Document:

xrf-ex47_571.htm

Exhibit 4.7

CHINA RAPID FINANCE LIMITED

SHARE SUBSCRIPTION AGREEMENT

 

Effective Date: June 17, 2019

In connection with the proposed investment by Hongkong Outjoy Education Technology Co., Ltd., a limited liability company registered in Hong Kong, and/or its designated investment entities (together known as "OET"), in China Rapid Finance Limited, a Cayman Islands exempted company with limited liability (the “Company”) (such transaction, the “Transaction”), pursuant to the terms of the Cooperation Agreement, dated on the date hereof (the “Effective Date”), by and between the Company and OET, OET proposes to purchase Class A ordinary shares (of China Rapid Finance Limited (the “Company”), par value $0.0001 per share (the “Ordinary Shares”), from the Company at a price per share equal to the Purchase Price (defined below), subject to the terms and conditions contained herein. In connection therewith, OET and the Company agree as follows: 

1.OET hereby irrevocably subscribes for and agrees to purchase from the Company, in  separate tranches (the date of each such tranche, a “Closing Date”), an aggregate number of Ordinary Shares (the “Shares”) equal to the U.S. dollar equivalent of RMB 100.0 million, at a price per share equal to the Purchase Price.  The “Purchase Price” means the weighted average closing price of the Company’s ADSs representing Ordinary Shares on the New York Stock Exchange (NYSE: XRF) (the “Relevant Shares”) for the thirty (30) trading days preceding the Effective Date, multiplied by 1.3.    The first tranche shall consist of Ordinary Shares having a value equal to the U.S. dollar equivalent of RMB 10.0 million, and the Closing Date for the first tranche shall be no later than thirty (30) days following the Effective Date.  The second tranche shall consist of Ordinary Shares having a value equal to the U.S. dollar equivalent of RMB 45.0 million, and the Closing Date for the second tranche shall be no later than ninety (90) days following the Effective Date.  The third tranche shall consist of Ordinary Shares having a value equal to the U.S. dollar equivalent of RMB 45.0 million, and the final Closing Date for the third tranche shall be no later than one hundred eighty (180) days following the Effective Date, provided that there has been no material adverse change in the Company’s business, properties, financial condition, stockholders’ equity or results of operations of the Company since the Effective Date. All exchange rates shall be based on the noon buying rate of the Federal Reserve Bank of New York.

2.OET shall deliver to the Company on each Closing Date the aggregate subscription amount for the Shares subscribed for on such Closing Date by wire transfer of United States dollars in immediately available funds to the account specified by the Company against delivery to OET, or to a custodian designated by OET, of the Shares in book-entry form.

3.OET is (i) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) or (ii) an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) or (iii) the Transaction is being completed in accordance with Regulation S under the Securities Act and all applicable conditions have been satisfied. OET is acquiring the Shares only for its own account and not for the account of others, and not on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act.  OET is not an entity formed for the specific purpose of acquiring the Shares.

4.The Company represents and warrants that:

a. The Company has been duly incorporated, is validly existing and is in good standing under the laws of the Cayman Islands, with corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted.

b. The Shares have been duly authorized and, when issued and delivered to OET against full payment therefor in accordance with the terms of this Subscription Agreement, will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Company’s Fourth Amended and Restated Memorandum and Articles of Association or under Cayman Islands law.

c. This Subscription Agreement has been duly authorized, executed and delivered by the Company and is enforceable in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

d. The issuance and sale of the Shares and the compliance by the Company with all of the provisions of this Subscription Agreement and the consummation of the transactions herein will be done in accordance with the New York Stock Exchange rules and will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company or any of its subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company is subject (a “Contract”), which would be reasonably like to have, individually or in the aggregate, a material adverse effect on the business, properties, financial condition, stockholders’ equity or results of operations of the Company (a “Material Adverse Effect”) or affect the validity of the Shares or the legal authority of the Company to comply with the terms of this Subscription Agreement; (ii) result in any violation of the provisions of the organizational documents of the Company; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of its properties which would have a Material Adverse Effect or affect the validity of the Shares or the legal authority of the Company to comply with this Subscription Agreement. 

e. The Company is not in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of (i) the organizational documents of the Company, (ii) any Contract or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties, except, in the case of clauses (ii) and (iii), for defaults or violations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect.

f. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance by the Company of this Subscription Agreement (including, without limitation, the issuance of the Shares), other than (i) filings required by applicable state securities laws, (ii) the filing of a Notice of Exempt Offering of Securities on Form D with the Securities and Exchange Commission (the “SEC”) under Regulation D of the Securities Act (if applicable),  (ii) those filings required by the New York Stock Exchange, and (iii) filings which, if not obtained, would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect.

g. As of the date of this Subscription Agreement, the authorized capital stock of the Company consists of 500,000,000 ordinary shares.  As of March 31, 2019, the Company had 59,466,874 Class A ordinary shares and 6,935,606 Class B ordinary shares issued and outstanding.  As of each Closing Date, (i) no shares of preferred stock will be issued and outstanding, (ii) no ordinary shares will be held in the treasury of the Company, and (iii) except for incentive share and employee benefit plans, no options, warrants or other securities exercisable for or convertible into shares of capital stock of the Company will be issued or outstanding.

h. Except for the Annual Report on Form 20-F for the year ended December 31, 2018 (the “2018 Form 20-F”), the Company has filed with the United States Securities and Exchange Commission (the “SEC”) all material forms, documents and reports required to be filed or furnished prior to the date of this Subscription Agreement by it with the SEC (the “Company SEC Documents”).  As of their respective dates, or, if amended or superseded by a filing prior to the date of this Subscription Agreement, as of the date of such amendment or superseding filing, the Company SEC Documents complied in all material respects with the requirements of the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be, and the applicable rules and regulations promulgated thereunder.  The books and records of the Company have been, and are being, maintained in all material respects in accordance with United States generally accepted accounting principles (to the extent applicable). 

i. Except for communications in connection with the 2018 Form 20-F, the Company has not received any written communication from a governmental entity that alleges that the Company is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

j. Assuming the accuracy of OET’s representations and warranties set forth in this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to OET.

k. Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection with any offer or sale of the Shares.

l. Except for such matters as have not had and would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect, there is no proceeding pending, or, to the Company’s knowledge, threatened against the Company or any judgment, decree, injunction, ruling or order of any governmental entity or arbitrator outstanding against the Company.

m. Neither the Company nor any of its subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.  

5. OET understands that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Shares have not been registered under the Securities Act. OET understands that the Shares may not be resold, transferred, pledged or otherwise disposed of by OET absent an effective registration statement under the Securities Act except (i) to the Company or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each case in accordance with any applicable securities laws of the states and of the United States and other jurisdictions, and that any certificates representing the Shares shall contain a legend to such effect. OET acknowledges that the Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. OET understands and agrees that the Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, OET may not be able to readily resell the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. OET understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Shares.

6. OET hereby agrees not to, directly or indirectly (1) offer, pledge, assign, encumber, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, any of the Shares or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of the Shares or such other securities, in cash or otherwise, or publicly announce an intention to do any of the foregoing, for a period of one year from each Closing Date. 

7. OET understands and agrees that OET is purchasing Shares directly from the Company.  OET further acknowledges that there have been no representations, warranties, covenants and agreements made to OET by any placement agent utilized by the Company as part of the issuance and sale of the Shares, the Company, any of their respective officers or directors or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements included in this Subscription Agreement.

8. OET represents and warrants that its acquisition and holding of the Shares will not constitute or result in a non-exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law. 

9. OET acknowledges and agrees that OET has received such information as OET deems necessary in order to make an investment decision with respect to the Shares. OET represents and agrees that OET and OET’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as OET and such undersigned’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares. 

10. OET became aware of this offering of the Shares solely by means of direct contact between OET, on the one hand, and the Company, on the other hand, and the Shares were offered to OET solely by direct contact between OET and the Company. OET did not become aware of this offering of the Shares, nor were the Shares offered to OET, by any other means. OET acknowledges that the Company represents and warrants that the Shares (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. 

11. OET acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares, including risks set forth the section entitled “Risk Factors” in the Company’s prospectus for its initial public offering, the Company’s Annual Report on Form 20-F for the year ended December 31, 2017 and the Company’s other periodic filings with the SEC. 

12. OET has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares, and OET has sought such accounting, legal and tax advice as OET has considered necessary to make an informed investment decision. 

13 .Alone, or together with any professional advisor(s), OET represents and acknowledges that OET has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for OET and that OET is able at this time and in the foreseeable future to bear the economic risk of a total loss of OET’s investment in the Company. OET acknowledges specifically that a possibility of total loss exists. 

14. In making its decision to purchase the Shares, OET represents that it has relied solely upon independent investigation made by OET.

15 .OET understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of this investment. 

