UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2024
Commission File Number: 333-226308
COLOR STAR TECHNOLOGY CO., LTD.
(Translation of registrant’s name into English)
80 Broad Street, 5th Floor
New York, NY 10005
Tel: +1 (929) 317-2699
(Address of principal executive office)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form
40-F ☐
Entry into a Material Agreement
Color Star Technology Co., Ltd. (the “Company”)
entered into a certain note exchange agreement dated October 8, 2024 (the “Note Exchange Agreement”) with certain institutional
investors (the “Purchasers”) that are party to a certain securities purchase agreement dated September 27, 2024 (the
“SPA”) by and among the Company and the Purchasers.
Pursuant to the SPA, the Company sold to the Purchasers
an initial tranche of senior secured convertible notes in the aggregate principal amount of approximately $7.6 million (the “Initial
Notes”), having an original issue discount of 8%, a maturity date twelve months from the date of issuance, bearing an interest
rate of 6% per annum, and convertible into Class A Ordinary Shares (the “Ordinary Shares”) of the Company, and accompanying
Series A Warrants to purchase up to an aggregate of 2,853,118 Ordinary Shares, with an exercise price of $1.60 per Ordinary Share (the
“Initial Warrants”). The Initial Notes are convertible into the Company’s Ordinary Shares at the holder’s
option, after 45 days from the date of issuance, in whole or in part, until the Initial Note is fully converted, at the lower of (i) $1.60
(“Conversion Price”), or (ii) a price equal to 90% of the lowest VWAP of the Ordinary Shares during the ten (10)-trading
day period immediately preceding the applicable conversion date (the “Alternate Conversion Price”).
Under the Note Exchange Agreement, the Purchasers
agreed to deliver to the Company for cancellation and termination the Initial Notes previously issued by the Company to the Purchasers
pursuant to the SPA. In exchange, the Company will issue to the Purchasers new convertible notes (the “New Notes”)
with substantially all of the same terms of the Initial Notes, except that the New Notes shall become convertible into the Company’s
Ordinary Shares at the holder’s option, immediately from the date of issuance, in whole or in part, until the New Notes are fully
converted.
The issuance of the New Notes is exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), and is made in reliance on, and in compliance
with, Section 3(a)(9) of the Securities Act.
A copy of the Note Exchange Agreement and the
New Note is included in this report on Form 6-K as Exhibits 99.1 and 99.2, respectively, and the foregoing description of the Note Exchange
Agreement and New Note is qualified in its entirety by reference thereto.
This
Form 6-K is hereby incorporated by reference into the registration statements of the Company on Form F-3 (Registration Number 333-2816868,
filed on August 20, 2024), to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: October 8, 2024
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COLOR STAR TECHNOLOGY CO., LTD. |
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By: |
/s/ Louis Luo |
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Name: |
Louis Luo |
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Title: |
Chief Executive Officer |
2
Exhibit 99.1
NOTE EXCHANGE AGREEMENT
THIS NOTE EXCHANGE AGREEMENT
(the “Agreement”), dated as of October ___, 2024, is entered into by and among Color Star Technology Co., Ltd., a Cayman
Islands exempted company (the “Company”), and the persons identified as “Holders” on the signature pages
hereto (the “Holders”).
WHEREAS, pursuant to a Securities
Purchase Agreement dated September 27, 2024, among the Company and the Holders (the “September Purchase Agreement”),
the Company issued to the Holders 8% Original Issue Discount Senior Secured Convertible Notes due September 30, 2025 (the “September
Notes”) in the aggregate principal amount of $7,608,695.65 and warrants to purchase ordinary shares, par value $0.04 per share,
of the Company; and
WHEREAS, subject to the terms
and conditions set forth herein, the Company and the Holders desire to cancel and retire the September Notes in exchange for New Notes
(as defined below), in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended
(the “Securities Act”).
NOW THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and each Holder hereby agrees as follows:
1. Definitions.
Terms used as defined terms herein and not otherwise defined shall have the meanings provided therefore in the September Purchase Agreement
and the September Notes.
