Document:

Exhibit 10.1

 

CONVERTIBLE NOTE PURCHASE AGREEMENT

 

This CONVERTIBLE NOTE
PURCHASE AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”),
dated June 21, 2018, is entered into by and between Seven Stars Cloud Group, Inc., an exempted company with limited liability incorporated
under the laws of Nevada (the “Company”), and Advantech Capital Investment II Limited, an exempted company incorporated
and existing under the laws of the Cayman Islands (the “Purchaser”).

 

W I T N E S S E T H:

 

WHEREAS, the Company
desires to issue to the Purchaser, and the Purchaser has agreed to purchase from the Company, the Note (as defined below), subject
to the terms and conditions set forth herein and in the Note.

 

NOW, THEREFORE, in
consideration of the respective undertakings stated herein, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

 

		1.	Definitions.
                                         Whenever used herein, unless the context otherwise requires, the following words and
                                         phrases shall have the following meanings:

 

“Affiliate”
of any specified Person shall mean any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition, “control”, when used with respect to
any specified Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

 

“Agreement”
shall have the meaning given to such term in the preamble.

 

“Board”
shall mean the board of directors of the Company.

 

“Business
Day” shall mean any day that is not a Saturday, a Sunday or other day on which banking institutions in the State of New
York, PRC, Hong Kong or the Cayman Islands are required by law to be closed.

 

“Claim Notice”
shall have the meaning specified in Section 6.2(a) of this Agreement.

 

“Closing”
shall have the meaning specified in Section 2.2 of this Agreement.

 

“Closing Date”
shall have the meaning specified in Section 2.2 of this Agreement.

 

“Common Stock”
means any share of common stock of the Company.

 

“Company”
shall have the meaning specified in the preamble to this Agreement.

 

    	 	1	 

     

    

 

“Conversion
Price” shall mean a per share price equal to $1.82 of the Common Stock, as adjusted in accordance with the conditions
in the Note.

 

“Conversion
Shares” shall have the meaning specified in the Note.

 

“Dispute”
shall have the meaning specified in Section 7.2 of this Agreement.

 

“Group Company”
means the Company, its subsidiaries and any other Person that is directly or indirectly controlled by the Company, including its
consolidated variable interest entities.

 

“Hong Kong”
shall mean the Hong Kong Special Administrative Region of the PRC.

 

“Indemnified
Party” shall have the meaning specified in Section 6.1 of this Agreement.

 

“Indemnifying
Party” shall have the meaning specified in Section 6.1 of this Agreement.

 

“Indemnity
Notice” shall have the meaning specified in Section 6.3 of this Agreement.

 

“Losses”
shall have the meaning specified in Section 6.1 of this Agreement.

 

“Material
Adverse Effect” shall mean any event, fact, circumstance or occurrence that, individually or in the aggregate with any
other events, facts, circumstances or occurrences, results in or would reasonably be expected to result in a material adverse change
in or a material adverse effect on (i) the financial condition, assets, liabilities, results of operations, business, prospects
or operations of the Company or its subsidiaries taken as a whole, except to the extent that any such Material Adverse Effect results
from (x) changes in generally accepted accounting principles that are generally applicable to comparable companies or (y) changes
in general economic and market conditions in the PRC; or (ii) the ability of the Company to consummate the transactions contemplated
by this Agreement.

 

“Maturity
Date” shall have the meaning specified in the Note.

 

“Note”
shall mean the promissory note issued by the Company to the Purchaser pursuant to Article 2 below, substantially in the
form of Exhibit A hereto.

 

“Person”
shall mean any natural person, firm, corporation, limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental authority or any other legal entity, including public bodies, whether
acting in an individual, fiduciary or other capacity.

 

“PRC”
shall mean the People’s Republic of China, excluding, for the purpose of this Agreement, Hong Kong, the Macau Special Administrative
Region and Taiwan.

 

“Principal
Amount” shall mean US$12,000,000.

 

“Purchaser”
shall have the meaning specified in the preamble to this Agreement.

 

“Regulation
S” shall have the meaning specified in Section 3.7 of this Agreement.

 

    	 	2	 

     

    

 

“Securities
Act” shall mean the United States Securities Act of 1933, as amended.

 

“Third Party
Claim” shall have the meaning specified in Section 6.2(a) of this Agreement.

 

“US$”
and “U.S. dollar” shall mean the lawful currency for the time being of the United States of America.

 

		2.	Note.

 

2.1             
Issuance of the Note. Subject to the satisfaction of terms and conditions of this Agreement, at the Closing (as defined
below), the Company agrees to issue to the Purchaser and the Purchaser hereby agrees to purchase from the Company, the Note, in
the amount of the Principal Amount.

 

2.2             
Closing. Subject to Sections 2.4 and 2.5 of this Agreement, the closing of the issuance and purchase
of the Note (the “Closing”) shall take place remotely via the exchange of documents and signatures, on a date
specified by the parties herein upon the fulfillment of the conditions to the closing as set forth in Section 2.4 and 2.5
or at such other place and time as the Company and the Purchaser may mutually agree. The date and time of the Closing are referred
to herein as the “Closing Date.”

 

2.3             
Payment and Delivery. At the Closing, the Purchaser shall pay and deliver to the Company an amount equal to the Principal
Amount in U.S. dollars by wire transfer, or by such other method mutually agreeable to the Company and the Purchaser, of immediately
available funds to such bank account designated in writing by the Company, such that the payment shall have been delivered and
made available to such bank account upon the Closing. The Company shall deliver to the Purchaser the duly executed Note dated the
Closing Date, free and clear of encumbrances.