16. The execution, delivery and performance by OET of this Subscription Agreement are within the powers of OET, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which OET is a party or by which OET is bound, and will not violate any provisions of OET’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature on this Subscription Agreement is genuine, and the signatory has been duly authorized to execute the same, and this Subscription Agreement constitutes a legal, valid and binding obligation of OET, enforceable against OET in accordance with its terms.  

17. Neither the due diligence investigation conducted by OET in connection with making its decision to acquire the Shares nor any representations and warranties made by OET herein shall modify, amend or affect OET's right to rely on the truth, accuracy and completeness of the Company's representations and warranties contained herein.

18. OET represents and warrants that OET is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by OFAC or in any Executive Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited by any OFAC sanctions program, (ii) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, 

or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. OET agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that OET is permitted to do so under applicable law.  OET also represents that, to the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the OFAC sanctions programs, including the OFAC List.  OET further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by OET and used to purchase the Shares were legally derived.

19. OET acknowledges and agrees that (a) no disclosure in any offering document has been prepared by any placement agent in connection with the offer and sale of the Shares; (b) no placement agents (x) have acted as OET’s financial advisor or fiduciary to OET or provided OET with any information or advice with respect to the Shares, nor is such information or advice necessary or desired or (y) makes or has made any representation as to the Company or the Shares.

20. Neither this Subscription Agreement nor any rights that may accrue to OET hereunder (other than the Shares to be acquired hereunder) may be transferred or assigned.

21. The Company may request from OET such additional information as the Company may deem necessary to evaluate the eligibility of OET to acquire the Shares, and OET shall provide such information as may reasonably be requested, to the extent readily available and to the extent consistent with its internal policies and procedures.

22. OET acknowledges that the Company will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, OET agrees to promptly notify the Company if any of the acknowledgments, understandings, agreements, representations and warranties set forth herein are no longer accurate. OET agrees that each purchase by OET of Shares from the Company will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties herein (as modified by any such notice) by OET as of the time of such purchase.

23. The Company is entitled to rely upon this Subscription Agreement and is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. 

24. This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof.  Except as otherwise expressly set forth herein, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successor and assigns. This Subscription Agreement may not be modified, waived or terminated except by an instrument in writing, signed by the party against whom enforcement of such modification, waiver, or termination is sought.

25. If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

26. This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

27. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.

THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE.

IN WITNESS WHEREOF, each of the parties have executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date set forth above.

 

HONGKONG OUTJOY EDUCATION TECHNOLOGY CO., LTD.

 

______________________________________

Name:

Title:

 

CHINA RAPID FINANCE LIMITED

 

______________________________________

Name:

Title:xrf-ex48_570.htm

Exhibit 4.8

 

NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

Dated:  June 17, 2019  66,402,480 Class A ordinary shares

WARRANT TO PURCHASE

CLASS A ORDINARY SHARES

OF

CHINA RAPID FINANCE LIMITED

 

Organized Under the Laws of the Cayman Islands

THIS CERTIFIES THAT, for value received, and subject to the provisions hereinafter set forth, Hongkong Outjoy Education Technology Co., Ltd., a limited liability company registered in Hong Kong, or its registered assigns (the “Holder”), is entitled to purchase from China Rapid Finance Limited, a Cayman Islands exempted company with limited liability (the “Company”), at the times set forth in this warrant (this “Warrant”), up to 66,402,480 (the “Maximum Amount”) duly authorized, validly issued, fully paid and nonassessable Class A ordinary shares, par value $0.0001 per share, of the Company (the “Shares”) at the Exercise Price (defined below).

1. Duration; Surrender.  The Holder’s right to purchase Shares represented hereby will commence on the date hereof (the “Commencement Date”) and will expire on the date that is five (5) years and six (6) months following the date of this Warrant (the “Expiration Date”).  All such rights shall be wholly null and void to the extent this Warrant is not exercised on or before the Expiration Date.  

2. Exercise; Payment; Partial Exercise.

2.1. Exercise of Warrants.  

2.1.1 .Holder shall only be permitted to purchase the amount of Shares (each such amount of Shares, the “EBITA Milestone Shares”) corresponding with the achievement of certain earnings before interest taxes and amortization (“EBITA”) milestones (the “EBITA Milestones”) by the project company to be established as a wholly owned subsidiary of the Company (the “Project Company”), as set forth on Exhibit A hereto.  Such EBITA Milestones must be achieved within five (5) years from the Effective Date to be valid, but this Warrant may be exercised for the corresponding EBITA Milestone Shares up until the Expiration Date..

