded to the next higher whole number of shares. To facilitate the transfer of the Ordinary Shares or the ADSs by the Investor, the Ordinary Shares or the ADSs will not bear any restrictive legends so long as there is an effective Registration Statement covering the offer and sale of such Ordinary Shares in the form of ADSs to the Investor and any resale of such Ordinary Shares in the form of ADSs.  The issuance and delivery of ADSs shall at all times be subject to the terms of the Deposit Agreement, dated September 27, 2018, between the Company, the Depositary and the owners and beneficial owners of ADSs issued thereunder, and to applicable law.

 

(c)               On or prior to the Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

 

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(d)              Notwithstanding anything to the contrary in this Agreement, if on any day during a Pricing Period the Company notifies Investor that a Material Outside Event has occurred, the parties agree that the pending Advance shall end and the final number of ADSs to be purchased by the Investor at the Closing for such Advance shall be equal to the number of ADSs sold by the Investor during the applicable Pricing Period prior to the notification from the Company of a Material Outside Event.

 

Section 2.03                             Hardship. In the event that the Company fails to perform its obligations as mandated in Section 2.02, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to the Securities Act and other rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement.

 

Section 2.04                             In the event that the Investor fails to perform its obligations as mandated in Section 2.02, the Investor agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Company is entitled at law or in equity, including, without limitation, specific performance, it will hold the Company harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Investor and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Company shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to the Securities Act and other rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement.

 

Article III. Representations and Warranties of Investor

 

Investor hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and as of each Advance Notice Date and each Advance Date:

 

Section 3.01                             Organization and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of the Cayman Islands and has all requisite power and authority to execute, deliver and perform this Agreement, including all transactions contemplated hereby. The decision to invest and the execution and delivery of this Agreement by the Investor, the performance by the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been duly authorized and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments on behalf of the Investor or its shareholders. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.

 

Section 3.02                             Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that its investment in the Company involves a high degree of risk, and that the Investor may lose all or a part of its investment.

 

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Section 3.03                             No Legal, Investment or Tax Advice from the Company. The Investor acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of the Company’s representatives or agents for legal, tax, investment or other advice with respect to the Investor’s acquisition of Ordinary Shares hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction and that the Investor may lose all or a part of its investment.

 

Section 3.04                             Investment Purpose. The Ordinary Shares purchased by the Investor hereunder are being or will be purchased for its own account, for investment purposes, and without any view or intention to distribute such shares in violation of the Securities Act or any other applicable securities laws. The Investor agrees not to assign or in any way transfer the Investor’s rights to the securities or any interest therein or its obligations under this Agreement and acknowledges that the Company will not recognize any purported assignment or transfer except in accordance with applicable Federal and state securities laws. No other Person has or will have a direct or indirect beneficial interest in the securities. The Investor agrees not to sell, hypothecate or otherwise transfer the Investor’s Ordinary Shares unless such shares are registered under Federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such registration is available.

 

Section 3.05                             Accredited Investor. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D.

 

Section 3.06                             Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information it deemed material to making an informed investment decision. The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and has received answers to such questions. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the Company’s representations and warranties contained in this Agreement. The Investor understands that its investment involves a high degree of risk.  The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to the transactions contemplated hereby.

 

Section 3.07                             Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any “affiliate” of the Company (as that term is defined in Rule 405 promulgated under the Securities Act).

 

Section 3.08                             Trading Activities. The Investor’s trading activities with respect to the Ordinary Shares and ADSs shall be in compliance with all applicable federal and state securities laws, rules and regulations and the rules and regulations of the Principal Market. Neither the Investor nor its affiliates has any open short position in the Ordinary Shares or the ADSs, nor has the Investor entered into any hedging transaction that establishes a net short position with respect to the Ordinary Shares or ADSs, and the Investor agrees that it shall not, and that it will cause its affiliates not to, engage in any short sales or hedging transactions with respect to the Ordinary Shares or ADSs; provided that the Company acknowledges and agrees that upon receipt of an Advance Notice the Investor has the right to sell (a) the ADSs representing the Shares to be issued to the Investor pursuant to the Advance Notice prior to receiving such securities, or (b) other ADSs that it holds as a long position.

 

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Section 3.09                             General Solicitation.  Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Ordinary Shares offered hereby.

