Document:

Exhibit 4.2

 

FIRST SUPPLEMENTAL INDENTURE

 

FIRST SUPPLEMENTAL INDENTURE
(this “First Supplemental Indenture”), dated as of January 18, 2018, between UNITED COMMUNITY BANKS,
INC., a Georgia corporation (the “Company”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
a national association, as trustee (the “Trustee”), registrar, paying agent and service agent.

 

WHEREAS, the Company
entered into to an Indenture dated as of January 18, 2018 (the “Original Indenture”), with the Trustee;

 

WHEREAS, the Original
Indenture is incorporated herein by this reference and the Original Indenture, as supplemented by this First Supplemental Indenture,
is herein called the “Indenture”;

 

WHEREAS, the Original
Indenture provides for the issuance from time to time of the Company’s debentures, notes or other debt instruments (therein
called the “Securities”), in an unlimited principal amount to be issued in one or more series as contemplated
therein;

 

WHEREAS, pursuant
to the terms of the Original Indenture, the Company desires by this First Supplemental Indenture to establish a new Series of Securities
to be known as its 4.500% Fixed to Floating Rate Subordinated Notes due January 30, 2028 (the “Subordinated Notes”);

 

WHEREAS, the Company
has duly authorized the execution and delivery of this First Supplemental Indenture to establish the Subordinated Notes as a Series
of Securities under the Original Indenture and to provide for, among other things, the issuance and form of the Subordinated Notes
and the terms, provision, and conditions thereof; and

 

WHEREAS, the Company
desires and has requested the Trustee to join with it in the execution and delivery of this First Supplemental Indenture, and all
requirements necessary to make this First Supplemental Indenture a valid instrument, in accordance with its terms, and to make
the Subordinated Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the
Company, have been satisfied;

 

NOW THEREFORE, in
consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION

 

SECTION 1.1 Definitions.

 

The following defined terms
used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for
which no definition is provided herein shall have the meanings set forth in the Original Indenture; provided, however, that, where
a term is defined both in this First Supplemental Indenture and the Original Indenture, the meaning given to such term in this
First Supplemental Indenture shall control for purposes of this First Supplemental Indenture (in respect of the Subordinated Notes
but not any other Series of Securities) and the Original Indenture.

 

“Additional
Notes” means any Subordinated Notes issued under this First Supplemental Indenture at any time after the date hereof,
in addition to the Initial Notes, and having the same terms in all respects as the Subordinated Notes (except for the issue date,
issue price and, if applicable, the initial interest payment date), which if issued, will be treated with the Initial Notes as
single Series and single class of Securities with the Subordinated Notes for all purposes under the Indenture.

  

    	 	 	 

     

    

 

“Calculation
Agent” means a banking institution or trust company to be appointed by the Company to act as calculation agent with
respect to the calculation of the alternate floating rate in the event the three-month LIBOR is discontinued or is no longer quoted
on Reuters LIBOR 01.

 

“Capital Stock”
means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership
or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation
that confers on a person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing person.

 

“Consolidated
Assets” means all assets owned directly by the Company or indirectly by the Company through any Subsidiary and reflected
on the Company’s consolidated balance sheet prepared in accordance with GAAP.

 

“Indebtedness”
means, with respect to any person, and without duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such person for borrowed money (including obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements, and any loans or advances from banks, whether or
not evidenced by notes or similar instruments) or evidenced by bonds, debentures, notes or similar instruments (whether or not
the recourse of the lender is to the whole of the assets of such person or to only a portion thereof) (other than any account payable
or other accrued current liability or obligation incurred in the ordinary course of business in connection with the obtaining of
materials or services), (b) all reimbursement obligations and other liabilities (contingent or otherwise) of such person with respect
to letters of credit, bank guarantees or bankers’ acceptances, (c) all obligations and liabilities (contingent or otherwise)
in respect of leases of such person required, in conformity with generally accepted accounting principles, to be accounted for
as capitalized lease obligations on the balance sheet of such person and all obligations and other liabilities (contingent or otherwise)
under any lease or related document (including a purchase agreement) in connection with the lease of real property which provides
that such person is contractually obligated to purchase or cause a third party to purchase the leased property and thereby guarantee
a minimum residual value of the leased property to the lessor and the obligations of such person under such lease or related document
to purchase or to cause a third party to purchase such leased property, (d) all obligations of such person (contingent or otherwise)
with respect to an interest rate or other swap, cap or collar agreement or other similar instrument or agreement or foreign currency
hedge, exchange, purchase or similar instrument or agreement, (e) all direct or indirect guaranties or similar agreements by such
person in respect of, and obligations or liabilities (contingent or otherwise) of such person to purchase or otherwise acquire
or otherwise assure a creditor against loss in respect of indebtedness, obligations or liabilities of another person of the kind
described in clauses (a) through (d), (f) any indebtedness or other obligations described in clauses (a) through (e) secured by
any mortgage, pledge, lien or other encumbrance existing on property which is owned or held by such person, regardless of whether
the indebtedness or other obligation secured thereby shall have been assumed by such person and (g) any and all refinancings, replacements,
deferrals, renewals, extensions and refundings of, or amendments, modifications or supplements to, any indebtedness, obligation
or liability of the kind described in clauses (a) through (f).

 

“Initial Notes”
means the aggregate principal amount of $100,000,000 of Subordinated Notes issued under this First Supplemental Indenture on the
Issue Date.

 

“interest determination
date” means the second London Banking Day immediately preceding the commencement of the applicable Interest Reset
Period.

 

“Interest Payment
Dates” means January 30 and July 30 of each year, commencing July 30, 2018 through but not including January 30,
2023, and January 30, April 30, July 30, and October 30 of each year thereafter.

 

“Interest Reset
Period” means each quarterly period during the periods in which the
interest rate on the Subordinated Notes is a floating rate equal to three-month LIBOR (provided, however, that in the event the
current three-month LIBOR is less than zero, three-month LIBOR will be deemed to be zero, plus 212 basis points), commencing on
and including an Interest Payment Date and ending on but excluding the next succeeding Interest Payment Date. The first Interest
Reset Period shall commence on and include January 30, 2023.

 

    	 	 	 

     

    

 

“Issue Date”
means January 18, 2018, the date of the original issuance of the Initial Notes.

 

“Junior Subordinated
Debt” means the Company’s Trust Preferred Securities Guarantees and the floating rate junior subordinated debentures
due 2034, the variable rate subordinated debentures due 2038, the floating rate junior subordinated notes due 2038, the floating
rate junior subordinated notes due 2036 and the floating rate junior subordinated deferrable interest debentures due 2036.

 

“LIBOR”
means, (i) the rate for deposits in U.S. dollars for the three-month period which appears on Reuters LIBOR 01 (as defined below)
at approximately 11:00 a.m., London time, on the applicable interest determination date. “Reuters LIBOR 01”
means the display designated on page LIBOR 01 on the Reuters Service (or such other page as may replace the LIBOR 01 page on that
service or any successor service for the purpose of displaying London interbank offered rates for U.S. dollar deposits of major
banks) and (ii) with respect to an interest determination date on which no rate appears on Reuters LIBOR 01 as of approximately
11:00 a.m., London time, on such interest determination date, the Calculation Agent shall request the principal London offices
of each of four major reference banks (which may include affiliates of the underwriters) in the London interbank market selected
by the Company to provide the Calculation Agent with a quotation of the rate at which deposits of U.S. dollars having a three-month
maturity, commencing on the second London Banking Day immediately following such interest determination date, are offered by it
to prime banks in the London interbank market as of approximately 11:00 a.m., London time, on such interest determination date
in a principal amount equal to an amount of not less than $1,000,000 that is representative for a single transaction in such market
at such time. If at least two such quotations are provided, LIBOR for such interest determination date will be the arithmetic mean
of such quotations as calculated by the Calculation Agent. If fewer than two quotations are provided, LIBOR for such interest determination
date will be the arithmetic mean of the rates quoted as of approximately 11:00 a.m., New York City time, on such interest determination
date by three major banks (which may include affiliates of the underwriters) selected by the Company for loans in U.S. dollars
to leading European banks having a three-month maturity commencing on the second London Banking Day immediately following such
interest determination date and in a principal amount equal to an amount of not less than $1,000,000 that is representative for
a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid by the Calculation
Agent are not quoting such rates as mentioned in this sentence, LIBOR for such interest determination date will be LIBOR determined
with respect to the immediately preceding interest determination date.

 

“London
Banking Day” means any day on which commercial banks are open for general business (including dealings in deposits
in U.S. dollars) in London.

 

“Material Subsidiary”
means United Community Bank and any successor thereof.

 

“Maturity Date”
means January 30, 2028.

 

“Record Date”
means, with respect to each January 30 Interest Payment Date, the close of business on the January 15 preceding such Interest Payment
Date, with respect to each April 30 Interest Payment Date, the close of business on the April 15 preceding such Interest Payment
Date, with respect to each July 30 Interest Payment Date, the close of business on the July 15 preceding such Interest Payment
Date, and with respect to each October 30 Interest Payment Date, the close of business on the October 15 preceding such Interest
Payment Date, in each case, whether or not such date is a Business Day.

 

“Redemption
Date” means any date fixed for redemption pursuant to the Indenture and the Subordinated Notes.

 

“Redemption
Price” means 100% of the principal amount of the Subordinated Notes being redeemed, plus accrued and unpaid interest
to but excluding the Redemption Date.

 

“Senior Indebtedness”
means the principal, premium, if any, interest, including any interest accruing after bankruptcy, and rent or termination payment
on or other amounts due on the Company’s current or future Indebtedness, whether created, incurred, assumed, guaranteed or
in effect guaranteed by the Company, including any deferrals, renewals, extensions, refundings, amendments, modifications or supplements
to the above. However, Senior Indebtedness does not include: (i) Indebtedness that expressly provides that it shall not be senior
in right of payment to the Subordinated Notes or expressly provides that it is on the same basis or junior to the Subordinated
Notes; (ii) the Company’s Indebtedness to any of the Company’s majority-owned Subsidiaries; (iii) the Junior Subordinated
Debt and (iv) the Subordinated Notes.

 

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“Subsidiary”
means, with respect to any person, (i) any corporation, association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person, (ii) any
partnership (a) the sole general partner or the managing general partner of which is such person or an entity described in clause
(i) and related to such person or (b) the only general partners of which are such person or of one or more entities described in
clause (i) and related to such person (or any combination thereof) and (iii) any limited liability company of which more than 50%
of the total membership interests is at the time owned or controlled, directly or indirectly, by such person.

 

“Trust Preferred
Securities Guarantees” means the guarantees issued by the Company in connection with the floating rate capital securities
due 2034 issued by Southern Bancorp Capital Trust I, the variable rate capital securities due 2038 issued by United Community Statutory
Trust III, the variable rate capital securities due 2036 issued by Tidelands Trust I, the floating rate capital securities due
2038 issued by Tidelands Trust II, the floating rate capital securities due 2036 issued by Four Oaks Statutory Trust and any guarantee
now or hereafter entered into by the Company in respect of any preferred or preference stock that is by its terms subordinated
to or on a parity with the Junior Subordinated Debt.

 

“Voting Stock”
means outstanding shares of Capital Stock having voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power because of default in dividends or other default.

 

ARTICLE II

THE SUBORDINATED NOTES

 

SECTION 2.1 Designation and Issuance of
Subordinated Notes.

 

2.1.1       There
is hereby created a Series of Securities designated, as previously recited, as the Company’s “4.500% Fixed to Floating
Rate Subordinated Notes due January 30, 2028.” In accordance with Section 2.3 of the Original Indenture, the Trustee will,
upon receipt of an Officers’ Certificate and an Opinion of Counsel, in each case complying with Sections 10.4 and 9.7 of
the Original Indenture, and a Company Order directing the Trustee to authenticate the Initial Notes, authenticate the Initial Notes.

 

2.1.2       The
aggregate principal amount of Subordinated Notes which may be authenticated and delivered under this First Supplemental Indenture
is unlimited. The aggregate principal amount of Initial Notes which may be authenticated and delivered under this First Supplemental
Indenture on the Issue Date is $100,000,000 (except for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Subordinated Notes pursuant to Sections 2.7, 2.8, 2.11, 3.6 or 9.6 of the Original Indenture),
and the Subordinated Notes shall be denominated and payable in United States Dollars. The Subordinated Notes will be issuable and
may be transferred only in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. The
Initial Notes will be issued at a price to the public of 100% of the principal amount thereof.