2. Agreements
and Acknowledgements.
(a) Exchange
of Notes. The Company hereby agrees to issue to each Holder an 8% Original Issue Discount Senior Secured Convertible Note due September
30, 2025, in the form attached hereto as Exhibit A (the “New Notes”), in the aggregate principal amount of $7,608,695.65
in exchange for the cancellation in full of the September Notes. Each Holder acknowledges and agrees that, upon the issuance and delivery
of the New Notes, the September Notes will be deemed cancelled and each Holder will deliver the original September Notes to the Company.
(b) Definition
of “Notes” in Transaction Documents. The Company and Holders hereby agree that, in the Transaction Documents, the term
“Notes” shall no longer mean the September Notes and, from the date hereof, “Notes” shall mean the New Notes.
3. Representations,
Warranties and Covenants. The Company hereby makes to the Holders the following representations, warranties and covenants:
(a) Organization
and Qualification. The Company and each of the Subsidiaries 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 (as applicable), 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 is in violation or 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 and the Subsidiaries 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
and the Subsidiaries, 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.
(b) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by
the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, its board of directors or its shareholders in connection therewith.
This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof 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.
(c) No
Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’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 give to others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument (evidencing a
Company or Subsidiary debt or otherwise) or other material understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) 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 is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company
or a Subsidiary 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.
(d) 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 this Agreement, other than: (i) the filing required pursuant to Section
3(f) of this Agreement, (ii) any required filing with the Commission of the Prospectus Supplement, if applicable, and (iii) such filings
as are required to be made under applicable state securities laws.
(e) Issuance
of the New Notes. The New Notes 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 Conversion Shares,
when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and
clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of Ordinary
Shares for issuance of the Conversion Shares pursuant to this Agreement and the New Notes.
(f) Disclosures.
The Company shall, on or before ___, New York City time, on the Trading Day immediately following the date hereof issue a Current
Report on Form 6-K disclosing all material terms of the transactions contemplated hereby and attaching the forms of this Agreement and
New Notes as exhibits thereto to the extent not previously filed with the Commission (such Current Report on Form 6-K with all exhibits
attached thereto, the “6-K Filing”). From and after the filing of the 6-K Filing, the Holder shall not be in possession
of any material, nonpublic information received from the Company or any of its subsidiaries or any of their respective officers, directors,
employees, affiliates or agents, that is not disclosed in the 6-K Filing. The Company shall not, and shall cause its officers, directors,
employees, affiliates and agents, not to, provide the Holder with any material, nonpublic information regarding the Company from and after
the filing of the 6-K Filing without the express written consent of the Holder. To the extent that the Company delivers any material,
non-public information to the Holder without the Holder’s express prior written consent, the Company hereby covenants and agrees that
the Holder shall not have any duty of confidentiality to the Company, any of its subsidiaries or any of their respective officers, directors,
employees, affiliates or agents with respect to, or a duty to the Company, any of its subsidiaries or any of their respective officers,
directors, employees, affiliates or agents not to trade on the basis of, such material, non-public information. The Company shall not
disclose the name of the Holder in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation.
In addition, effective upon the filing of the 6-K Filing, 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 their respective officers,
directors, affiliates, employees or agents, on the one hand, and the Holder or any of its affiliates, on the other hand, shall terminate
and be of no further force or effect. The Company understands and confirms that the Holder will rely on the foregoing representations
in effecting transactions in securities of the Company.
(g) No
Commission Paid. Neither the Company nor any of its affiliates nor any Person acting on behalf of or for the benefit of any of the
foregoing, has paid or given, or agreed to pay or give, directly or indirectly, any commission or other remuneration (within the meaning
of Section 3(a) (9) of the Securities Act and the rules and regulations of the Commission promulgated thereunder) for soliciting this
exchange.
