Document:

Exhibit 10.12

  

  
    

    

    IN THE UNITED STATES BANKRUPTCY COURT

     FOR THE DISTRICT OF DELAWARE

     

    
      	 	 	 	 
	
              In re:

            	
               

            	 	Chapter 11
	
               

            	
               

            	 	
               

            
	
              WOODBRIDGE GROUP OF COMPANIES, LLC,

              et al.,1

            	
               

            	 	Case No. 17-12560 (BLS)
	
               

            	
               

            	 	
              (Jointly Administered)

            
	
              Remaining Debtors.

            	
               

            	 	
               

            
	 	 	 	
              Ref. Doc. No. 4521

               

              

            

    

     

    ORDER, PURSUANT TO SECTION 105(a) OF THE BANKRUPTCY CODE

     AND BANKRUPTCY RULE 9019, AUTHORIZING AND APPROVING ENTRY INTO

     A SETTLEMENT WITH THE UNITED STATES OF AMERICA

    

    

    Upon the Motion of Woodbridge Liquidation Trust and Woodbridge Wind-Down Entity for Entry of an Order, Pursuant to Section 105(a) of the Bankruptcy Code and Bankruptcy Rule 9019,
        Authorizing and Approving Entry into a Settlement with the United States of America (the “Motion”)2 filed by the Woodbridge Liquidation Trust (the “Trust”), formed pursuant to the confirmed and effective First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliated Debtors [D.I. 2397] (the “Plan”) in the jointly-administered chapter 11 bankruptcy cases (the “Chapter

        11 Cases”) of Woodbridge Group of Companies, LLC and its affiliated debtors and debtors in possession (collectively, the “Debtors”); and this Court having found that it has jurisdiction to consider the Motion and the relief requested
      therein pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012; and this Court having
      found that venue of these cases and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having found that this matter is a core proceeding pursuant to 28 U.S.C. § 157(b); and this Court having determined that
      it may enter a final order consistent with Article III of the United States Constitution; and it appearing that notice of the Motion has been given as set forth in the Motion and that such notice is adequate and no other or further notice need be
      given; and this Court having found and determined that the relief sought in the Motion is in the best interest of the Trust and its beneficiaries; and that the legal and factual bases set forth in the Motion establish just cause for the relief
      granted herein; and after due deliberation and sufficient cause appearing therefor,

     

    
      
 

     

    

    	

          	1	
            The Remaining Debtors and the last four digits of their respective federal tax identification numbers are as follows: Woodbridge Group of Companies, LLC (3603) and Woodbridge Mortgage Investment Fund 1, LLC (0172). The Remaining Debtors’
              mailing address is 14140 Ventura Boulevard #302, Sherman Oaks, California 91423.

          

     

    
      	 	
              2

            	
              Capitalized terms used, but not otherwise defined herein, have the meaning given to them in the Motion.

            

    

    

    

    
      
        

    

    
      IT IS HEREBY ORDERED THAT:

       

      

      
        1.           The Motion is GRANTED as set forth herein.

      

      

      

      2.           Pursuant to section 105(a) of the Bankruptcy Code and Bankruptcy Rule 9019, the Trust is authorized to enter into the Stipulation and Settlement Agreement (the “Agreement”),

        in substantially the form attached hereto as Exhibit 1, which Agreement is authorized and approved in its entirety.

       

      

      3.           Immediately upon entry of this Order, the Trust is authorized and empowered to take any and all actions necessary or appropriate to consummate, carry out, effectuate, or otherwise enforce the terms,
        conditions, and provisions of the Agreement.

      

      

      4.           The Court shall retain jurisdiction and power over any and all matters arising from or related to the interpretation or implementation of this Order and the Settlement Agreement.

      

      

      
        	 	
                

              
	
                Dated: September 17th, 2020

              	
                BRENDAN L. SHANNON UNITED STATES BANKRUPTCY JUDGE

              
	Wilmington, Delaware	
                 

              

         

        

      

    

    
      
        

    

    EXHIBIT 1 TO ORDER

     

    

    
      
        

    

    UNITED STATES DISTRICT COURT

     SOUTHERN DISTRICT OF FLORIDA

    

    

    CASE NO. 19-20178-CR-ALTONAGA

     

    

    
      	
               UNITED STATES OF AMERICA

            	
               

            
	
               

            	
               

            
	
              v.

            	 
	 	 
	
              ROBERT SHAPIRO,

            	 
	 	 
	
              Defendant.

            	 
	/	 
	 	 
	WOODBRIDGE LIQUIDATION TRUST,	 
	 	 
	
              Third-Party Petitioner.

            	 
	/	 

    

    

    

    STIPULATION AND SETTLEMENT AGREEMENT

    

    

    The United States of America (the “United States”) and Petitioner Woodbridge Liquidation Trust, by and through its trustee, Michael I. Goldberg, (“Petitioner” or the “Liquidation Trust”) (together,
      the “Parties”) stipulate and agree, subject to the Court’s approval, in the above-captioned matter as follows:

     

    
      
        	
                I.

              	
                RECITALS

              

      

    

    

    

    	 	A.	
            Instant Criminal Case and Forfeiture Proceedings

          

     

    

    1.         From in or around July 2012, through in or around December 2017, in the Southern District of Florida and elsewhere, Defendant Robert Shapiro (the “Defendant”) and his co- conspirators
      engaged in a conspiracy to commit mail and wire fraud in violation of 18 U.S.C. §§ 1341, 1343 and 1349, to defraud investors and obtain money and property by materially false and fraudulent pretenses, representations, and promises in connection with
      the sale of promissory notes and units, by: (a) soliciting and causing others to solicit millions of dollars in investor funds under false and fraudulent pretenses, representations and promises; (b) intentionally failing to utilize investor funds in
      the manner that they, their co-conspirators and others had promised; (c) misappropriating and converting investor funds for their own benefit and the benefit of others without the knowledge and authorization of the investors; and (d) making false
      statements and engaging in other fraudulent activities designed to conceal the commission of the offense. See Shapiro’s Stipulated Factual Proffer 1-2, ECF No. 140.

     

    

    
      
        

    

    
    2.         The Defendant and his co-conspirators fraudulently convinced thousands of investors to invest more than $1.29 billion in the following entities (collectively, referred to as the
      “Woodbridge Entities”):

     

    

    (i)          Woodbridge Group of Companies, LLC (d/b/a Woodbridge Wealth) (“Woodbridge Group of Companies”);

    (ii)        Woodbridge Mortgage Investment Fund 1, LLC; Woodbridge Mortgage Investment Fund 2, LLC, Woodbridge Mortgage Investment Fund 3, LLC, Woodbridge Mortgage Investment Fund
      3A, LLC, Woodbridge Mortgage Investment Fund 4, LLC, Woodbridge Commercial Bridge Loan Fund 1, LLC, and Woodbridge Commercial Bridge Loan Fund 2, LLC (the “Woodbridge Fund Companies”);

    
      (iii)        WMF Management, LLC (“WMF”);

    

    (iv)        Woodbridge Structured Funding, LLC (a/k/a Woodbridge Structured Funding of Florida, LLC) (“WSF”);

    
      (v)         Woodbridge Realty of Colorado (“Woodbridge Realty”);

    

    
      (vi)        Mercer Vine, Inc. (“Mercer Vine”);

    

    
      (vii)       Riverdale Funding, LLC (“Riverdale”); and

    

    (viii)     RS Protective Trust (“RS Trust”), which was the holding trust for the assets of Woodbridge, WMF, WSF, and more than 270 limited liability companies (the “RS Trust
      LLCs”).

     

    

    See id. at 2-3 & n.1-8, 7.

     

      

    3.           On April 4, 2019, a federal grand jury returned an Indictment charging the Defendant, inter alia, in Count 1 with conspiracy to commit mail and wire fraud in
      violation of 18 U.S.C. §§ 1341, 1343, and 1349, and in Count 10 with evasion of payment of federal income taxes. See Indictment, ECF No. 3.

     

    

    
      2

      
        

    

    4.          The Indictment contained forfeiture allegations, which alleged that upon a conviction of a violation of 18 U.S.C. §§ 1341, 1343 and/or 1349, the Defendant shall forfeit to the United States of America, any
      property, real or personal, which constitutes or is derived from proceeds traceable to such violation, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c). See id. at 19. The Indictment alleged that
      property directly subject to forfeiture includes, but is not limited to (the “Directly Forfeitable Assets”):

    

    (i)          All assets on deposit in account number 4040774877 at Alpine Bank, held in the name of Carbondale Basalt Owners LLC;

    (ii)         All assets on deposit in account number 8900003424 at Alpine Bank, held in the name of Davana Sherman Oaks Owners LLC;

    (iii)        All assets on deposit in account number 8970196989 at Alpine Bank, held in the name of Midland Loop Enterprises LLC;

    (iv)        All assets on deposit in account number 36044043514 at Capital One Bank, held in the name of Jeri Shapiro;

    (v)         All assets on deposit in account number 80-27009771 at East West Bank, held in the name of Davana Primrose Ventures LLC;

    (vi)        All assets on deposit in account number 20-27007984 at East West Bank, held in the name of Jeri L Shapiro;

    (vii)       All assets on deposit in account number 80-27010068 at East West Bank, held in the name of Reliance Marketing Solutions LLC;

    (viii)      All assets on deposit in account number 80-27010381 at East West Bank, held in the name of Settlement Depot LLC;

    (ix)        All assets on deposit in account number X96-267462 at Fidelity Cash Management, held in the name of Jeri Shapiro;

    (x)         All assets on deposit in account number 197148628 at Regions Bank, held in the name of Commercial Bridge Lenders LLC;

    (xi)        All assets on deposit in account number 2010131932 at Timberline Bank, held in the name of Golden Mesa Ventures LLC;

    (xii)       All assets on deposit in account number 2010131940 at Timberline Bank, held in the name of Golden Primrose Ventures LLC;

    (xiii)      All assets on deposit in account number 157514954443 at US Bank, held in the name of Jeri Shapiro;

    (xiv)      One (1) 18-karat, white gold, bangle bracelet, with 550 round diamonds (12.50 carats) and 1,434 black diamonds (24.92 carats);

    (xv)       One (1) pair of 18-karat, white gold, drop earrings, with 1,344 round-cut diamonds (13.80 carats);

    (xvi)      One (1) pair of 18-karat, white gold, button earrings, with 162 round diamonds (13.89 carats);

    (xvii)     One (1) pair of 18-karat, white gold, drop earrings with 99 yellow sapphires (1.10 carats), 117 tsavorites (1.18 carats), 125 blue sapphires (1.38 carats), 124 blue
      diamonds (1.36 carats), 120 amethysts (1.24 carats), 120 pink sapphires (1.18 carats), and 125 orange sapphires (1.26 carats);

    (xviii)    One (1) pair of 18-karat, white gold, drop earrings with 22 emeralds (35.53 carats) and round-cut diamonds (7.18 carats);

     

    

    
      3

      
        

    

    
      (xix)      One (1) pair of 18-karat, rose gold, golden pearl earrings with round-cut diamonds (.39 carat);

      (xx)       One (1) pair of 18-karat, rose gold, drop earrings with round-cut diamonds (.62 carat);

      
        (xxi)      One (1) pair of 18-karat, rose gold, drop earrings with rubies (38.90 carats);

      

      
        (xxii)     One (1) emerald and diamond ring;

      

      (xxiii)    One (1) platinum ring with certified Colombia emerald-cut emerald (9.54 carats), eight trapezoid-cut diamonds (2.09 carats), and 166 round-cut diamonds (1.42 carats);

      (xxiv)    One (1) pair of 18-karat, white gold earrings with multi-color pearls (11.8- 15.5mm) and round-cut diamonds (.98 carat);

      (xxv)     One (1) platinum ring with oval-cut ruby (10.19 carats), two trapezoid diamonds (1.19 carats), and 70 round-cut diamonds (2.08 carats);1

      
        (xxvi)    One (1) 18-karat, rose gold, bangle bracelet with round diamonds (1.50 carats); 

        

      

    

    (xxvii)   One (1) 18-karat, white gold, bangle bracelet with round diamonds (1.5 carats);

     (xxviii)  One (1) pair of 14-karat, white gold, drop earrings with two black diamonds (61.81 carats), two icy grey diamonds (23.92 carats), two rose-cut diamonds (.36 carat), and
      266 round diamonds (1.63 carats);

    
      (xxix)    One (1) 18-karat, yellow gold ring with 13 radiant-cut diamonds (13.83 carats); and

      (xxx)     One (1) 1969 Mercury convertible, bearing Vehicle Identification Number (“VIN”) 9F92M565911.

       

      See id. at 20-23. The Indictment also advised that substitute property is subject to forfeiture, pursuant to
          21 U.S.C. § 853(p). See id. at 23.

       

        

      5.           On April 5, 2019, the Court entered a Protective Order for Assets Subject to Forfeiture, enjoining and restraining the Directly Forfeitable Assets in order to ensure their availability
        for criminal forfeiture. See Protective Order, ECF No. 8.

       

      

      6.           On August 4, 2019, the Court accepted the Defendant’s guilty plea to Counts 1 and 10 of the Indictment. See Minute Entry, ECF No. 138;
        Shapiro’s Plea Agreement, ECF No. 139; Shapiro’s Stipulated Factual Proffer, ECF No. 140. As part of his guilty plea, the Defendant agreed to the forfeiture of the Directly Forfeitable Assets and the following substitute property (the “Substitute
        Assets I”):

       

      

      
        

       

        

      1 The Indictment contained a scrivener’s error indicating that the oval-cut ruby was 10.91 carats. The correct weight is reflected above, and is 10.19 carats.