2.1.2. For purposes of determining the EBITA milestones as set forth in Exhibit A hereto,  EBITA shall be the aggregate EBITA of the Project Company for the most recent four (4) fiscal quarters and shall be calculated on a quarterly basis by the Company’s Chief Financial Officer in accordance with U.S. generally accepted accounting principles. Upon the achievement of any EBITA Milestones, this Warrant shall become exercisable by the Holder for those EBITA Milestone Shares corresponding with such EBITA Milestones.  For the avoidance of doubt, once an EBITA Milestone has been achieved, the Holder can purchase the EBITA Milestone Shares corresponding with any prior thresholds of EBITA Milestones, but each tranche of EBITA Milestone Shares may only be exercised on one occasion.  In the event of any dispute relating to the calculation of EBITA or the achievement of any EBITA Milestone, the Holder may request that an independent third party accounting firm acceptable to both the Holder and the Company be engaged to review such calculations, and the conclusions of such third party shall be binding upon both parties.

2.1.3. The exercise price shall be US$0.0001 per Share (the “Exercise Price”).  

2.1.4. Subject to the provisions of Section 2.1.1, this Warrant may be exercised by the Holder, in one or more instances until such time as the Maximum Amount of the Shares have been purchased by the cumulative exercises of this Warrant by the Holder, during normal business hours on any business day on or prior to the Expiration Date, by delivering to the Company at its principal office an election notice and subscription substantially in the form attached to this Warrant duly executed by the Holder and either (i) accompanied by payment, in cash or by check payable to the order of the Company, in in an amount equal to the number of Shares for which this Warrant is then being exercised, as designated in such election notice and subscription, multiplied by the Exercise Price (the “Aggregate Exercise Price”) or (ii) through the cashless exercise set forth in Section 2.2 below, and the Holder will thereupon be entitled to receive the number of duly authorized, validly issued, fully paid and nonassessable Shares in accordance with the terms of this Warrant.

2.1.5. The Holder shall be deemed to have surrendered all rights under this Warrant upon the earlier to occur of (i) the Maximum Amount of the Shares having been purchased by the cumulative exercises of this Warrant, and (ii) the Expiration Date.

2.2. Cashless Exercise.  The Holder shall have the right to pay all or a portion of the Aggregate Exercise Price by making a “Cashless Exercise,” in which the Holder shall  be entitled to receive a number of Shares equal to the quotient obtained by dividing [(A-B)(X)] by (A), where:

(A) = the VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable notice of exercise, a form of which is attached hereto as Exhibit B (the “Notice of Exercise”);

(B) = the Exercise Price; and 

(X) = the number of Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

“Trading Day” shall mean a day on which there is trading or quoting for any security on the New York Stock Exchange (the “NYSE”).

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

3.Shares Fully Paid.  The Company represents, warrants, covenants and agrees that all Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable.  

4. Adjustment of Number of Shares Issuable Upon Exercise of the Warrant.

4.1 The number of Shares issuable upon exercise of this Warrant thereof shall be proportionately adjusted to reflect any stock dividend, stock split, reverse stock split, recapitalization or the like affecting the number of outstanding Shares that occurs after the date hereof.

4.2 If after the date hereof, the Company (or any other entity, the stock or other securities of which are at the time receivable on the exercise of this Warrant), consolidates with or merges into another entity or conveys all or substantially all of its assets to another entity, then, in each such case, Holder, upon any permitted exercise of each this Warrant, at any time after the consummation of such reorganization, consolidation, merger or conveyance, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise of this Warrant prior to such consummation, the stock or other securities or property to which such Holder would have been entitled upon the consummation of such reorganization, consolidation, merger or conveyance if such Holder had exercised this Warrant immediately prior thereto, all subject to further adjustment as provided in this Section 4. The successor or purchasing entity in any such reorganization, consolidation, merger or conveyance (if other than the Company) shall duly execute and deliver to Holder a written acknowledgment of such entity’s obligations under this Warrant.

4.3 Upon the occurrence of any event resulting in an adjustment in the number of Shares (or other stock or securities or property) receivable upon the exercise of this Warrant, the Company shall promptly thereafter (i) compute such adjustment in accordance with the terms of this Warrant, (ii) prepare a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based, and (iii) deliver copies of such certificate to the Holder.

5. Representations and Warranties of Holder.  Holder represents and warrants to the Company that, on the date hereof and on the date the Holder exercises the Warrant:

5.1 Holder understands that the Warrant and the Shares have not been registered under the Securities Act and acknowledges that the Warrant and the Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration becomes available.