(h) Bring
Down. The Company expressly reaffirms that each of the representations, warranties and covenants set forth in the Purchase Agreement
(as supplemented or qualified by the disclosures in any disclosure schedule to Purchase Agreement), continues to be true, accurate and
complete in all material respects as of the date hereof, and the Company hereby remakes and incorporates herein by reference each such
representation, warranty and covenant as though made on the date of this Agreement.
4. Representations
and Warranties of the Holders. Each Holder, for itself and for no other Holder, hereby represents and warrants as of the date hereof
to the Company as follows (unless as of a specific date therein):
(a) Organization;
Authority. Such Holder 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 incorporated or formed 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 Holder 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 Holder. Each Transaction Document to which it is a party has been
duly executed by such Holder, and when delivered by such Holder in accordance with the terms hereof, will constitute the valid and legally
binding obligation of such Holder, 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) Own
Account. Such Holder is acquiring the Securities 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 Securities (this representation and warranty not limiting such
Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal
and state securities laws). Such Holder is acquiring the Securities hereunder in the ordinary course of its business.
(c) Holder
Status. At the time such Holder was offered the Securities, it was, and as of the date hereof it is, and on each date on which it
exercises any Warrants or converts any Notes it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12) or (a)(13) under the Securities Act or (ii) a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act.
The Company acknowledges and agrees that the representations
contained in Section 4 shall not modify, amend or affect such Holder’s right to rely on the Company’s representations, warranties
and covenants contained in this Agreement or any express representations, warranties and covenants 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 transaction
contemplated hereby.
5. Miscellaneous.
(a) The
respective obligations and agreements of the Holders hereunder are subject to the following conditions being met: (a) the accuracy in
all material respects of the representations, warranties and covenants of the Company contained herein (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) and (b)
the performance by the Company of all if its obligations, covenants and agreements required to be performed hereunder. Except as expressly
set forth above, all of the terms and conditions of the Transaction Documents shall continue in full force and effect after the execution
of this Agreement and shall not be in any way changed, modified or superseded by the terms set forth herein.
(b) The
parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the New Notes and the underlying conversion
Shares shall take on the registered characteristics of the September Notes and the underlying conversion Shares being exchanged. The
Company agrees not to take any position contrary to this Section 5(b).
(c) This
Agreement may be executed in two or more counterparts and by facsimile signature or otherwise, and each of such counterparts shall be
deemed an original and all of such counterparts together shall constitute one and the same agreement. 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.
(d) The
Company has elected to provide all Holders with the same terms and form of agreement for the convenience of the Company and not because
it was required or requested to do so by the Holders. The obligations of each Holder under this Agreement, and any Transaction Document
are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance
or non-performance of the obligations of any other Holder under this Agreement or any Transaction Document. Nothing contained herein or
in any Transaction Document, and no action taken by any Holder pursuant thereto, shall be deemed to constitute the Holders as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert
or as a group with respect to such obligations or the transactions contemplated by this Agreement or the Transaction Documents. Each Holder
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 Holder to be joined as an additional party in any
proceeding for such purpose. Each Holder has been represented by its own separate legal counsel in their review and negotiation of this
Agreement and the Transaction Documents.
(e) If
any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining
provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions
of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question
does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the
benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s).
(f) This
Agreement shall be governed by and interpreted in accordance with laws of the State of New York, excluding its choice of law rules. The
parties hereto hereby waive the right to a jury trial in any litigation resulting from or related to this Agreement. The parties hereto
consent to exclusive jurisdiction and venue in the federal courts sitting in the southern district of New York, unless no federal subject
matter jurisdiction exists, in which case the parties hereto consent to exclusive jurisdiction and venue in the New York state courts
in the borough of Manhattan, New York. Each party waives all defenses of lack of personal jurisdiction and forum non conveniens. Process
may be served on any party hereto in the manner authorized by applicable law or court rule.