       

      

    

    
      4

      
        

    

    
      (i)          The wine collection stored at 4030 Longridge Avenue, Sherman Oaks, CA;

    

    
      (ii)         A cashier’s check for $250,000 from East West Bank;

    

    
      (iii)        A mortgage payment made out of East West Bank of $399,867.67;

    

    (iv)        all assets on deposit in account number 226157004 at Regions Bank, held in the name of Lionshare Lending LLC; and

    
      (v)         Any outstanding balance of credits in JP Morgan Chase and Citicard credit cards.

    

    

    See Shapiro’s Plea Agreement 13c.

     

      

    7.           In addition, the Defendant’s wife, Jeri Shapiro, executed a Consent to Forfeiture, in which she consented to the forfeiture of the Directly
      Forfeitable Assets and the Substitute Assets I, and waived and withdrew any claim she may have to such property. See Jeri Shapiro’s Consent to Forfeiture, ECF No. 143. Jeri Shapiro also agreed to take all
      steps requested by the United States for the forfeiture of all assets identified, whether by the United States or by her, which are or may be subject to forfeiture, including by consenting to all orders of forfeiture. Id. 10.

    

    

    
      8.           Pursuant to 18 U.S.C. § 981(a)(1)(C), which is made criminally applicable by 28 U.S.C. § 2461(c), any property, real or personal, which constitutes or is derived from proceeds
        traceable to a conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 1341, 1343, or 1349 is subject to direct criminal forfeiture. Pursuant to 21 U.S.C. § 853(c), which is also made applicable by 28 U.S.C. § 2461(c), the United
        States’ right, title, and interest in property that is subject to direct criminal forfeiture vests upon the commission of the act giving rise to the forfeiture.

    

     

    

    
      5

      
        

    

    9.           On October 15, 2019, the Court entered an Order that preliminarily forfeited, subject to third-party interests, the Directly Forfeitable Assets, the Substitute Assets I, and the
      following additional substitute property (the “Substitute Assets II”):

     

    

    (i)          check and resulting proceeds from East West Bank Check # 827015508, dated March 06, 2019 from Davana Primrose Ventures to Summit Sherman Oaks LLC in the amount of
      $250,000.00;

    (ii)         check and resulting proceeds from East West Bank Check # 827015548, dated April 01, 2019 from Davana Sherman Oaks to Jeri Shapiro in the amount of $250,000.00; and

    (iii)        check and resulting proceeds from East West Bank Check # 827015549, dated April 01, 2019 from Davana Sherman Oaks to Jeri Shapiro in the amount of $250,000.00.

    

    

    See Order, ECF No. 170. The Court also imposed a forfeiture money judgment on the Defendant, which amount was
        later amended to be $470,000,000 in U.S. currency and which represented the value of the proceeds traceable to Count 1 of the Indictment. See Am. Forfeiture Money Judgment, ECF No. 174.

     

      

    10.         On October 16, 2019, the Court sentenced the Defendant to a total of 300 months of imprisonment, that is, 240 months for Count 1 of the Indictment and a consecutive 60 months for Count 2
      of the Indictment. See Judgment, ECF No. 175.

     

    

    
      11.         On November 4, 2019, the Court imposed a restitution judgment in the amount of $478,912,763 against the Defendant. See Am. Judgment, ECF No.
        178.

       

      

    

    
      
        	 	
                B.

              	
                Liquidation Trust’s Petition

              

         

        

      

    

    12.         Notice of the criminal forfeiture of the Directly Forfeitable Assets, the Substitute Assets I, and the Substitute Assets II was posted on an official government internet site
      (www.forfeiture.gov) for a period of 30 days. See Decl. of Publication, ECF No. 183.

     

    

    
      6

      
        

    

    13.         Direct notice was sent to any person who reasonably appeared to be a potential claimant with standing to contest their forfeiture, or such person was on actual notice of the forfeiture.

     

    

    14.         The notice described the Directly Forfeitable Assets, the Substitute Assets I, and the Substitute Assets II, and advised that any person, other than the Defendant, asserting a legal
      interest in the such assets may petition the Court for a hearing to adjudicate the validity of that person’s alleged interest, within 60 days of the first day of publication or within 30 days of receipt of notice, whichever is earlier. Fed. R. Crim.
      P. 32.2(b)(6); 21 U.S.C. § 853(n)(2).

     

    

    15.         On March 13, 2020, the Liquidation Trust filed its Verified Claims and Petition for Adjudication of Interests (“Petition”). See Petition, ECF
      No. 193.

     

    

    16.         In the Petition, the Liquidation Trust claimed the Directly Forfeitable Assets, the Substitute Assets I, and the Substitute Assets II as property of the Woodbridge Entities’ bankruptcy
      estates, which property was vested in the Liquidation Trust pursuant to the First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliate Debtors (the “Bankruptcy Plan”). See

        id. at 2-3.

     

    

    17.         The Bankruptcy Plan was confirmed by the United States Bankruptcy Court for the District of Delaware (“Bankruptcy Court”) on October 26, 2018, in In re
        Woodbridge Group of Companies, LLC, et al., Case No. 17-12560 (Bankr. D. Del.). See id.; Petition’s Exhibit A, ECF No. 193-1 (“Order Confirming First Amended Joint Chapter 11 Plan,” the Bankruptcy
      Court Order); Petition’s Exhibit B, ECF No. 193-2, (“First Amended Joint Chapter 11 Plan of Liquidation,” the Bankruptcy Plan).

     

    

    
      7

      
        

    

    18.         In confirming the Bankruptcy Plan, the Bankruptcy Court found that: (i) beginning no later than July 2012, through December 1, 2017, the Defendant used his web of more than 275 limited
      liability companies to conduct a massive Ponzi scheme raising more than $1.22 billion from over 8,400 unsuspecting investors nationwide; (ii) the Ponzi scheme involved the payment of purported returns to existing investors from funds contributed by
      new investors; and (iii) the Ponzi scheme was discovered no later than December 2017. See Petition’s Exhibit A at 16 (page 15 of the Bankruptcy Court Order).

    

    19.         Pursuant to the Bankruptcy Plan, the Liquidation Trust was automatically vested on February 15, 2019, with the Woodbridge Entities’ bankruptcy estates’ rights, title, and interests in,
      among other assets, non-real-estate-related assets or entities that may be transferred or otherwise provided, directly or indirectly, to or for the benefit of the Liquidation Trust.

     

    

    20.         Under the Bankruptcy Plan, the Liquidation Trust is obligated to identify the assets of the Woodbridge Entities’ bankruptcy estates and take affirmative steps to recover all such assets
      for the benefit of its beneficiaries, the vast majority of whom are victims of the Defendant’s fraudulent scheme and conspiracy. See Petition 2-3.

     

    

    21.         The vast majority of the beneficiaries of the Liquidation Trust are victims of Shapiro’s fraud schemes. See Petition 3. The Liquidation Trust
      beneficiaries include the holders of allowed claims in Class 3 and Class 5, as defined in Section 3.4 and Section 3.6 of the Bankruptcy Plan. See Petition’s Exhibit B, ECF No. 193-2 (Bankruptcy Plan, § 3.4
      Class 3: Standard Note Claims, and § 3.6 Class 5: Unit Claims). There are a total of approximately 7,940 claims in Class 3 and Class 5, which each represent a pecuniary loss as a direct result of the illegal acts that were committed in the course of
      Defendant’s offense that was the underlying basis for the forfeiture of the Directly Forfeitable Assets, the Substitute Assets I, and the Substitute Assets II. Class 3 and Class 5 claims were used to
      calculate the amount for the restitution judgment that was imposed against the Defendant.

     

    

    
      8

      
        

    

    22.         Class 3 and Class 5 claims have not been otherwise fully compensated for their pecuniary losses. Under the Bankruptcy Plan, the Liquidation Trust shall first distribute assets to each
      holder of Class A Liquidation Trust Interests, which includes Class 3 and Class 5, on a pro rata basis until the aggregate amount of all distributions equals the product of (i) the total number of Class A
      Liquidations Interests and (ii) $75.00. See Petition’s Exhibit B, ECF No. 193-2 (Bankruptcy Plan, § 1.19 Class A Liquidation Trust Interests; and § 1.84 Liquidation Trusts Interest Waterfall).

     

    
      	 	
              C.

            	
              Subject Assets

            

    

     

    23.         As a result of the Court’s Order and authorized searches of Defendant and his wife’s residence and storage facility, the United States has located and is currently in custody of the
      property listed in Exhibit A (collectively, the “Subject Assets”).

     

    

    24.         The following Directly Forfeitable Assets and Substitute Assets I identified in the Order are either duplicative of other assets or have not been recovered, and therefore, are not
      included among the Subject Assets (collectively, the “Released Assets”):

     

    

    (a)         All assets on deposit in account number 157514954443 at US Bank, held in the name of Jeri Shapiro;

    (b)         One (1) 18-karat, white gold, bangle bracelet, with 550 round diamonds (12.50 carats) and 1,434 black diamonds (24.92 carats);

    (c)         One (1) pair of 18-karat, white gold, drop earrings with 99 yellow sapphires (1.10 carats), 117 tsavorites (1.18 carats), 125 blue sapphires (1.38 carats), 124 blue
      diamonds (1.36 carats), 120 amethysts (1.24 carats), 120 pink sapphires (1.18 carats), and 125 orange sapphires (1.26 carats);

    (d)         One (1) pair of 18-karat, rose gold, golden pearl earrings with round-cut diamonds (.39 carat);

    
      (e)         One (1) emerald and diamond ring;2

    

    

    

    
      

     

      

    2 This is a duplicative asset. The asset is already more fully identified in line 18 of Exhibit A, as one (1) platinum ring with certified Colombia emerald-cut emerald (9.54 carats), eight trapezoid- cut
      diamonds (2.09 carats), and 166 round-cut diamonds (1.42 carats), seized from residence at 4030 Longridge Avenue.

     

    

    
      9

      
        

    

    
      (f)          A cashier’s check for $250,000 from East West Bank;3

       

      (g)         A mortgage payment made out of East West Bank of $399,867.67;

    

    (h)         All assets on deposit in account number 226157004 at Regions Bank, held in the name of Lionshare Lending LLC; and

    
      (i)          Any outstanding balance of credits in JP Morgan Chase and Citicard credit cards.

    

    

    

    25.         The Liquidation Trust stipulates and understands that the Released Assets are not in the United States’ custody, consents to the United States seeking the Court’s release of them from
      forfeiture, and withdraws any claim in its Petition for the Released Assets.

     

    

    26.         It is a primary goal of the United States Department of Justice to recover assets through forfeiture that may be used to compensate victims who have incurred a pecuniary loss as a direct
      result of the commission of the offense underlying such forfeiture.

      

    

    27.         The Parties share the common goal of locating and distributing assets to the victims of the Defendant’s fraud conspiracy in a timely and cost-effective manner.

     

    

    28.         The Parties have agreed to resolve this matter consistent with the sound policy favoring settlement of legal disputes without resort to unnecessary litigation.

     

    

    29.         Petitioner believes that this Stipulation and Settlement Agreement (the “Agreement”) is in the best interests of the Liquidation Trust and its beneficiaries.

     

    

    30.         The Court has jurisdiction over the Parties, the Subject Assets, and the subject matter of the Agreement.

     

    	

          	II.	
            DEFINITIONS

          

     

    

    
      31.         “Agreement” means this Stipulation and Settlement Agreement.

       

      

    

    32.         “Bankruptcy Case” means In re Woodbridge Group of Companies, LLC, et al., Bankruptcy Case No. 17-12560 (BLS) (Bankr. D. Del.).

     

    

    
      
 

     

      

    3 This is a duplicative asset. The asset is one of the cashier checks more fully identified in lines 27, 28, or 29 of Exhibit A.

     

    

    
      10

      
        

    

    33.         “Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware, which is presiding over the Bankruptcy Case.

     

    

    34.         “Bankruptcy Plan” means the First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliated Debtors, confirmed by the Bankruptcy Court on
      October 26, 2018, in the Bankruptcy Case. See Petition’s Exhibit B, ECF No. 193-2.

     

    

    35.         “Collateral Source Recoveries” means any amount recovered by a Qualifying Victim under an order of restitution, as set forth in 18 U.S.C. § 3664(j)(2), or any compensation from any other
      source with respect to the such loss, as set forth in by 18 U.S.C. § 3664(j)(1). Collateral Source Recoveries shall be calculated on a gross basis, with no reduction or credit for prejudgment interest, attorney’s fees, or costs.

     

    

    36.         “Criminal Case” means the above-captioned case, United States v. Shapiro, Case No. 19-20178-CR-CMA, including all forfeiture ancillary
      proceedings.

     

    

    
      37.         “Defendant” means Robert Shapiro.

    

    

    

    38.         The “Court” means the United States District Court for the Southern District of Florida, which is presiding over the Criminal Case.

     

    

    39.         The “Directly Forfeitable Assets” means the specific property alleged to be directly subject to forfeiture in the Indictment, ECF No. 3, in the Criminal Case.