 

2.1.3       The
Subordinated Notes constitute unsecured, subordinated obligations of the Company, and will be subordinated in right of payment
to the prior payment in full of all of the Company’s Senior Indebtedness. The Subordinated Notes also are effectively subordinated
to all debt and other liabilities, including trade payables and lease obligations, if any, of the Company’s Subsidiaries.

 

SECTION 2.2 Form and Terms of Subordinated
Notes.

 

2.2.1       The
principal amount of the Subordinated Notes outstanding (together with any accrued unpaid interest and other amounts) shall be payable
in accordance with the terms and conditions set forth in the Indenture and the Subordinated Notes on any Redemption Date and on
the Maturity Date.

 

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2.2.2       Interest
on the Subordinated Notes shall be payable semi-annually in arrears on each January 30 and July 30 up to but not including January
30, 2023, with interest accruing from and including January 18, 2018 to but excluding January 30, 2023, at an initial rate of 4.500%
per year, and interest shall be payable quarterly in arrears thereafter on January 30, April 30, July 30 and October 30, of each
year through the Maturity Date or early Redemption Date, with such interest accruing from and including January 30, 2023, at a
floating rate per annum equal to the then-current three-month LIBOR (provided, however, that in the event the current three-month
LIBOR is less than zero, three-month LIBOR will be deemed to be zero, plus 212 basis points) to the person in whose name the Subordinated
Notes (or one or more predecessor Subordinated Notes) are registered at the close of business on the Record Date for such Interest
Payment Date. Payments of interest on the Subordinated Notes will include interest accrued to but excluding the respective Interest
Payment Dates. The floating rate for each Interest Reset Period shall be calculated by the Company on the relevant interest determination
date and notified to the Trustee on the Interest Payment Date occurring during such Interest Reset Period; provided, however, that,
in the event the three-month LIBOR is discontinued or is no longer quoted on Reuters LIBOR 01, the Company shall appoint a Calculation
Agent to calculate the alternate floating rate. In the event the Company appoints a Calculation Agent, the Calculation Agent shall
calculate the floating rate for each Interest Reset Period and notify the Company and the Trustee of such rate on the Interest
Payment Date occurring during such Interest Reset Period. Interest payments for the Subordinated Notes during the fixed period
shall be computed and paid on the basis of a 360-day year of twelve 30-day months and interest during the floating period shall
be calculated based upon the actual number of days during the period divided by 360 days. In the event that any Interest Payment
Date during the fixed rate period is not a Business Day, then a payment of the interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same
force and effect as if made on the date the scheduled Interest Payment Date. In the event that an Interest Payment Date occurring
during the floating rate period is not a Business Day, the Company will pay interest on the next day that is a Business Day, unless
it would thereby fall in the next succeeding calendar month, in which case such Interest Payment Date will be brought forward to
the immediately preceding Business Day, and no interest will accrue or fail to accrue as a result of that postponement or earlier
payment.

 

2.2.3       The
place of payment where the Subordinated Notes may be presented or surrendered for payment, where the Subordinated Notes may be
surrendered for registration of transfer or exchange (to the extent required or permitted, as applicable, by the terms of the Subordinated
Notes) and where notices and demand to or upon the Trustee in respect of the Subordinated Notes and the Indenture may be served
shall be the office of the Paying Agent from time to time, which shall initially be The Bank of New York Mellon Trust Company,
N.A., c/o The Bank of New York Mellon, 111 Sanders Creek Parkway, East Syracuse, New York 13057.

 

2.2.4       The
Subordinated Notes shall be issuable in whole or in part in the form of one or more registered Global Securities, substantially
in the form set forth in Exhibit A hereto, registered in the name of the Depository or its nominee. The Company has initially appointed
The Depository Trust Company, New York, New York, to act as Depository with respect to such Global Securities. Except under the
limited circumstances described below, Subordinated Notes represented by the Global Security will not be exchangeable for, and
will not otherwise be issuable as, Subordinated Notes in definitive form. The Global Securities described above may not be transferred
except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.

 

Owners of beneficial interests
in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security
representing a Subordinated Note shall be exchangeable, except for another Global Security of like denomination and tenor to be
registered in the name of the Depository or its nominee or to a successor Depository or its nominee. The rights of Holders of such
Global Security shall be exercised only through the Depository.

 

A Global Security shall
be exchangeable for Subordinated Notes registered in the names of persons other than the Depository or its nominee only if (i)
the Depository notifies the Company that it is unwilling or unable to continue as a Depository for such Global Security and no
successor Depository shall have been appointed by the Company, or if at any time the Depository ceases to be a clearing agency
registered under the Exchange Act, at a time when the Depository is required to be so registered to act as such Depository and
no successor Depository shall have been appointed by the Company, in each case within 90 calendar days after the Company receives
such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall
be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Subordinated Notes. Any Global Security
that is exchangeable pursuant to the preceding sentence shall be exchangeable for Subordinated Notes registered in such names as
the Depository shall direct in writing in an aggregate principal amount equal to the principal amount of the Global Security with
like tenor and terms.

 

    	 	5	 

     

    

 

2.2.5       The
Subordinated Notes are not convertible into Securities of any other Series.

 

2.2.6       All
of the Events of Default set forth in clauses (a), (b), (d), (e), (f) and (g) of Section 6.1 of the Original Indenture will apply
and clauses (c) and (h) of such Section will not apply with respect to the Subordinated Notes. Notwithstanding the foregoing, upon
the occurrence of an Event of Default with respect to the Subordinated Notes (other than an Event of Default referred to in Section
6.1(e) or (f) of the Original Indenture), then, notwithstanding Section 6.2 of the Original Indenture, neither the Trustee nor
the Holders of the Subordinated Notes may declare such principal amount and accrued but unpaid interest due and payable immediately;
however, provided that, upon the occurrence of an Event of Default set forth in clauses (a), (b), (d), (e), (f) and (g) of Section
6.1 of the Original Indenture, the Trustee may, subject to 6.7 of the Original Indenture, seek to enforce its rights and the rights
of the Holders of the Subordinated Notes to all overdue installments of interest and the payment of principal at the Maturity Date,
as well as the performance any covenant or agreement under the Indenture.

 

If an Event of Default
specified in Section 6.1(e) or (f) of the Original Indenture shall occur, the principal amount (or specified amount) of and accrued
and unpaid interest, if any, on all outstanding Subordinated Notes shall ipso facto become and be immediately due and payable
without any acceleration or other act on the part of the Trustee or any Holder.

 

2.2.7      So
long as any of the Subordinated Notes are outstanding but subject to the provisions of Article V of the Original Indenture, the
Company covenants that it:

 

(a)          will
not, nor will it permit the Material Subsidiary to, directly or indirectly, sell or otherwise dispose of any shares of, securities
convertible into, or options, warrants or rights to subscribe for or purchase shares of, Voting Stock of the Material Subsidiary,
nor will the Company permit the Material Subsidiary to issue any shares of, or securities convertible into, or options, warrants
or rights to subscribe for or purchase shares of, Voting Stock of the Material Subsidiary if, in each case, after giving effect
to any such transaction and to the issuance of the maximum number of shares of Voting Stock of the Material Subsidiary issuable
upon the exercise of all such convertible securities, options, warrants or rights, the Company would cease to own, directly or
indirectly, at least 80% of the issued and outstanding Voting Stock of the Material Subsidiary; and

 

(b)          will
not permit the Material Subsidiary to:

 

(i) merge or
consolidate with or into any corporation or other person, unless the Company is the surviving corporation or person, or unless,
upon consummation of the merger or consolidation, the Company will own, directly or indirectly, at least 80% of the surviving corporation’s
issued and outstanding Voting Stock; or

 

(ii) lease, sell,
assign or transfer all or substantially all of its properties and assets to any person (other than the Company), unless, upon such
sale, assignment or transfer, the Company will own, directly or indirectly, at least 80% of the issued and outstanding Voting Stock
of that person.

 

    	 	6	 

     

    

 

Notwithstanding the foregoing,
any such sale, assignment or transfer of securities, any such merger or consolidation or any such lease, sale, assignment or transfer
of properties and assets shall not be prohibited if: (A) required by law, such lease, sale, assignment or transfer of securities
is made to any person for the purpose of the qualification of such person to serve as a director; (B) such lease, sale, assignment
or transfer of securities is made by the Company or any of its Subsidiaries acting in a fiduciary capacity for any person other
than the Company or any Subsidiary; (C) made in connection with the consolidation of the Company with or the sale, lease or conveyance
of all or substantially all of the assets of the Company to, or merger of the Company with or into any other person (as to which
Article V of the Original Indenture shall apply); (D) required by any law or any rule, regulation or order of any governmental
agency or authority; or (E) required as a condition imposed by any law or any rule, regulation or order of any governmental agency
or authority to the acquisition by the Company, directly or indirectly, through purchase of stock or assets, merger, consolidation
or otherwise, of any person; provided, that, in the case of (E) only, after giving effect to such disposition and acquisition,
(y) at least 80% of the issued and outstanding Voting Stock of such person will be owned, directly or indirectly, by the Company
and (z) the Consolidated Assets of the Company will be at least equal to 70% of the Consolidated Assets of the Company prior thereto;
and nothing in this section shall prohibit the Company or the Material Subsidiary from the sale or transfer of assets pursuant
to any securitization transaction or the pledge of any assets to secure borrowings incurred in the ordinary course of business,
including, without limitation, deposit liabilities, mortgage escrow funds, reverse repurchase agreements, Federal Home Loan Bank
advances, recourse obligations incurred in connection with the Material Subsidiary’s lending activities and letters of credit.

 

SECTION 2.3 Registrar, Paying Agent and
Service Agent.

 

The Company initially appoints
the Trustee to act as Registrar, Paying Agent and Service Agent with respect to the Subordinated Notes, and the Trustee hereby
agrees so to initially act. The Company may change any Paying Agent, Registrar or Service Agent without notice to any Holder. The
Company or any of its Subsidiaries may act in any such capacity.

 

SECTION 2.4 Redemption of Subordinated Notes.

 

The Subordinated Notes
shall be redeemable at the Company’s option prior to the stated maturity pursuant to this Section 2.4 and in accordance with
Article III of the Original Indenture. A notice of redemption of the Subordinated Notes may not be conditional.

 

(a)          The
Subordinated Notes shall be redeemable, in whole or in part, at the option of the Company on any Interest Payment Date on or after
January 30, 2023, at the Redemption Price, and in accordance with the provisions set forth in the Indenture and Subordinated Notes.