***********************
IN WITNESS WHEREOF, this Agreement is executed as of the date first set forth above.
| COLOR STAR TECHNOLOGY CO., LTD. | |
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| By: | | |
| | Name: |
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[signature pages of Holders to follow]
SIGNATURE PAGE OF HOLDER TO
NOTE EXCHANGE AGREEMENT
AMONG COLOR STAR TECHNOLOGY CO., LTD. AND
THE HOLDERS THEREUNDER
Name of Holder: ____________________________________
By: ______________________________________________
Name: ____________________________________________
Title: _____________________________________________
Principal Amount of September Notes: $______________________
Exhibit 99.2
Original Issue Date: October ___, 2024
Original Principal Amount: US$___
Purchase Price: US$___
REGISTERED
SENIOR SECURED
CONVERTIBLE NOTE
DUE September ___, 2025
THIS SENIOR SECURED CONVERTIBLE
NOTE is one of a series of duly authorized and validly issued 8% Original Issue Discount Senior Secured Convertible Notes of Color Star
Technology Co., Ltd., a Cayman Islands exempted company (the “Company”), having its principal place of business at
80 Broad Street, 5th Floor, New York, NY 10005, designated as its Senior Secured Convertible Note due September ___, 2025 (this
note, the “Note” and, collectively with the other notes of such series, the “Notes”).
FOR VALUE RECEIVED, the Company
promises to pay to ___ or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder,
the principal sum of US$___ on September ___, 2025 (the “Maturity Date”) or such earlier date as this Note is required
or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal
amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:
Section 1.
Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not
otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following
meanings:
“Alternate
Consideration” shall have the meaning set forth in Section 5(e).
“Alternate
Conversion Price” shall have the meaning set forth in Section 4(b).
“Bankruptcy
Event” means any of the following events: (a) the Company or any significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any significant Subsidiary thereof, (b) there is commenced against the Company, or any significant Subsidiary thereof any
such case or proceeding that is not dismissed within sixty (60) days after commencement, (c) the Company or any significant
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered, (d) the Company or any significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any
substantial part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment, (e) the
Company or any significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company, or any
significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts, (g) the Company or any significant Subsidiary thereof admits in writing that it is generally unable to pay its debts
as they become due, (h) the Company or any significant Subsidiary thereof, by any act or failure to act, expressly indicates its
consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
are open for use by customers on such day.
“Buy-In”
shall have the meaning set forth in Section 4(c)(v).
“Change
of Control Redemption Notice Date” shall have the meaning set forth in Section 6(b).
“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting
securities of the Company (other than by means of conversion or exercise of the Notes and the Securities issued together with the Notes),
(b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after
giving effect to such transaction, the shareholders of the Company immediately prior to such transaction own less than 50% of the aggregate
voting power of the Company or the successor entity of such transaction, (c) the Company (and all of its Subsidiaries, taken as a whole)
sells or transfers all or substantially all of its assets to another Person and the shareholders of the Company immediately prior to such
transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement
at one time or within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority
of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as
members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of
the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is
a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
“Conversion”
shall have the meaning ascribed to such term in Section 4.
“Conversion
Date” shall have the meaning set forth in Section 4(a).
“Conversion
Price” shall have the meaning set forth in Section 4(b).
“Conversion
Shares” means, collectively, the Ordinary Shares issuable upon conversion of this Note, including interest payable in kind thereon,
in accordance with the terms hereof.
“Note Register”
shall have the meaning set forth in Section 2(c).
“Event
of Default” shall have the meaning set forth in Section 8(a).
“Exempt
Issuance” shall have the meaning set forth in the Purchase Agreement.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Fixed
Conversion Price” shall have the meaning set forth in Section 4(b).
“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).
“Late Fees”
shall have the meaning set forth in Section 2(d).
“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Note, plus all accrued and
unpaid interest hereon, divided by the lesser of (i) the Conversion Price, or (ii) 85% of the average of the three lowest VWAPs during
the ten (10) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable date the Mandatory Default
Amount is either (A) demanded (if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever
has a lower Conversion Price, multiplied by the highest closing price for the Ordinary Shares on the Principal Market during the period
beginning on the date of first occurrence of the Event of Default and ending on the date the Mandatory Default Amount is paid in full,
or (ii) 130% of the sum of the outstanding principal amount of this Note, plus accrued and unpaid interest hereon, and (b) all other amounts,
costs, expenses and liquidated damages due in respect of this Note.