 

2.4             
Conditions to the Purchaser’s Obligations to Effect the Closing. The obligation of the Purchaser to purchase
the Note at the Closing is subject to the satisfaction, on or before the Closing Date, of the following conditions, any of which
may be waived in writing by the Purchaser in its sole discretion:

 

(a)              
All corporate and other actions required to be taken by the Company in connection with the execution and performance of
this Agreement and the issuance, sale and delivery of the Note shall have been completed; and the Company shall have delivered
a copy of its board resolutions and/or the shareholder resolutions (as applicable) approving the execution and performance of this
Agreement and the issuance, sale and delivery of the Note;

 

(b)              
The representations and warranties of the Company to the Purchaser contained in Article 3 of this Agreement shall
have been true and correct on the date of this Agreement and true and correct in all material respects as of the Closing Date,
and the Company shall have performed and complied in all material respects with all, and not be in breach or default in any material
respects under any, agreements, covenants, conditions and obligations contained in this Agreement that are required to be performed
or complied with on or before the Closing Date;

 

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(c)              
No governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law
(whether temporary, preliminary or permanent) that is in effect and restrains, enjoins, prevents, prohibits or otherwise makes
illegal the consummation of the transactions contemplated by this Agreement with respect to the Purchaser, or imposes any damages
or penalties in connection with the transactions contemplated by this Agreement with respect to the Purchaser that are substantial
in relation to the Company; and no action, suit, proceeding or investigation shall have been instituted by a governmental authority
of competent jurisdiction or threatened that seeks to restrain, enjoin, prevent, prohibit or otherwise make illegal the consummation
of the transactions contemplated by this Agreement with respect to the Purchaser, or imposes any damages or penalties in connection
with the transactions contemplated by this Agreement with respect to the Purchaser that are substantial in relation to the Company;

 

(d)              
The Company and the Purchaser shall have entered into a registration rights agreement in form and substance satisfactory
to the Purchaser (the "Registration Rights Agreement");

 

(e)              
The Purchaser shall have completed its legal, financial, management, technology and business due diligence investigation
of the Group Companies to its satisfaction; and

 

(f)               
The Purchaser has received legal opinions issued by the U.S. counsel to the Group Company, dated the Closing Date, in form
and substance satisfactory to the Purchaser.

 

2.5             
Conditions to the Company’s Obligations to Effect the Closing. The obligation of the Company to issue the Note
at the Closing is subject to the satisfaction, or waiver by the Company, of each of the following conditions, upon or before the
Closing:

 

(a)              
All corporate and other actions required to be taken by the Purchaser in connection with the purchase of the Note shall
have been completed;

 

(b)              
The representations and warranties of the Purchaser contained in Article 4 of this Agreement shall have been true
and correct on the date of this Agreement and in all material respects as of the Closing Date, and the Purchaser shall have performed
and complied in all material respects with all, and not be in breach or default in any material respect under any agreements, covenants,
conditions and obligations contained in this Agreement that are required to be performed or complied with on or before the Closing
Date; and

 

(c)              
No governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law
(whether temporary, preliminary or permanent) that is in effect and restrains, enjoins, prevents, prohibits or otherwise makes
illegal the consummation of the transactions contemplated by this Agreement with respect to the Purchaser, or imposes any damages
or penalties in connection with the transactions contemplated by this Agreement with respect to the Purchaser that are substantial
in relation to the Company; and no action, suit, proceeding or investigation shall have been instituted by a governmental authority
of competent jurisdiction or threatened that seeks to restrain, enjoin, prevent, prohibit or otherwise make illegal the consummation
of the transactions contemplated by this Agreement with respect to the Purchaser, or imposes any damages or penalties in connection
with the transactions contemplated by this Agreement with respect to the Purchaser that are substantial in relation to the Company.

 

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		3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants
to the Purchaser the following:

 

3.1             
Due Formation. The Company is a company duly incorporated as an exempted company with limited liability, validly
existing and in good standing under the laws of the Cayman Islands. The Company has all requisite power and authority to carry
on its business as it is currently being conducted.

 

3.2             
Authority. The Company has full power and authority to enter into, execute and deliver this Agreement and each agreement,
certificate, document and instrument to be executed and delivered by the Company pursuant to this Agreement and to perform its
obligations hereunder. The execution and delivery by the Company of this Agreement and any agreements, certificates, documents
and instruments to be executed and delivered by the Company pursuant to this Agreement, and the performance by the Company of its
obligations hereunder, have been duly authorized by all requisite actions on its part.

 

3.3             
Valid Agreement. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’
rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other
equitable remedies.

 

3.4             
Valid Issuance of the Note and the Conversion Shares. The Common Stock issuable upon conversion of the Note has been
duly authorized and reserved. The Note and the Conversion Shares to be issued, sold and delivered upon conversion of the Note will
be duly and validly issued and fully paid, and based in part upon the representations and warranties of the Purchaser in this Agreement,
will be issued in compliance with all applicable federal and state securities laws.

 

3.5             
Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any provision of the organizational documents of the Company or violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental
entity or court to which the Company is subject, or (ii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of or creation of an encumbrance under, or create in any party the right to accelerate, terminate, modify,
or cancel, any agreement, contract, lease, license, instrument, or other arrangement to which the Company is a party or by which
the Company is bound or to which any of the Company’s assets are subject. There is no action, suit or proceeding, pending
or threatened against the Company that questions the validity of this Agreement or the right of the Company to enter into this
Agreement or to consummate the transactions contemplated hereby.

 

3.6             
Consents and Approvals. Neither the execution and delivery by the Company of this Agreement, nor the consummation
by the Company of any of the transactions contemplated hereby, nor the performance by the Company of this Agreement in accordance
with its terms requires the consent, approval, order or authorization of, or registration with, or the giving notice to, any governmental
or public body or authority or any third party, except such as have been or will have been obtained, made or given on or prior
to the Closing Date.