 

Article IV. Representations and Warranties of the Company

 

Except as set forth in the SEC Documents, the Company represents and warrants to the Investor that, as of the date hereof, each Advance Date (other than representations and warranties which address matters only as of a certain date, which shall be true and correct as written as of such certain date), that:

 

Section 4.01                             Organization and Qualification. Each of the Company and its Subsidiary (as defined below) is an entity duly organized and validly existing under the laws of its state of organization or incorporation, and has the requisite power and authority to own its properties and to carry on its business as now being conducted.  Each of the Company and its Subsidiary is duly qualified to do business and is in good standing (to the extent applicable) in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. “Subsidiaries” means any Person (as defined below) in which the Company, directly or indirectly, owns a majority of the outstanding capital stock having voting power or holds a majority of the equity or similar interest of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”

 

Section 4.02                             Authorization, Enforcement, Compliance with Other Instruments. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Ordinary Shares in accordance with the terms hereof and thereof.  The execution and delivery by the Company of this Agreement and the other Transaction Documents, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Ordinary Shares) have been or (with respect to consummation) will be duly authorized by the Company’s board of directors or other governing body and no further consent or authorization will be required by the Company, its board of directors or its shareholders.  This Agreement and the other Transaction Documents to which it is a party have been (or, when executed and delivered, will be) duly executed and delivered by the Company and, assuming the execution and delivery thereof and acceptance by the Investor, constitute (or, when duly executed and delivered, will be) the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively, this Agreement and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

 

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Section 4.03                             No Conflict. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Ordinary Shares) will not (i) result in a violation of the articles of association or other organizational documents of the Company (with respect to consummation, as the same may be amended prior to the date on which any of the transactions contemplated hereby are consummated), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or its Subsidiary is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or its Subsidiary or by which any property or asset of the Company or its Subsidiary is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations that would not reasonably be expected to have a Material Adverse Effect.

 

Section 4.04                             SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to Section 15(d) of the Exchange Act  for the one year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (all of the foregoing filed within one year preceding the date hereof or amended after the date hereof, or filed after the date hereof, and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, and all registration statements filed by the Company under the Securities Act, being hereinafter referred to as the “SEC Documents”). The Company has made available to the Investor through the SEC’s website at http://www.sec.gov, true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the respective dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

 

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Section 4.05                             Equity Capitalization.

 

(i)                                     Definitions:

 

(A)                               “Class A Ordinary Shares” means (x) the Company’s shares of class A ordinary shares, par value $0.00001 per share, and (y) any capital stock into which such shares shall have been changed or any share capital resulting from a reclassification of such ordinary shares.

 

(B)                               “Class B Ordinary Shares” means (x) the Company’s shares of class B ordinary shares, par value $0.00001 per share, and (y) any capital stock into which such shares shall have been changed or any share capital resulting from a reclassification of such ordinary shares.

 

(ii)                                  As of the date hereof, the authorized capital stock of the Company consists of (A) 13,750,000,000 authorized  Class A Ordinary Shares, of which 2,789,018,291 are issued and outstanding, (B) 250,000,000 authorized Class B Ordinary Shares, of which 246,224,465 are issued and outstanding, and (C) 1,000,000,000 shares of a par value of US$0.00001 each of such class or classes (however designated) as the board of directors of the Company may determine in accordance with Article 9 of the Articles of Association, of which nil share is issued and outstanding

 

(iii)                               Existing Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares, interests or capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company; (C) there are no agreements or arrangements under which the Company is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to this Agreement); (D) there are no outstanding securities or instruments of the Company which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Ordinary Shares hereunder; and (F) the Company has no stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

 

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(iv)          Organizational Documents. The Company has furnished to the Investor or filed on EDGAR true, correct and complete copies of the Company’s Memorandum of Association, as amended and as in effect on the date hereof (the “Memorandum of Association”), and the Company’s Articles of Association, as amended and as in effect on the date hereof (the “Articles of Association”), and the terms of all convertible securities and the material rights of the holders thereof in respect thereto.

 

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Section 4.06          Insurance. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

Section 4.07          Regulatory Permits. Except as would not cause a Material Adverse Effect, the Company and its subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permits.

 

Section 4.08          Internal Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

Section 4.09          Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Ordinary Shares or any of the Company’s Subsidiary, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.

 

Section 4.10          Subsidiaries. Except as disclosed in the SEC Documents, the Company does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, association or other business entity.

 

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Section 4.11          Certain Transactions. Except as set forth in the SEC Documents (or as not required to be disclosed pursuant to applicable law) none of the officers or directors of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer or director, or to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer or director has a substantial interest or is an officer, director, trustee or partner.

 

Section 4.12          Dilution. The Company is aware and acknowledges that issuance of Ordinary Shares hereunder could cause dilution to existing shareholders and could significantly increase the outstanding number of Ordinary Shares.

 

Section 4.13          Registration Statement; Form F-3 Eligibility.  The Company and the transactions contemplated by this Agreement meet the requirements for the use of Form F-3 under the Securities Act. Each of the Registration Statement and any post-effective amendment thereto has been declared effective by the SEC under the Securities Act. No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any base prospectus, the Prospectus Supplement, the Prospectus has been issued and no proceedings for any of those purposes or pursuant to Section 8A of the Securities Act have been instituted or are pending or, to the knowledge of the Company, are threatened by the Commission, and, to the knowledge of the Company, the Company has complied to the SEC’s satisfaction with any request on the part of the SEC for additional information.