 

(b)          The
Subordinated Notes may not be otherwise redeemed prior to January 30, 2023, except that the Company may, at its option, redeem
the Subordinated Notes at any time in whole but not in part, at the Redemption Price upon the occurrence of:

 

(i)          a
“Tax Event,” which means the receipt by the Company of an opinion of independent tax counsel to the effect that as
a result of (1) an amendment to or change (including any announced prospective amendment or change) in any law or treaty, or any
regulation thereunder, of the United States or any of its political subdivisions or taxing authorities; (2) a judicial decision,
administrative action, official administrative pronouncement, ruling, regulatory procedure, regulation, notice or announcement,
including any notice or announcement of intent to adopt or promulgate any ruling, regulatory procedure or regulation (any of the
foregoing, an “administrative or judicial action”); (3) an amendment to or change in any official position with respect
to, or any interpretation of, an administrative or judicial action or a law or regulation of the United States that differs from
the previously generally accepted position or interpretation; or (4) a threatened challenge asserted in writing in connection with
an audit of the Company’s federal income tax returns or positions or a similar audit of any of the Company’s Subsidiaries,
or a publicly known threatened challenge asserted in writing against any other taxpayer that has raised capital through the issuance
of securities that are substantially similar to the Subordinated Notes, in each case, occurring or becoming publicly known on or
after the original issue date of the Subordinated Notes, there is more than an insubstantial risk that interest payable by the
Company on the Subordinated Notes is not, or, within 90 days of the date of such opinion, will not be, deductible by the Company,
in whole or in part, for United States federal income tax purposes;

 

    	 	7	 

     

    

 

(ii)         a
“Tier 2 Capital Event,” which means the receipt by the Company of an opinion of independent bank regulatory counsel
to the effect that as a result of: (1) any amendment to, or change in, the laws, rules or regulations of the United States (including,
for the avoidance of doubt, any agency or instrumentality of the United States, including the FRB and other appropriate federal
bank regulatory agencies) that is enacted or becomes effective after the initial issuance of the Subordinated Notes; (2) any proposed
change in those laws, rules or regulations that is announced or becomes effective after the initial issuance of the Subordinated
Notes; or (3) any official administrative decision or judicial decision or administrative action or other official pronouncement
interpreting or applying those laws, rules or regulations or policies with respect thereto that is announced after the initial
issuance of the Subordinated Notes, in each case, there is more than an insubstantial risk that the Company will not be entitled
to treat the Subordinated Notes then outstanding as “Tier 2 Capital” (or its equivalent) for purposes of the capital
adequacy rules of the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) (or, as and if applicable,
the capital adequacy rules or regulations of any successor appropriate federal banking agency) as then in effect and applicable,
for so long as any Subordinated Note is outstanding; or

 

(iii)        a
“1940 Act Event,” which means the Company becoming required to register as an investment company pursuant to the Investment
Company Act of 1940, as amended.

 

No such redemption of the
Subordinated Notes by the Company prior to January 30, 2023, shall be made without the prior approval of the Federal Reserve Board
if such prior approval is or will be required at the Redemption Date which is prior to January 30, 2023, in order for the Subordinated
Notes to qualify as Tier 2 capital of the Company under the rules and guidelines of the Federal Reserve Board.

 

Prior to giving any notice to the Holders of
the Company’s election to redeem the Subordinated Notes as described above, the Company must deliver to the Trustee an Opinion
of Counsel and an Officers’ Certificate certifying that (i) a Tax Event, a Tier 2 Capital Event or a 1940 Act Event has occurred
and (ii) the Company is entitled to redeem the Subordinated Notes in accordance with this Section 2.4(b), upon which such Opinion
of Counsel and Officers’ Certificate the Trustee may conclusively rely.

 

SECTION 2.5 Issuances of Additional Notes.

 

The Company may, from time
to time, and without notice to or consent of Holders of the Subordinated Notes, issue Additional Notes. The Initial Notes issued
on the Issue Date, and any Additional Notes issued shall be treated as a single Series and single class of Securities for all purposes
under the Indenture.

 

At any time after the execution
of this First Supplemental Indenture, the Company may deliver Additional Notes to the Trustee for authentication, together with
an Officers’ Certificate complying with Section 10.4 of the Original Indenture and a Company Order for the authentication
and delivery of such Additional Notes, as well as an Opinion of Counsel complying with Section 10.4 of the Original Indenture.
Subject to Section 2.3 of the Original Indenture, the Trustee shall thereafter authenticate and deliver such Additional Notes in
accordance with such Officers’ Certificate and Company Order. In authenticating such Additional Notes and accepting the additional
responsibilities under this First Supplemental Indenture in relation to such Additional Notes, the Trustee shall be entitled to
receive and fully protected in relying upon such Officers’ Certificate, which such Officers’ Certificate shall set
forth any limit upon the aggregate principal amount of such Additional Notes to be authenticated and delivered under this First
Supplemental Indenture and setting forth the issue price, the issue date and the CUSIP number of such Additional Notes and be prepared
in accordance with Section 10.4 of the Original Indenture.

 

ARTICLE THREE

SINKING FUND

 

SECTION 3.1 No Sinking Fund.

 

The Subordinated Notes
are not entitled to the benefit of any sinking fund.

 

    	 	8	 

     

    

 

ARTICLE FOUR

MISCELLANEOUS PROVISIONS

 

SECTION 4.1 Ratification.

 

The Original Indenture,
as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed. This First Supplemental Indenture
shall be deemed part of the Original Indenture in the manner and to the extent provided herein and therein and every Holder of
Subordinated Notes authenticated and delivered under this First Supplemental Indenture shall be bound hereby and thereby. Notwithstanding
any other provision of the Original Indenture or this First Supplemental Indenture to the contrary, the provisions of this First
Supplemental Indenture shall apply solely with respect to the Subordinated Notes and, with respect to the Subordinated Notes, to
the extent any provisions of this First Supplemental Indenture or the Subordinated Notes issued hereunder shall conflict with any
provision of the Original Indenture, the provisions of this First Supplemental Indenture or the Subordinated Notes, as applicable,
shall govern.

 

SECTION 4.2 Counterparts.

 

This First Supplemental
Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

SECTION 4.3 Governing Laws.

 

This First Supplemental
Indenture and the Subordinated Notes shall be governed by the laws of the State of New York applicable to agreements made and to
be performed in such State, without regard to the conflict of laws provisions thereof.

 

SECTION 4.4 Successors.

 

All agreements of the Company
in this First Supplemental Indenture and the Subordinated Notes shall bind its successor. All agreements of the Trustee in this
First Supplemental Indenture shall bind its successor.

 

SECTION 4.5 Severability.

 

In case any provision in
this First Supplemental Indenture or in the Subordinated Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 4.6 Conflict with Trust Indenture
Act.

 

If any provision of this
First Supplemental Indenture limits, qualifies or conflicts with another provision hereof which is required or deemed to be included
in this First Supplemental Indenture by, or is otherwise governed by, any of the provisions of the Trust Indenture Act of 1934
(the “TIA”), such other provision shall control; and if any provision hereof otherwise conflicts with
the TIA, the TIA shall control unless otherwise provided as contemplated by Section 10.1 of the Original Indenture with respect
to this Series of Subordinated Notes.

 

SECTION 4.7 No Additional Rights.

 

Nothing in this First Supplemental
Indenture is intended to or shall provide any rights to any parties other than those expressly contemplated by this First Supplemental
Indenture.

 

SECTION 4.8 Effective Date.

 

This First Supplemental
Indenture shall become effective upon the execution and delivery by the parties hereto.

 

SECTION 4.9 No Liability of the Trustee;
Rights, Protections, Immunities and Indemnities of the Trustee.

 

The Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture or the
Subordinated Notes (other than with respect to the certificate of authentication) or for or in respect of the recitals contained
herein, all of which are made solely by the Company.

 

    	 	9	 

     

    

 

All of the rights, protections,
benefits, immunities and indemnities afforded or given to the Trustee pursuant to the Original Indenture shall apply to and be
enforceable by the Trustee acting in its capacity as Trustee for the Subordinated Notes and pursuant to this First Supplemental
Indenture mutatis mutandi as if set forth and incorporated herein. The Trustee is acting hereunder, not in its individual
capacity, but solely in its capacity as Trustee for the Subordinated Notes under the Indenture. 

 

    	 	10	 

     

    

 

IN WITNESS WHEREOF, the parties hereto
have caused this First Supplemental Indenture to be duly executed as of the day and year first above written.

 

	 	UNITED COMMUNITY BANKS, INC.
	 	 	 	 
	 	By:	/s/ Jefferson Harralson
	 	 	Name: 	Jefferson L. Harralson
	 	 	Title:	Executive Vice President and Chief Financial Officer
	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee, Registrar, Paying Agent, and Service Agent
	 	 	 	 
	 	By:	/s/ Karen Yu
	 	 	Name:	Karen Yu
	 	 	Title:	Vice President

 

    	 	 	 

     

    

 

EXHIBIT A

 

(see attached)

 

    	 	 	 

     

    

 

FORM OF GLOBAL SECURITY

 

This
SECURITY is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the
Depository Trust Company (“DTC”) or a nominee of DTC. This Security is exchangeable for Securities registered in the
name of a person other than DTC or its nominee only in the limited circumstances described in the Indenture, and may not be transferred
except as a whole by DTC to a nominee of DTC, by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee
to a successor Depository or a nominee of such a successor Depository.

 

UNLESS THIS SECURITY IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

NEITHER THE HOLDERS NOR
THE BENEFICIAL OWNERS OF THIS SECURITY SHALL BE ENTITLED TO PAYMENTS OF PRINCIPAL OR INTEREST EXCEPT PURSUANT TO THE PROVISIONS
HEREOF.

 

THE SECURITY DOES NOT EVIDENCE
SAVINGS ACCOUNTS OR DEPOSITS AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

 

UNITED COMMUNITY BANKS, INC.

 

4.500% Fixed to Floating Rate Subordinated
Notes Due January 30, 2028

 

	 	 	CUSIP  	 
	 	 	 	 
	No. 	 	$	 

 

UNITED COMMUNITY BANKS, INC. (which includes
any successor under the within-mentioned Indenture) promises to pay to Cede & Co. or registered assigns, the principal sum
of          , on January 30, 2028.

 

Interest Payment Dates: January 30 and July
30 of each year, commencing July 30, 2018 ,through but not including January 30, 2023, and January 30, April 30, July 30, and October
30 of each year thereafter.

 

Record Dates: January 15, April 15, July 15,
and October 15.

 

    	 	 	 

     

    

 

	 	UNITED COMMUNITY BANKS, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	 	 

     

    

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the Series designated therein referred
to in the within-mentioned Indenture:

 

	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.	 
	as Trustee	 
	 	 	 	 
	By:	 	Dated: January 18, 2018	 
	 	Name:	 	 
	 	Title:	 	 

 

    	 	 	 

     

    

 

(Reverse of Note)

 

UNITED COMMUNITY BANKS, INC.

 

4.500% Fixed to Floating Rate Subordinated
Notes Due January 30, 2028

 

Capitalized terms used
herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

1.           Interest.
This Subordinated Note is one of the duly authorized issue of Securities of United Community Banks, Inc. (the “Company”),
a Georgia corporation, of a Series designated as the “4.500% Fixed to Floating Rate Subordinated Notes due January 30, 2028”
(herein called the “Subordinated Notes”) initially issued in an aggregate principal amount of $100,000,000. The Company
promises to pay interest on the principal amount of this Subordinated Note semi-annually in arrears on each January 30 and July
30 up to but not including January 30, 2023, with interest accruing from and including January 18, 2018 to but excluding January
30, 2023, at an initial rate of 4.500% per year, and interest shall be payable quarterly in arrears thereafter on January 30, April
30, July 30 and October 30, of each year through the Maturity Date or early Redemption Date, with such interest accruing from and
including January 30, 2023, at a floating rate per annum equal to the then-current three-month LIBOR (provided, however, that in
the event the current three-month LIBOR is less than zero, three-month LIBOR will be deemed to be zero, plus 212 basis points).
Interest payments for this Subordinated Note during the fixed period shall be computed and paid on the basis of a 360-day year
of twelve 30-day months and interest during the floating period shall be calculated based upon the actual number of days during
the period divided by 360 days. In the event that any date on which interest is payable on this Subordinated Note during the fixed
rate period is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect
as if made on the date the payment was originally payable. In the event that an Interest Payment Date occurring during the floating
rate period is not a Business Day, the Company will pay interest on the next day that is a Business Day, unless it would thereby
fall in the next succeeding calendar month, in which case such Interest Payment Date will be brought forward to the immediately
preceding Business Day, and no interest will accrue or fail to accrue as a result of that postponement or earlier payment.

 

2.           Method
of Payment. The Company will pay interest on this Subordinated Note to the persons who are registered Holders of this Subordinated
Note at the close of business on the Record Date for such Interest Payment Date, even if such Subordinated Note is canceled after
such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Original Indenture (as
herein defined) with respect to defaulted interest. The Subordinated Note will be payable as to principal, premium, if any, and
interest at the office or agency of the Paying Agent appointed from time to time by the Company, whose address is initially The
Bank of New York Mellon Trust Company, N.A., c/o The Bank of New York Mellon, 111 Sanders Creek Parkway, East Syracuse, New York
13057. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender
for payment of public and private debts.