 

    	 	5	 

     

    

 

3.7             
Securities Laws. Assuming the accuracy of the representations and warranties of the Purchaser in this Agreement,
(a) no directed selling efforts into the United States (as defined in Rule 902 of Regulation S under the Securities Act (“Regulation
S”)) have been made by the Company, any of its affiliates, or any person acting on its behalf with respect to the Note,
and (b) none of such persons has taken any actions that would result in the sale of the Note to the Purchaser under this Agreement
requiring registration under the Securities Act.

 

3.8             
Events Subsequent to Most Recent Fiscal Period. Since January 1, 2018 until the date hereof and to the Closing Date,
there has not been any event, fact, circumstance or occurrence that has had or would reasonably be expected to have a Material
Adverse Effect.

 

		4.	Representations
                                         and Warranties of the Purchaser. The Purchaser hereby represents and warrants
                                         to the Company the following:

 

4.1             
Due Formation. The Purchaser is duly formed, validly existing and in good standing in the jurisdiction of its organization.
The Purchaser has all requisite power and authority to carry on its business as it is currently being conducted.

 

4.2             
Authority. The Purchaser has full power and authority to enter into, execute and deliver this Agreement and each
agreement, certificate, document and instrument to be executed and delivered by the Purchaser pursuant to this Agreement and to
perform its obligations hereunder. The execution and delivery by the Purchaser of this Agreement and any agreements, certificates,
documents and instruments to be executed and delivered by the Purchaser pursuant to this Agreement, and the performance by the
Purchaser of its obligations hereunder have been duly authorized by all requisite actions on its part.

 

4.3             
Valid Agreement. This Agreement has been duly executed and delivered by the Purchaser and constitutes the legal,
valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of
creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.

 

4.4             
Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any provision of the organizational documents of the Purchaser or violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental
entity or court to which the Purchaser is subject, or (ii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of or creation of an encumbrance under, or create in any party the right to accelerate, terminate, modify,
or cancel, any agreement, contract, lease, license, instrument, or other arrangement to which the Purchaser is a party or by which
the Purchaser is bound or to which any of the Purchaser’s assets are subject, in each case of the foregoing (i) and (ii),
in such a manner that would materially and adversely affect the Purchaser’s ability to consummate the transactions contemplated
hereby. There is no action, suit or proceeding, pending or threatened against the Purchaser that questions the validity of this
Agreement or the right of the Purchaser to enter into this Agreement or to consummate the transactions contemplated hereby.

 

    	 	6	 

     

    

 

4.5             
Consents and Approvals. Neither the execution and delivery by the Purchaser of this Agreement, nor the consummation
by the Purchaser of any of the transactions contemplated hereby, nor the performance by the Purchaser of this Agreement in accordance
with its terms requires the consent, approval, order or authorization of, or registration with, or the giving notice to, any governmental
or public body or authority or any third party, except such as have been or will have been obtained, made or given on or prior
to the Closing Date.

 

4.6             
Investment Intent. The Purchaser is purchasing the Note solely for its own account for investment and not with a
view to or for sale in connection with any distribution of the Note or any portion thereof and not with any present intention of
selling, offering to sell or otherwise disposing of or distributing the Note or any portion thereof in any transaction. The entire
legal and beneficial interest of the Note is being purchased, and will be held, for the Purchaser’s account only, and neither
in whole or in part for any other Person.

 

4.7             
Regulation S Eligibility; Restriction on Resale. The Purchaser acknowledges that the Purchaser is acquiring the Note
in an offshore transaction in reliance upon the exemption from registration provided by Regulation S. The Purchaser is not a U.S.
person as defined in Rule 902 of Regulation S and is located outside of the United States. The Purchaser understands that the Note
to be purchased by the Purchaser has not been registered under the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, a U.S. person except pursuant to an exemption from, or in a transaction not subject
to the registration requirements under the Securities Act.

 

4.8             
Experience. The Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of its investment in its Purchased Shares. The Purchaser is capable of bearing the economic
risks of such investment, including a complete loss of its investment.

 

		5.	Covenants.

 

5.1             
Use of Proceeds. The Company shall use the proceeds from the issuance of the Note for general corporate purposes
and shall not be used to repay any shareholders loans.

 

5.2             
Other Convertible Note Offering. Without the Purchaser’s prior written consent, the Company shall not issue
or agree to issue to any Person any convertible note or instrument similar to the Note that is dated as at any date during the
period starting from the date hereof and ending on a date that is 180 days after the Closing Date, with an aggregate principal
amount exceeding US$40 million (including the Principal Amount).

 

5.3             
Further Assurances. From the date of this Agreement to the Closing Date, the Company and the Purchaser shall use
their reasonable best efforts to fulfill or obtain the fulfillment of the conditions precedent to the consummation of the transactions
contemplated hereby.

 

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		6.	INDEMNIFICATION.

 

6.1             
Indemnification. The Company (an “Indemnifying Party”) shall indemnify and hold the Purchaser
and its directors, officers, employees, advisors and agents (collectively, the “Indemnified Party”) harmless
from and against any losses, claims, damages, fines, expenses and liabilities of any kind or nature whatsoever, including but not
limited to any investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any
pending or threatened legal action or proceeding, and any taxes or levies that may be payable by such person by reason of the indemnification
of any indemnifiable loss hereunder (collectively, “Losses”) resulting from or arising out of: (a) the breach
of any representation or warranty of such Indemnifying Party contained in this Agreement or in any schedule or exhibit hereto;
or (b) the violation or nonperformance, partial or total, of any covenant or agreement of such Indemnifying Party contained in
this Agreement for reasons other than gross negligence or willful misconduct of such Indemnified Party. In calculating the amount
of any Losses of an Indemnified Party hereunder, there shall be subtracted the amount of any insurance proceeds and third-party
payments received by the Indemnified Party with respect to such Losses, if any.