5.2 Holder is acquiring the Warrant for Holder’s own account for investment and not with a view to, or for sale in connection with, any distribution thereof. 

5.3 Holder understands that the Warrant and the Shares that may be acquired upon exercise are being offered and sold to the Holder in reliance on an exemption from the registration requirements of United States federal and state securities laws under Regulation S promulgated by the Securities and Exchange Commission under the Securities Act and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the applicability of such exemptions and the suitability of the Holder to acquire the Warrant and the underlying Shares.

6.No Rights or Liabilities as Shareholder. The Holder, as such, of this Warrant shall not be entitled to vote, receive dividends or be deemed the holder of Shares which may at any time be issuable on the exercise of this Warrant represented thereby for any purpose whatever, nor shall anything contained herein or in this Warrant be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, merger, conveyance or otherwise), or to receive notice of meetings or other actions affecting shareholders or to receive dividend or subscription rights, or otherwise, until this Warrant shall have been exercised in accordance with the provisions hereof and the receipt and collection of the Exercise Price and any other amounts payable upon such exercise by the Company. No provision hereof, in the absence of affirmative action by Holder to purchase Shares shall give rise to any liability of such holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

7. Miscellaneous.

7.1 Restrictions; Legends. This Warrant and the Shares issuable hereunder are subject in all respects to the provisions of the Company’s Fourth Amended and Restated Memorandum and Articles of Association, as amended from time to time (the “M&A”).  This Warrant, the rights granted hereunder, and any certificate issued upon the exercise of this Warrant and any certificate issued upon any direct or indirect transfer of this Warrant or of any Shares issuable upon exercise of this Warrant are transferable only upon satisfaction of the conditions set forth in the M&A, and shall be stamped or otherwise imprinted with any legends deemed appropriate or necessary by the Company.

7.2 Registration and Transfer of Warrants. The Company will cause to be kept a register for the registration and transfer of the Holders’ rights under this Warrant.  The person in whose name this Warrant is so registered will be deemed and treated as the owner and holder thereof for all purposes of this Warrant, and the Company will not be affected by any notice or knowledge to the contrary.

7.3 Lock up. Holder hereby agrees not to, directly or indirectly (1) offer, pledge, assign, encumber, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, any of the Shares or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of the Shares 

or such other securities, in cash or otherwise, or publicly announce an intention to do any of the foregoing, for a period of six months from each date of exercise. 

7.4 Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), only by a written instrument or written instruments executed by the Company and the Holder(s).

7.5 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five days after having been sent by certified mail, return receipt requested, postage prepaid, or (d) after delivery by a recognized overnight courier, when delivery is verified in the courier’s systems.  All communications shall be sent to the address appearing on the signature page hereto or at such other address or electronic mail address as such party may designate by ten days’ advance written notice to the other parties hereto.  The Holder consents to the delivery of any notice given by the Company by (i) facsimile telecommunication, (ii) electronic mail, or (iii) any other form of electronic transmission directed to the Holder.

7.6 Headings. The section headings contained in this Warrant are provided solely for convenience and do not form a part of this Warrant.

7.7 Governing Law. This Warrant is to be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to its rules of conflict of laws.

7.8 Assignment. Neither this Warrant nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part by the Holder to any person or entity without the prior written consent of the Company; provided that the EBITA Milestone Shares obtained from the exercise of this Warrant may be assigned to members of the Holder’s management team.

[Remainder of This Page Intentionally Blank; Signature Page Follows]

The parties have executed this Warrant as of the date first set forth above.

 

	
CHINA RAPID FINANCE LIMITED

	
 
	
 

	
By:
	
 

	
 
	
 

	
Name:
	
 

	
 
	
 

	
Title:
	
 

	
 
	
 

	
HONGKONG OUTJOY EDUCATION TECHNOLOGY CO., LTD.