 

3.           Paying
Agent, Registrar and Service Agent. Initially, The Bank of New York Mellon Trust Company, N.A., the trustee (“Trustee”)
under the Indenture, will act as Paying Agent, Registrar and Service Agent. The Company may change any Paying Agent, Registrar
or Service Agent without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

 

4.           Indenture.
The Company and the Trustee entered into an Indenture dated as of January 18, 2018 (the “Original Indenture”) and a
First Supplemental Indenture dated as of January 18, 2018 (the “First Supplemental Indenture” and together with the
Original Indenture, the “Indenture”) setting forth certain terms of the Subordinated Notes. The terms of the Subordinated
Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA. The Subordinated Notes
are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. To the extent
any provision of this Subordinated Note conflicts with the express provisions of the Indenture, the provisions of the Indenture
shall govern and be controlling. The Subordinated Notes are unsecured obligations of the Company.

 

    	 	 	 

     

    

 

5.           Denominations,
Transfer, Exchange. The Subordinated Notes are in registered form without coupons in denominations of $1,000 and integral multiples
of $1,000 in excess thereof. The transfer of Subordinated Notes may be registered and Subordinated Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Subordinated Notes during the period between a record date and the
next succeeding Interest Payment Date.

 

6.           Persons
Deemed Owners. The registered Holder of a Subordinated Note may be treated as its owner for all purposes.

 

7.           Amendment,
Supplement and Waiver. Subject to certain exceptions and the applicable provisions of the Indenture, the Indenture or the Subordinated
Notes may be amended or supplemented with the written consent of the Holders of at least a majority in principal amount of the
then outstanding Subordinated Notes (including, without limitation, consents obtained in connection with a tender offer or exchange
offer for the Subordinated Notes), for the purpose of adding any provisions to or changing in any manner or eliminating any of
the provisions of the Indenture or of modifying in any manner the rights of the Holders of the Subordinated Notes. Subject to applicable
provisions of the Indenture, Holders of a majority in principal amount of the then outstanding Subordinated Notes by notice to
the Trustee (including consents obtained in connection with a tender offer or exchange offer for the Subordinated Notes) may waive
compliance by the Company with any provision of the Indenture or the Subordinated Notes with respect to the Subordinated Notes.
As provided in the Indenture, without the consent of any Holder of a Subordinated Note, the Indenture or the Subordinated Notes
may be amended or supplemented to, among other things, cure any ambiguity, defect or inconsistency; provide for uncertificated
Subordinated Notes in addition to or in place of certificated Subordinated Notes; or make any other change that does not adversely
affect the rights of any Holder in any material respect.

 

8.           Defaults
and Remedies. If an Event of Default with respect to the Subordinated Notes occurs and is continuing, the principal and interest
owed on the Subordinated Notes shall only become due and payable in accordance with the terms and conditions set forth in Article
VI of the Original Indenture (as amended by Section 2.2.6 of the First Supplemental Indenture). Accordingly, the Holder of this
Subordinated Note has no right to accelerate the maturity of this Subordinated Note in the event the Company fails to pay interest
on any of the Subordinated Notes or fails to perform any other obligations under the Subordinated Notes or in the Indenture that
are applicable to the Subordinated Notes.

 

9.           Redemption.
The Subordinated Notes of this Series shall be redeemable, in whole or in part, at the option of the Company, on any Interest Payment
Date on or after January 30, 2023, at the Redemption Price. Notwithstanding the foregoing sentence, the Company may redeem the
Subordinated Notes at any time, including before January 30, 2023, in whole but not in part, at the Redemption Price, upon the
occurrence of a Tax Event, Tier 2 Capital Event or a 1940 Act Event. No such redemption of the Subordinated Notes by the Company
prior to January 30, 2023, shall be made without the prior approval of the Board of Governors of the Federal Reserve System (“Federal
Reserve Board”) if such prior approval is or will be required at the Redemption Date which is prior to January 30, 2023,
in order for the Subordinated Notes to qualify as Tier 2 capital of the Company under the rules and guidelines of the Federal Reserve
Board.

 

10.         Conversion.
The Subordinated Notes are not convertible into or exchangeable for any of the equity securities, other securities or assets of
the Company or any Subsidiary.

 

11.         No
Sinking Fund. There is no sinking fund provided for the Subordinated Notes.

 

12.         Trustee
Dealings with Company. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Subordinated
Notes and may otherwise deal with the Company or any affiliate of the Company with the same rights it would have if it were not
the Trustee.

 

13.         Discharge
and Defeasance. Subject to certain conditions, the Company at any time shall be entitled to terminate some or all of its obligations
under the Subordinated Notes and the Indenture if the Company deposits with the Trustee cash in Dollars (as defined in the Indenture)
and/or U.S. Government Obligations (as defined in the Indenture) in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of, premium, if any, on and interest on the outstanding
Subordinated Notes on the earliest Redemption Date on or after January 30, 2023.

 

    	 	 	 

     

    

 

14.         Subordination.
The Indebtedness evidenced by this Subordinated Note is, to the extent provided in the Indenture, subordinate and junior in right
of payment and upon liquidation to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this
Subordinated Note is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Subordinated Note,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on such Holder’s
behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided, and (c) appoints the
Trustee such Holder’s attorney-in-fact for any and all such purposes.

 

15.         
No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Subordinated Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder of the Subordinated Notes, by accepting the Subordinated Notes, waives
and releases all such liability. The waiver and release are part of the consideration for the issue of the Subordinated Notes.

 

16.         Authentication.
This Subordinated Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

17.         Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= custodian),
and U/G/M/A (= Uniform Gifts to Minors Act). Additional abbreviations may also be used though not in the above list.

 

18.         CUSIP
Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company
may cause CUSIP numbers to be printed on the Subordinated Notes.

 

19.         Available
Information. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests
may be made to:

 

United Community Banks, Inc.

2 West Washington Street

Greenville, South Carolina 29601

Attention: Jefferson Harralson

  

20.       
Governing Law. THIS SUBORDINATED NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

  

 

    	 	 	 

     

    

 

Assignment Form

 

To assign this Subordinated Note, fill in the
form below: (I) or (we) assign and transfer this Subordinated Note to

 

 

 

(Insert assignee’s Social Security or
Tax Identification number)

 

  

 

 

(Print or type assignee’s name, address
and zip code)

 

And irrevocably appoint ______________________________________
to transfer this Subordinated Note on the books of the Company. The agent may substitute another to act for him.

 

 

 

  

Date:______________________

 

	 	Your signature:	 	 
	 	(Sign exactly as your name appears on the face of this Note)
	 	 	 	 
	 	Tax Identification No.:  	 
	 	 	 	 
	 	SIGNATURE GUARANTEE:
	 	 
	 	 

 

Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.Exhibit 10.1

 

SHARE PURCHASE AGREEMENT

 

This Share Purchase Agreement
(this “Agreement”) is dated as of January 22, 2018, between Recon Technology, Ltd., a Cayman Islands company
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to the
terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act
of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company, ordinary shares of the Company as more fully described
in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1         Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:

 

“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.4.

 

“Action”
shall have the meaning ascribed to such term in Section 3.1(j).

 

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

 

“Board
of Directors” means the board of directors of the Company.

 

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

 

“Cayman
Islands Counsel” means Campbells, with offices located at Floor 35, Room 3507, Edinburgh Tower, The Landmark, 15 Queen’s
Road Central, Hong Kong.

 

“Closing”
means the closing of the purchase and sale of the Shares pursuant to Section 2.1.

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived, but in no event later than
the second (2nd) Trading Day following the date hereof.

 

     

     

    

 

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

 

“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“Kaufman”
means Kaufman & Canoles, P.C., with offices located at Two James Center, 1021 East Cary Street, Suite 1400, Richmond, Virginia
23219.

 

“Loeb”
means Loeb & Loeb LLP, with offices located at 345 Park Avenue, New York, New York 10154.

 

“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).

 

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

 

“Exempt
Issuance” means the issuance of (a) Ordinary Shares or options to employees, officers or directors of the Company pursuant
to any share or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the
Company, and (b) securities upon the exercise or exchange of or conversion of any Shares issued hereunder and/or other securities
exercisable or exchangeable for or convertible into Ordinary Shares issued and outstanding on the date of this Agreement, provided
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities (other than in connection with share splits or combinations)
or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by
a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities”
(as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection
therewith, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself
or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company
and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction
in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities, and (d) up to 3,000,000 Ordinary Shares to be issued to Xinhaixin International Holdings Limited,
a British Virgin Islands company ("Xinhaixin"), pursuant to the Share Purchase Agreement dated as of November 20, 2017,
by and between the Company, and Yongquan Bi, a citizen of People’s Republic of China, sole shareholder of Xinhaixin.

 

“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.

 

     

     

    

 

“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).

 

“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).

 

“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).

 

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

 

“Lock-Up
Agreement” means the written agreement, in the form of Exhibit A attached hereto, between the Company and each
of the Company’s directors and officers.

 

“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).

 

“Ordinary
Shares” means the ordinary shares of the Company, par value $0.0185 per share, and any other class of securities into
which such securities may hereafter be reclassified or changed.

 

“Ordinary
Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Ordinary Shares, including, without limitation, any debt, preferred shares, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Ordinary Shares.

 

“Per
Share Purchase Price” equals $1.66, subject to adjustment for reverse and forward share splits, share dividends, share
combinations and other similar transactions of the Ordinary Shares that occur after the date of this Agreement.

 

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

 

“Placement Agent”
means Maxim Group LLC.

 

“PRC”
means the People’s Republic of China.

 

“PRC Counsel”
means Jingtian & Gongcheng, with offices located at 34th Floor, Tower 3, China Central Place, 77 Jianguo Road, Chaoyang District,
Beijing 100025, China.

 

“PRC Entities”
means, collectively, the PRC Subsidiaries and the VIEs.

 

“PRC
Subsidiaries” means Recon Technology (Jining) Co., Ltd, a wholly foreign-owned enterprise formed under the laws of the
PRC and Recon Hengda Technology (Beijing) Co., Ltd. a wholly foreign-owned enterprise formed under the laws of the PRC.

 

     

     

    

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus”
means the final prospectus filed for the Registration Statement.

 

“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.

 

“Registration
Statement” means the effective registration statement with Commission file No. 333-213702 which registers the sale of
the Shares to the Purchasers.

 

“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

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

 

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

 

“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

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

 

“Shares”
means the Ordinary Shares issued or issuable to each Purchaser pursuant to this Agreement.

 

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include locating and/or borrowing Ordinary Shares). 

 

“Subscription
Amount” means, as to each Purchaser, the amount to be paid for Shares purchased hereunder as specified below such Purchaser’s
name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars
and in immediately available funds.

 

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

 

     

     

    

 

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

 

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

 

“Transaction
Documents” means this Agreement all exhibits and schedules hereto and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette
Place, Woodmere, New York 11598 and a facsimile number of +1 (646) 536-3179, and any successor transfer agent of the Company.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.11.

 

“VIE”
means any VIE of the Company as set forth on Schedule 3.1(a) including (i) Beijing BHD Petroleum Technology Co. Ltd. a variable
interest entity established under the laws of the PRC, (ii) Nanjing Recon Technology Co., Ltd. a variable interest entity established
under the laws of the PRC, (iii) Huang Hua BHD Petroleum Equipment Manufacturing Co. LTD. a variable interest entity established
under the laws of the PRC (iv) Gan Su BHD Environmental Technology Co., Ltd. a variable interest entity established under the
laws of the PRC and (v) Qing Hai BHD New Energy Technology Co., Ltd. a variable interest entity established under the laws of
the PRC.,

. 

ARTICLE II.

PURCHASE AND SALE

 

2.1         Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $5,963,550 of Shares. Each Purchaser’s Subscription Amount as set forth on the
signature page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” settlement
with the Company or its designee. The Company shall deliver to each Purchaser its respective Shares as determined pursuant to
Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of
Loeb or such other location as the parties shall mutually agree. Unless otherwise directed by the Placement Agent, settlement
of the Shares shall occur via “Delivery Versus Payment” (i.e., on the Closing Date, the Company shall issue the Shares
registered in the Purchasers’ names and addresses and released by the Transfer Agent directly to the account(s) at the Placement
Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly electronically deliver such
Shares to the applicable Purchaser, and payment therefor shall be made by the Placement Agent (or its clearing firm) by wire transfer
to the Company).