     

    40.         “Effective Date” means the first business day after the date when the following events have all occurred: (i) entry of an order by the Court approving the Agreement that is final and
      non-appealable; (ii) the expiration of the notice period under 21 U.S.C. § 853; and (iii) either the conclusion of all related criminal matters as the Subject Assets are also being held in federal custody as evidence in the Criminal Case, or if the
      United States determines, in its sole discretion, that any of the Subject Assets are no longer required for evidentiary purposes.

     

    

    
      11

      
        

    

    41.         The “Liquidation Trust” means Woodbridge Liquidation Trust, by and through its trustee, Michael I. Goldberg.

     

    

    42.         “Net Sale Proceeds” shall be calculated by deducting from the sale prices of the Subject Assets any direct costs or expenses incurred for their seizure, maintenance, disposition, and
      distribution to any Qualifying Victim, including costs incurred solely to fulfill Petitioner’s obligations of providing notice to Qualifying Victims and of making reports to the United States under this Agreement. In calculating Net Sale Proceeds, no
      deduction shall be made for any indirect cost or expense incurred by Petitioner, including, but not limited to, Trustee fees, attorney’s fees, the fees of professionals and other persons retained by the Trustee not directly incurred as a result of
      the sale and distribution of the Subject Assets to Qualifying Victims; any taxes imposed on the Liquidation Trust; indemnity reserves; and any other bankruptcy-related costs or expenses that were not directly incurred as a result of the sale and
      distribution of Subject Assets to Qualifying Victims.

     

    

    43.         “Order” refers to the preliminary order of forfeiture entered on October 15, 2019, in which the Court forfeited, subject to third-party interests, the Subject Assets. See Order, ECF No. 170.

     

    

    
      44.         The “Parties” means the United States and Petitioner.

       

      

    

    45.         “Petition” means Petitioner Woodbridge Liquidation Trust’s Verified Claims and Petition for Adjudication of Interests, which was filed on March 13, 2020, and in which Petitioner claimed
      the Subject Assets. See Petition, ECF No. 193.

     

    

    46.         “Petitioner” is the “Liquidation Trust,” and is referred to as either Petitioner or Liquidation Trust in this Agreement.

     

    

    
      12

      
        

    

    47.         “Qualifying Victim” means (a) a person or entity with an outstanding restitution balance in the Criminal Case as a result of the restitution judgment in the amount of $478,912,763 entered
      by the Court in the Defendant’s Amended Judgment, ECF No. 178 and which was calculated based on allowed claims in Class 3 and Class 5 at the time; (b) a person or entity that otherwise meets the qualifying criteria set forth in 28 C.F.R. § 9.8(b) by
      demonstrating (1) a pecuniary loss of a specific amount that has been directly caused by the criminal offense, or related offense, that was the underlying basis for the forfeiture, and the loss is supported by documentary evidence including invoices
      and receipts, that (2) the pecuniary loss is the direct result of the illegal acts and is not the result of otherwise lawful acts that were committed in the course of the criminal offense, that (3) the person or entity did not knowingly contribute
      to, participate in, benefit from, or act in a willfully blind manner towards the commission of the offense, or related offense, that was the underlying basis for the forfeiture, that (4) the person or entity has not in fact been compensated for the
      wrongful loss of the property by the perpetrator or others, and that (5) the person or entity does not have recourse reasonably available to other assets from which to obtain compensation for the wrongful loss of the property; or (c) consistent with
      28 C.F.R. § 9.2, a person or entity that purchased units of the Liquidation Trust from a person or entity that meets the criteria set forth in either subsections (a) or (b) above.

     

    

    48.         The “Released Assets” are the assets that were identified in the Order, but are either duplicative of other preliminarily forfeited assets or have not been recovered.

     

    

    
      49.         “Shapiro” refers to the Defendant, Robert Shapiro.

    

     

    50.         The “Subject Assets” means the specific assets that are subject to this Agreement, which are listed in the attached Exhibit A.

     

    

    
      13

      
        

    

    51.         The “Substitute Assets I” are the specific assets listed as substitute property in the Defendant’s Plea Agreement, ECF No. 139, that the Defendant agreed to forfeit.

     

    

    52.         The “Substitute Assets II” are the specific assets later identified as the Defendant’s substitute property that were preliminarily forfeited pursuant to 21 U.S.C. § 853(p) in the Order,
      ECF No. 170.

     

    

    
      53.         “Trustee” refers to Michael I. Goldberg, who is the trustee of the Liquidation Trust.

    

    

    

    54.         The “United States” means the United States of America, by and through the United States Attorney’s Office for the Southern District of Florida.

     

    

    	

          	III.	
            TERMS

          

     

    

    55.         The terms of the Agreement are subject to the approval of the Court, and any violation of any term or condition shall be construed as a violation of an order of the Court.

     

    

    56.         The United States agrees to seek the Court’s approval of the Agreement after the Agreement is executed by the Parties.

     

    

    57.         Within 30 days after the Effective Date, or such other time by agreement of the Parties, the United States agrees to release the Subject Assets to Petitioner in full settlement and
      satisfaction of Petitioner’s claim(s) arising from and related to the seizure, detention, or forfeiture of the Subject Assets.

     

    

    58.         Petitioner agrees to take the Subject Assets in their existing condition “as is, where is, and with all faults” with respect to all facts,
      circumstances, conditions and defects, and agrees that the United States will not be responsible for any costs and/or expenses that have been incurred or will be incurred related to the Subject Assets.

     

    

    59.         Petitioner agrees that the United States has no obligation to inspect for, repair or correct any such facts, circumstances, conditions or defects or to compensate Petitioner for same as
      the United States has specifically bargained for the assumption by Petitioner of all costs and risk of conditions with respect to the Subject Assets and the Parties have structured the terms of the Agreement in consideration thereof.

     

    

    
      14

      
        

    

    60.         Upon the United States’ release of the Subject Assets, Petitioner, its agents, heirs, relatives, and assigns hereby withdraw all claim(s) and waive any defense(s) in this matter that it
      has or might have against the United States, the United States Attorney’s Office for the Southern District of Florida, the United States Department of Justice, the Federal Bureau of Investigation, the United States Marshals Service, and all agents,
      officers, and employees thereof, (the “Released Parties”) relating to the restraint, seizure of, the commencement of forfeiture proceedings against, or the forfeiture of the Subject Assets, including any claim(s) for lost profits or interest.

     

    

    61.         Upon release of the Subject Assets, Petitioner agrees to hold harmless and fully indemnify the Released Parties from all claims pertaining to this matter and the Subject Assets.

     

    

    62.         Petitioner agrees to sell, liquidate, transfer, or otherwise dispose of the Subject Assets, or any part thereof or interest therein, upon such terms designed to maximize the value of the
      Net Sale Proceeds and by commercially reasonable means.

     

    

    63.         Petitioner agrees to distribute the Net Sale Proceeds on a pro rata basis to each Qualifying Victim, up to the outstanding amount of the
      pecuniary loss of that Qualifying Victim. No distribution shall be made for any amount Petitioner knows to have been already recovered by a Qualifying Victim for the same pecuniary loss, or any compensation from any other source with respect to such
      loss.

     

    

    64.         Petitioner shall publish a notice to all Qualifying Victims advising that by accepting the distribution, each Qualifying Victim submits under penalty of perjury that the Net Sale Proceeds
      distributed to said Qualifying Victim would not result in the receipt of funds in excess of the outstanding amount of the pecuniary loss of that Qualifying Victim.

     

    

    
      15

      
        

    

    65.         Petitioner shall provide the United States the following information regarding the Subject Assets and the distribution of Net Sale Proceeds to Qualifying Victims: (a) a list of the Net
      Sale Proceeds for each of the Subject Assets; and (b) a list indicating the amount distributed to each Qualifying Victim from the Net Sale Proceeds. If requested by the United States, Petitioner also agrees to provide supporting documentation for
      each of these lists.

     

    

    
      66.         Each of the Parties agrees to bear its own costs and attorney’s fees.

    

    

    

    67.         The Agreement shall be governed by and construed in accordance with the federal law and, where applicable, the laws of the State of Florida, without giving effect to any principles of
      conflicts of law.

     

    

    68.         Petitioner has read and fully understand each provision of the Agreement, and has freely and voluntarily signed into the Agreement.

     

    

    69.         The Agreement may be executed in one or more counterparts, each of which when executed and delivered shall be an original, and all of which when executed shall constitute one and the same
      instrument.

     

    

    
      16

      
        

    

    
      
        
          
            
              
                70.         The Agreement contains the entire agreement between Petitioner and the United States.

              

            

          

        

         

        

        	
                FOR THE UNITED STATES OF AMERICA:

              	
                 

              
	
                 

              	
                 

              
	
                 

              	
                ARIANA FAJARDO ORSHAN

                

              
	 	UNITED STATES ATTORNEY

         

        

      

      	
               

            	Date:	 	 	By:	
               

            	 
	
               

            	
               Nalina Sombuntham

            
	
               

            	
              Assistant United States Attorney

               Deputy Chief, Asset Forfeiture Division

            

       

      

    

    
      FOR PETITIONER WOODBRIDGE LIQUIDATION TRUST:

      

      

      
        	
                 

              	Date:	 	 	By:	
                 

              	 
	
                 

              	
                Michael I. Goldberg

              
	
                 

              	
                Trustee of and Authorized Representative for

                 Petitioner Woodbridge Liquidation Trust

              

      

      

      

      
        	
                 

              	Date:	 	 	By:	
                 

              	 
	
                 

              	
                
                  Adam L. Schwartz, Esq.

                

              
	
                 

              	
                Counsel for Petitioner

              

         

        

      

    

    
      17

      
        

    

    EXHIBIT A

    Subject Assets

     

    

    
      18

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            1

          	
            19-FBI-004085

          	
            Approximately $244.01 seized from account number 4040774877 at Alpine Bank, held in the name of Carbondale Basalt Owners LLC;

          
	
            2

          	
            19-FBI-004086

          	
            Approximately $342.17 seized from account number 8900003424 at Alpine Bank, held in the name of Davana Sherman Oaks Owners LLC;

          
	
            3

          	
            19-FBI-004087

          	
            Approximately $146,997.01 seized from account number 8970196989 at Alpine Bank, held in the name of Midland Loop Enterprises LLC;

          
	
            4

          	
            19-FBI-004088

          	
            Approximately $15,997.20 seized from account number 36044043514 at Capital One Bank, held in the name of Jeri Shapiro;

          
	
            5

          	
            19-FBI-004089

          	
            Approximately $208,578.06 seized from account number 80-27009771 at East West Bank, held in the name of Davana Primrose Ventures LLC;

          
	
            6

          	
            19-FBI-004090

          	
            Approximately $72,641.89 seized from account number 20-27007984 at East West Bank, held in the name of Jeri L Shapiro;

          
	
            7

          	
            19-FBI-004091

          	
            Approximately $101,834.53 seized from account number 80-27010068 at East West Bank, held in the name of Reliance Marketing Solutions LLC;

          
	
            8

          	
            19-FBI-004092

          	
            Approximately $1,301.44 seized from account number 80-27010381 at East West Bank, held in the name of Settlement Depot LLC;

          
	
            9

          	
            19-FBI-004093

          	
            Approximately $436,469.44 seized from account number X96-267462 at Fidelity Cash Management, held in the name of Jeri Shapiro;

          
	
            10

          	
            19-FBI-004094

          	
            Approximately $6,315.88 seized from account number 197148628 at Regions Bank, held in the name of Commercial Bridge Lenders LLC;

          
	
            11

          	
            19-FBI-004095

          	
            Approximately $140,940.14 seized from account number 2010131932 at Timberline Bank, held in the name of Golden Mesa Ventures LLC;

          
	
            12

          	
            19-FBI-004096

          	
            Approximately $10,689.29 seized from account number 2010131940 at Timberline Bank, held in the name of Golden Primrose Ventures LLC;

          

     

    

    
      19

      
        

    

    
      	
              #

            	
              CATS ID No.