“Mandatory
Redemption” means the redemption of this Note pursuant to the terms of Section 6 hereof.
“Mandatory
Redemption Amount” shall have the meaning set forth in Section 6(a).
“Mandatory
Redemption Notice” shall have the meaning set forth in Section 6(a).
“Mandatory
Redemption Notice Date” shall have the meaning set forth in Section 6(a).
“New York
Courts” shall have the meaning set forth in Section 9(d).
“Notice
of Conversion” shall have the meaning set forth in Section 4(a).
“Ordinary
Shares” means the ordinary shares of the Company, par value $0.04 per share.
“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the
number of instruments which may be issued to evidence such Notes.
“Pre-Notice”
shall have the meaning set forth in Section 6(a).
“Principal
Market” means The Nasdaq Capital Market.
“Purchase
Agreement” means the Securities Purchase Agreement, dated as of September 27, 2024, by and among the Company and the original
Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“Registration
Statement” means a registration statement meeting the requirements set forth in the Purchase Agreement and covering the resale
of the Conversion Shares by each Holder.
“Required
Holders” means holders of more than 50% of the principal amount of the Notes then outstanding.
“Required
Minimum” shall have the meaning set forth in Section 4(c)(vi).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).
“Successor
Entity” shall have the meaning set forth in Section 5(e).
“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 will, in accordance with the terms hereof,
be listed or quoted for trading on the date in question: the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq
Global Select Market; the New York Stock Exchange; OTC Markets; the OTC Bulletin Board or the OTC Markets Group Inc. (or any successors
to any of the foregoing).
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then
listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest
preceding date) on the Trading Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on
a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as
applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary
Shares are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Ordinary Shares so reported, or (d) in all other cases, the fair market
value of an Ordinary Share as determined by an independent appraiser selected in good faith by the Required Holders and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Section 2.
Interest.
a) Payment of
Interest in Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount
of this Note at the rate of six percent (6.0%) per annum, payable on each Conversion Date (as to the principal amount then being converted),
and on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment Date is not a Business
Day, then the applicable payment shall be due on the next succeeding Business Day), in duly authorized, validly issued, fully paid and
non-assessable Ordinary Shares at the Conversion Rate at which the principal is then converted (such shares, for the avoidance of doubt,
shall be considered “Conversion Shares” for all purposes herein and shall be delivered with the Conversion Shares issuable
upon conversion of any principal amounts hereunder in the same form and in the same manner as such principal Conversion Shares as described
herein); provided, however, if there is not an effective Registration Statement available for the issuance of such Ordinary Shares, payment
shall be made in cash; provided, further, that at any time during which there is an Event of Default, the Company shall pay interest
to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate of ten percent (10.0%) per
annum (the “Default Rate”). In the event that such Event of Default is subsequently cured (and no other Event of Default
then exists, including, without limitation, for the Company’s failure to pay such Interest at the Default Rate), the adjustment
referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure;
provided that the interest as calculated and unpaid at such rate during the continuance of such Event of Default shall continue to apply
to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure of such
Event of Default. For the avoidance of doubt, any time that the Company delivers Conversion Shares for the payment of interest hereunder,
the Company shall have filed or shall file a prospectus supplement pursuant to Rule 424 for the issuance of such Conversion Shares.
b) Interest Calculations.
Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing
on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated
damages and other amounts which may become due hereunder, has been made. Interest shall cease to accrue with respect to any principal
amount converted, provided that, the Company actually delivers the Conversion Shares within the time period required by Section 4(c)(ii)
herein. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration
and transfers of this Note (the “Note Register”).
c) Late Fee.
All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of ten percent
(10.0%) per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily from
the date such interest is due hereunder through and including the date of actual payment in full.
d) Prepayment.
Except as otherwise set forth in this Note, the Company may not prepay any portion of the principal amount of this Note without the prior
written consent of the Holder.