 

     

     

    

 

2.2         Deliveries.

 

(a)          On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)          this
Agreement duly executed by the Company;

 

(ii)         a
legal opinion of Kaufman, in a form satisfactory to the Placement Agent and each Purchaser that agreed to purchase, together with
its affiliates, at least $1 million of Shares;

 

(iii)        a
legal opinion of PRC Counsel, in a form satisfactory to the Placement Agent and each Purchaser that agreed to purchase, together
with its affiliates, at least $1 million of Shares;

 

(iv)        a
legal opinion of Cayman Islands Counsel, in a form satisfactory to the Placement Agent and each Purchaser that agreed to purchase,
together with its affiliates, at least $1 million of Shares;

 

(v)         a
cold comfort letter, addressed to the Placement Agent in form and substance reasonably satisfactory in all material respects from
Friedman LLP;

 

(vi)        Lock-Up
Agreements;

 

(vii)       subject
to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent
to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”)
Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of
such Purchaser; and

 

(viii)      the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act.

 

(b)          On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

 

(i)          this
Agreement duly executed by such Purchaser; and

 

(ii)         such
Purchaser’s Subscription Amount, which shall be made available for “Delivery Versus Payment” settlement with
the Company or its designee.

 

     

     

    

 

2.3         Closing
Conditions.

 

(a)          The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)          the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)         all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and

 

(iii)        the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

(b)          The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:

 

(i)          the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)         all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been
performed;

 

(iii)        the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

(iv)        there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;

 

(v)         each
of the Lock-Up Agreements shall remain in full force and effect; and

 

(vi)        from
the date hereof to the Closing Date, trading in the Ordinary Shares shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are
reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national
or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing.

 

     

     

    

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1      Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:

 

(a)          Subsidiaries.
All of the direct and indirect Subsidiaries of the Company and the VIEs are set forth on Schedule 3.1(a). The Company owns
(or, as to each VIE, controls), directly or indirectly, all of the share capital or other equity interests of each Subsidiary
and each VIE free and clear of any Liens, and all of the issued and outstanding shares of share capital of each Subsidiary and
each VIE are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase
securities.

 

(b)          Organization
and Qualification. The Company, each of the Subsidiaries and each of the VIEs is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with
the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary nor any VIE is in violation nor default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company, the Subsidiaries and the
VIEs is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure
to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material
adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the
results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, the Subsidiaries and
the VIEs, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect
on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”)
and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

 

     

     

    

 

(c)          Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d)          No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s or any
VIE’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with,
or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation
of any Lien upon any of the properties or assets of the Company or any Subsidiary or any VIE, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary or VIE debt or otherwise) or other understanding to which
the Company or any Subsidiary or any VIE is a party or by which any property or asset of the Company or any Subsidiary or any
VIE is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company
or a Subsidiary or a VIE is subject (including federal and state securities laws and regulations), or by which any property or
asset of the Company or a Subsidiary or a VIE is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(e)          Filings,
Consents and Approvals. 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 or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.3 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement,
(iii) application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner
required thereby, and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required
Approvals”).

 

     

     

    

 

(f)          Issuance
of the Shares; Registration. The Shares are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company. The Company has reserved from its duly authorized share capital the maximum number of Ordinary Shares issuable pursuant
to this Agreement. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities
Act, which became effective on October 7, 2016 (the “Effective Date”), including the Prospectus, and such
amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective
under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted
or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of
the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration Statement
and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement
and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did
not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at time
the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material
respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Company was at the time of the filing of the Registration Statement eligible to use Form S-3. The
Company is eligible to use Form S-3 or Form F-3 under the Securities Act and it meets the transaction requirements with respect
to the aggregate market value of securities being sold pursuant to this offering and during the twelve (12) months prior to this
offering, as set forth in General Instruction I.B.6 of Form S-3 and General Instruction I.B.5 of Form F-3.

 

     

     

    

 

(g)          Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g). The Company has not issued any Ordinary Shares of
its available share capital since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise
of employee share options under the Company’s share option plans, the issuance of Ordinary Shares to employees pursuant
to the Company’s employee share purchase plans and pursuant to the conversion and/or exercise of Ordinary Share Equivalents
outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of the Shares or as set forth on Schedule 3.1(g)(i),
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire, any Ordinary Shares or the share capital of any Subsidiary or any VIE, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary or any VIE is or may become bound to issue additional Ordinary Shares or
Ordinary Share Equivalents or share capital of any Subsidiary or any VIE. The issuance and sale of the Shares will not obligate
the Company, any Subsidiary or any VIE to issue Ordinary Shares or other securities to any Person (other than the Purchasers)
and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price
under any of such securities. There are no outstanding securities or instruments of the Company or any Subsidiary or any VIE that
contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which
the Company or any Subsidiary or VIE is or may become bound to redeem a security of the Company or such Subsidiary or VIE. The
Company does not have any share appreciation rights or “phantom share” plans or agreements or any similar plan or
agreement. All of the outstanding shares of share capital of the Company are duly authorized, validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any
shareholder, the Board of Directors or others is required for the issuance and sale of the Shares. There are no shareholders agreements,
voting agreements or other similar agreements with respect to the Company’s share capital to which the Company is a party
or, to the knowledge of the Company, between or among any of the Company’s shareholders.

 

(h)          SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject
to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case
of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

     

     

    

 

(i)          Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) neither the Company nor any Subsidiary
nor any VIE has incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred
in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its
shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its share capital and (v) the Company
has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company share option plans.
The Company does not have pending before the Commission any request for confidential treatment of information. Except for the
issuance of the Shares contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance,
occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its
Subsidiaries or its VIEs or their respective businesses, prospects, properties, operations, assets or financial condition that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

(j)          Litigation.
Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary, any VIE or any of their
respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal,
state, county, local or foreign) (collectively, an “Action”). None of the Actions set forth on Schedule
3.1(j), (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or
the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary nor any VIE, nor any director or officer thereof, is or has been the subject of
any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary or
any VIE under the Exchange Act or the Securities Act.

 

     

     

    

 

(k)          Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company or any Subsidiary or any VIE, which could reasonably be expected to result in a Material Adverse Effect. None of the
Company’s or its Subsidiaries’ or its VIEs’ employees is a member of a union that relates to such employee’s
relationship with the Company, such Subsidiary or such VIE, and neither the Company nor any of its Subsidiaries nor any of its
VIEs is a party to a collective bargaining agreement, and the Company and its Subsidiaries and VIEs believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary or any VIE,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of
any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries
or any of its VIEs to any liability with respect to any of the foregoing matters. The Company, its Subsidiaries and its VIEs are
in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(l)          Compliance.
Neither the Company nor any Subsidiary nor any VIE: (i) is in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary or
any VIE under), nor has the Company or any Subsidiary or any VIE received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation
of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation
of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse
Effect.

 

(m)          Environmental
Laws. The Company, its Subsidiaries and its VIEs (i) are in compliance with all federal, state, local and foreign laws relating
to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface
or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment,
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental
Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license
or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect.

 

     

     

    

 

(n)          Regulatory
Permits. The Company, the Subsidiaries and the VIEs possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC
Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect
(“Material Permits”), and neither the Company nor any Subsidiary nor any VIE has received any notice of proceedings
relating to the revocation or modification of any Material Permit.

 

(o)          Title
to Assets. The Company, the Subsidiaries and the VIEs have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company,
the Subsidiaries and the VIEs, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the
value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company,
the Subsidiaries and the VIEs and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves
have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any
real property and facilities held under lease by the Company, the Subsidiaries and the VIEs are held by them under valid, subsisting
and enforceable leases with which the Company, the Subsidiaries and the VIEs are in compliance.

 

(p)          Intellectual
Property. The Company, the Subsidiaries and the VIEs have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). Except as set forth on Schedule 3.1(p), none of the Company, any Subsidiary or any VIE has received
a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is
expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor
any Subsidiary nor any VIE has received, since the date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the
rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge
of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights. The Company, its Subsidiaries and its VIEs have taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

     

     

    

 

(q)          Insurance.
The Company, the Subsidiaries and the VIEs are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company,the Subsidiaries and the VIEs
are engaged; provided, however, that the Company does not maintain directors and officers insurance coverage. Neither the Company
nor any Subsidiary nor any VIE has any reason to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost.

 

(r)          Transactions
With Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the officers or directors of the Company
or any Subsidiary or any VIE and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary or any
VIE is presently a party to any transaction with the Company or any Subsidiary or any VIE (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money
to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder,
member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including share option agreements
under any share option plan of the Company.

 

(s)          Sarbanes-Oxley;
Internal Accounting Controls. The Company, the Subsidiaries and the VIEs are in compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company, the Subsidiaries
and the VIEs maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets
is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company, the Subsidiaries and the VIEs have established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company, the Subsidiaries and the VIEs and designed such disclosure controls and procedures to
ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company, the Subsidiaries
and the VIEs as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company, its Subsidiaries and the VIEs that have materially affected,
or is reasonably likely to materially affect, the internal control over financial reporting of the Company, its Subsidiaries and
the VIEs.

 

     

     

    

 

(t)          Certain
Fees. Other than the compensation payable to the Placement Agent under the terms of its agreement with the Company, dated
January 18, 2018 (the “Engagement Letter”) relating to the placement of the Securities, no brokerage or finder’s
fees or commissions are or will be payable by the Company or any Subsidiary or any VIE to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction
Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf
of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.

 

(u)          Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not
be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.

 

(v)         Registration
Rights. No Person has any right to cause the Company or any Subsidiary or any VIE to effect the registration under the Securities
Act of any securities of the Company or any Subsidiary or any VIE.

 

(w)         Listing
and Maintenance Requirements. The Ordinary Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Ordinary Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Ordinary Shares is or has been listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Ordinary Shares are currently
eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company
is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection
with such electronic transfer.

 

     

     

    

 

(x)          Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Shares and the Purchasers’ ownership of the Shares.

 

(y)          Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information which is not otherwise
disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely on the foregoing representation
in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company and its Subsidiaries and VIEs, their respective businesses and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth
in Section 3.2 hereof.

 

(z)          No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Shares to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.

 

     

     

    

 

(aa)         Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Shares hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(aa)
sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary or any VIE,
or for which the Company or any Subsidiary or any VIE has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred
in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to
be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary nor any VIE is in default with respect to any Indebtedness.

 

(bb)         Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company, its Subsidiaries and the VIEs each (i) has made or filed all United States federal, state
and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company or of any Subsidiary or of any VIE know of no basis for any such claim.

 

(cc)         Foreign
Corrupt Practices. Neither the Company nor any Subsidiary nor any VIE, nor to the knowledge of the Company or any Subsidiary
or any VIE, any agent or other person acting on behalf of the Company or any Subsidiary or any VIE, has (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political
activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic
political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any
Subsidiary or any VIE (or made by any person acting on its behalf of which the Company is aware) which is in violation of law,
or (iv) violated in any material respect any provision of FCPA.

 

     

     

    

 

(dd)         Accountants.
The Company’s independent registered public accounting firm is Friedman LLP. To the knowledge and belief of the Company,
such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending June 30,
2017.

 

(ee)         
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby
and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares. The
Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(ff)         Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Shares
for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently
may have a “short” position in the Ordinary Shares, and (iv) each Purchaser shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative” transaction. The Company further
understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period
that the Shares are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing shareholders'
equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges
that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

     

     

    

 

(gg)       Regulation
M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any securities of the Company to
facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases
of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement
agent in connection with the placement of the Shares.

 

(hh)        Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor any VIE nor, to the Company's knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary or any VIE is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

(ii)          U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.

 

(jj)          Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries, or VIEs or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or VIEs or Affiliates owns
or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or
twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal
Reserve. Neither the Company nor any of its Subsidiaries or Affiliates or VIEs exercises a controlling influence over the management
or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

(kk)        Money
Laundering. The operations of the Company and its Subsidiaries and VIEs are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiary or any VIE with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company or any Subsidiary or any VIE, threatened.

 

(ll)          Lock-up
Agreement. The Company has signed a Lock-Up Agreement with each of the Company’s directors and officers in the form
attached hereto as Exhibit A.