 

6.2             
Third Party Claims. 

 

(a)              
If any third party shall notify any Indemnified Party in writing with respect to any matter involving a claim by such third
party (a “Third Party Claim”) which such Indemnified Party believes would give rise to a claim for indemnification
against the Indemnifying Party under this Article 6, then the Indemnified Party shall promptly (i) notify the Indemnifying
Party thereof in writing within thirty (30) days of receipt of notice of such claim and (ii) transmit to the Indemnifying Party
a written notice (“Claim Notice”) describing in reasonable detail the nature of the Third Party Claim, a copy
of all papers served with respect to such claim (if any), and the basis of the Indemnified Party’s request for indemnification
under this Agreement.

 

(b)              
Upon receipt of a Claim Notice with respect to a Third Party Claim, the Indemnifying Party shall have the right to assume
the defense of any Third Party Claim by, within thirty (30) days of receipt of the Claim Notice, notifying the Indemnified Party
in writing that the Indemnifying Party elects to assume the defense of such Third Party Claim, and upon delivery of such notice
by the Indemnifying Party, the Indemnifying Party shall have the right to fully control and settle the proceeding, provided,
that, any such settlement or compromise shall be permitted hereunder only with the written consent of the Indemnified Party.

 

(c)              
If requested by the Indemnifying Party, the Indemnified Party shall, at the sole cost and expense of the Indemnifying Party,
cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim which the Indemnifying Party elects to
contest, including the making of any related counterclaim against the person asserting the Third Party Claim or any cross complaint
against any person. The Indemnified Party shall have the right to receive copies of all pleadings, notices and communications with
respect to any Third Party Claim, other than any privileged communications between the Indemnifying Party and its counsel, and
shall be entitled, at its sole cost and expense, to retain separate co-counsel and participate in, but not control, any defense
or settlement of any Third Party Claim assumed by the Indemnifying Party pursuant to Section 6.2(b) of this Agreement.

 

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(d)              
In the event of a Third Party Claim for which the Indemnifying Party elects not to assume the defense or fails to make such
an election within the thirty (30) days of the Claim Notice, the Indemnified Party may, at its option, defend, settle, compromise
or pay such action or claim at the expense of the Indemnifying Party; provided, that, any such settlement or compromise
shall be permitted hereunder only with the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld
or delayed.

 

6.3             
Other Claims. In the event any Indemnified Party should have a claim against the Indemnifying Party hereunder which
does not involve a Third Party Claim, the Indemnified Party shall promptly transmit to the Indemnifying Party a written notice
(the “Indemnity Notice”) describing in reasonable detail the nature of the claim, the Indemnified Party’s
best estimate of the amount of Losses attributable to such claim and the basis of the Indemnified Party’s request for indemnification
under this Agreement. If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days from its receipt
of the Indemnity Notice that the Indemnifying Party disputes such claim, the Indemnifying Party shall be deemed to have accepted
and agreed with such claim.

 

		7.	MISCELLANEOUS.

 

7.1             
Survival of the Representations and Warranties. All representations and warranties made by any party hereto shall
survive for eighteen (18) months and shall terminate and be without further force or effect on the date that is eighteen (18) months
from the date hereof, except as to any claims thereunder which have been asserted in writing pursuant to Section 6.1 against
the party making such representations and warranties on or prior to such date that is eighteen (18) months from the date hereof.

 

7.2             
Governing Law; Arbitration. This Agreement shall be governed and interpreted in accordance with the laws of Hong
Kong without giving effect to the conflicts of law principles thereof. Any dispute arising out of or relating to this Agreement,
including any question regarding its existence, validity or termination (“Dispute”) shall be referred to and
finally resolved by arbitration at the Hong Kong International Arbitration Centre in accordance with the Hong Kong International
Arbitration Centre Administered Arbitration Rules then in force. There shall be three arbitrators. Each Party has the right to
appoint one arbitrator and the third arbitrator shall be appointed by the Hong Kong International Arbitration Centre. The language
to be used in the arbitration proceedings shall be English. The seat of arbitration shall be Hong Kong. Each of the Parties irrevocably
waives any immunity to jurisdiction to which it may be entitled or become entitled (including without limitation sovereign immunity,
immunity to pre-award attachment, post-award attachment or otherwise) in any arbitration proceedings and/or enforcement proceedings
against it arising out of or based on this Agreement or the transactions contemplated hereby.

 

7.3             
Amendment. This Agreement shall not be amended, changed or modified, except by another agreement in writing executed
by the parties hereto.

 

7.4             
Binding Effect. This Agreement shall inure to the benefit of, and be binding upon, the Purchaser, the Company, and
their respective heirs, successors and permitted assigns.

 

7.5             
Assignment. Neither this Agreement nor any of the rights, duties or obligations hereunder may be assigned by the
Company or the Purchaser without the express written consent of the other Party, except that the Purchaser may assign or pledge
all or any part of its rights and obligations hereunder and under the Note to any Affiliate of the Purchaser, without the consent
of the Company, provided that no such assignment shall relieve the Purchaser of its obligations hereunder if such assignee does
not perform such obligations. Any purported assignment in violation of the foregoing sentence shall be null and void.