Section 3.
Registration of Transfers and Exchanges.
a) Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
b) Investment
Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the
Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state
securities laws and regulations.
c) Reliance on
Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat
the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.
Section 4.
Conversion.
a) Voluntary
Conversion. Until this Note is no longer outstanding, this Note (along with all interest accrued thereon) shall be convertible, in
whole or in part, into Conversion Shares, at the option of the Holder, at any time and from time to time (subject to the conversion limitations
set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the
form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein
the principal amount of this Note and interest to be converted and the date on which such conversion shall be effected (such date, the
“Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the
date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions
hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this
Note, plus all accrued and unpaid interest thereon, has been so converted, in which case the Holder shall surrender this Note as promptly
as is reasonably practicable after such conversion without delaying the Company’s obligation to deliver the Conversion Shares on
the Share Delivery Date. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note and accrued
interest in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s)
converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business
Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling
and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and
agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted
principal amount of this Note may be less than the amount stated on the face hereof.
b) Conversion
Price. The Holder may, at its option, effect conversions of this Note at the lower of (i) US$1.60 (the “Fixed Conversion
Price”) or (ii) a price equal to 90% of the lowest VWAP of the Ordinary Shares during the ten (10)-Trading Day period immediately
preceding the applicable Conversion Date, in each case subject to adjustment as provided herein (the “Alternate Conversion Price”,
and together with the Fixed Conversion Price, the “Conversion Price”).
c)
Mechanics of Conversion.
i. Conversion Shares
Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall be determined
by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted (along with interest accrued thereon
in accordance with Section 2 herein) by (y) the Conversion Price.
ii.
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) one (1) Trading Day and (ii) the number
of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause its transfer agent to deliver, to the Holder the Conversion Shares which shall
be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing
the number of Conversion Shares being acquired upon the conversion of this Note including accrued and unpaid interest. On the Share Delivery
Date, the Company or its transfer agent shall deliver any Conversion Shares required to be delivered by the Company under this Section
4(c) electronically through the Depository Trust Company or another established clearing corporation performing similar functions. As
used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the Ordinary Shares as in effect on the date of delivery of the Notice
of Conversion.
iii. Failure
to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as
directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company
at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Company shall
promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the
Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.
iv. Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion
of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder
to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person,
and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with
the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by
the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any
or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone
associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction
from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained,
and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note,
which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying
dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction,
the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason
to deliver to the Holder such Conversion Shares (for the avoidance of doubt, including the Conversion Shares issuable as payment for
accrued interest) pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each US$1,000 of principal amount being converted, US$10 per Trading Day (increasing to US$20 per Trading
Day on the third Trading Day after the Share Delivery Date) for each Trading Day after such Share Delivery Date until such Conversion
Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or
declare an Event of Default pursuant to Section 8 hereof for the Company’s failure to deliver Conversion Shares within the period
specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the
Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
v. Compensation
for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to the Holder,
if the Company fails for any reason to deliver to the Holder such Conversion Shares (for the avoidance of doubt, including the Conversion
Shares issuable as payment for accrued interest) by the Share Delivery Date pursuant to Section 4(c)(ii), and if after such Share Delivery
Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage
firm otherwise purchases, Ordinary Shares to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder
was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall
(A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which
(x) the Holder’s total purchase price (including any brokerage commissions) for the Ordinary Shares so purchased exceeds (y) the
product of (1) the aggregate number of Ordinary Shares that the Holder was entitled to receive from the conversion at issue multiplied
by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions)
and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of
the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares
that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii). For example, if
the Holder purchases Ordinary Shares having a total purchase price of US$11,000 to cover a Buy-In with respect to an attempted conversion
of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to
such purchase obligation was a total of US$10,000 under clause (A) of the immediately preceding sentence, the Company shall be required
to pay the Holder US$1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver Conversion Shares upon conversion of this Note
as required pursuant to the terms hereof.