 

3.1(A)  
Representations and Warranties of the Company as to PRC Matters. Except as set forth in the Disclosure Schedules, which
Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent
of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations
and warranties to each Purchaser:

 

     

     

    

 

(a)          The
Company conducts substantially all of its operations and generates substantially all of its revenue through (1) the PRC Subsidiaries
and (2) the VIEs.

 

(b)          Each
of the PRC Entities has been duly established, is validly existing as a company in good standing under the laws of the PRC, has
the corporate power and authority to own, lease and operate its property and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not, singly or in the aggregate, have a Material Adverse Effect. Each
PRC Entity has applied for and obtained all requisite business licenses, clearance and permits required under PRC law as necessary
for the conduct of its businesses, and each PRC Entity has complied in all material respects with all PRC laws in connection with
foreign exchange, including without limitation, carrying out all relevant filings, registrations and applications for relevant
permits with the PRC State Administration of Foreign Exchange and any other relevant authorities, and all such permits are validly
subsisting. The registered capital of each PRC Entity has been fully paid up in accordance with the schedule of payment stipulated
in its respective articles of association, approval document, certificate of approval and legal person business license (hereinafter
referred to as the "Establishment Documents") and in compliance with PRC laws and regulations, and there is no
outstanding capital contribution commitment for any PRC Entity. The Establishment Documents of the PRC Entities have been duly
approved in accordance with the laws of the PRC and are valid and enforceable. The business scope specified in the Establishment
Documents of each PRC Entity complies with the requirements of all relevant PRC laws and regulations. The outstanding equity interests
of each PRC Entity is owned of record by the respective entities or individuals identified as the registered holders thereof in
the Registration Statement and the Prospectus.

 

(c)          Except
as disclosed in the Registration Statement and the Prospectus, no consents, approvals, authorizations, orders, registrations,
clearances, certificates, franchises, licenses, permits or qualifications of or with any PRC governmental agency are required
for the Company's or its Subsidiaries' contractual arrangements and agreements with the VIEs and their registered equity holders
(the "VIE Structure") or the execution, delivery and performance of such contractual arrangements and agreements
(the "VIE Structuring Documents"). None of the VIE Structuring Documents has been revoked and no such revocation
is pending or threatened. Each of the VIE Structuring Documents has been entered into prior to the date thereof in compliance
with all applicable laws and regulations and constitutes a valid and legally binding agreement, enforceable in accordance with
its terms.

 

     

     

    

 

(d)          The
VIE Structure and the execution, delivery and performance of the VIE Structuring Documents and the consummation of the transactions
contemplated thereby did not and do not (i) conflict with, or result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which any PRC Entity is a party or by which any PRC Entity is bound or by which any of the properties or assets of any PRC Entity
is subject, (ii) violate or conflict with the Establishment Documents of any PRC Entity, or (iii) violate or conflict with any
applicable laws, regulations, rules, orders, decrees, guidelines, notices or other legislation of the PRC.

 

(e)          The
VIE Structure complies, and after the consummation of the Offering and sale of the Shares will comply, with all applicable laws,
regulations, rules, orders, decrees, guidelines, notices or other legislation of the PRC; the VIE Structure has not been challenged
by any PRC governmental agency and there are no legal, arbitration, governmental or other proceedings (including, without limitation,
governmental investigations or inquiries) pending before or, to the Company's knowledge, threatened or contemplated by any PRC
governmental agency in respect of the VIE Structure.

 

(f)           The
Company possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of each
of the VIEs.

 

(g)          No
PRC Subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Company (or the Company's Subsidiary
that holds the outstanding equity interest of such PRC Subsidiary), and no VIE is currently prohibited, directly or indirectly,
from paying any of its obligations set forth in the VIE Structuring Documents. Except as disclosed in the Registration Statement
and the Prospectus, no PRC Entity is prohibited or restricted, directly or indirectly, from making any other distribution on such
PRC Entity's equity capital, or from repaying to the Company any loans or advances to such PRC Entity made by the Company or any
of its Subsidiaries.

 

(h)          The
choice of the laws of the State of New York as the governing law of this Agreement is a valid choice of law under the laws of
the PRC and will be honored by courts in the PRC.

 

(i)           None
of the PRC Entities nor any of their properties, assets or revenues are entitled to any right of immunity on the grounds of sovereignty
from any legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any court, from services of
process, from attachment prior to or in aid of execution of judgment, or from any other legal process or proceeding for the giving
of any relief or for the enforcement of any judgment.

 

(j)           It
is not necessary that this Agreement, the Registration Statement, the Prospectus or any other document be filed or recorded with
any governmental agency, court or other authority in the PRC.

 

(k)          No
transaction, stamp, capital or other issuance, registration, transaction, transfer or withholding taxes or duties are payable
in the PRC by or on behalf of the Agent to any PRC taxing authority in connection with (i) the issuance, sale and delivery of
the Shares by the Company or (ii) the execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby.

 

     

     

    

 

(l)           The
Company has taken all necessary steps to comply with, and to ensure compliance by all of the Company's direct or indirect shareholders
and option holders who are PRC residents with, any applicable rules and regulations of the PRC State Administration of Foreign
Exchange of the PRC (the "SAFE Rules and Regulations"), including, without limitation, requiring each shareholder
and option holder that is, or is directly or indirectly owned or controlled by, a PRC resident to complete any registration and
other procedures required under applicable SAFE Rules and Regulations.

 

(m)         The
Company is aware of, and has been advised as to, the content of the Rules on Mergers and Acquisitions of Domestic Enterprises
by Foreign Investors jointly promulgated on August 8, 2006 by the PRC Ministry of Commerce, the PRC State Assets Supervision and
Administration Commission, the PRC State Administration of Taxation, the PRC State Administration of Industry and Commerce, the
China Securities Regulatory Commission ("CSRC") and the PRC State Administration of Foreign Exchange of the PRC
and amended by PRC Ministry of Commerce on June 22, 2009 (the "M&A Rules"), in particular the relevant provisions
thereof that purport to require offshore special purpose vehicles controlled directly or indirectly by PRC-incorporated companies
or PRC residents and established for the purpose of obtaining a stock exchange listing outside of the PRC to obtain the approval
of the CSRC prior to the listing and trading of their securities on any stock exchange located outside of the PRC. The Company
has received legal advice specifically with respect to the M&A Rules from its PRC counsel and the Company understands such
legal advice. In addition, the Company has communicated such legal advice in full to each of its directors that signed the Registration
Statements and each such director has confirmed that he or she understands such legal advice.

 

(n)          The
issuance and sale of the Shares, the listing and trading of the Shares on the Exchange and the consummation of the transactions
contemplated by this Agreement, the Registration Statement and the Prospectus are not and will not be, as of the date hereof and
on each Settlement Date, prohibited or otherwise affected by the M&A Rules or any official clarifications, guidance, interpretations
or implementation rules in connection with or related to the M&A Rules.

 

(o)          The
Company has taken all necessary steps to ensure compliance by each of its shareholders, option holders, directors, officers and
employees that is, or is directly or indirectly owned or controlled by, a PRC resident or citizen with any applicable rules and
regulations of the relevant PRC government agencies (including but not limited to the PRC Ministry of Commerce, the PRC National
Development and Reform Commission and the PRC State Administration of Foreign Exchange) relating to overseas investment by PRC
residents and citizens (the "PRC Overseas Investment and Listing Regulations"), including, requesting each shareholder,
option holder, director, officer, employee and participant that is, or is directly or indirectly owned or controlled by, a PRC
resident or citizen to complete any registration and other procedures required under applicable PRC Overseas Investment and Listing
Regulations.

 

     

     

    

 

(p)          As
of the date hereof, the M&A Rules and Related Clarifications do not require the Company to obtain the approval of the CSRC
prior to the issuance and sale of the Shares, the listing and trading of the Shares on the Nasdaq Capital Market, or the consummation
of the transactions contemplated by this Agreement, the Registration Statement, or the Prospectus.

 

(q)          Each
of the PRC Entities is in compliance with all requirements under all applicable PRC laws and regulations to qualify for their
exemptions from enterprise income tax or other income tax benefits (the "Tax Benefits") as described in
the Registration Statement and the Prospectus, and the actual operations and business activities of each such PRC Entity are sufficient
to meet the qualifications for the Tax Benefits. No submissions made to any PRC government authority in connection with obtaining
the Tax Benefits contained any misstatement or omission that would have affected the granting of the Tax Benefits. No PRC Entity
has received notice of any deficiency in its respective applications for the Tax Benefits, and the Company is not aware of any
reason why any such PRC Entity might not qualify for, or be in compliance with the requirements for, the Tax Benefits.

 

(r)           All
local and national PRC governmental tax holidays, exemptions, waivers, financial subsidies, and other local and national PRC tax
relief, concessions and preferential treatment enjoyed by any PRC Entity as described in the Registration Statement and the Prospectus
are valid, binding and enforceable and do not violate any laws, regulations, rules, orders, decrees, guidelines, judicial interpretations,
notices or other legislation of the PRC.

 

(s)          The
Placement Agent will not be deemed to be resident, domiciled, carrying on business or subject to taxation in the PRC solely by
reason of its execution, delivery, performance or enforcement of, or the consummation of any transaction contemplated by this
Agreement, the Registration Statement or the Prospectus.

 

3.2         Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they
shall be accurate as of such date):

 

(a)          Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability
company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

     

     

    

 

(b)          Understandings
or Arrangements. Such Purchaser is acquiring the Shares as principal for its own account and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Shares (this representation and warranty
not limiting such Purchaser’s right to sell the Shares pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws). Such Purchaser is acquiring the Shares hereunder in the ordinary course of
its business.

 

(c)          Purchaser
Status. At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is, either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act.

 

(d)          Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Shares, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

(e)          Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its
financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 
Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided
such Purchaser with any information or advice with respect to the Shares nor is such information or advice necessary or desired. 
Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Shares
and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser
agrees need not be provided to it.  In connection with the issuance of the Shares to such Purchaser, neither the Placement
Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

 

     

     

    

 

(f)           Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material pricing terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation
set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment
decision to purchase the Shares covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s
representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in
order to effect Short Sales or similar transactions in the future.

 

The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right
to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing
shares in order to effect Short Sales or similar transactions in the future.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1         Furnishing
of Information. Until the earlier of (a)the time that no Purchaser owns Shares or (b) one (1) year following the Closing Date,
the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then
subject to the reporting requirements of the Exchange Act.

 

4.2         Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and
regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent transaction.

 

     

     

    

 

4.3           Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m. (New York City time) on January 22, 2018, issue a press release
disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 6-K, including the
Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the
issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by the Company or any of its Subsidiaries or VIEs, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective
upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of the VIEs or any of their
respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates
on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release
nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any
Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission
or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal
securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure
is required by law or Trading Market or FINRA regulations, in which case the Company shall provide the Purchasers with prior notice
of such disclosure permitted under this clause (b).

 

4.4           Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that
any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted
by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of
receiving Shares under the Transaction Documents or under any other agreement between the Company and the Purchasers.

 

     

     

    

  

4.5           Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.3, the Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company
reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to
the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and
confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent,
the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of
its Subsidiaries any of its VIEs, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to
the Company, any of its Subsidiaries, any of its VIEs or any of their respective officers, directors, agents, employees or Affiliates
not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable
law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public
information regarding the Company or any Subsidiaries or any VIEs, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 6-K. The Company understands and confirms that each Purchaser shall be relying
on the foregoing covenant in effecting transactions in securities of the Company.

 

4.6           Use
of Proceeds. Except as set forth on Schedule 4.6 attached hereto, the Company shall use the net proceeds from the sale
of the Shares hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion
of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior
practices), (b) for the redemption of any Ordinary Shares or Ordinary Share Equivalents, (c) for the settlement of any outstanding
litigation or (d) in violation of FCPA or OFAC regulations.

 

4.7           Indemnification
of Purchasers. Subject to the provisions of this Section 4.7, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of
a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any shareholder of the Company who is
not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such shareholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may
be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will
not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that
a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification
required by this Section 4.7 shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any
cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject
to pursuant to law.