 

Section 4.14          Acknowledgment Regarding Investor’s Purchase of Shares. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length investor with respect to this Agreement and the transactions contemplated hereunder. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Investor’s purchase of the Shares hereunder. The Company is aware and acknowledges that it shall not be able to request Advances under this Agreement if the Registration Statement is not effective or if any issuances of Ordinary Shares or the ADSs pursuant to any Advance would violate any rules of the Principal Market.

 

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Section 4.15          Neither the Company, nor any Subsidiary of the Company, nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary of the Company, is a Person that is, or is owned or controlled by a Person that is:

 

(a)              on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC from time to time;

 

(b)              the subject of any Sanctions;

 

(c)               has a place of business in, or is operating, organized, resident or doing business in a country or territory that is, or whose government is, the subject of Sanctions Programs (including without limitation Crimea, Cuba, Iran, North Korea, Sudan and Syria).

 

Article V.  Indemnification

 

The Investor and the Company represent to the other the following with respect to itself:

 

Section 5.01          Indemnification by the Company. In consideration of the Investor’s execution and delivery of this Agreement, and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Investor, and all of its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) and each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Investor Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable and documented expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion therein; (b) any material misrepresentation or breach of any material representation or material warranty made by the Company in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; (c) any material breach of any material covenant, material agreement or material obligation of the Company contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; or (d) any cause of action, suit or claim brought or made against such Investor Indemnitee not arising out of any action or inaction of an Investor Indemnitee, and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement executed pursuant hereto by any of the Investor Indemnitees. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

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Section 5.02          Indemnification by the Investor. In consideration of the Company’s execution and delivery of this Agreement, and in addition to all of the Investor’s other obligations under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers, directors, shareholders, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Company Indemnitees”) from and against any and all Indemnified Liabilities incurred by the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Investor will only be liable for written information relating to the Investor furnished to the Company by or on behalf of the Investor specifically for inclusion in the documents referred to in the foregoing indemnity, and will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Investor by or on behalf of the Company specifically for inclusion therein; (b) any misrepresentation or breach of any representation or warranty made by the Investor in this Agreement or any instrument or document contemplated hereby or thereby executed by the Investor; (c) any breach of any covenant, agreement or obligation of the Investor(s) contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby executed by the Investor; or (d) any cause of action, suit or claim brought or made against such Company Indemnitee not arising out of any action or inaction of a Company Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement executed pursuant hereto by any of the Company Indemnitees. To the extent that the foregoing undertaking by the Investor may be unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

Section 5.03          Notice of Claim. Promptly after receipt by an Investor Indemnitee or Company Indemnitee of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Investor Indemnitee or Company Indemnitee, as applicable, shall, if a claim for an Indemnified Liability in respect thereof is to be made against any indemnifying party under this Article V, deliver to the indemnifying party a written notice of the commencement thereof; but the failure to so notify the indemnifying party will not relieve it of liability under this Article V except to the extent the indemnifying party is prejudiced by such failure. The indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and the Investor Indemnitee or Company Indemnitee, as the case may be; provided, however, that an Investor Indemnitee or Company Indemnitee shall have the right to retain its own counsel with the reasonable fees and expenses of not more than one counsel for such Investor Indemnitee or Company Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Investor Indemnitee or Company Indemnitee and the indemnifying party would be inappropriate due to actual or potential differing interests between such Investor Indemnitee or Company Indemnitee and any other party represented by such counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Investor Indemnitee or Company Indemnitee which relates to such action or claim. The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor Indemnitee or Company Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Investor Indemnitee or Company Indemnitee of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Investor Indemnitee or Company Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The indemnification required by this Article V shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received and payment therefor is due.

 

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Section 5.04          Remedies. The remedies provided for in this Article V are not exclusive and shall not limit any right or remedies which may otherwise be available to any indemnified person at law or in equity. The obligations of the parties to indemnify or make contribution under this Article V shall survive expiration or termination of this Agreement for a period of three years. Notwithstanding anything to the contrary under this Agreement or applicable law, the no party shall be entitled to any indemnification pursuant to Article V (other than claims for any damages resulting from fraud) until the aggregate amount of all such damages that would otherwise be indemnifiable to such party equals or exceeds $25,000 (the “Basket”), at which time such party shall be entitled to indemnification for the full amount of all damages (including all damages incurred prior to exceeding the Basket).

 

Section 5.05          Limitation of liability. Notwithstanding the foregoing, no party shall be entitled to recover from the other party for punitive, indirect, incidental or consequential damages.