            	
              Subject Asset Description

            
	
              13

            	
              19-FBI-004098

            	
              One (1) pair of 18-karat, white gold, drop earrings, with 1,344 round- cut diamonds (13.80 carats), seized from residence at 4030 Longridge Avenue;

            
	
              14

            	
              19-FBI-004098

            	
              One (1) pair of 18-karat, white gold, button earrings, with 162 round diamonds (13.89 carats), seized from residence at 4030 Longridge Avenue;

            
	
              15

            	
              19-FBI-004098

            	
              One (1) pair of 18-karat, white gold, drop earrings with 22 emeralds (35.53 carats) and round-cut diamonds (7.18 carats), seized from storage locker at 7660 Balboa Blvd;

            
	
              16

            	
              19-FBI-004098

            	
              One (1) pair of 18-karat, rose gold, drop earrings with round-cut diamonds (.62 carat), seized from residence at 4030 Longridge Ave;

            
	
              17

            	
              19-FBI-004098

            	
              One (1) pair of 18-karat, rose gold, drop earrings with rubies (38.90 carats), seized from storage locker at 7660 Balboa Blvd;

            
	
              18

            	
              19-FBI-004098

            	
              One (1) platinum ring with certified Colombia emerald-cut emerald (9.54 carats), eight trapezoid-cut diamonds (2.09 carats), and 166 round-cut diamonds (1.42 carats), seized from residence at 4030 Longridge
                Avenue;

            
	
              19

            	
              19-FBI-004098

            	
              One (1) pair of 18-karat, white gold earrings with multi-color pearls (11.8-15.5mm) and round-cut diamonds (.98 carat), seized from storage locker at 7660 Balboa Blvd;

            
	
              20

            	
              19-FBI-004098

            	
              One (1) platinum ring with oval-cut ruby (10.19 carats), two trapezoid diamonds (1.19 carats), and 70 round-cut diamonds (2.08 carats), seized from residence at 4030 Longridge Avenue,

            
	
              21

            	
              19-FBI-004098

            	
              One (1) 18-karat, rose gold, bangle bracelet with round diamonds (1.50 carats), seized from storage locker at 7660 Balboa Blvd;

            
	
              22

            	
              19-FBI-004098

            	
              One (1) 18-karat, white gold, bangle bracelet with round diamonds (1.5 carats), seized from storage locker at 7660 Balboa Blvd;

            

    

     

    

    
      20

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            23

          	
            19-FBI-004098

          	
            One (1) pair of 14-karat, white gold, drop earrings with two black diamonds (61.81 carats), two icy grey diamonds (23.92 carats), two rose-cut diamonds (.36 carat), and 266 round diamonds (1.63 carats), seized
              from residence at 4030 Longridge Avenue;

          
	
            24

          	
            19-FBI-004098

          	
            One (1) 18-karat, yellow gold ring with 13 radiant-cut diamonds (13.83 carats), seized from storage locker at 7660 Balboa Blvd;

          
	
            25

          	
            19-FBI-004099

          	
            One (1) 1969 Mercury convertible, bearing Vehicle Identification Number (“VIN”) 9F92M565911, seized from residence at 4030 Longridge Avenue;

          
	
            26

          	
            20-FBI-000175

          	
            Wine collection stored at 4030 Longridge Avenue, Sherman Oaks, CA;

          
	
            27

          	
            20-FBI-000180

          	
            Approximately $250,000 in resulting proceeds from East West Bank Check # 827015508, dated March 06, 2019 from Davana Primrose Ventures to Summit Sherman Oaks LLC in the amount of $250,000.00;

          
	
            28

          	
            20-FBI-000181

          	
            Approximately $250,000 in resulting proceeds from East West Bank Check # 827015548, dated April 01, 2019 from Davana Sherman Oaks to Jeri Shapiro in the amount of $250,000.00;

          
	
            29

          	
            20-FBI-000182

          	
            Approximately $250,000 in resulting proceeds from East West Bank Check # 827015549, dated April 01, 2019 from Davana Sherman Oaks to Jeri Shapiro in the amount of $250,000.00;

          
	
            30

          	
            N/A

          	
            Item 1: one (1) watch with multiple colored stones

          
	
            31

          	
            N/A

          	
            Item 2: one (1) pendent with multiple colored stones

          
	
            32

          	
            N/A

          	
            Item 3: one (1) black box and one (1) silver colored ring with clear stones

          
	
            33

          	
            N/A

          	
            Item 5: one (1) black box, one (1) pair of earrings with clear and dark colored stones

          
	
            34

          	
            N/A

          	
            Item 6: one (1) white box and one (1) bracelet yellow colored, one (1) pair of yellow colored earrings with clear stone

          
	
            35

          	
            N/A

          	
            Item 7: one (1) black and white colored bracelet with clear stones

          

     

    

    
      21

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            36

          	
            N/A

          	
            Item 8: one (1) black colored bracelet with multiple colored stones in shape of an elephant

          
	
            37

          	
            N/A

          	
            Item 9: one (1) brown box containing a pair of silver colored earrings with white and purple stones

          
	
            38

          	
            N/A

          	
            Item 10: one (1) yellow colored necklace with purple and green colored stones, one (1) yellow colored pair of earrings with green and purple stones, one (1) black case with ““Bvlgari”” ““custom care”” written
              on it”

          
	
            39

          	
            N/A

          	
            Item 11: one (1) box containing six (6) earring backs

          
	
            40

          	
            N/A

          	
            Item 12: one (1) brown and silver colored bracelet

          
	
            41

          	
            N/A

          	
            Item 14: one (1) pair of silver colored earrings with multiple white stones

          
	
            42

          	
            N/A

          	
            Item 15: one (1) pair of silver colored earrings

          
	
            43

          	
            N/A

          	
            Item 16: one (1) pair of silver colored earrings

          
	
            44

          	
            N/A

          	
            Item 17: one (1) pair of silver colored earrings with multiple colored stones

          
	
            45

          	
            N/A

          	
            Item 18: one (1) pair of silver colored earrings with clear stones

          
	
            46

          	
            N/A

          	
            Item 19: one (1) pair of white and yellow colored stones

          
	
            47

          	
            N/A

          	
            Item 20: one (1) yellow colored necklace with white and green colored stones, one (1) yellow colored necklace with multiple colored stones”

          
	
            48

          	
            N/A

          	
            Item 21: one (1) pair of silver colored earrings with white and green colored stones

          
	
            49

          	
            N/A

          	
            Item 22: one (1) pair of silver colored earrings with green stones

          
	
            50

          	
            N/A

          	
            Item 23: one (1) pair of silver and black earrings with clear stones

          
	
            51

          	
            N/A

          	
            Item 24: one (1) silver colored pair of earrings with white stones

          
	
            52

          	
            N/A

          	
            Item 25: one (1) pair of silver colored earrings with white stones

          

     

    

    
      22

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            53

          	
            N/A

          	
            Item 26: one (1) pair of silver colored earrings with a blue and a purple stone

          
	
            54

          	
            N/A

          	
            Item 27: one (1) pair of silver colored earrings with clear stones

          
	
            55

          	
            N/A

          	
            Item 28: one (1) yellow colored pair of earrings with white stones

          
	
            56

          	
            N/A

          	
            Item 29: one (1) pair of yellow colored earrings with multiple colored stones

          
	
            57

          	
            N/A

          	
            Item 30: one (1) pair of silver colored earrings with clear stones”

          
	
            58

          	
            N/A

          	
            Item 31: one (1) yellow colored earring and one (1) yellow colored broken earring

          
	
            59

          	
            N/A

          	
            Item 32: one (1) yellow colored pair of earrings with multiple colored stones

          
	
            60

          	
            N/A

          	
            Item 33: one (1) rose colored pair of earrings with white stones

          
	
            61

          	
            N/A

          	
            Item 34: one (1) yellow colored pair of earrings

          
	
            62

          	
            N/A

          	
            Item 35: one (1) pair of yellow colored earrings with multiple colored stones

          
	
            63

          	
            N/A

          	
            Item 36: one (1) pair of yellow colored earrings with clear and red stones

          
	
            64

          	
            N/A

          	
            Item 37: one (1) pair of yellow colored earrings with red colored stones

          
	
            65

          	
            N/A

          	
            Item 38: one (1) pair of yellow colored earrings

          
	
            66

          	
            N/A

          	
            Item 39: one (1) pair of yellow colored earrings with multiple colored stones

          
	
            67

          	
            N/A

          	
            Item 40: one (1) single yellow colored earring with multiple clear stones

          
	
            68

          	
            N/A

          	
            Item 41: three (3) silver colored earring backs

          
	
            69

          	
            N/A

          	
            Item 42: one (1) pair of rose colored earrings with clear stones with one (1) earring back

          
	
            70

          	
            N/A

          	
            Item 43: one (1) single silver colored earring with multiple clear stones

          
	
            71

          	
            N/A

          	
            Item 44: one (1) single yellow colored earring broken with earring back

          

     

    

    
      23

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            72

          	
            N/A

          	
            Item 45: one (1) white envelope, seven (7) checkbooks in two (2) cardboard folders with loose checks

          
	
            73

          	
            N/A

          	
            Item 46: US currency: 8 x $100, 32 x $20, total = $1440

          
	
            74

          	
            N/A

          	
            Item 47a: money from item 47; US currency: 19 x $100, 23 x $1, total

            = $1923

          
	
            75

          	
            N/A

          	
            Item 50: foreign currency; 626.9 Euros, 400 Danish Kroners, 20 Israeli Shekels

          
	
            76

          	
            N/A

          	
            Item 51: suspected Chagall painting

          
	
            77

          	
            N/A

          	
            Item 97: Happy Days signatures photo

          
	
            78

          	
            N/A

          	
            Item 133: Joe Namath signed photo

          
	
            79

          	
            N/A

          	
            Item 54: US currency; 7 x $100, 1x $50, 13 x $20, 6 x $5, 15 x $1, total = $1055

          
	
            80

          	
            N/A

          	
            Item 55: one (1) black case with brown colored reading glasses with clear stones and ear plugs

          
	
            81

          	
            N/A

          	
            Item 56: US currency; 128 x $100, 94 x $20, total = $14,680

          
	
            82

          	
            N/A

          	
            Item 58: one (1) silver colored watch with clear stones

          
	
            83

          	
            N/A

          	
            Item 66a: one (1) silver colored earring with backing and one (1) gold colored pendent with black, yellow and gold colored design

          
	
            84

          	
            N/A

          	
            Item 69a: foreign currency; 1730 British Pounds, 1230 South African Rands, 215 Euros, 10000 CFP Francs, 30 New Zealand Dollars, 260 Israeli Shekels, 200 Australian Dollars, 800 Danish Kroners

          
	
            85

          	
            N/A

          	
            Item 70: one (1) brown bag

          
	
            86

          	
            N/A

          	
            Item 71a: fourteen (14) purses

          
	
            87

          	
            N/A

          	
            Item 71b: twelve (12) purses

          
	
            88

          	
            N/A

          	
            Item 71c: five (5) purses

          
	
            89

          	
            N/A

          	
            Item 71d: six (6) purses

          

     

    

    
      24

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            90

          	
            N/A

          	
            Item 71e: nine (9) purses

          
	
            91

          	
            N/A

          	
            Item 71f: two (2) purses

          
	
            92

          	
            N/A

          	
            Item 71g: sixteen (16) purses

          
	
            93

          	
            N/A

          	
            Item 71h: sixteen (16) purses

          
	
            94

          	
            N/A

          	
            Item 71i: thirteen (13) purses

          
	
            95

          	
            N/A

          	
            Item 71j: seven (7) purses

          
	
            96

          	
            N/A

          	
            Item 71k: eight (8) purses

          
	
            97

          	
            N/A

          	
            Item 71l: six (6) purses

          
	
            98

          	
            N/A

          	
            Item 71m: ten (10) purses

          
	
            99

          	
            N/A

          	
            Item 71n: six (6) purses

          
	
            100

          	
            N/A

          	
            Item 72: one (1) gold colored watch with the word “Rolex” written on it

          
	
            101

          	
            N/A

          	
            Item 73a: ten (10) pairs of shoes

          
	
            102

          	
            N/A

          	
            Item 73b: seven (7) pairs of shoes

          
	
            103

          	
            N/A

          	
            Item 73c: twelve (12) pairs of shoes

          
	
            104

          	
            N/A

          	
            Item 73d: twelve (12) pairs of shoes

          
	
            105

          	
            N/A

          	
            Item 73e: nine (9) pairs of shoes

          
	
            106

          	
            N/A

          	
            Item 73f: fifteen (15) pairs of shoes

          
	
            107

          	
            N/A

          	
            Item 73g: eleven (11) pairs of shoes

          
	
            108

          	
            N/A

          	
            Item 73h: six (6) pairs of shoes

          

     

    

    
      25

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            109

          	
            N/A

          	
            Item 73i: nine (9) pairs of shoes

          
	
            110

          	
            N/A

          	
            Item 73j: thirteen (13) pairs of Manolo Blahnik shoes

          
	
            111

          	
            N/A

          	
            Item 73k: eleven (11) pairs of shoes

          
	
            112

          	
            N/A

          	
            Item 73l: fifteen (15) pairs of shoes

          
	
            113

          	
            N/A

          	
            Item 73m: fourteen (14) pairs of Stuart Weitzman shoes

          
	
            114

          	
            N/A

          	
            Item 73n: thirteen (13) pairs of shoes

          
	
            115

          	
            N/A

          	
            Item 73o: ten (10) pairs of shoes

          
	
            116

          	
            N/A

          	
            Item 73p: nine (9) pairs of Christian Louboutin shoes

          
	
            117

          	
            N/A

          	
            Item 73q: eight (8) pairs of Stuart Weitzman shoes

          
	
            118

          	
            N/A

          	
            Item 73r: fifteen (15) pairs of shoes

          
	
            119

          	
            N/A

          	
            Item 73s: six (6) pairs of Valentinos shoes

          
	
            120

          	
            N/A

          	
            Item 73t: sixteen (16) pairs of J. Choos choes

          
	
            121

          	
            N/A

          	
            Item 73u: twelve (12) pairs of shoes

          
	
            122

          	
            N/A

          	
            Item 73v: eight (8) pairs of Jimmy Choo shoes

          
	
            123

          	
            N/A

          	
            Item 73w: twelve (12) pairs of J. Choos shoes

          
	
            124

          	
            N/A

          	
            Item 73x: ten (10) pairs of shoes

          
	
            125

          	
            N/A

          	
            Item 73y: ten (10) pairs of shoes

          
	
            126

          	
            N/A

          	
            Item 73z: six (6) pairs of shoes

          
	
            127

          	
            N/A

          	
            Item 73aa: seven (7) pairs of shoes

          

     

    

    
      26

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            128

          	
            N/A

          	
            Item 73bb: nine (9) pairs of shoes and one (1) bag

          
	
            129

          	
            N/A

          	
            Item 74a: sixty-four (64) items of clothing

          
	