 

     

     

    

  

4.8           Reservation
of Ordinary Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times until Closing, free of preemptive rights, a sufficient number of Ordinary Shares for the purpose of enabling the
Company to issue the Shares pursuant to this Agreement.

 

4.9           Listing
of Ordinary Shares. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Ordinary Shares
on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote
all of the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company
further agrees, if the Company applies to have the Ordinary Shares traded on any other Trading Market, it will then include in
such application all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or
quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue
the listing and trading of its Ordinary Shares on a Trading Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of
the Ordinary Shares for electronic transfer through the Depository Trust Company or another established clearing corporation,
including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation
in connection with such electronic transfer.

 

4.10         Lock-Up. 
The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except to extend the
term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms.  If any
officer or director that is a party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly
use its best efforts to seek specific performance of the terms of such Lock-Up Agreement.

 

     

     

    

  

4.11         Subsequent
Equity Sales. From the date hereof until sixty (60) days after the Closing Date, neither the Company nor any Subsidiary nor
any VIE shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Ordinary Shares or
Ordinary Share Equivalents. Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance,
except that no Variable Rate Transaction shall be an Exempt Issuance. “Variable Rate Transaction” means a transaction
in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive additional Ordinary Shares either (A) at a conversion price, exercise price or exchange rate
or other price that is based upon and/or varies with the trading prices of or quotations for the Ordinary Shares at any time after
the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to
being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the Ordinary Shares or (ii)
enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the
Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against
the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

4.12         Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration
is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate
right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect
to the purchase, disposition or voting of Shares or otherwise.

 

4.13         Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending
at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.3.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release
as described in Section 4.3, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and
the information included in the Disclosure Schedules.  Notwithstanding the foregoing and notwithstanding anything contained
in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time
that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.3, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company
in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in Section 4.3 and (iii) no Purchaser shall have any
duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries or the VIEs after
the issuance of the initial press release as described in Section 4.3.  Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.

 

     

     

    

  

4.14         Capital
Changes. Until the one (1) year anniversary of the Closing Date, the Company shall not undertake a reverse or forward share
split or reclassification of the Ordinary Shares without the prior written consent of the Purchasers holding a majority in interest
of the Shares.

 

ARTICLE V.

MISCELLANEOUS

 

5.1           Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before January 26, 2018; provided, however, that no such termination will affect
the right of any party to sue for any breach by any other party (or parties).

 

5.2           Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent
fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company
and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery
of any Shares to the Purchasers.

 

5.3           Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus
Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.

 

     

     

    

  

5.4           Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto
at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth
on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any
Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for
such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided
pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries
or any VIEs, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 6-K.

 

5.5           Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and Purchasers which purchased (or, if prior to the Closing, which have agreed to
purchase) at least 50.1% in interest of the Shares based on the initial Subscription Amounts hereunder or, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or
waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted
Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or
a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately,
materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in
accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Shares and the Company.

 

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

 

5.7           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect
to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.8           Third-Party
Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in Section 4.7 and this Section 5.8.

 

     

     

    

  

5.9           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action
or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence
an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company
under Section 4.7, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action
or Proceeding.

 

5.10         Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Shares.

 

5.11         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

5.12         Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

     

     

    

  

5.13         Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.

 

5.14         Replacement
of Shares. If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in
lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Shares.

 

5.15         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation
the defense that a remedy at law would be adequate.

 

5.16         Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

     

     

    

 

5.17         Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each
Purchaser and its respective counsel have chosen to communicate with the Company through Loeb. Loeb does not represent any of
the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the
Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between
and among the Purchasers.

 

5.18         Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.

 

5.19         Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

5.20         Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and Ordinary Shares in any Transaction Document shall be subject to adjustment for reverse and
forward share splits, share dividends, share combinations and other similar transactions of the Ordinary Shares that occur after
the date of this Agreement.

 

5.21         WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

 

(Signature Pages Follow)

 

     

     

    

  

IN WITNESS WHEREOF,
the parties hereto have caused this Share Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.

 

	RECON
    TECHNOLOGY, LTD	 	Address for Notice:
	 	 	 
	By:	 	 	 
	 	Name: Shenping Yin	 	E-Mail:
	 	Title: Chief Executive Officer	 	Fax:
	 	 	 	 
	With a copy to (which shall not constitute notice):	 	 
	Anthony W. Basch	 	 
	Kaufman & Canoles, P.C.	 	 
	Two James Center, 14th Floor	 	 
	1021 E. Cary St.	 	 
	Richmond, VA 23219	 	 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

     

     

    

 

[PURCHASER SIGNATURE PAGES TO SHARE PURCHASE
AGREEMENT]

 

IN WITNESS WHEREOF, the
undersigned have caused this Share Purchase Agreement to be duly executed by their respective authorized signatories as of the
date first indicated above.

 

	Name
    of Purchaser:	 

 

	Signature
    of Authorized Signatory of Purchaser:  	 

 

	Name
    of Authorized Signatory:  	 

 

	Title
    of Authorized Signatory:  	 

 

	Email
    Address of Authorized Signatory:  	 

 

	Facsimile
    Number of Authorized Signatory:  	 

 

 

Address for Notice to Purchaser:

 

 

Address for Delivery of Shares to Purchaser (if not same as address
for notice):

 

Subscription Amount: $_________________

 

Shares: _________________

 

EIN Number: _______________________

 

 ̈
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed
to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations
of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded,
(ii) the Closing shall occur on the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the
above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition
and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.

 

[SIGNATURE PAGES CONTINUE]

 

     

     

    

 

Schedule 3.1(a)

 

List of Subsidiaries

 

The following are the Registrant, its subsidiaries and its variable
interest entities (“VIEs”):

 

Registrant (Cayman Islands):

 

Recon Technology, Ltd

 

Subsidiary (Hong Kong):

 

Recon Technology Co., Limited

 

Recon Investment Ltd.

 

Subsidiary (PRC):

 

Recon Technology (Jining) Co., Ltd.

 

Recon Hengda Technology (Beijing) Co., Ltd.

 

VIE affiliates (PRC):

 

Beijing BHD Petroleum Technology Co. Ltd.

 

Nanjing Recon Technology Co., Ltd.

 

Huang Hua BHD Petroleum Equipment Manufacturing Co. LTD.

 

Gan Su BHD Environmental Technology Co., Ltd. (51% owned
by Beijing BHD Petroleum Technology Co. Ltd.)

 

Qing Hai BHD New Energy Technology Co., Ltd. (55% owned
by Beijing BHD Petroleum Technology Co. Ltd.)

 

     

     

    

 

Schedule 3.1(g)

 

Capitalization

 

	 	 	As of June 30,	 	 	As of June 30,	 	 	As of June 30,	 
	 	 	2016	 	 	2017	 	 	2017	 
	 	 	RMB	 	 	RMB	 	 	U.S. Dollars	 
	ASSETS	 	 	 	 	 	 	 	 	 	 	 	 
	Current assets	 	 	 	 	 	 	 	 	 	 	 	 
	Cash	 	¥	1,817,620	 	 	¥	3,809,279	 	 	$	562,054	 
	Notes receivable	 	 	4,660,177	 	 	 	6,112,960	 	 	 	901,960	 
	Trade accounts receivable, net	 	 	38,097,626	 	 	 	39,425,911	 	 	 	5,817,245	 
	Inventories, net	 	 	6,313,070	 	 	 	2,627,974	 	 	 	387,754	 
	Other receivables, net	 	 	22,000,112	 	 	 	4,106,510	 	 	 	605,911	 
	Purchase advances, net	 	 	1,323,305	 	 	 	11,476,000	 	 	 	1,693,270	 
	Prepaid expenses	 	 	110,310	 	 	 	828,441	 	 	 	122,235	 
	Total current assets	 	 	74,322,220	 	 	 	68,387,075	 	 	 	10,090,429	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Property and equipment, net	 	 	2,907,762	 	 	 	2,767,970	 	 	 	408,411	 
	Long-term trade accounts receivable, net	 	 	2,220,332	 	 	 	-	 	 	 	-	 
	Total Assets	 	¥	79,450,314	 	 	¥	71,155,045	 	 	$	10,498,840	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current liabilities	 	 	 	 	 	 	 	 	 	 	 	 
	Trade accounts payable	 	¥	7,540,430	 	 	¥	8,352,870	 	 	$	1,232,456	 
	Other payables	 	 	4,144,326	 	 	 	3,651,900	 	 	 	538,834	 
	Other payable- related parties	 	 	3,680,244	 	 	 	3,314,019	 	 	 	488,979	 
	Deferred revenue	 	 	406,681	 	 	 	1,259,725	 	 	 	185,871	 
	Accrued payroll and employees' welfare	 	 	381,109	 	 	 	2,014,514	 	 	 	297,239	 
	Taxes payable	 	 	755,880	 	 	 	684,721	 	 	 	101,030	 
	Short-term borrowings - related parties	 	 	12,941,848	 	 	 	10,168,008	 	 	 	1,500,277	 
	Total current liabilities	 	 	29,850,518	 	 	 	29,445,757	 	 	 	4,344,686	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Commitments and Contingencies	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equity	 	 	 	 	 	 	 	 	 	 	 	 
	Common stock, ($0.0185 U.S. dollar par value, 100,000,000 shares authorized; 5,804,005 and 9,902,914
    shares issued and outstanding as of June 30, 2016 and 2017, respectively)	 	 	741,467	 	 	 	1,261,288	 	 	 	186,101	 
	Additional paid-in capital	 	 	100,612,455	 	 	 	123,436,043	 	 	 	18,212,837	 
	Statutory reserve	 	 	4,148,929	 	 	 	4,148,929	 	 	 	612,169	 
	Accumulated deficit	 	 	(63,907,512	)	 	 	(95,352,659	)	 	 	(14,069,168	)
	Accumulated other comprehensive loss	 	 	(219,040	)	 	 	(249,156	)	 	 	(36,762	)
	Total stockholders’ equity	 	 	41,376,299	 	 	 	33,244,445	 	 	 	4,905,177	 
	Non-controlling interest	 	 	8,223,497	 	 	 	8,464,843	 	 	 	1,248,977	 
	Total equity	 	 	49,599,796	 	 	 	41,709,288	 	 	 	6,154,154	 
	Total Liabilities and Stockholders’ Equity	 	¥	79,450,314	 	 	¥	71,155,045	 	 	$	10,498,840	 

 

     

     

    

 

Schedule 3.1(g)(i)

 

Outstanding Rights to Receive Ordinary Shares

 

Options to purchase an aggregate of 815,600
ordinary shares are outstanding to officers, directors and employees of the Company.

 

An aggregate of 1,960,666 un-vested restricted
ordinary shares are outstanding to officers, directors and employees of the Company.

 

     

     

    

 

Schedule 3.1(i)

 

Undisclosed Material Changes

 

None

 

     

     

    

 

Schedule 3.1(j)

 

Pending or Threatened Litigation

 

None.

 

     

     

    

 

Schedule 3.1(p)

 

Intellectual Property

 

None.

 

     

     

    

 

Schedule 3.1(r)

 

Transactions with Affiliates and Employees

 

Previously Disclosed

 

Transactions with Related Persons

 

Because we do not have
access certification to Jidong Oilfield, Nanjing Recon, one of our Domestic Companies, conducted transactions with Jidong Oilfield
through Beijing Yabei Nuoda Science and Technology Co. Ltd. (“Yabei Nuoda”), which has access certification to the
oilfield and wherein one of the Founders, Mr. Yin Shenping, was the legal representative of Yabei Nuoda before December 2013 and
Chairman as of September 30, 2014. On October 30, 2014, Mr. Yin resigned from the chairman position and since that point Yabei
Nuoda was no longer a related party of the Company after October 30, 2014. Mr. Yin does not have any equity interest in this company
currently.