 

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7.6             
Notices. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall
be deemed to have been duly given on the date of actual delivery if delivered personally to the party hereto to whom notice is
to be given, on the date sent if sent by telecopier, tested telex or prepaid telegram, on the next business day following delivery
to Federal Express properly addressed or on the day of attempted delivery by the U.S. Postal Service if mailed by registered or
certified mail, return receipt requested, postage paid, and properly addressed as follows:

 

	If to the Company, at:	
        Seven Stars Cloud Group, Inc.

        No. 4 Drive-in Movie Theater Park, No. 21

        Liangmaqiao Road,
        Chaoyang District, Beijing,

        P.R.C. 100125

        Attn: Legal Department

        Telecopy: 86+10-8586-2775

 

	If to the Purchaser, at:	
        190 Elgin Avenue, George Town, Grand Cayman KY

        1-9005, Cayman
        Islands

         

        With a copy to:

        Suite 1702-03, One Exchange Square, 8 Connaught Place,

        Central,
        Hong Kong

        Phone +852 2801 6988

        Fax: +852 28014882

        Attn: Finance Department

 

Any party hereto may
change its address for purposes of this Section 7.6 by giving the other Party written notice of the new address in the manner
set forth above.

 

7.7             
Entire Agreement. This Agreement constitutes the entire understanding and agreement between the parties with respect
to the matters covered hereby, and all prior agreements and understandings, oral or in writing, if any, between the parties with
respect to the matters covered hereby are merged and superseded by this Agreement.

 

7.8             
Severability. If any provisions of this Agreement shall be adjudicated to be illegal, invalid or unenforceable in
any action or proceeding whether in its entirety or in any portion, then such provision shall be deemed amended, if possible, or
deleted, as the case may be, from the Agreement in order to render the remainder of the Agreement and any provision thereof both
valid and enforceable, and all other provisions hereof shall be given effect separately therefrom and shall not be affected thereby.

 

7.9             
Fees and Expenses. Except as otherwise provided in this Agreement, the Company and the Purchaser will bear their
respective expenses incurred in connection with the negotiation, preparation and execution of this Agreement and the transactions
contemplated hereby, including fees and expenses of attorneys, accountants, consultants and financial advisors.

 

    	 	10	 

     

    

 

7.10         
Confidentiality. (a) Each party hereto shall keep in confidence, and shall not use (except for the purposes of the
transactions contemplated hereby) or disclose, any non-public information disclosed to it or its affiliates, representatives or
agents in connection with this Agreement or the transactions contemplated hereby, and (b) each party hereto shall ensure that its
affiliates, representatives and agents keep in confidence, and do not use (except for the purposes of the transactions contemplated
hereby) or disclose, any such non-public information, provided, however, that nothing in this Agreement shall restrict any party
from disclosing information (i) that is already publicly available and not as a result of a breach of this section, or (ii) that
may be required by applicable law, statute, treaty, rule, regulation, order, right, privilege, qualification, license or franchise
or determination of an arbitrator or a court or other governmental authority or stock exchange; provided, however,
that any disclosure related to the terms of the transactions contemplated hereby shall require the Company to provide prior written
notice to the Purchaser and at least a time period not shorter than two (2) Business Days for the Purchaser to review and provide
comments on such disclosure.

 

7.11         
Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of
this Agreement were not performed in accordance with the terms hereof and that the parties hereto shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or equity.

 

7.12         
Termination. In the event that the Closing shall not have occurred by June 30, 2018, the Company or the Purchaser
(with respect to itself) may terminate this Agreement with no further force or effect, except for the provisions of Article
7, which shall survive any termination under this Section 7.12, provided that any party who is then in a material
breach of this Agreement shall not be entitled to terminate this Agreement.

 

7.13         
Headings. The headings of the various articles and sections of this Agreement are inserted merely for the purpose
of convenience and do not expressly or by implication limit, define or extend the specific terms of the section so designated.

 

7.15         
Execution in Counterparts. For the convenience of the Parties and to facilitate execution, this Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute
but one and the same instrument.

 

    	 	11	 

     

    

 

7.16         
No Waiver. Except as specifically set forth herein, the rights and remedies of the parties to this Agreement are
cumulative and not alternative. No failure or delay on the part of any party in exercising any right, power or remedy under this
Agreement will operate as a waiver of such right, power or remedy, and no single or partial exercise of any such right, power
or remedy will preclude any other or further exercise of such right, power or remedy or the exercise of any other right, power
or remedy. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party;
(b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation of that party or of the right of the party giving
such notice or demand to take further action without notice or demand as provided in this Agreement.

 

[Remainder of Page Intentionally Left
Blank]

 

    	 	12	 

     

    

 

IN WITNESS WHEREOF, the
parties have executed this Convertible Note Purchase Agreement as of the date first above written.

  

 

	 	Seven Stars Cloud Group, Inc.	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 

 

Signature Page to Convertible Note Purchase
Agreement

 

     

     

    

 

IN WITNESS WHEREOF, the
parties have executed this Convertible Note Purchase Agreement as of the date first above written.

 

 

	 	Advantech Capital Investment II Limited	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 

 

Signature Page to Convertible Note Purchase
Agreement

 

     

     

    

 

Exhibit
A 

FORM OF CONVERTIBLE PROMISSORY NOTEExhibit 10.2

 

Execution Version

  

THIS CONVERTIBLE
BOND (“CB”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED
EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
FOR PURCHASER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO- ACTION LETTER
FROM THE SECURITIES AND EXCHANGE COMMISSION.

 

SEVEN
STARS CLOUD

 

GROUP, INC.