            130

          	
            N/A

          	
            Item 74b: eight (8) jackets

          
	
            131

          	
            N/A

          	
            Item 74c: eighteen (18) items of clothing/dresses

          
	
            132

          	
            N/A

          	
            Item 74d: eighteen (18) items of clothing/dresses

          
	
            133

          	
            N/A

          	
            Item 74e: twenty (20) items of clothing/dresses/belts/scarf

          
	
            134

          	
            N/A

          	
            Item 75a: nine (9) pairs of men’s shoes

          
	
            135

          	
            N/A

          	
            Item 75b: ten (10) pairs of men’s shoes

          
	
            136

          	
            N/A

          	
            Item 75c: men’s belts and one (1) pair of men’s shoes

          
	
            137

          	
            N/A

          	
            Item 76a: eleven (11) items of men’s clothing

          
	
            138

          	
            N/A

          	
            Item 76b: thirteen (13) items of men’s suits

          
	
            139

          	
            N/A

          	
            Item 76c: nine (9) items of men’s clothing and suits

          
	
            140

          	
            N/A

          	
            Item 77: one (1) set of 4 Luis Vuitton luggage bags

          
	
            141

          	
            N/A

          	
            Item 78: gold framed art

          
	
            142

          	
            N/A

          	
            Item 80: red framed art

          
	
            143

          	
            N/A

          	
            Item 87: black framed art

          
	
            144

          	
            N/A

          	
            Item 79: suspected Jean Dufy watercolor

          
	
            145

          	
            N/A

          	
            Item 86: suspected falling cat painting

          
	
            146

          	
            N/A

          	
            Item 81: chess set

          

     

    

    
      27

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            147

          	
            N/A

          	
            Item 82: Giancinto Bosco moon sculpture

          
	
            148

          	
            N/A

          	
            Item 83: metal hands sculpture

          
	
            149

          	
            N/A

          	
            Item 84: suspected Frank Melsler sculpture

          
	
            150

          	
            N/A

          	
            Item 85: Giancinto Bosco tall sculpture

          
	
            151

          	
            N/A

          	
            Item 88: suspected horse painting

          
	
            152

          	
            N/A

          	
            Item 89: vase on desk painting

          
	
            153

          	
            N/A

          	
            Item 99: Magic Johnson signed photo

          
	
            154

          	
            N/A

          	
            Item 122: suspected Renoir sketch

          
	
            155

          	
            N/A

          	
            Item 90: signed Academy Awards poster

          
	
            156

          	
            N/A

          	
            Item 91: signed Elvis photgraphs

          
	
            157

          	
            N/A

          	
            Item 92: suspected signed Elvis photo

          
	
            158

          	
            N/A

          	
            Item 93: metal hands sculpture with base

          
	
            159

          	
            N/A

          	
            Item 94: one (1) framed wall art

          
	
            160

          	
            N/A

          	
            Item 98: suspected Joe Namath art 27/69”

          
	
            161

          	
            N/A

          	
            Item 96: suspected Joe Namath autographed helmet

          
	
            162

          	
            N/A

          	
            Item 101: one (1) pair of silver and black colored earrings with clear stones

          
	
            163

          	
            N/A

          	
            Item 102: one (1) pair of yellow colored earrings with green stones

          
	
            164

          	
            N/A

          	
            Item 103: two (2) silver colored earrings with orange and clear stones

          
	
            165

          	
            N/A

          	
            Item 104: two (2) silver colored earrings with clear, yellow stones and white fluorescent stones with backing

          

     

    

    
      28

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            166

          	
            N/A

          	
            Item 105: one (1) pair of silver colored earrings with clear stones

          
	
            167

          	
            N/A

          	
            Item 106: one (1) pair of oval shaped, silver colored earrings with clear stones and backings

          
	
            168

          	
            N/A

          	
            Item 107: one (1) pair of bronze colored earrings with clear stones

          
	
            169

          	
            N/A

          	
            Item 108: one (1) pair of bronze colored earrings

          
	
            170

          	
            N/A

          	
            Item 109: one (1) silver colored bracelet

          
	
            171

          	
            N/A

          	
            Item 110: one (1) silver colored bracelet

          
	
            172

          	
            N/A

          	
            Item 111: one (1) silver watch with ““chanel”” in writing

          
	
            173

          	
            N/A

          	
            Item 112: one (1) silver and black colored watch with clear stone

          
	
            174

          	
            N/A

          	
            Item 113: one (1) yellow colored ring with clear stones

          
	
            175

          	
            N/A

          	
            Item 114: one (1) silver colored ring with clear stones

          
	
            176

          	
            N/A

          	
            Item 115: one (1) silver and yellow colored ring with green and clear stones

          
	
            177

          	
            N/A

          	
            Item 116: one (1) silver colored ring with green, red, blue, clear stones

          
	
            178

          	
            N/A

          	
            Item 117: one (1) silver colored necklace with clear stones with black bag with ““XIV Karats LTD Beverly Hills”” logo

          
	
            179

          	
            N/A

          	
            Item 118: two (2) silver colored necklaces

          
	
            180

          	
            N/A

          	
            Item 120: foreign currency; 20000 CFP Francs, 2000 Hungarian Forints, 20 Euros, 100 Australian Dollars, 200 Czech Koruns, 920 Israeli Shekels

          
	
            181

          	
            N/A

          	
            Item 123: man and hanging woman sculpture

          
	
            182

          	
            N/A

          	
            Items 124 and 125: two (2) pottery vases

          
	
            183

          	
            N/A

          	
            Items 124 and 125: two (2) pottery vases

          

     

    

    
      29

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            184

          	
            N/A

          	
            Item 126: Picasso small vase

          
	
            185

          	
            N/A

          	
            Item 127: nine (9) furs

          
	
            186

          	
            N/A

          	
            Item 129: US currency; 55 x $20, 1 x $5, 3 x $1, total = $1108

          
	
            187

          	
            N/A

          	
            Item 130: three (3) Louis Vuitton bags

          
	
            188

          	
            N/A

          	
            Item 131: three (3) Louis Vuitton luggage bags

          
	
            189

          	
            N/A

          	
            Item 132: one (1) Louis Vuitton bag

          
	
            190

          	
            N/A

          	
            Item 136: one (1) silver colored ring with clear stones

          
	
            191

          	
            N/A

          	
            Item #1: One (1) dark grey statute

          
	
            192

          	
            N/A

          	
            Item #2: Eight (8) yellow-colored metal bars in plastic cases with certification numbers: B001600, C001086, B003657, B004513, 014646, C001732, B003533, B04200

          
	
            193

          	
            N/A

          	
            Item #3: One (1) yellow-colored metal bar in clear ziptop bag, S/N 7798AE

          
	
            194

          	
            N/A

          	
            Item #4: Three (3) opaque plastic containers with red lids each containing fifteen yellow-colored metal disks; one (1) opaque plastic container with red lid containing ten (10) yellow-colored metal discs.

          
	
            195

          	
            N/A

          	
            Item #5: Seven (7) yellow-colored metal bars labeled “Credit Suisse, 10 oz, fine gold 999 Chi Essayeur Fondeur” wrapped in plastic, with serial numbers: 021217, 023440 023586, 024426, 024425, 024614, 025092
              (all with

            certificate).

          
	
            196

          	
            N/A

          	
            Item #6: Black case containing: one (1) pair of earrings with black/tan/grey multi-colored spheres, metal and clear stones; one (1) pair of earrings with red stones; one (1) pair of earrings with green and
              clear stones; one (1) pair of earrings with clear stones.

          
	
            197

          	
            N/A

          	
            Item #7: Black cloth bag containing: one(1) pair of yellow metal earrings with multi-color and clear stones; one (1) matching yellow metal chain with multi-color and clear stones and medallion; one (1) yellow
              metal chain with medallion with clear stones labeled “Bvlgari Bvlgari”

          

     

    

    
      30

      
        

    

    	
            #

          	
            CATS ID No.

          	
            Subject Asset Description

          
	
            198

          	
            N/A

          	
            Item #8: Grey cloth bag containing: one (1) yellow metal band with clear/yellow stones; one (1) yellow metal band containing black and clear stones.

          
	
            199

          	
            N/A

          	
            Item #9: Light tan cloth bag containing: one (1) rose/yellow metal band with clear stones; one (1) silver-colored metal band with clear stones; one (1) metal band with black and clear stones with
              detached/broken hinge.

          
	
            200

          	
            N/A

          	
            Item #10: Black pouch containing: one (1) silver-colored metal watch with clear stones labeles “Bvlgari”; one (1) yellow-metal watch with clear stones labeled “Bvlgari.”

          
	
            201

          	
            N/A

          	
            Item #11: Painting labeled “Le Clown Marc Chagall.”

          
	
            202

          	
            N/A

          	
            Item #12: Framed art piece with multi-colored puzzle-piece shaped object.

          
	
            203

          	
            N/A

          	
            Item #13: Multi-colored wall art with illegible signature on the back - “Caution.”

          
	
            204

          	
            N/A

          	
            Item #14: Multi-colored wall art with illegible signature on the back - “1-2-3 Shoreditch.”

          
	
            205

          	
            N/A

          	
            Item #15: Yellow wall art appearing to be of Marilyn Monroe, wrapped in a blue blanket.

          

    

    

    

    

    
      31Exhibit 4.3

 

 

 

Newegg Inc.

17560 Rowland Street

City of Industry, CA 91748

Phone: (626) 271-9700

Fax: (626) 964-4626

 

October 23, 2020

 

Digital Grid (Hong Kong) Technology Co., Limited

Hangzhou Lianluo Interactive Technology Co., Ltd.

Hyperfinite Galaxy Holding Limited

10th Floor, Zhuzong Tower

No. 25 Mid Rd. of East 3rd Ring Road

Beijing, People’s Republic of China

Attention: Yingmei Yang

 

Fred Chang

1260 Dorothea Rd.

La Habra Heights, CA 90631

 

Lianluo Smart Limited (to be renamed Newegg
Commerce, Inc. at the Closing)

Room 611, 6th Floor

BeiKong Technology Building

No. 10 Baifuquan Road, Changping District

Beijing 102200, People’s Republic of China

 

Ladies and Gentlemen:

 

Reference is made herein to that certain Stockholders
Agreement dated March 30, 2017 (the “Stockholders Agreement”) by and among Newegg Inc., a Delaware corporation
(“Newegg”), the Newegg Stockholders (as defined therein), and Digital Grid (Hong Kong) Technology Co., Limited,
a company incorporated under the laws of Hong Kong (“Liaison”). Capitalized terms used but not defined herein
shall have the respective terms assigned thereto in the Stockholders Agreement.

 

Newegg, Lianluo Smart Limited, a business
company incorporated under the laws of the British Virgin Islands (“LLIT”), and Lightning Delaware Sub, Inc.,
a Delaware corporation (“Merger Sub”) have entered into that certain Agreement and Plan of Merger dated of even
date herewith (the “Merger Agreement”) pursuant to which Merger Sub will merge with and into Newegg (the “Merger”)
and Newegg will become a wholly-owned subsidiary of LLIT. The stockholders of Newegg will receive Class A common shares of LLIT
(which will become known as common shares upon completion of the Merger) as consideration for the Merger.

 

     

     

    

 

In connection with the transactions contemplated
by the Merger Agreement, including the Merger, the undersigned acknowledge and agree as follows:

 

1. Assignment to and Assumption by LLIT.
Effective at the Closing (as defined in the Merger Agreement), Newegg hereby assigns to LLIT, and LLIT hereby assumes, all of the
rights and obligations of Newegg under the Stockholders Agreement without further action by any of the parties hereto. For purposes
of complying with the terms of the Stockholders Agreement, any reference to Newegg set forth in such provisions shall be replaced
with LLIT and LLIT shall have all of the rights of, and the obligation to fulfill all of the obligations of, Newegg thereunder.

 

2. Application of Stockholders Agreement
to LLIT Common Shares. All references in the Stockholders Agreement to “Company Stock” or similar references are
hereby revised to be read as references to the Class A common shares of LLIT (which will become known as common shares upon completion
of the Merger).

 

3. Joinder. Hangzhou Lianluo Interactive
Technology Co., Ltd., a corporation incorporated in the Peoples’ Republic of
China, and Hyperfinite Galaxy Holding
Limited each agree to become a party to, be bound by the obligations of, and receive the benefits of, a Liaison party and a Principal
Stockholder as defined in and pursuant to the Stockholders Agreement, as amended from time to time thereafter, effective as of
the Closing.

 

4. Amendment and Restatement of Stockholders
Agreement. Effective immediately after the Closing and after giving effect to this letter agreement, the Stockholders Agreement
shall be amended and restated in its entirety and replaced with the Amended and Restated Shareholders Agreement attached hereto
as Exhibit A (the “A&R SHA”), which amendment and restatement shall occur immediately after the Closing
without further action by any of the parties hereto or thereto. The undersigned include, for the avoidance of doubt, Newegg (and
LLIT as successor in interest to Newegg), the Minority Representative and Liaison, which are the parties required under Section
6.11 of the Stockholders Agreement to effect such amendment and restatement and to give effect to the A&R SHA. The undersigned
represent and warrant that no other parties have a right to consent to such amendment and restatement.

 

5. Governing Law. This letter agreement
shall be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise
govern under applicable principles of conflicts of Laws thereof.