 

Sales to related parties consisted of the following:

 

	 	 	For the years ended
    June 30,	 
	 	 	2015	 	 	2016	 	 	2017	 	 	2017	 
	 	 	RMB	 	 	RMB	 	 	RMB	 	 	U.S. Dollars	 
	Xiamen Henda Hitek Computer Network Co. Ltd	 	¥	1,676,036	 	 	¥	-	 	 	¥	-	 	 	$	-	 
	Xiamen Huangsheng Hitek Computer Network Co. Ltd.	 	 	752,137	 	 	 	-	 	 	 	-	 	 	 	-	 
	Revenues from related parties	 	¥	2,428,173	 	 	¥	-	 	 	¥	-	 	 	$	-	 

 

Purchase from related parties consisted
of the following:

 

	 	 	For the years ended
    June 30,	 
	 	 	2015	 	 	2016	 	 	2017	 	 	2017	 
	 	 	RMB	 	 	RMB	 	 	RMB	 	 	U.S. Dollars	 
	Huanghua Heng Da Xiang Tong Manufacture Ltd	 	¥	862,782	 	 	¥	338,862	 	 	¥	-	 	 	$	-	 
	Xiamen Huangsheng Hitek Computer Network Co. Ltd.	 	 	797,587	 	 	 	588,894	 	 	 	-	 	 	 	-	 
	Purchases from related parties	 	¥	1,660,369	 	 	¥	927,756	 	 	¥	-	 	 	$	-	 

  

Other payables consisted of the
following:

 

	 	 	June 30,
 2016	 	 	June 30,
 2017	 	 	June 30, 

     2017	 
	Related Party	 	RMB	 	 	RMB	 	 	U.S. Dollars	 
	Expenses paid by the major shareholders	 	¥	3,144,263	 	 	¥	3,062,709	 	 	$	451,899	 
	Due to family member of one owner	 	 	285,000	 	 	 	-	 	 	 	-	 
	Due to management staff for costs incurred on behalf of Recon	 	 	250,981	 	 	 	251,310	 	 	 	37,080	 
	Total	 	¥	3,680,244	 	 	¥	3,314,019	 	 	$	488,979	 

 

     

     

    

 

 

The Company also had short-term
borrowings` from related parties. Below is a summary of the Company’s short-term borrowings due to related parties as of
June 30, 2016 and 2017, respectively.

 

	Short-term borrowings	 	June 30, 2016	 	 	June 30, 2017	 	 	June 30, 2017	 
	due to related parties:	 	RMB	 	 	RMB	 	 	U.S. Dollars	 
	Short-term borrowing from a Founder, 5.75% annual interest, due on September 25,
    2016	 	¥	1,807,207	 	 	¥	-	 	 	$	-	 
	Short-term borrowing from a Founder, 5.75% annual interest, due on October 10, 2016	 	 	2,409,610	 	 	 	-	 	 	 	-	 
	Short-term borrowing from a Founder's family member, 5.43% annual interest, due on November 4,
    2016	 	 	1,805,180	 	 	 	-	 	 	 	-	 
	Short-term borrowing from a Founder's family member, no interest, due on December 16, 2016	 	 	1,500,000	 	 	 	-	 	 	 	-	 
	Short-term borrowing from a Founder's family member, no interest, due on December 28, 2016	 	 	400,000	 	 	 	-	 	 	 	-	 
	Short-term borrowing from a Founder, 5.22% annual interest, due on March 10, 2017	 	 	2,529,795	 	 	 	-	 	 	 	-	 
	Short-term borrowing from a Founder, 5.22% annual interest, due on May 6, 2017	 	 	2,490,056	 	 	 	-	 	 	 	-	 
	Short-term borrowing from a Founder, 5.65% annual interest, due on August 24, 2017*	 	 	-	 	 	 	62,692	 	 	 	9,251	 
	Short-term borrowing from a Founder, 5.65% annual interest, due on August 31, 2017**	 	 	-	 	 	 	1,260,165	 	 	 	185,936	 
	Short-term borrowing from a Founder, 5.65% annual interest, due on August 31, 2017***	 	 	-	 	 	 	1,420,223	 	 	 	209,552	 
	Short-term borrowing from a Founder, 5.65% annual interest, due on September 11, 2017****	 	 	-	 	 	 	722,262	 	 	 	106,569	 
	Short-term borrowing from a Founder, 5.65% annual interest, due on September 16, 2017*****	 	 	-	 	 	 	541,187	 	 	 	79,851	 
	Short-term borrowing from a Founder, 5.65% annual interest, due on September 18, 2017******	 	 	-	 	 	 	804,530	 	 	 	118,707	 
	Short-term borrowing from a Founder's family member, no interest, due on December 31, 2017	 	 	-	 	 	 	350,000	 	 	 	51,642	 
	Short-term borrowing from a Founder, 5.22% annual interest, due on May 10, 2018*******	 	 	-	 	 	 	2,529,428	 	 	 	373,214	 
	Short-term borrowing from a Founder, 5.22% annual interest, due on June
    7, 2018********	 	 	-	 	 	 	2,477,521	 	 	 	365,555	 
	Total short-term borrowings due to related parties	 	¥	12,941,848	 	 	¥	10,168,008	 	 	$	1,500,277	 

  

	*	As of August 24, 2017, the short-term borrowing was fully
    paid back.
	**	As of August 31, 2017, the short-term borrowing was fully paid back.
	***	As of August 31, 2017, the short-term borrowing was fully paid back.
	****	As of September 11, 2017, the short-term borrowing was fully paid
    back.
	*****	As of September 16, 2017, the short-term borrowing was fully paid
    back.
	******	As of September 18, 2017, the short-term borrowing was fully paid
    back.
	*******	As of September 12, 2017, the short-term borrowing was fully paid
    back.
	********	As of September 12, 2017, the short-term borrowing was fully paid
    back.

 

     

     

    

  

Account payable due to related
parties - The Company purchased automation products and heating furnaces from Xiamen Huangsheng Hitek Computer Network
Co. Ltd (“Huangsheng Hitek”) and HuangHua Heng Da Xiang Tong Manufacture Ltd (“Huanghua Xiang Tong”),
the ending balance of accounts payable due to Huangsheng Hitek as of June 30, 2016 and 2017 were both nil. On March 18, 2016,
the Company terminated its equity investment in Huanghua Xiang Tong and therefore has no related-party relationship with this
entity after March 18, 2016.

 

Leases from related parties -
The Company has various agreements for the lease of office space owned by the Founders and their family members. The terms of
the agreement state that the Company will continue to lease the property at a monthly rent of ¥140,000 with annual rental
expense at ¥1.68 million ($0.25 million). The details of leases from related parties are as below:

 

	 	 	 	 	 	 	Monthly Rent	 	 	Monthly Rent	 
	Lessee	 	Lessor	 	Rent Period	 	RMB	 	 	USD	 
	Nanjing Recon	 	Yin Shenping	 	July 10, 2014 - March 31, 2018	 	¥	60,000	 	 	$	8,853	 
	BHD	 	Chen Guangqiang	 	January 1, 2015 - December 31, 2017	 	 	22,500	 	 	 	3,320	 
	BHD	 	Mr Chen's family member	 	January 1, 2015 - December 31, 2017	 	 	47,500	 	 	 	7,009	 
	Recon BJ	 	Yin Shenping	 	July 1, 2016 - June 30, 2018	 	 	10,000	 	 	 	1,475	 

 

Expenses paid by
the owner on behalf of Recon - One owner of Nanjing Recon, the CEO and the CTO paid certain operating expenses for
the Company. As of June 30, 2016 and 2017, ¥3,144,263 and ¥3,062,709 ($451,899) was due to them, respectively.

 

Not previously disclosed

 

RMB10 million long-term (10 year) borrowing
from a founder and related party, 8.9% interest due in November 2027.

 

     

     

    

 

Schedule 3.1(aa)

 

Outstanding Secured and Unsecured Indebtedness
in Excess of $50,000

 

1.          RMB1.9
million Short-term borrowing from third party, no interest, due in June and August 2018.

 

2.          RMB6.1
million Short-term borrowing from related party, 5.22% interest, due in June and August 2018.

 

3.          RMB10
million long-term (10 year) borrowing from a founder and related party, 8.9% interest due in November 2027.

 

     

     

    

 

Schedule 4.6

 

Variations from Stated Use of Proceeds

 

None

 

     

     

    

 

Exhibit A

Form of Lock-Up Agreement

Recon Technology, Inc.

 

January ___, 2018

 

Recon Technology, Inc.

Room 1902, Building C

King Long International Mansion,

9 Fulin Road, Beijing, 100107 PRC

 

Re: Recon
Technology, Ltd. - Lock-Up Agreement

 

Ladies and Gentlemen:

 

This Lock-Up Agreement
is being delivered to you in connection with the Securities Purchase Agreement (the "Purchase Agreement"), dated
as of January ___, 2018 by and among Recon Technology, Ltd., a Cayman Islands company (the "Company") and the
investors party thereto (the "Buyers"), with respect to the issuance of shares
of the Company's ordinary shares, $0.0185 par value (the "Ordinary Shares"). Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.

 

In order to induce the
Buyers to enter into the Purchase Agreement, the undersigned agrees that, commencing on the date hereof and ending on [March 26],
2018 (the "Lock-Up Period"), the undersigned will not, and will cause all affiliates (as defined in Rule 144
promulgated under the 1933 Act) of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned
not to, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short
sale or otherwise dispose of or agree to dispose of, directly or indirectly, any Ordinary Shares or Ordinary Shares Equivalents,
or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to any Ordinary Shares or Ordinary Shares Equivalents owned directly by the undersigned (including
holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of
the Securities and Exchange Commission (collectively, the "Undersigned's Shares"), or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the
Undersigned's Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Ordinary
Shares or other securities, in cash or otherwise, (iii) make any demand for or exercise any right or cause to be filed a registration
statement, including any amendments thereto, with respect to the registration of any Ordinary Shares or Ordinary Shares Equivalents
or (iv) publicly disclose the intention to do any of the foregoing.

 

The foregoing restriction
is expressly agreed to preclude the undersigned, and any affiliate of the undersigned and any person in privity with the undersigned
or any affiliate of the undersigned, from engaging in any hedging or other transaction which is designed to or which reasonably
could be expected to lead to or result in a sale or disposition of the Undersigned's Shares even if the Undersigned's Shares would
be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include, without limitation,
any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect
to any of the Undersigned's Shares or with respect to any security that includes, relates to, or derives any significant part
of its value from the Undersigned's Shares.

 

     

     

    

  

Notwithstanding the foregoing,
the undersigned may transfer the Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound in writing by the restrictions set forth herein or (ii) to any trust for the direct or indirect benefit
of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing
by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value. For
purposes of this Lock-Up Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not
more remote than first cousin. The undersigned now has, and, except as contemplated by the immediately preceding sentence, for
the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned's Shares, free and clear of all
liens, encumbrances, and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent (the "Transfer Agent") and registrar against the transfer of the Undersigned's
Shares except in compliance with the foregoing restrictions.

 

In order to enforce this
covenant, the Company shall impose irrevocable stop-transfer instructions preventing the Transfer Agent from effecting any actions
in violation of this Lock-Up Agreement.

 

The undersigned acknowledges
that the execution, delivery and performance of this Lock-Up Agreement is a material inducement to each Buyer to complete the
transactions contemplated by the Purchase Agreement and that the Company shall be entitled to specific performance of the undersigned's
obligations hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver
and perform this Lock-Up Agreement, that the undersigned has received adequate consideration therefor and that the undersigned
will indirectly benefit from the closing of the transactions contemplated by the Purchase Agreement.

 

The undersigned understands
and agrees that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives,
successors, and assigns.

 

This Lock-Up Agreement
may be executed in two counterparts, each of which shall be deemed an original but both of which shall be considered one and the
same instrument.

 

This Lock-Up Agreement
will be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of
law or conflicting provision or rule (whether of the State of New York, or any other jurisdiction) that would cause the laws of
any jurisdiction other than the State of New York to be applied. In furtherance of the foregoing, the internal laws of the State
of New York will control the interpretation and construction of this Lock-Up Agreement, even if under such jurisdiction's choice
of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.

 

[Remainder of page intentionally left blank]

 

     

     

    

  

	 	Very truly yours,
	 	 
	 	 
	 	Exact Name of Shareholder
	 	 
	 	 
	 	Authorized Signature
	 	 
	 	 
	 	Title

 

	Agreed to and Acknowledged:	 
	 	 
	Recon Technology, Inc.	 
	 	 	 
	By:  	 	 
	 	Name:  	 
	 	Title:

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