 

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Article VI.
 Covenants of the Company

 

Section 6.01          Registration Statement.

 

(a)              The Company has filed, in accordance with the provisions of the Securities Act and the rules and regulations thereunder, with the SEC a shelf registration statement (with File Number 333-237251) (the “Initial Registration Statement”) with the SEC under the Securities Act on Form F-3 with respect to the issuance and sale of securities by the Company, including Ordinary Shares (which includes Ordinary Shares represented by ADSs), which contains, among other things a Plan of Distribution section disclosing the methods by which the Company may sell the Ordinary Shares. The Initial Registration Statement was declared effective on January 4, 2021 and remains in effect on the date hereof. Except where the context otherwise requires, the Initial Registration Statement, as amended when it became effective, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus subsequently filed with the SEC pursuant to Rule 424(b) under the Securities Act or deemed to be a part of the Initial Registration Statement pursuant to Rule 430B of the Securities Act, is herein called the “Registration Statement.”

 

(b)              Promptly after the date hereof (and prior to the Company delivering the first Advance Notice to the Investor hereunder), the Company shall file with the SEC a report on Form 6-K or such other appropriate form as determined by counsel to the Company, relating to the transactions contemplated by this Agreement and a Prospectus Supplement pursuant to Rule 424(b) of the Securities Act disclosing all information relating to the transaction contemplated hereby required to be disclosed therein and an updated Plan of Distribution, including, without limitation, the name of the Investor, the number of Shares being offered hereunder, the terms of the offering, the purchase price of the Shares, and other material terms of the offering, and any other information or disclosure necessary to register the transactions contemplated herein (collectively, the “Initial Disclosure”) and shall provide the Investor with 24 hours to review the Initial Disclosure prior to its filing. Promptly, and in any event no later than two business days after each Advance Date, the Company shall file with the SEC a Prospectus Supplement pursuant to Rule 424(b) of the Securities Act disclosing all information relating to the particular Advance to be disclosed therein, including, without limitation, the number of Shares offered and the purchase price of the Shares, and other material terms of the particular offering, and any other information or disclosure necessary to register the Shares issued pursuant to such Advance.

 

(c)               Maintaining a Registration Statement. The Company shall use commercially reasonable efforts to maintain the effectiveness of any Registration Statement with respect to the Ordinary Shares it proposes to sell at all times during the Commitment Period (the “Registration Period”). Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed and at all times while effective, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with such Registration Statement shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading. During the Commitment Period, the Company shall notify the Investor promptly if (i) the Ordinary Shares sold hereunder (if any) shall cease to be authorized for listing on the Principal Market, (ii) the Ordinary Shares sold hereunder (if any) ceases to be registered under Section 12(b) or Section 12(g) of the Exchange Act or (iii) the Company fails to file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act.

 

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(d)              Filing Procedures. Not less than one business day prior to the filing of a Registration Statement and not less than one business day prior to the filing of any related amendments and supplements to all Registration Statements (except for any amendments or supplements caused by the filing of any annual reports on Form 20-F, current reports on Form 6-K, and any similar or successor reports), if and to the extent that any of such Registration Statement, or any amendment or supplement thereto, pertains to the transactions contemplated hereunder, the Company shall use its best efforts to furnish to the Investor copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the reasonable and prompt review of the Investor. The Investor shall furnish comments on a Registration Statement and any related amendment and supplement to a Registration Statement to the Company within 24 hours of the receipt thereof. If the Investor fails to provide comments to the Company within such 24-hour period, then the Registration Statement, related amendment or related supplement, as applicable, shall be deemed accepted by the Investor in the form originally delivered by the Company to the Investor.

 

(e)               Delivery of Final Documents. The Company shall furnish to the Investor without charge, (i) at least one copy of each Registration Statement as declared effective by the SEC and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) at the request of the Investor, 10 copies of the final prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as the Investor may reasonably request) and (iii) such other documents as the Investor may reasonably request from time to time in order to facilitate the disposition of the Ordinary Shares owned by the Investor pursuant to a Registration Statement. Filing of the forgoing with the SEC via its EDGAR system shall satisfy the requirements of this section.