 

6. Counterparts. This letter agreement
may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be
deemed to constitute one and the same agreement. This Agreement may be executed by facsimile or electronic transmission in portable
document format (.pdf), each of which shall be deemed an original.

 

	 	Sincerely,
	 	 	 
	 	NEWEGG INC.
	 	 	 
	 	By: 	 
	 	Name:	 
	 	Title:	 

 

    2

     

    

 

Acknowledged and Agreed:

 

	Lianluo Smart Limited (to be renamed 

Newegg Commerce, Inc. at the Closing)	 
	 	 	 
	By: 	                	 
	Name:	 	 
	Title:	 	 
	 	 	 
	Digital Grid (Hong Kong) Technology Co., Limited	 
	 	 	 
	By: 	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	Hangzhou Lianluo Interactive Technology Co., Ltd.	 
	 	 	 
	By: 	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	Hyperfinite Galaxy Holding Limited	 
	 	 	 
	By: 	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	 	 
	Fred Chang, as Minority Representative	 

 

    3

     

    

 

EXHIBIT A

 

     

     

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEWEGG COMMERCE, INC.

 

AMENDED AND RESTATED

SHAREHOLDERS AGREEMENT

 

[●], 202[●]1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		1	Note
                                         to Draft: Insert date of the Closing under the Merger Agreement.

 

     

     

    

 

TABLE OF CONTENTS

  

	 	 	Page
	 	 	 
	Article I. RESTRICTIONS ON TRANSFERS	2
	Section 1.01	Resale of Shares.	2
	Section 1.02	Pre-Emptive Rights.	2
	Section 1.03	Right of First Refusal	3
	Section 1.04	Void Assignment	5
	Section 1.05	Cooperation	5
	Section 1.06	Expenses	5
	Article II. LIQUIDATION; VOLUNTARY TERMINATION	5
	Article III. LOCKUP	5
	Section 3.01	“Market Stand-off” Agreement	5
	Article IV. INDEMNIFICATION; LIMITATION OF LIABILITY	6
	Section 4.01	Indemnification; Limitation of Liability	6
	Section 4.02	D&O Insurance	7
	Article V. GENERAL PROVISIONS	7
	Section 5.01	Confidentiality	7
	Section 5.02	Successors and Assigns	8
	Section 5.03	Specific Performance	8
	Section 5.04	Governing Law.	9
	Section 5.05	Waiver of Jury Trial	9
	Section 5.06	Interpretation	9
	Section 5.07	Notices	10
	Section 5.08	Reorganizations	11
	Section 5.09	Counterparts	12
	Section 5.10	Severability	12
	Section 5.11	Amendment and Waiver	12
	Section 5.12	Tax Withholding	12
	Section 5.13	Entire Agreement	12
	Section 5.14	Legends	13
	Article VI. DEFINITIONS	13

 

    - i -

     

    

 

NEWEGG COMMERCE, INC.

 

AMENDED AND RESTATED

SHAREHOLDERS AGREEMENT

 

This Amended and Restated Shareholders Agreement, dated as
of [●], 202[●] (this “Agreement”), is made by and among (i) Newegg Commerce, Inc., a business company
incorporated under the laws of the British Virgin Islands (the “Company”), as assignee of Newegg, Inc., a Delaware
corporation (“Newegg Delaware”), (ii) the Persons whose names appear on the signature pages hereto (collectively,
the “Newegg Shareholders”), and (iii) Digital Grid (Hong Kong) Technology Co., Limited, a company incorporated
under the laws of Hong Kong (“Digital Grid”), Hangzhou Lianluo Interactive Technology Co., Ltd., a corporation incorporated in the Peoples’ Republic of
China, and Hyperfinite Galaxy Holding Limited, (collectively, the parties
in this clause (iii), “Liaison” and, together with the Newegg Shareholders, the “Principal Shareholders”).
Each of the parties hereto is sometimes referred to individually as a “Party” and collectively as the “Parties”
in this Agreement.

 

RECITALS

 

WHEREAS, Newegg Delaware,
Digital Grid, and the Newegg Shareholders entered into that certain Stockholders Agreement on March 30, 2017 (the “Original
Agreement”);

 

WHEREAS, Newegg Delaware,
the Company (under its former name of Lianluo Smart Limited), and Lightning Delaware Sub, Inc., a Delaware corporation (“Merger
Sub”) entered into that certain Agreement and Plan of Merger dated October 23, 2020 (the “Merger Agreement”),
pursuant to which, among other things, Merger Sub merged with and into Newegg Delaware (the “Merger”), with
Newegg Delaware surviving as a wholly-owned Subsidiary of the Company; and

 

WHEREAS, as a condition
to the closing of the transactions contemplated by the Merger Agreement, including the Merger, the Original Agreement must be amended
and restated and replaced in its entirety by this Agreement.

 

NOW THEREFORE, in consideration
of the mutual covenants, conditions and agreements set forth herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties intending to be legally bound agree as follows:

 

    - 1 -

     

    

 

Article I.

RESTRICTIONS ON TRANSFERS

 

Section 1.01
Resale of Shares.

 

(a)
General Restriction. The Principal Shareholders shall, and shall cause each of its Affiliates to, not Transfer all or any
portion of Company Shares without first complying with the provisions of this ‎Article I and applicable Law.

 

(b)
Affiliate Transfers. Notwithstanding ‎Section 1.01 or ‎Section 1.03, a Principal Shareholder and its Affiliates
may Transfer Company Shares to an Affiliate (an “Affiliate Transferee”) so long as such Affiliate Transferee
executes a joinder to this Agreement in the form attached as Exhibit A (a “Joinder”) hereto agreeing
to be bound by the provisions of this Agreement which bind such Principal Shareholder as if such Affiliate Transferee were such
Principal Shareholder for purposes of this Agreement.

 

(c)
Permitted Transfers. Each of the Principal Shareholders may Transfer all or any portion of its Company Shares to a Permitted
Transferee without approval of the Board only in compliance with this ‎Article I and only if such Permitted Transferee
executes a Joinder agreeing to be bound by the provisions of this Agreement which bind such Principal Shareholder and such other
documents and instruments as the Board may reasonably request as necessary or appropriate to confirm such Permitted Transferee
as a stockholder in the Company.

 

(d)
Transferrable Rights and Obligations. Upon a Transfer in accordance with the terms of this Agreement by any Principal Shareholder
of a portion or all of its Company Shares, the Permitted Transferee shall (i) be bound by the obligations of the Transferring
Principal Shareholder hereunder and (ii) shall have such rights of the Transferring Principal Shareholder under this Agreement
as the Principal Shareholder shall assign in its sole discretion.

 

Section 1.02
Pre-Emptive Rights.

 

(a)
In the event that the Company intends to issue any Company Shares or other Equity Interests (including securities that are convertible
into or exchangeable for Company Shares or other Equity Interests) after the date hereof, other than any Excluded Issuance or in
connection with a Public Offering (the “New Securities”), the Company shall give written notice (a “Preemption
Notice”) thereof to the Principal Shareholders, which shall, as set forth below, provide each Principal Shareholder the
right to subscribe for its Pro Rata Share of the New Securities.

 

(b)
Each Preemption Notice (i) shall set forth the price (or formula by which the price will be determined, which may refer to a future
contingent event) and terms on which the Company proposes to issue the New Securities, together with a calculation of such Principal
Shareholder’s Pro Rata Share of the New Securities (the “Preemption Terms”), and (ii) offer to issue to
each Principal Shareholder up to such Pro Rata Share of the New Securities on the Preemption Terms, which offer must remain open
until at least the close of business on the 15th Business Day following the date on which the Principal Shareholder receives or
is deemed (pursuant to ‎Section 5.07) to receive the Preemption Notice (the “Preemption Election Period”).
Each Principal Shareholder exercising its preemptive rights must, within the Preemption Election Period, advise the Company in
writing (the “Preemption Exercise Notice”) whether it is exercising its rights (in whole or in part) hereunder
and deliver payment in full for the New Securities it elects to purchase. If a Principal Shareholder fails to deliver a Preemption
Exercise Notice, together with payment for the New Securities, within the Preemption Election Period, then such Principal Shareholder
shall be deemed to have waived its purchase rights under this ‎Section 1.02 in connection with such offering of New Securities
(and, for the avoidance of doubt, this shall not operate as a waiver with respect to any future offerings of New Securities).

 

    - 2 -

     

    

 

(c)
In the event any Principal Shareholder fails to give the Company a Preemption Exercise Notice within the Preemption Election Period,
or elects to purchase fewer than all of its Pro Rata Share of the New Securities, then, the Company shall give written notice of
any such unsubscribed New Securities to any Principal Shareholder who has elected to purchase all of its Pro Rata Share of the
New Securities, and each such Principal Shareholder shall have the right, by giving written notice to the Company within 2 Business
Days of receiving or being deemed (pursuant to ‎Section 5.07) to have received such written notice from the Company, to
purchase its Pro Rata Share of such unsubscribed New Securities on the Preemption Terms, and such right shall continue to apply
repeatedly and iteratively until all New Securities have been allocated to the Principal Shareholders or none of the Principal
Shareholders have elected to participate in such further purchase. If, at the end of such process, there are New Securities that
have not been subscribed for by the Principal Shareholders, the Company may, for a period of time not to exceed 60 days, sell such
unsubscribed New Securities, on the Preemption Terms, to a Third Party Purchaser. If, however, at the end of such 60-day period,
the Company has not consummated a sale of any of such unsubscribed New Securities, the Company shall no longer be permitted to
sell such New Securities without again complying with this ‎Section 1.02. 

 

(d) Notwithstanding any provision herein
to the contrary, any issuance of Equity Interest (other than an Excluded Issuance) by any Subsidiary of the Company other than
to the Company or a wholly owned Subsidiary of the Company shall be deemed an issuance by the Company of its Equity Interests to
which the preemptive rights under this ‎Section 1.02 shall apply, mutatis mutandis.

 

Section 1.03
Right of First Refusal.

 

(a)
In the event that any Principal Shareholder or any of its Affiliates (a “Transferring Shareholder”) receives
a bona fide offer from one or more Persons other than an Affiliate Transferee (each, a “Third Party Purchaser”)
to acquire any or all of its or its Affiliates’ Company Shares, and such Transferring Shareholder desires to Transfer any
or all of its Company Shares (the “ROFR Shares”) to such Third Party Purchaser pursuant to such bona fide offer
(a “ROFR Sale”), then (i) the Company shall have the right (a “ROFR Right”), but
not the obligation, to elect to purchase all (and not less than all) of the ROFR Shares proposed to be Transferred to the Third
Party Purchaser, at the same price, and on the same terms and conditions offered by the Third Party Purchaser (the “ROFR
Terms”), (ii) in the event the Company does not deliver a ROFR Exercise Notice during the Company ROFR Exercise Period,
or delivers a ROFR Exercise Notice for less than all of the ROFR Shares, then each of the Principal Shareholders other than the
Transferring Shareholders (each, a “ROFR Shareholder”) shall have a ROFR Right to elect to purchase all (and
not less than all) of its Pro Rata Share of the ROFR Shares proposed to be Transferred to the Third Party Purchaser on the ROFR
Terms. In the event that a ROFR Sale is in exchange for non-cash consideration, then the ROFR Right shall be exercisable based
on the Fair Market Value of such non-cash consideration.

 

    - 3 -

     

    

 

(b)
The Transferring Shareholder shall notify the Company and each ROFR Shareholder in writing of any ROFR Right at least 60 days prior
to the date (the “ROFR Sale Date”) on which the Transferring Shareholder expects to consummate the ROFR Sale
(the “ROFR Notice”). The ROFR Notice shall set forth (i) a copy of the written bona fide offer, if any,
(ii) a copy of the stock purchase agreement, merger agreement or any other agreements entered or to be entered into with the Third
Party Purchaser with respect to the Transfer (if available), and if not available, a summary of the material terms and conditions
pertaining to the Transfer, (iii) the proposed amount and form of consideration and other material terms and conditions, and (iv) the
ROFR Sale Date.

 

(c)
The Company may exercise its ROFR Right by delivery of an irrevocable written notice (the “ROFR Exercise Notice”)
to the Transferring Shareholder and each ROFR Shareholder, within 30 days following receipt of the ROFR Notice (the “Company
ROFR Exercise Period”), accepting the Transfer of all (but not less than all) of the ROFR Shares on the ROFR Terms.

 

(d)
In the event the Company does not deliver a ROFR Exercise Notice during the Company ROFR Exercise Period, or delivers a ROFR Exercise
Notice for less than all of the ROFR Shares, then each ROFR Shareholder may exercise its ROFR Right by delivery of a ROFR Exercise
Notice to the Company and the Transferring Shareholder, within 30 days following the first to occur of (i) the expiration of the
Company ROFR Exercise Period or (ii) receipt of a ROFR Exercise Notice from the Company which relates to less than all of
the ROFR Shares (the “Shareholder ROFR Exercise Period” and, together with the Company ROFR Exercise Period,
the “ROFR Exercise Periods”), accepting the Transfer of all (but not less than all) of its Pro Rata Share of
the ROFR Shares on the ROFR Terms. Such ROFR Right shall continue to apply repeatedly and iteratively during the Shareholder ROFR
Exercise Period until the time when all ROFR Shares have been allocated to the ROFR Shareholders or when all of the ROFR Shareholders
have elected not to make further purchases of ROFR Shares.