vi. Reservation
of Shares Issuable Upon Conversion. So long as any Notes remain outstanding, the Company covenants that it will at all times
reserve and keep available out of its authorized and unissued number of Ordinary Shares for the sole purpose of issuance upon
conversion of this Note and all other Notes as herein provided, free from preemptive rights or any other actual contingent purchase
rights of Persons other than the Holder (and the other holders of the Notes), not less than 100% of such aggregate number of
Ordinary Shares as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account
the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note and all
other Notes (the “Required Minimum”); provided, that on any date of determination, the Required Minimum shall be
at least the maximum aggregate number of Ordinary Shares then issued or potentially issuable in the future pursuant to this Note,
based on the assumption that the Conversion Price equals 20% of the VWAP on the Trading Day immediately preceding such date of
determination. The Company covenants that all Ordinary Shares that shall be so issuable shall, upon issue, be duly authorized,
validly issued, fully paid and nonassessable and, if the applicable Registration Statement is then effective for the Conversion
Shares under the Securities Act, shall be registered for public resale in accordance with such Registration Statement.
vii. Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any
fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price
or round up to the next whole share.
viii. Transfer
Taxes and Expenses. The issuance of Conversion Shares on conversion of this Note shall be made without charge to the Holder hereof
for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided
that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery
of any such Conversion Shares upon conversion in a name other than that of the Holder of this Note so converted and the Company shall
not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall
have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.
The Company shall pay all transfer agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of
the Conversion Shares.
d) Holder’s
Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not have the right to convert
any portion of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion,
the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the
Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Ordinary Shares beneficially owned
by the Holder and its Affiliates and Attribution Parties shall include the number of Conversion Shares issuable upon conversion of this
Note with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which are issuable upon
(i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates
or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company
subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other
Notes or the Warrants (as defined in the Purchase Agreement) beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation
contained in this Section 4(d) applies, the determination of whether this Note is convertible (in relation to other securities owned
by the Holder together with any Affiliates and Attribution Parties) and of which principal amount of this Note is convertible shall be
in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination
of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates or Attribution
Parties) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure
compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion
that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 4(d), in determining the number of outstanding Ordinary Shares, the Holder may rely on the number of outstanding Ordinary
Shares as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission,
as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the
Company’s transfer agent setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder,
the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding.
In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities
of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding Ordinary Shares
was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of Ordinary Shares outstanding immediately
after giving effect to the issuance of the Conversion Shares issuable upon conversion of this Note held by the Holder. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect
to the issuance of Conversion Shares upon conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions
of this Section 4(d) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day
after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply
to each successor holder of this Note.
Section 5.
Certain Adjustments.
a) Share Dividends
and Share Splits. If the Company, at any time while this Note is outstanding: (i) pays a share dividend or otherwise makes a distribution
or distributions payable in Ordinary Shares on Ordinary Shares or any Ordinary Share Equivalents (as defined in the Purchase Agreement)
(which, for avoidance of doubt, shall not include any Conversion Shares issued by the Company upon conversion of the Notes), (ii) subdivides
outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of a reverse share split) outstanding Ordinary
Shares into a smaller number of shares or (iv) issues, in the event of a reclassification of Ordinary Shares, any shares of capital stock
of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares
(excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number
of Ordinary Shares outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Reserved.
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues or sells
any Ordinary Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of
any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of Ordinary Shares acquirable upon complete conversion of this Note (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be
determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result
of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro
Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin
off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Note, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had
held the number of Ordinary Shares acquirable upon complete conversion of this Note (without regard to any limitations on conversion
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken
for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be
determined for the participation in such Distribution (provided, however, that, to the extent that the
Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership
of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).
e) Fundamental
Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its
Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of
Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted
by the holders of fifty percent (50%) or more of the outstanding Ordinary Shares, (iv) the Company, directly or indirectly, in one
or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any
compulsory share exchange pursuant to which the Ordinary Shares is effectively converted into or exchanged for other securities,
cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share
purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent
(50%) of the outstanding Ordinary Shares (not including any Ordinary Shares held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Note, the
Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately
prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this
Note), the number of shares of capital stock or other equity security of the successor or acquiring corporation or of the Company,
if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable
as a result of such Fundamental Transaction by a holder of the number of Conversion Shares for which this Note is convertible
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Note).