 

(f)                Amendments and Other Filings. The Company agrees that on such dates as the Securities Act shall require, the Company will file a Prospectus Supplement or other appropriate form as determined by counsel with the SEC under the applicable paragraph of Rule 424(b) under the Securities Act, which Prospectus Supplement will set forth, within the relevant period, the amount of Shares (including Ordinary Shares in the form of ADSs) sold to the Investor, the net proceeds to the Company and the discount paid by the Investor with respect to such Shares. The Company shall provide the Investor at least 24 hours to comment on a draft of each such Prospectus Supplement (and shall give due consideration to all such comments) and shall deliver or make available to the Investor, without charge, an electronic copy of each form of Prospectus Supplement, together with the Base Prospectus. The Company consents to the use of the Prospectus (and of any Prospectus Supplement thereto) in accordance with the provisions of the Securities Act and with the securities or “blue sky” laws of the jurisdictions in which the Shares may be sold by the Investor, in connection with the offering and sale of the Shares and for such period of time thereafter as the Prospectus is required by the Securities Act to be delivered in connection with sales of the Shares.  If during such period of time any event shall occur that in the judgment of the Company and its counsel is required to be set forth in the Prospectus or should be set forth therein in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary to supplement or amend the Prospectus to comply with the Securities Act or any other applicable law or regulation, the Company shall forthwith prepare and file with the SEC an appropriate Prospectus Supplement to the Prospectus and shall promptly furnish or make available to the Investor an electronic copy thereof. The Company shall (i) prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the related prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period.

 

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(g)               Blue-Sky. The Company shall use its commercially reasonable efforts to, if applicable, (i) register and qualify the Ordinary Shares covered by a Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Ordinary Shares for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (w) make any change to its Articles of Incorporation, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6.01(g), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Ordinary Shares for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

Section 6.02          Listing of ADSs. The Company shall use its commercially reasonable efforts to maintain the authorization for quotation of the ADSs on the Principal Market and shall notify the Investor promptly if the ADSs shall cease to be authorized for quotation on the Principal Market.

 

Section 6.03          Opinion of Counsel. Prior to the date of the first Advance Notice, the Investor shall have received an opinion letter from Cayman Islands counsel to the Company in form and substance reasonably satisfactory to the Investor.

 

Section 6.04          Exchange Act Registration. The Company will file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act and will not take any action or file any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act.

 

Section 6.05          [RESERVED]

 

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Section 6.06          Corporate Existence. The Company will take all steps necessary to preserve and continue the corporate existence of the Company during the Commitment Period.

 

Section 6.07          Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company will immediately notify the Investor, and confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect of a Registration Statement or related prospectus relating to an offering of Ordinary Shares: (i) receipt of any request for additional information by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other Federal governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Ordinary Shares for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related prospectus of any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or of the necessity to amend the Registration Statement or supplement a related prospectus to comply with the Securities Act or any other law; and (v) the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate; and the Company will promptly make available to the Investor any such supplement or amendment to the related prospectus. The Company shall not deliver to the Investor any Advance Notice, and the Investor shall not sell any Shares pursuant to a Registration Statement, during the continuation of any of the foregoing events (each of the events described in the immediately preceding clauses (i) through (v), inclusive, a “Material Outside Event”).

 

Section 6.08          Consolidation. If an Advance Notice has been delivered to the Investor, then the Company shall not effect any consolidation of the Company with or into, or a transfer of all or substantially all the assets of the Company to another entity before the transaction contemplated in such Advance Notice has been closed in accordance with Section 2.02 hereof, and all Shares in connection with such Advance have been received by the Investor. The Company shall not deliver an Advance Notice if a shareholder meeting, stock split, stock consolidation, or dividend (collectively, a “Corporate Action”), or the record date for any Corporate Action, would fall during the period beginning five Trading Days prior to the date of delivery of such Advance Notice and ending five Trading Days following the Closing of such Advance Notice.

 

Section 6.09          Market Activities. The Company will not, directly or indirectly, take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company under Regulation M of the Exchange Act.

 

Section 6.10          Expenses. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses incident to the performance of its obligations hereunder, including but not limited to (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of each prospectus and of each amendment and supplement thereto; (ii) the preparation, issuance and delivery of any Shares issued pursuant to this Agreement as well as any conversion or depositary fees or expenses due to the Depositary in respect of the sale and issuance of the ADSs (for the avoidance of doubt, excluding the resale of ADSs by the Investor) pursuant to this Agreement, (iii) all fees and disbursements of the Company’s counsel, accountants and other advisors, (iv) the qualification of the Shares under securities laws in accordance with the provisions of this Agreement, including filing fees in connection therewith, (v) the printing and delivery of copies of any prospectus and any amendments or supplements thereto, (vi) the fees and expenses incurred in connection with the listing or qualification of the ADSs for trading on the Principal Market, or (vii) filing fees of the SEC and the Principal Market.

 

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Section 6.11          Current Report.  The Company shall not, and the Company shall cause each its Subsidiary and each of its and their respective officers, directors, employees and agents not to, provide the Investor with any material, non-public information regarding the Company or any of its Subsidiaries without the express prior written consent of the Investor (which may be granted or withheld in the Investor’s sole discretion). Notwithstanding anything contained in this Agreement to the contrary, the Company expressly agrees that it shall publicly disclose, no later than four (4) Business Days following the date hereof, any information communicated to the Investor by or, to the knowledge of the Company, on behalf of the Company in connection with the transactions contemplated herein, which, following the date hereof would, if not so disclosed, constitute material, non-public information regarding the Company or its Subsidiary.