 

CONVERTIBLE BOND

 

	US$12,000,000	 Date of Issuance: June , 2018

 

FOR
VALUE RECEIVED, Seven Stars Cloud Group, Inc., a Nevada corporation (the “Company”), hereby promises to pay
to the order of Advantech Capital Investment II Limited, an exempted company incorporated and existing under the laws of the Cayman
Islands (“Holder”), the aggregate principal sum of Twelve Million US Dollars ($12,000,000) (the “Principal”)
in lawful money of the United States of America and in immediately available funds, subject to the provisions contained herein.
The Company and Holder shall be collectively referred to as the “Parties”. Unless otherwise expressly provided
in this CB, initially capitalized words or terms used in this convertible bond ("CB") shall have the meanings
set forth in the Purchase Agreement.

 

		1.	PRINCIPAL REPAYMENT

 

1.1                 
Maturity Date. The Principal and any other amounts payable to Holder hereunder, shall be due and payable to Holder
on the third anniversary of the Date of Issuance (the “Maturity Date”).

 

1.2                 
Interest. Interest will accrue from the date hereof on the Principal amount at the rate of 8% per annum compounded
annually until payment in full or until the conversion of the Principal pursuant to Section 2 of this CB. If the Principal is not
converted pursuant to Section 2 of this CB, interest shall be paid with the Principal amount on the Maturity Date. If the Principal
is converted pursuant to Section 2 of this CB, interest accrued through the Conversion Date shall be paid or converted into Common
Stocks (as defined in Section 2.1 below) at the option of Holder on the Conversion Date in accordance with Section 2 of this CB.

 

1.3                 
Payment. All payments made pursuant to this CB shall be made by check or wire transfer of immediately available funds
and in lawful money of the United States of America to Holder at the address for notices pursuant to Section 5.6 below or at such
other place as Holder may designate. Any payment on this CB shall be applied first to accrued interest, then to other amounts owing
hereunder, and thereafter to the outstanding principal balance hereof.

 

		2.	CONVERSION

 

2.1                 
Right to Convert. Holder shall have the right but not the obligation to convert any portion of this CB into up to
shares of common stock of the Company (the “Common Stock”) representing 19.9% Common Stock (on a fully diluted
and fully converted basis) (such portion of this CB, "First Conversion Amount"). At any time following the conversion
of the First Conversion Amount, subject to the approval of the Company's Shareholders, Holder shall have the right but not the
obligation to convert the remaining portion of the Principal and the interest accrued thereon ("Remaining Conversion Amount")
into Common Stock. Holder shall not be entitled to vote any shares of Common Stock acquired by it pursuant to this CB or any other
Company Agreements in connection with any such stockholder approval sought by the Company.

 

     

     

    

 

2.2                 
Stockholder Approval. As promptly as practicable after the Closing of this CB, and in any event, within three (3)
months, the Company covenants and agrees to use best efforts to (i) obtain any approvals of the Company’s stockholders required
under the Company’s organizational documents, applicable laws and/or the listing rules and regulations of NASDAQ in connection
with the transactions contemplated by this CB, (ii) file an Information Statement pursuant to Section 14(c) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder with the
Securities and Exchange Commission with regard to the transactions contemplated by this CB (the “Information Statement”),
and (iii) mail the definitive Information Statement to the Company’s stockholders (the “Conversion Conditions”).

 

2.3                 
Conversion Price. Following the election by Holder pursuant to Section 2.1, upon satisfaction of the Conversion Conditions,
the first conversion Amount shall be automatically converted into shares of the Common Stock at a conversion rate of $1.82 per
share ("Rate of Conversion") of Common Stock (the “First Conversion Shares”). Following the
conversion of the First Conversion Amount and the election by Holder pursuant to Section 2.1, upon satisfaction of the Conversion
Conditions and applicable shareholder's approval, the Remaining Conversion Amount shall be automatically converted into shares
of the Common Stock at the Rate of Conversion (together with the First Conversion Shares, the “Conversion Shares”).

 

2.4                 
Mechanics of Conversion. Upon satisfaction of the Conversion Conditions, the Company and Holder shall agree to a
date for such conversion which, in no event, shall be no later than ten (10) calendar days following the date of the satisfaction
of the Conversion Conditions, in compliance with Exchange Act Rule 14c-2(b) (the “Conversion Date”). On or before
the Conversion Date, Holder shall surrender the CB for conversion and the Company shall (i) denote in its corporate records the
ownership by Holder of the Conversion Shares, effective as of close of business on the Conversion Date and (ii) return to Holder
a new CB with respect to the portion of the original CB which was not converted. Effective as of close of business on the Conversion
Date (i) the rights of Holder with respect to the Principal, together with all other amounts due hereunder to Holder shall cease,
and (ii) Holder shall be treated for all purposes as having become the record holder of such Conversion Shares. Subject to the
terms of Section 2.4 of the Purchase Agreement and the Escrow Agreement, on the Conversion Date the Conversion Shares shall be
placed in the Escrow Account. The issuance of Common Stock upon conversion of this CB shall be made without charge to Holder for
any tax in respect of such issuance, and such Conversion Shares shall be issued in such names as may be directed by Holder.

 

2.5                 
Adjustment of Conversion Shares. Subject to Section 2.6 hereof, the number and kind of Conversion Shares or other
securities to be issued upon conversion determined pursuant to Section 2.3 shall be subject to adjustment from time to time upon
the happening of certain events while this conversion right remains outstanding, as follows:

 

(a)                
Merger, Sale of Assets, etc. If the Company at any time shall consolidate with or merge into or sell or convey all
or substantially all its assets to any other corporation or other entity, this CB shall thereafter be deemed to evidence the right
to purchase such number and kind of shares or other securities and property as would have been issuable or distributable on account
of such consolidation, merger, sale or conveyance, upon or with respect to the securities subject to the conversion or purchase
right immediately prior to such consolidation, merger, sale or conveyance. The foregoing provision shall similarly apply to successive
transactions of a similar nature by any such successor or purchaser. Without limiting the generality of the foregoing, the anti-dilution
provisions of this Section 2.5 shall apply to such securities of such successor or purchaser after any such consolidation, merger,
sale or conveyance.