	
 

	
By:
	
 

	
 
	
 

	
Name:
	
 

	
 
	
 

	
Title:
	
 

	
 
	
 

	
Address:
	
 

EXHIBIT A

EBITA MILESTONES

	
EBITA Milestone Number
	
Project Company EBITA (USD)
	
EBITA Milestone Shares

	
1
	
3,676,471
	
4,913,811

	
2
	
7,352,941
	
3,706,249

	
3
	
11,029,412
	
3,004,821

	
4
	
14,705,882
	
2,553,883

	
5
	
18,382,353
	
2,236,360

	
6
	
22,058,824
	
1,999,025

	
7
	
25,735,294
	
1,813,971

	
8
	
29,411,765
	
1,665,066

	
9
	
33,088,235
	
1,542,289

	
10
	
36,764,706
	
1,439,066

	
11
	
40,441,176
	
1,350,894

	
12
	
44,117,647
	
1,274,575

	
13
	
47,794,118
	
1,207,774

	
14
	
51,470,588
	
1,148,743

	
15
	
55,147,059
	
1,096,143

	
16
	
58,823,529
	
1,048,935

	
17
	
62,500,000
	
1,006,293

	
18
	
66,176,471
	
967,558

	
19
	
69,852,941
	
932,191

	
20
	
73,529,412
	
899,753

	
21
	
77,205,882
	
869,878

	
22
	
80,882,353
	
842,261

	
23
	
84,558,824
	
816,642

	
24
	
88,235,294
	
792,803

	
25
	
91,911,765
	
770,555

	
26
	
95,588,235
	
749,738

	
27
	
99,264,706
	
730,211

	
28
	
102,941,176
	
711,853

	
29
	
106,617,647
	
694,556

	
30
	
110,294,118
	
678,226

	
31
	
113,970,588
	
662,782

	
32
	
117,647,059
	
648,149

	
33
	
121,323,529
	
634,262

	
34
	
125,000,000
	
621,063

	
35
	
128,676,471
	
608,499

	
36
	
132,352,941
	
596,523

	
37
	
136,029,412
	
585,094

	
38
	
139,705,882
	
574,172

	
39
	
143,382,353
	
563,723

	
40
	
147,058,824
	
553,716

	
41
	
150,735,294
	
544,121

	
42
	
154,411,765
	
534,913

	
43
	
158,088,235
	
526,067

	
44
	
161,764,706
	
517,561

	
45
	
165,441,176
	
509,375

	
46
	
169,117,647
	
501,491

	
47
	
172,794,118
	
493,892

	
48
	
176,470,588
	
486,560

	
49
	
180,147,059
	
479,483

	
50
	
183,823,529
	
472,645

	
51
	
187,500,000
	
466,036

	
52
	
191,176,471
	
459,642

	
53
	
194,852,941
	
453,452

	
54
	
198,529,412
	
447,458

	
55
	
202,205,882
	
441,649

	
56
	
205,882,353
	
436,016

	
57
	
209,558,824
	
430,551

	
58
	
213,235,294
	
425,246

	
59
	
216,911,765
	
420,094

	
60
	
220,588,235
	
415,089

	
61
	
224,264,706
	
410,223

	
62
	
227,941,176
	
405,490

	
63
	
231,617,647
	
400,886

	
64
	
235,294,118
	
396,404

	
65
	
238,970,588
	
392,039

	
66
	
242,647,059
	
387,787

	
67
	
246,323,529
	
383,643

	
68
	
250,000,000
	
379,603

	
69
	
253,676,471
	
375,663

	
70
	
257,352,941
	
371,819

	
71
	
261,029,412
	
368,067

	
72
	
264,705,882
	
364,403

	
73
	
268,382,353
	
360,826

	
74
	
272,058,824
	
357,331

	
75
	
275,735,294
	
353,915

	
76
	
279,411,765
	
350,576

	
77
	
283,088,235
	
347,311

	
78
	
286,764,706
	
344,118

	
79
	
290,441,176
	
340,994

	
80
	
294,117,647
	
337,936

	
Total
	
 
	
66,402,480

EXHIBIT B

FORM OF ELECTION NOTICE AND SUBSCRIPTION

[To be executed and delivered only upon exercise of Warrant]

To China Rapid Finance Limited:

The undersigned registered holder of the enclosed Warrant hereby irrevocably exercises such Warrant for, and purchases thereunder, ____________ Class A ordinary shares, which shares are eligible to be purchased due to the satisfaction of EBITA Milestone #[s] __, by (check one of the following two options):

�� payment to China Rapid Finance Limited in the aggregate amount of $____________ therefor, which is equal to $0.0001 multiplied by the number of Class A ordinary shares being purchased; or 

�� by cashless exercise in accordance with the terms of Section 2.2 of the enclosed Warrant.

 

	
HONGKONG OUTJOY EDUCATION TECHNOLOGY CO., LTD.

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
 

	
Name:
	
 
	
 

	
 
	
 
	
 

	
Title:
	
 
	
 

	
 
	
 
	
 

	
Dated:

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