 

Section 6.12          [RESERVED]

 

Section 6.13          Use of Proceeds.  The Company will use the proceeds from the sale of the Ordinary Shares hereunder for working capital and other general corporate purposes or, if different, in a manner consistent with the application thereof described in the Registration Statement and the Prospectus. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated herein, or lend, contribute, facilitate or otherwise make available such proceeds to any Person (i) to fund, either directly or indirectly, any activities or business of or with any Person that is identified on the list of Specially Designated Nationals and Blocker Persons maintained by OFAC, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions or Sanctions Programs, or (ii) in any other manner that will result in a violation of Sanctions.

 

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Article VII.
  Conditions for Delivery of Advance Notice

 

Section 7.01          Conditions Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver an Advance Notice and the obligations of the Investor hereunder with respect to an Advance is subject to the satisfaction by the Company, on each Advance Notice Date (a “Condition Satisfaction Date”), of each of the following conditions:

 

(a)              Accuracy of the Company’s Representations and Warranties. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects.

 

(b)              Registration of the Ordinary Shares with the SEC. There is an effective Registration Statement pursuant to which the Investor is permitted to utilize the prospectus thereunder to resell all of the Ordinary Shares and the ADSs issuable pursuant to such Advance Notice. The Company shall have filed with the SEC all reports, notices and other documents required under the Exchange Act and applicable SEC regulations during the twelve-month period immediately preceding the applicable Condition Satisfaction Date.

 

(c)               Authority. The Company shall have obtained all permits and qualifications required by any applicable state for the offer and sale of all the Ordinary Shares issuable pursuant to such Advance Notice, or shall have the availability of exemptions therefrom. The sale and issuance of such Ordinary Shares shall be legally permitted by all laws and regulations to which the Company is subject.

 

(d)              No Material Outside Event. No Material Outside Event shall have occurred and be continuing.

 

(e)               Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior the applicable Condition Satisfaction Date.

 

(f)                No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or directly and adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have a Material Adverse Effect.

 

(g)               No Suspension of Trading in or Delisting of ADSs. The ADSs are quoted trading on the Principal Market and all of the ADSs issuable pursuant to such Advance Notice will be listed or quoted for trading on the Principal Market and the Company believes, in good faith, that trading of the ADSs on the Principal Market will continue uninterrupted for the foreseeable future. The issuance of Ordinary Shares and the ADSs with respect to the applicable Advance Notice will not violate the shareholder approval requirements of the Principal Market. The Company shall not have received any notice threatening the continued quotation of the ADSs on the Principal Market.

 

24

 

(h)              Authorized. There shall be a sufficient number of authorized but unissued and otherwise unreserved Ordinary Shares for the issuance of all of the shares issuable pursuant to such Advance Notice.

 

(i)                  Executed Advance Notice. The Investor shall have received the Advance Notice executed by an officer of the Company and the representations contained in such Advance Notice shall be true and correct as of the applicable Condition Satisfaction Date.

 

(j)                 Consecutive Advance Notices and Conversion. Except with respect to the first Advance Notice, the Company shall have delivered all Shares and ADSs relating to all prior Advances, and unless waived by the Investor, at least 10 Trading Days shall have elapsed from (i) the immediately preceding Advance Date and (ii) any conversion date pursuant to convertible notes held by the Investor.

 

Article VIII.
  Non-Disclosure of Non-Public Information

 

The Company covenants and agrees that it shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing, any material non-public information (as determined under the Securities Act, the Exchange Act, or the rules and regulations of the SEC) to the Investor without also disseminating such information to the public, unless prior to disclosure of such information the Company identifies such information as being material non-public information and provides the Investor with the opportunity to accept or refuse to accept such material non-public information for review.  Unless specifically agreed to in writing, in no event shall the Investor have a duty of confidentially, or be deemed to have agreed to maintain information in confidence, with respect to (i) any information disclosed in violation of this provision or (ii) the delivery of any Advance Notices.

 

Article IX.
  Non Exclusive Agreement

 

Notwithstanding anything contained herein, this Agreement and the rights awarded to the Investor hereunder are non-exclusive,  and, subject to the provisions in Section 6.13,  the Company may, at any time throughout the term of this Agreement and thereafter, issue and allot, or undertake to issue and allot, any shares and/or securities and/or convertible notes, bonds, debentures, options to acquire shares or other securities and/or other facilities which may be converted into or replaced by Ordinary Shares or other securities of the Company, and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any rights with respect to its existing and/or future share capital.