 

(b)                
Reclassification. If the Company at any time shall, by reclassification or otherwise, change the Common Stock into
the same or a different number of securities of any class or classes that may be issued or outstanding, this CB shall thereafter
be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable
as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

 

     

     

    

 

(c)                
Stock Splits, Combinations and Dividends. If the shares of Common Stock are subdivided or combined into a greater
or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the number
of Conversion Shares to be issued upon conversion shall be proportionately reduced in case of subdivision of shares or stock dividend
or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares
of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately
prior to such event.

 

(d)               
Incorporation of Outstanding Shares. The Rate of Conversion shall be adjusted if the Company incorporates outstanding
securities of the Company (including the form of reverse share split) to decrease the number of shares, the rate of Conversion
shall be multiplied by a fraction, whose numerator is the number of outstanding securities of the Company immediately before the
occurrence of the matter, and denominator is the number of outstanding securities of the Company immediately after the occurrence
of the matter.

 

(e)                
Issues at Less than Rate of Conversion. If and whenever the Company shall issue any shares (other than Common Stocks
issued on the exercise of this CB or on the exercise of any other rights of conversion into, or exchange or subscription for, any
Common Stock) or issue or grant options, warrants or other rights to subscribe for, purchase or otherwise acquire any shares, in
each case at a price per share which is less than the Rate of Conversion on the date of announcement of the terms of such issue,
the Rate of Conversion shall be adjusted to be equal to such price per share. Such adjustment shall become effective on the date
of issue of such additional shares or, as the case may be, the issue or grant of such options, warrants or other rights.

 

2.6                 
Most Favored Nation Treatment. If, within the period commencing from the Date of Issuance until the Conversion Date,
or (in terms that the conversion set forth in Section 2 does not occur) the Maturity Date, the Company issues or agrees to issue
to any person convertible notes or other instruments similar to this CB with terms or conditions more favorable to such person
than, or otherwise benefits such person in a manner that is more favorable to such person than the terms set forth in this CB,
the Company shall notify Holder and upon Holder’s request, promptly amend this CB in order for Holder to receive all such
more favorable terms and conditions without imposing any additional obligation or liability on Holder.

 

2.7                 
Adjustment Notices. Whenever the number of Conversion Shares to be issued upon conversion is adjusted as provided
in Section 2.5, the Company shall promptly deliver to Holder written notice setting forth the revised number of Conversion Shares
with a statement of facts regarding the adjustment and the computation thereof.

 

2.8                 
Seniority. The CB ranks senior in right of payment to any of the Company’s indebtedness that is expressly subordinated
in right of payment to the CB, pari passu in right of payment to any of the Company’s other indebtedness and liabilities
that are not so subordinated, junior in right of payment to any of the Company’s secured indebtedness to the extent of the
value of the assets securing such indebtedness, and structurally junior to all indebtedness and liabilities incurred by the Company’s
subsidiaries.

 

2.9                 
Exempted Transactions. The Holder understands and acknowledges that, concurrently with issuance of this CB, the Company
is also in the process of negotiating, concluding or closing the following financing transactions: (i) subscription of Common Stock
of the Company by GT DOLLAR PTE. LTD. in the amount of US$10,000,000.92; and (ii) subscriptions of Common Stock of the Company
by Beijing Tonghe Fund Management Co., Ltd. (北京通和基金管理有限公司)
and Sun Seven Stars Investment Limited or any other affiliate of Mr. Bruno Wu and/or Ms. Lan Yang or the Company (the “Exempted
Transactions”). The Company confirms and covenants that the price of any Common Stock to be issued or issuable in the Exempted
Transactions shall be equal to US$1.82 per share.

 

     

     

    

 

		3.	COVENANTS OF THE COMPANY 

 

3.1                 
Payment of Principal; Conversion. The Company hereby covenants and agrees that it shall pay or cause to be paid all
amounts due hereunder on the Maturity Date or, if applicable prior to the Maturity Date, the Company shall effect or cause to be
effected any conversion of the Principal into Conversion Shares.

 

3.2                 
Reserves. From the date hereof until the Conversion Date or Maturity Date, whichever is later, the Company shall
at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of issue upon
conversion of this CB, such number of shares of Common Stock as shall then be issuable upon the conversion of this CB. The Company
covenants that all such shares of Common Stock shall, upon issuance, be duly and validly issued, fully paid and non-assessable.

 

3.3                 
Consent Rights. Prior to conversion of all of the Principals and accrued interest, or (in terms that the conversion
set forth in Section 2 does not occur) the Maturity Date, the following acts of the Company shall require prior written approval
of Holder: (i) any consolidation, merger or corporate reorganization involving the Company; and (ii) any Related Party Transaction
or series of Related Party Transactions in excess of US$5,000,000. For purpose of this CB, “Related Party Transaction”
means an agreement, contract, plan, arrangement or other transaction effected or proposed to be effected by the Company, or by
an entity controlled by the Company, (1) to which, at the relevant time, a Related Party of the Company is a party or has a material
financial interest, or (2) to which an officer, director, business partner or employee of a Related Party of the Company is a party
or has a material financial interest. “Related Party” means (A) a director or stockholder of the Company, (B) a director
or stockholder's spouse, or a parent or sibling thereof; (C) a child, grandchild, parent, cousin, uncle, aunt of a director or
stockholder, or the spouse of any thereof; (D) an individual living in the same home as the director or stockholder, or a trust
or estate of which a person specified in subparagraph (A) to (D) inclusive of this subdivision is a substantial beneficiary; or
(E) an entity, other than the Company or an entity controlled by the Company, that is controlled by or is an affiliate of the director
or stockholder or any person specified in subparagraphs (A) to (D), inclusive, of this subdivision.