 

(e)
If the Transferring Shareholder receives one or more ROFR Exercise Notices for all of the ROFR Shares prior to the end of the applicable
ROFR Exercise Period, then the Parties shall consummate the sale of the ROFR Shares on the ROFR Terms.

 

(f)
If the Transferring Shareholder does not receive ROFR Exercise Notices sufficient to sell all of the ROFR Shares within the applicable
ROFR Exercise Period, then all of the ROFR Exercise Notices shall be null and void, and the Transferring Shareholder may effect
the Transfer of all of the ROFR Shares to the same Third Party Purchaser identified in the ROFR Notice on the ROFR Terms on or
prior to the later of (i) the 60th day following the date of the expiration of the applicable ROFR Exercise Period and (ii) if
applicable, the 10th day following the receipt of all necessary governmental approvals, but in no event later than the 90th day
following the date of the expiration of the applicable ROFR Exercise Period. If the Transfer of the ROFR Shares is not consummated
within such time period, then any proposed Transfer by such Transferring Shareholder shall once again be subject to the terms and
conditions of this ‎Section 1.03.

 

    - 4 -

     

    

 

Section 1.04
Void Assignment. Any purported Transfer of any Equity Interests of the Company in contravention of this Agreement
shall be void and ineffectual and shall not bind or be recognized by the Company or any other Party, and the Company shall not
record such Transfer on its books or treat any purported transferee of such Equity Interests as the owner of such Equity Interests
for any purpose. In the event of any Transfer in contravention of this Agreement, the purported transferee shall have no right
to any profits, losses or distributions of the Company or any other rights of a Principal Shareholder.

 

Section 1.05
Cooperation. In the event of a potential sale by a Transferring Shareholder to a Third Party Purchaser pursuant
to the terms of ‎Section 1.03, the Directors and officers of the Company shall (i) permit such potential Third
Party Purchaser, after executing a reasonable confidentiality agreement in customary form, to conduct a due diligence review of
the Company and its business, operations, prospects, assets, liabilities, financial condition, and results of operations, and
(ii) make available the officers and technical personnel of the Company, during normal business hours, upon reasonable advance
notice and at such Transferring Shareholder’s sole cost and expense, for the purpose of making presentations to, and answering
questions from, such potential Third Party Purchaser.

 

Section 1.06
Expenses. Except as otherwise provided herein, each Principal Shareholder shall bear its own expenses incurred in
connection with this ‎Article I, and any Principal Shareholder effecting a Transfer pursuant to this ‎Article I
shall reimburse the Company for any expenses incurred by the Company in connection therewith.

 

Article II.

LIQUIDATION; VOLUNTARY TERMINATION

 

Section 2.01
This Agreement shall terminate automatically upon the complete liquidation of the Company, or otherwise with the written
consent of each Principal Shareholder; provided that such transaction is duly approved pursuant to, and complies with,
the other provisions of this Agreement and applicable Law.

 

Article III.

LOCKUP

 

Section 3.01
“Market Stand-off” Agreement.

 

(a)
Each of the Holders agrees not to directly or indirectly sell or otherwise Transfer or dispose of any Locked Up Securities
held by such Holder, if requested by the Company and an underwriter of Equity Interests of the Company, for a period not
longer than (A) the 180-day period following a Public Offering and (B) the 90-day period following any subsequent public
offering of Locked Up Securities declared effective under the Securities Act, in each case beginning on the effective date of
the registration statement of the Company filed under the Securities Act if, and to the extent, requested by the managing
underwriter or underwriters in the case of an underwritten public offering (which period may be extended upon the request of
the managing underwriter, to extent required by any rules of the Financial Industry Regulatory Authority, Inc.); provided that
if such offering includes a primary underwritten offering by the Company, all directors and executive officers of the Company
enter into similar agreements; and provided further that if such offering does not include a
primary underwritten offering by the Company, the Holders shall only be required to enter into such agreements if such Holder
is selling shares in connection with such offering.

 

    - 5 -

     

    

 

(b)
If requested by the underwriters, the Holders shall execute a separate agreement to the foregoing effect. The Company may impose
stop-transfer instructions with respect to the shares (or securities) subject to the foregoing restriction until the end of said
period. The provisions of this ‎Section 3.01 shall be binding upon any transferee who acquires Locked Up Securities.

 

Article IV.

INDEMNIFICATION; LIMITATION OF LIABILITY

 

Section 4.01
Indemnification; Limitation of Liability.

 

(a)
Indemnification. Except as limited by applicable Law or the amended and restated articles of association of the Company,
and subject to the provisions of this ‎Section 4.01, the Directors, and
the directors or managers of each Subsidiary thereof (each an “Indemnitee”), shall not be liable for, and shall
be indemnified and held harmless by the Company against, any losses, liabilities and reasonable expenses (including reasonable
attorneys’ fees) (each, a “Loss”), arising from proceedings in which such Indemnitee may be involved,
as a party or otherwise, by reason of he or she being a Director of the Company, or director or manager of any Subsidiary thereof,
or by reason of his or her involvement in the management of the affairs of the Company or its Subsidiaries, whether or not he or
she continues to be such at the time any such Loss is paid or incurred. Notwithstanding the foregoing, an Indemnitee shall not
be held harmless or indemnified under this ‎Section 4.01 for any Losses
arising out of the fraud, dishonesty, intentional misconduct, or knowing or reckless breach of Indemnitee’s obligations under
this Agreement, or bad faith of such Indemnitee. The rights of indemnification provided in this ‎Section 4.01
are in addition to any rights to which an Indemnitee may otherwise be entitled by contract or as a matter of Law. Without limiting
the foregoing, an Indemnitee shall be entitled to indemnification by the Company against reasonable expenses (as incurred), including
attorneys’ fees, incurred by the Indemnitee in connection with the defense of any action to which the Indemnitee may be made
a party (without regard to the success of such defense), to the fullest extent permitted under the provisions of applicable Law.

 

(b)
Payments Prior to Final Disposition. Except as limited by applicable Law or the amended and restated articles of association
of the Company, expenses incurred by an Indemnitee in defending any proceeding (except a proceeding by or in the right of the Company
or any Principal Shareholder against such Indemnitee) shall be paid by the Company in advance of the final disposition of the proceeding,
upon receipt of a written undertaking by or on behalf of such Indemnitee to repay such amount if such Indemnitee is determined
pursuant to this ‎Section 4.01 or adjudicated to be ineligible for indemnification.
This undertaking shall be an unlimited general obligation of the Indemnitee but does not need to be secured unless so determined
by the Board.

 

    - 6 -

     

    

 

(c)
Heirs and Representatives. The indemnification provided by this ‎Section 4.01
shall inure to the benefit of the heirs and personal representatives of each Indemnitee.

 

(d)
Officers and Agents. The Company may, at the direction of the Board, indemnify and advance expenses to any officer, employee
or agent of the Company or its Subsidiaries to the same extent and subject to the same conditions under which it may indemnify
and advance expenses under ‎Section 4.01(a)
and ‎Section 4.01(b).

 

(e)
Not Exclusive. The right to indemnification and the advancement and payment of expenses conferred in this ‎Section 4.01
shall not be exclusive of any other right that a Director or other Person indemnified pursuant to this ‎Section 4.01
may have or hereafter acquire under any Law or provision of this Agreement.

 

(f)
No Shareholder Personal Liability for Indemnification. Any indemnification pursuant to this ‎Section 4.01
shall be made only out of the assets of the Company and shall not cause any Principal Shareholder to incur any personal liability
or result in any liability of any Principal Shareholder to any third party.

 

Section 4.02
D&O Insurance. The Company shall purchase and maintain director and officer liability insurance on behalf of
any Person who is or was a Director or officer of the Company, or any director, officer or manager of any Subsidiary thereof,
against any liability asserted against such Person or incurred by such Person in any capacity identified in ‎Section 4.01
or arising out of such Person’s status as an Indemnitee, whether or not the Company would have the power to indemnify such
Person against that liability under ‎Section 4.01.

 

Article V.

 

GENERAL
PROVISIONS

 

Section 5.01
Confidentiality.

 

(a)
Each Party agrees and acknowledges that the Principal Shareholders may receive confidential, non-public information about the Company
and any of its Subsidiaries.

 

(b)
No Party shall disclose any information relating to the Company or any Subsidiary thereof (the “Confidential Information”)
without the prior written consent of the Board (which consent shall not be unreasonably conditioned, withheld or delayed); provided
that (i) Confidential Information may be disclosed if required by applicable Law, legal process or any stock exchange
or other self-regulatory organization (subject to the provisions of ‎Section 5.01(c)),
or in connection with the making or maintaining of any claim by such Party, arising under this Agreement or asserting or enforcing
any rights hereunder and (ii) each Party may disclose Confidential Information to its Representatives that are actively engaged
in the monitoring or oversight of such Party’s investment in the Company and its Subsidiaries, so long as (x) such Representatives
agree to keep such information confidential (or the Party directs such Representative to keep such information confidential, in
which case such Party shall be liable for any failure on the part of its Representatives to so keep such information confidential),
and (y) the sharing of such Confidential Information with such Representatives does not violate any applicable Law; provided,
further, that the Newegg Shareholders and Liaison, their respective Affiliates, and their respective Representatives shall be permitted
to disclose Confidential Information to financial institutions, investment bankers and prospective purchasers (who are bound by
a customary non-disclosure agreement approved by the Board) in connection with soliciting, marketing and effecting a permitted
Transfer of its Company Shares. The term “Confidential Information” does not include information that (A) is
or has become generally available to the public other than as a result of a direct or indirect disclosure by a Party or any of
its Representatives in breach of the provisions hereof or (B) was within the possession of a Party or any of its Representatives
from a source other than the Company prior to its being furnished to such Party by or on behalf of the Company; provided,
that in the case of (B) above, the source of such information was not known by such Party to be bound by a confidentiality
agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Company with respect to such information.

 

    - 7 -

     

    

 

(c)
In the event that any Party is required by applicable Law, regulation, legal process or any stock exchange or other self-regulatory
organization, to disclose any of the Confidential Information, such Party shall promptly notify the Company in writing so that
the Company may seek a protective order or other appropriate remedy. Nothing herein shall be deemed to prevent any Party from honoring
a subpoena (or governmental order) that seeks discovery of the Confidential Information if (A) a motion for a protective order,
motion to quash and/or other motion filed to prevent the production or disclosure of the Confidential Information has been denied
or is not made in a timely manner; provided, however, that such Party shall disclose only that portion of the Confidential
Information which such Party’s outside legal counsel advises is required and that it exercise commercially reasonable efforts
to preserve the confidentiality of the remainder of the Confidential Information; or (B) the Company consents in writing to having
the Confidential Information produced or disclosed pursuant to the subpoena (or governmental order). In no event will any Party
or any of its Representatives oppose any action by the Company to obtain a protective order or other relief to prevent the disclosure
of the Confidential Information or to obtain reliable assurance that confidential treatment will be afforded the Confidential Information.
The Company shall promptly reimburse the Party for any reasonable costs and expenses (including fees and disbursements of counsel)
incurred in connection with any action that the Party may be required to take, or is requested by the Company to take, under this
‎Section 5.01. Notwithstanding any other provision of this Agreement, no prior
notice, consent or other action shall be required in respect of any disclosure of Confidential Information made to any banking,
financial, accounting, securities or similar supervisory authority exercising its routine supervisory or audit functions, provided that such disclosure is made in the ordinary course and is not specific to the Company.

 

Section 5.02
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective
legal representatives, heirs, legatees, successors and permitted assigns.

 

Section 5.03
Specific Performance. Each Party, in addition to being entitled to exercise all rights provided herein or granted
by Law, including recovery of damages, shall be entitled to seek specific performance of the Party’s rights under this Agreement.
Each Party agrees that monetary damages may not be adequate compensation for any loss incurred by reason of a breach by the Party
of the provisions of this Agreement and each Party hereby agrees to waive the defense in any action for specific performance that
a remedy at Law would be adequate.

 

    - 8 -

     

    

 

Section 5.04
Governing Law.

 

(a) The
terms and conditions of this Agreement and the rights of the parties hereunder shall be governed by and construed in all respects
in accordance with the laws of the British Virgin Islands.

 

(b)
The Parties hereby irrevocably agree that the courts of the British Virgin Islands shall have exclusive jurisdiction in respect
of any dispute, suit, action, arbitration or proceedings (“Proceedings”) which may arise out of or in connection
with this Agreement. By execution and delivery of this Agreement, each Party irrevocably submits to the jurisdiction of the above
courts for itself and in respect of its property with respect to such action. The Parties irrevocably agree that the venue would
be proper in each of the above courts, and hereby waive any objection to Proceedings in the courts of the British Virgin Islands
on the grounds of venue or on the basis that the Proceedings have been brought in an inconvenient forum. Delivery of any process
required by any of the above courts in accordance with ‎Section 5.07 shall constitute
valid and lawful service of process against each Party, without necessity for services by any other means provided by applicable
Law.