 

Article X.
  Choice of Law/Jurisdiction

 

This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard in New York County, New York, and expressly consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County, New York and the United States District Court of the Southern District of New York, sitting in New York, New York, for the adjudication of any civil action asserted pursuant to this paragraph.

 

25

 

Article XI. Assignment; Termination

 

Section 11.01                      Assignment. Neither this Agreement nor any rights of the parties hereto may be assigned to any other Person.

 

Section 11.02                      Termination.

 

(a)              Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest of (i) the first day of the month next following the 36-month anniversary of the date hereof or (ii) the date on which the Investor shall have made payment of Advances pursuant to this Agreement in the aggregate amount of the Commitment Amount.

 

(b)              The Company may terminate this Agreement effective upon fifteen Trading Days’ prior written notice to the Investor; provided that (i) there are no outstanding Advance Notices, the Ordinary Shares under which have yet to be issued, and (ii) the Company has paid all amounts owed to the Investor pursuant to this Agreement. This Agreement may be terminated at any time by the mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such written consent.

 

(c)               Nothing in this Section 11.02 shall be deemed to release the Company or the Investor from any liability for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under this Agreement. The indemnification provisions contained in Article V shall survive termination hereunder.

 

Article XII. Notices

 

Other than with respect to Advance Notices, which must be in writing and will be deemed delivered on the day set forth in Section 2.01(b), any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or e-mail if sent on a Trading Day, or, if not sent on a Trading Day, on the immediately following Trading Day; (iii) 5 days after being sent by U.S. certified mail, return receipt requested, (iv) 1 day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications (except for Advance Notices which shall be delivered in accordance with Exhibit A hereof) shall be:

 

	
If to the Company, to:
    	
 
    	
CooTek (Cayman) Inc.
   9-11 Floors, No.16, Lane   399, Xinlong Road,  Minhang District, Shanghai 201101, People’s   Republic of China
 Telephone:    +86 021 6485 6352

Attention:  Robert Cui, CFO
   E-Mail:  ir@cootek.cn
    

 

26

 

	
With a copy to (which   shall not constitute notice or delivery of process) to:
    	
 
    	
 

 

Wilson Sonsini Goodrich & Rosati; Professional Corporation

Unit 2901, 29F, Tower C, Beijing Yintai Centre, No. 2   Jianguomenwai Avenue, Chaoyang District, Beijing, 100022

People’s Republic of China

Attention: Dan Ouyang, Esq. Partner; Ke Li, Esq. Of Counsel

Email: douyang@wsgr.com; keli@wsgr.com
    
	
 
    	
 
    	
 
    
	
If to the Investor(s):
    	
 
    	
YA II PN, Ltd.
    
	
 
    	
 
    	
1012 Springfield Avenue
    
	
 
    	
 
    	
Mountainside, NJ 07092
    
	
 
    	
 
    	
Attention:
    	
Mark Angelo
    
	
 
    	
 
    	
 
    	
Portfolio Manager
    
	
 
    	
 
    	
Telephone:
    	
(201) 985-8300 
    
	
 
    	
 
    	
Email:    mangelo@yorkvilleadvisors.com
    
	
 
    	
 
    	
 
    
	
With a Copy (which shall   not constitute notice or delivery of process) to:
    	
 
    	
David Fine, Esq.

1012 Springfield Avenue

Mountainside, NJ 07092
    
	
 
    	
 
    	
Telephone:
    	
(201) 985-8300
    
	
 
    	
 
    	
Email:
    	
legal@yorkvilleadvisors.com
    

 

Either may change its information contained in this Article XII by delivering notice to the other party as set forth herein.

 

Article XIII. Miscellaneous

 

Section 13.01                      Counterparts. This Agreement may be executed in identical counterparts, both which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  Facsimile or other electronically scanned and delivered signatures, including by e-mail attachment, shall be deemed originals for all purposes of this Agreement.

 

Section 13.02                      Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their respective affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement, and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

 

27

 

Section 13.03                      Reporting Entity for the Ordinary Shares. The reporting entity relied upon for the determination of the trading price or trading volume of the Ordinary Shares on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.

 

Section 13.04                      Structuring and Due Diligence Fee. [RESERVED]

 

Section 13.05                      Commitment Fee. The Company shall pay to the Investor, a commitment fee in the amount equal to $200,000 (being 1% of the Commitment Amount) (the “Commitment Fee”). The Commitment Fee shall be due and payable at the Closing of the first Advance hereunder, and shall be paid at the election of the Company either in cash or by the issuance of such number of Ordinary Shares (the “Commitment Fee Shares”) as is equal to the Commitment Fee divided by the VWAP of the ADSs as of the date of such Closing, and multiplying the resulting number of ADSs by the then applicable Ordinary Share-to-ADS conversion ratio, which is set at one (1) ADS representing fifty (50) Ordinary Shares as of the date hereof. The issuance of the Commitment Fee Shares shall be covered by the Registration Statement as supplemented by a Prospectus Supplement.