 

		4.	DEFAULT, ACCELERATION

 

4.1                 
Events of Default. Each of the following events shall be an “Event of Default” hereunder: (i) the Company
fails to pay timely any amounts due under this CB on the date the same becomes due and payable, (ii) the Company breaches any covenant,
representation, warranty, or agreement under this CB, (iii) the Company files a petition or action for relief under any bankruptcy,
insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes
any assignment for the benefit of creditors or takes any action in furtherance of any of the foregoing, or (iv) an involuntary
petition is filed against the Company (unless such petition is dismissed or discharged within sixty (60) days of filing) under
any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or
other similar official) is appointed to take possession, custody or control of any property of the Company.

 

4.2                 
Acceleration. Upon the occurrence of an Event of Default, all outstanding principal, accrued interest and other amounts
owing hereunder shall, at the option of Holder, and, in the case of an Event of Default pursuant to Sections 4.1(a)(iii) or (iv)
above, automatically, be immediately due and payable. Holder shall have all rights and may exercise any remedies available to it
at law or in equity, successively or concurrently.

 

4.3                 
Costs of Collection. In the event of any Event of Default hereunder, the Company shall pay all reasonable attorneys’
fees and court costs incurred by Holder in enforcing and collecting this CB.

 

		5.	MISCELLANEOUS

 

5.1                 
Registration Rights. Holder shall have the registration rights pursuant to certain registration rights agreement
dated hereof.

 

5.2                 
Remedies Cumulative and Continuing. All powers and remedies of Holder hereunder with respect to an Event of Default
shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other thereof or of any other power or remedy
available to Holder, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements
contained in this CB, and every power and remedy given by this CB or by applicable law to Holder may be exercised from time to
time, and as often as shall be deemed expedient by Holder.

 

     

     

    

 

5.3                 
Replacement; Exchange. If this CB is destroyed, lost or stolen, the Company will deliver a new convertible bond to
Holder on the same terms and conditions as this CB with a notation of the unpaid principal in substitution of the prior CB. Holder
shall furnish to the Company reasonable evidence that the CB was destroyed, lost or stolen and any security or indemnity that may
be reasonably required by the Company in connection with the replacement of this CB.

 

5.4                 
Choice of Law. This CB shall be governed by and construed in accordance with the Requirements of Law of the State
of New York without giving effect to the principles of conflict of Laws.

 

5.5                 
Bank Account. On the Date of Issuance, the Holder shall remit the Principal by wire transfer of immediately available
funds to the following bank account as designated by the Company:

 

Name
of Bank: THE HONG KONG AND SHANGHAI BANKING CORPORATION LIMITED

 

Address: 1 QUEEN'S ROAD CENTRAL, HONG KONG

 

Account No.: 411758345838

 

Account holder: YOU ON DEMAND (ASIA) LIMITED

 

SWIFTCODE: HSBCHKHHHKH

 

5.6                 
Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be delivered
personally, telecopied or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given
if delivered personally or telecopied, on the date of such delivery, or if sent by reputable overnight courier, on the first Business
Day following the date of such mailing, as follows:

 

		(a)	if to the Company:

 

Seven Stars
Cloud Group, Inc.

No. 4
Drive-in Movie Theater Park, No. 21 Liangmaqiao Road, Chaoyang District, Beijing, P.R.C. 100125

Attn:
Legal Department

Telecopy:
86+10-8586-2775

 

		(b)	if to Holder:

 

190 Elgin
Avenue, George Town, Grand Cayman KY 1-9005, Cayman Islands

 

With a copy
to:

Suite 1702-03,
One Exchange Square, 8 Connaught Place, Central, Hong Kong

Phone +852
2801 6988

Fax: +852
28014882

Attn: Finance
Department

 

Any Party may by notice given in accordance with
this Section 5.6 designate another address or Person for receipt of notices hereunder.

 

5.7                 
Assignment. This CB shall be binding upon the Company and Holder and its successors and assigns. The Company may
not assign this CB or delegate any of its obligations hereunder without the written consent of Holder. Holder may assign this CB
and its rights hereunder to any third party at any time without consent of the Company.

 

     

     

    

 

5.8                 
Cooperation; Further Action. Each Party to this CB shall, without further consideration, execute and deliver any
further or additional instruments and perform any acts which may become reasonably necessary to effectuate and carry out the purposes
of this CB.

 

5.9                 
Severability. If any provision of this CB shall be held to be invalid or unenforceable, such determination shall
not affect the remaining provisions of this CB.

 

5.10              
Amendments. This CB may not be altered or amended, and no right under this CB may be waived, except by a writing
executed by the Parties to this CB or except as otherwise provided in this CB. No waiver of any term, provision or condition of
this CB, in any one or more instances, shall be deemed or construed as a further or continuing waiver of any such term, provision,
or condition, or as a waiver of any other term, provision, or condition of this CB.

 

5.11              
Headings. The headings in this CB are for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

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

 

 

 

     

     

    

 

IN WITNESS WHEREOF, the undersigned have executed
this CB as of the date first set forth above.

 

	 	SEVEN STARS  CLOUD GROUP, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	Name:	Bruno Wu	 
	 	Title:	CEO	 
	 	 	 	 
	 	 	 	 
		ADVANTECH CAPITAL INVESTMENT II LIMITED	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

 

[Signature Page – Convertible Bond]

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