 

Section 5.05
Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT
IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

Section 5.06
Interpretation. The table of contents and headings of the Sections contained in this Agreement are solely for the
purpose of reference, are not part of the agreement of the Parties and shall not affect the meaning or interpretation of this
Agreement. Unless the context otherwise requires: (a) an accounting term not otherwise defined has the meaning assigned to
it in accordance with then-applicable GAAP; (b) “or” is not exclusive; (c) words in the singular include
the plural, and words in the plural include the singular; (d) provisions apply to successive events and transactions; (e) the
words “herein,” “hereof” and other words of similar import refer to this Agreement as a whole and not
to any particular Article, or other subdivision; (f) all references herein to Articles, Sections, Recitals, Exhibits, Appendixes,
Annexes, paragraphs, subparagraphs and clauses shall be deemed to be references to Articles, Sections, Recitals, paragraphs, subparagraphs
and clauses of, and Exhibits, Appendixes and Annexes to, this Agreement unless the context shall otherwise require; (g) the
words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”; (h) the word “extent” in the phrase “to the extent” shall mean the degree to which
a subject or other thing extends, and such phrase shall not mean simply “if”; (i) references to “$”
or “dollars” shall mean United States dollars; (j) the word “days” refers to calendar days unless Business
Days are expressly specified; (k) if any action under this Agreement is required to be done or taken on a day that is not a Business
Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter;
(l) references from or through any date mean, unless otherwise specified, from and including or through and including, respectively;
(m) the words “writing,” “written” and other words of similar import refer to printing, typing and other
means of reproducing words (including electronic media) in a visible form; (n) this Agreement is to be construed without regard
to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be
drafted; and (o) unless otherwise expressly provided herein, any agreement, instrument or statute defined or referred to herein
or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, consolidated, replaced or rewritten, including (in the case of agreements or instruments) by
waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments
thereto and instruments incorporated therein.

 

    - 9 -

     

    

 

Section 5.07
Notices. All notices, requests, demands, waivers and other communications required or permitted to be given or made
under this Agreement shall be in writing and shall be deemed to have been duly given or made if (a) delivered personally,
(b) mailed by certified or registered mail with postage prepaid, (c) sent by next-Business Day or overnight mail or
delivery, or (d) sent by facsimile or email, provided that delivery of such facsimile or email is promptly confirmed,
as follows (or at such other address for a Party as shall be specified by like notice):

 

		(i)	if to the Company, to

 

17560 Rowland Street

City of Industry, CA 91748

	 	Attention:	Anthony Chow, Chief Executive Officer;
	 	 	Matt Strathman, General Counsel; and
	 	 	Robert Chang, Chief Financial Officer
	 	E-mail:	Anthony.K.Chow@Newegg.com;
	 	 	Matt.O.Strathman@Newegg.com; and
	 	 	Robert.Y.Chang@Newegg.com

 

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

 

Gibson, Dunn & Crutcher LLP

3161 Michelson Drive

Irvine, CA 92612

	 	Attention:	David C. Lee
	 	E-mail:	DLee@GibsonDunn.com

 

(ii) if to any Newegg Shareholder, to the
last address for such Newegg Shareholder in the Register of Members of the Company.

 

    - 10 -

     

    

 

		(iii)	if to any Liaison party, to

 

10th Floor, Zhuzong Tower

No. 25 Mid Rd. of East 3rd Ring Road

Beijing, People’s Republic of China

	 	Attention:	Yingmei Yang
	 	E-mail:	yangyingmei@lianluo.com

 

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

 

Jin & Koppell PLLC

99 Park Avenue, Suite 1100

New York, NY 10016

	 	Attention:	Ruth Jin
	 	E-mail:	rjin@jinlex.com

 

		(iv)	if to the Minority Representative, to

 

Fred Chang

1260 Dorothea Rd.

La Habra Heights, CA 90631

E-mail: fred.the.chang@gmail.com

 

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

 

Lee Cheng

Maschoff Brennan

100 Spectrum Center Dr., Suite 100

Irvine, CA 92618

Email: lcheng@mabr.com

 

All such notices, requests, demands, waivers
and other communications will be deemed to have been received (w) if by personal delivery, on the day of such delivery, (x) if
by certified or registered mail, on the fifth Business Day after the mailing thereof, (y) if by next-Business Day or overnight
mail or delivery, on the day delivered or (z) if by email prior to 5:00 p.m. at the place of receipt, on the day on which
such email was sent, provided that a copy is also sent by certified or registered mail.

 

Section 5.08
Reorganizations. Nothing in this Agreement shall prevent the Company from effecting, and the Parties to this Agreement
hereby authorize the Company or any of its Subsidiaries with the approval of the Board to effect, any recapitalization, corporate
reorganization, “corporate inversion” involving the creation of one or more holding companies and/or holding company
subsidiaries, or similar transaction (any such transaction, a “Reorganization”). The provisions of this Agreement
shall apply, to the full extent set forth herein, with respect to any Company Shares or other Equity Interests of the Company
or any of its Subsidiaries, or any successor or assign of the Company (whether by merger, consolidation, sale of assets, business
combination or otherwise) that may be issued in respect of, in exchange for, or in substitution of such Company Shares and shall
be appropriately adjusted for any share dividends, splits, reverse splits, combinations, recapitalizations, and the like occurring
after the date hereof. If the Board approves any such Reorganization, each Principal Shareholder agrees to consent to and raise
no objection to such Reorganization, and to take all actions determined by the Board to be necessary and appropriate in connection
with the consummation of such Reorganization.

 

    - 11 -

     

    

 

Section 5.09
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an
original and all of which together shall be deemed to constitute one and the same agreement. This Agreement may be executed by
facsimile or electronic transmission in portable document format (.pdf), each of which shall be deemed an original.

 

Section 5.10
Severability. In the event that any one or more of the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal, or unenforceable in any respect for any reason, the validity, legality, and enforceability
of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired
thereby.

 

Section 5.11
Amendment and Waiver. This Agreement may be amended, and the observance of any term of this Agreement may be waived,
with (and only with) the written consent of each of the Company, the Minority Representative and Liaison; provided, however,
that any such amendment that would disproportionately, materially and adversely affect the rights of any other Principal Shareholder
shall not to that extent be effective without the written consent of such other Principal Shareholder. Each Party (including the
Newegg Shareholders) agree to be bound by any amendment or waiver made in compliance with the prior sentence. No waiver of any
breach shall be deemed to be a further or continuing waiver of such breach or a waiver of any other or subsequent breach. Except
as otherwise expressly provided herein, no failure on the part of any Party to exercise, and no delay in exercising, any right,
power or remedy hereunder, or otherwise available in respect hereof at Law or in equity, shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof,
or the exercise of any other right, power or remedy. Notwithstanding the foregoing, any amendment or modification hereto solely
to add or remove parties to this Agreement as a result of Transfers permitted and in accordance with the terms of this Agreement
shall not require the consent of any party hereto. At any time hereafter, Permitted Transferees may be made Parties in accordance
with the provisions of this Agreement and by executing a signature page in the form attached as Exhibit A hereto, which
signature page shall be countersigned by the Company and shall be attached to this Agreement and become a part hereof without
any further action of any other Party.

 

Section 5.12
Tax Withholding. The Company shall be entitled to require payment in cash or deduction from other amount payable
to any Principal Shareholder of any sums required by federal, state, or local tax Law to be withheld with respect to the issuance,
vesting, exercise, repurchase, or cancellation of any Company Shares or any option to purchase any Company Shares.

 

Section 5.13
Entire Agreement. This Agreement, together with any executed Joinders, constitutes the entire agreement of the Parties
with respect to the subject matter hereof.

 

    - 12 -

     

    

 

Section 5.14
Legends. To the extent the Company Shares are certificated at any time, each certificate representing Company Shares
from time to time owned by the Principal Shareholders shall bear a legend substantially as follows:

 

“THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL AND OTHER RESTRICTIONS. THESE SHARES SHALL NOT BE TRANSFERRED EXCEPT
IN ACCORDANCE WITH THAT CERTAIN SHAREHOLDERS AGREEMENT AMONG THE COMPANY AND CERTAIN OF ITS SHAREHOLDERS.”

 

Article VI.

 

DEFINITIONS

 

Capitalized undefined terms used herein shall have the same
meaning ascribed to them in the amended and restated memorandum and articles of association of the Company. For purposes of this
Agreement, the following terms shall have the respective meanings set forth below:

 

“Affiliate”
means, with respect to any specified Person, any other Person that, at the time of determination, directly or indirectly through
one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person; provided that no
Shareholder shall be deemed an Affiliate of any other Shareholder solely by reason of their investment in the Company.

 

“Board” means
the board of Directors of the Company or the Directors present at a duly convened meeting of the Directors at which a Board Quorum
is present.

 

“Business Day”
means a weekday on which banks are generally open for business in the British Virgin Islands other than a Saturday, Sunday or other
day on which banking institutions in New York, New York or the People’s Republic of China or British Virgin Islands are required
or authorized by Law or executive order to be closed.

 

“Company Shares”
means the Company’s Common Shares (formerly known as Class A Common Shares).

 

“Control”
or “Controlled” means, as for any Person, the possession, directly or indirectly of the power to direct or cause
the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or
otherwise.

 

“Director”
means those persons holding office as directors of the Company from time to time.

 

“Equity Interests”
means any shares or capital shares of or other type of equity interest in a Person, including any restricted shares, warrants,
options or other securities to purchase capital shares or other types of equity interests.

 

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

 

    - 13 -

     

    

 

“Excluded Issuance”
means (i) any Equity Interests issued as share dividends, or pursuant to share splits, recapitalization or other similar events
that do not adversely affect the proportionate amount of the Company Shares held by the Principal Shareholders, (ii) Company Shares
issuable to officers, employees, directors, managers or independent contractors of the Company or any of its Subsidiaries pursuant
to warrants, options, notes or other rights to acquire securities of the Company issued pursuant to any stock option or any similar
equity incentive plan of the Company approved by the Board; and (iii) Equity Interests issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the Company provided that any such issuance shall only be
to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in which the Company is issuing Equity Interests primarily
for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

“Fair Market Value”
means the fair market value determined in good faith by the Board.

 

“GAAP” means
United States generally accepted accounting principles.

 

“Governmental Entity”
means any national, federal, provincial, state, county, township, municipal, local or foreign government, or any legislature, administrative
or regulatory authority, agency, commission, board, bureau, branch, department, division, court, tribunal, magistrate, justice,
multi-national organization, quasi-governmental body, or other similar recognized organization, body or instrumentality of any
federal, state, county, township, municipal, local or foreign government or any other similar recognized organization, body or
instrumentality exercising similar powers or authority.

 

“Holder” means
each holder of Locked Up Securities.

 

“Law” means
any law (statutory, common or otherwise), constitution, treaty, convention, statute, ordinance, code, rule, regulation, standard,
judgment, order, writ, injunction, ruling, decree, decision, arbitration award, agency requirement or other similar authority enacted,
adopted, promulgated, entered or applied by any Governmental Entity.

 

“Locked Up Securities”
means all Company Shares held by the Principal Shareholders.

 

“Minority Representative”
means the representative selected by the Newegg Shareholders holding a majority of the total voting interests represented by the
Company Shares held by the Newegg Shareholders, subject to removal and reselection by such Newegg Shareholders from time to time.
The initial Minority Representative shall be Fred Chang.

 

“Percentage Interest”
means, with respect to any Principal Shareholder, the percentage derived by dividing (i) the number of Company Shares owned
by such Principal Shareholder, by (ii) total number of the then outstanding Company Shares held by all Principal Shareholders.

 

“Permitted Transferee”
means any Affiliate Transferee or any Transferee that has received Company Shares from any Principal Shareholder in accordance
with ‎Section 1.03 (Right of First Refusal).

 

    - 14 -

     

    

 

“Person” means
individuals, corporations, trusts, the estates of deceased individuals, partnerships, limited liability companies, unincorporated
associations of persons and other legal entities.

 

“Pro Rata Share”
means for purposes of ‎Section 1.03 (Right of First Refusal), the percentage which corresponds to the ratio which
each ROFR Shareholder’s Percentage Interest bears to the total Percentage Interests of all ROFR Shareholders exercising their
ROFR Right.

 

“Public Offering”
means an offering  of Company Shares pursuant to a registration statement filed with
the SEC where such Company Shares will be listed on the New York Stock Exchange, the NASDAQ Global Market, the NASDAQ Capital Market,
or any other internationally recognized stock exchange.

 

“Representatives”
as to any Person, means such Person’s directors, officers, employees, Affiliates, consultants, financial advisors, financial
sources, attorneys and accountants or agents.

 

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

 

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

 

“Subsidiary”
of any specified Person means another Person, 50% or more of the total combined voting power of all classes of Equity Interests
or other voting interests of which, or 50% or more of the Equity Interest of which, is owned directly or indirectly by such
specified Person.

 

“Transfer”
means any direct or indirect sale, bequest, exchange, assignment, gift, transfer, pledge, creation of any security interest or
other encumbrance, and any other disposition of any kind (whether with or without consideration and whether voluntary or involuntary
or by operation of Law) affecting title to or possession of any Company Shares.

 

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EXHIBIT A 

 

FORM OF JOINDER

 

By execution of this joinder, the undersigned
agrees to become a party to, be bound by the obligations of, and receive the benefits of, a Permitted Transferee as defined in
and pursuant to the Newegg Inc. Amended and Restated Shareholders Agreement, dated as of [●], 202[●], by the parties
thereto, as amended from time to time thereafter.

 

	 	 
	 	[Name of Permitted Transferee]
	 	 
	 	Address:
	 	 
	 	 

 

	 	Acknowledged and accepted by:
	 	 	 
	 	Newegg Inc.
	 	 	 
	 	By:	                  
	 	Name: 	 
	 	Title:  	 

 

 

- 1 -

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