 

Section 13.06                      Brokerage. Each of the parties hereto represents that it has had no dealings in connection with this transaction with any finder or broker who will demand payment of any fee or commission from the other party. The Company on the one hand, and the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities to any person claiming brokerage commissions or finder’s fees on account of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions contemplated hereby.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

28

 

IN WITNESS WHEREOF, the parties hereto have caused this Standby Equity Distribution Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.

 

	
 
    	
 
    	
COMPANY:
    
	
 
    	
 
    	
COOTEK   (CAYMAN) INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Karl Kan Zhang
    
	
 
    	
 
    	
Name:
    	
Karl   Kan Zhang
    
	
 
    	
 
    	
Title:
    	
Chairman   of the Board of Directors and Chief Technology Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
YA II   PN, LTD.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Yorkville   Advisors Global, LP
    
	
 
    	
 
    	
Its:
    	
Investment   Manager
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
Yorkville Advisors Global   II, LLC
    
	
 
    	
 
    	
 
    	
Its:
    	
General Partner
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/   Matt Beckman
    
	
 
    	
 
    	
 
    	
Name:
    	
Matt   Beckman
    
	
 
    	
 
    	
 
    	
Title:
    	
Member
    

 

29

 

EXHIBIT A
 ADVANCE NOTICE

 

COOTEK (CAYMAN) INC.

 

	
Dated:                      
    	
Advance Notice Number:             
    

 

The undersigned,                                 hereby certifies, with respect to the sale of Ordinary Shares represented by ADSs of COOTEK (CAYMAN) INC. (the “Company”) issuable in connection with this Advance Notice, delivered pursuant to that certain Standby Equity Distribution Agreement, dated as of           , 2021 (the “Agreement”), as follows:

 

1.                                      The undersigned is the duly elected                            of the Company.

 

2.                                      There are no fundamental changes to the information set forth in the Registration Statement which would require the Company to file a post-effective amendment to the Registration Statement.

 

3.                                      The Company has performed in all material respects all covenants and agreements to be performed by the Company and has complied in all material respects with all obligations and conditions contained in this Agreement on or prior to the Advance Notice Date, and shall continue to perform in all material respects all covenants and agreements to be performed by the Company through the applicable Advance Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof.

 

4.                                      The Advance requested is                            .

 

5.                                      The Minimum Acceptable Price with respect to this Advance Notice is                (if left blank then no Minimum Acceptable Price will be applicable to this Advance).

 

6.                                      The number of Ordinary Shares of the Company outstanding as of the date hereof is                .

 

The undersigned has executed this Advance Notice as of the date first set forth above.

 

	
 
    	
 
    	
COOTEK (CAYMAN) INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    

 

Please deliver this Advance Notice by email with a follow up phone call to:

Email: Trading@yorkvilleadvisors.com

Attention: Trading Department and Compliance Officer

Confirmation Telephone Number: (201) 985-8300.

 

 

EXHIBIT B
  FORM OF SETTLEMENT DOCUMENT

 

VIA EMAIL

 

COOTEK (CAYMAN) INC.

Attn:

Email:

 

	
 
    	
 
    	
Below please find the settlement information with   respect to the Advance Notice Date of:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
 
    	
Amount of Advance Notice
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Minimum Acceptable Price for this Advance (if any)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Number of Excluded Days (if any)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Adjusted Advance Amount (after taking into account   any adjustments pursuant to Section 2.01):
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Market Price
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Purchase Price (Market Price x 90%) per share
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Number of ADSs due to Investor
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
Number of Ordinary Shares due to the Investor
    	
 
    	
 
    

 

If there were any Excluded Days then add the following (see Section 2.01(d)):

 

	
9.
    	
 
    	
Number of ADSs Sold by Investor on Excluded Days
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
Additional Amount to be paid by Investor (ADSs in   number 9 x Minimum Acceptable Price)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
Total Amount to be paid to Company (Adjusted Advance   Amount + Additional Amount):
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
Total ADSs to be issued to Investor (ADSs due to   Investor + Additional Shares):
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
13
    	
 
    	
Total Ordinary Shares due to the Investor
    	
 
    	
 
    

 

Please issue the number of Shares due to the Investor to the account of the Investor as follows:

 

INVESTOR’S DTC PARTICIPANT #:

 

ACCOUNT NAME:

ACCOUNT NUMBER:

 

 

ADDRESS:

CITY:

COUNTRY:

CONTACT PERSON:

NUMBER AND/OR EMAIL:

 

	
 
    	
 
    	
Sincerely,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
YA II PN, LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Approved By COOTEK (CAYMAN) INC.:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:

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