For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) Ordinary Share in such
Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Ordinary Shares are
given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given
the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the
“Successor Entity”) to assume in writing all of the obligations of the Company under this Note and the other
Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to
written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange
for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to
this Note which is convertible for a corresponding number of shares of capital stock or other equity securities of such Successor
Entity (or its parent entity) equivalent to the Conversion Shares acquirable and receivable upon conversion of this Note (without
regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which
applies the applicable Conversion Price hereunder to such shares of capital stock (but taking into account the relative value of the
Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock or other equity securities,
such number of shares of capital stock or other equity securities and such conversion price being for the purpose of protecting the
economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Note and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and
may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Notwithstanding
the preceding, if it is a condition of the buyer, which condition the Required Holders have agreed to, that the Notes and/or
Warrants not be assumed and must be converted in such Fundamental Transaction into the equity and/or cash paid in such Fundamental
Transaction, then this Note and/or such Warrants may be cancelled upon payment in full therefor.
f) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th
of a share, as the case may be. For purposes of this Section 5, the number of Ordinary Shares deemed to be issued and outstanding as of
a given date shall exclude any treasury shares of the Company.
g)
Notice to the Holder.
i. Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall
deliver to each Holder within one (1) Trading Day a notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow
Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Shares,
(B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize
the granting to all holders of the Ordinary Shares of rights or warrants to subscribe for or purchase any shares of capital stock of
any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Ordinary Shares, any consolidation or merger to which the Company (and all of its Subsidiaries, taken as a whole) is a party,
any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Ordinary
Shares are converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered to the Holder at
its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver
such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Report on
Form 6-K. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice through
the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
h) Voluntary
Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during the term
of this Note, with the prior written consent of the Required Holders, reduce the then current Conversion Price of each of the Notes to
any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
Section 6.
Mandatory Redemption.
a)
Mandatory Redemption at Election of Holder.
i. If, at any
time while this Note is outstanding, the Company shall carry out one or more Subsequent Financings (as defined in the Purchase
Agreement), the Holder shall have the right to require the Company to first use up to 30% of the gross proceeds of such Subsequent
Financing to redeem all or a portion of this Note for an amount in cash equal to the outstanding principal amount of this Note, plus
all accrued but unpaid interest, plus all liquidated damages, if any, and any other amounts, if any, multiplied by 1.05 (the
“Mandatory Redemption Amount”) then owing to the Holder in respect of this Note (a “Mandatory
Redemption”). The Company shall deliver notice to the Holder of the Subsequent Financing at least five (5) Trading Days
prior to the closing of the Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it
wants to review the details of such financing (such additional notice, a “Mandatory Redemption Notice” and the
date such Mandatory Redemption Notice is deemed delivered hereunder, the “Mandatory Redemption Notice Date”). If
the Holder exercises its right herein to require a Mandatory Redemption by delivering written notice to the Company within five (5)
Trading Days of the Mandatory Redemption Notice Date, the Company shall effect the Mandatory Redemption and pay the Mandatory
Redemption Amount to the Holder on or prior to the fifth (5th) Trading Day following the consummation of the Subsequent
Financing. The Company’s payment of the Mandatory Redemption Amount shall be applied ratably to all of the holders of the then
outstanding Notes which exercise the right to require a Mandatory Redemption on the basis of their (or their predecessor’s)
initial purchases of Notes pursuant to the Purchase Agreement. Notwithstanding the foregoing, this Section 6 shall not apply with
respect to an Exempt Issuance, except that no Variable Rate Transaction (as defined in the Purchase Agreement) shall be an Exempt
Issuance.
ii. If, at any
time while this Note is outstanding, a Change of Control Transaction shall occur, the Holder shall have the right to require the
Company to redeem all of this Note, plus all accrued but unpaid interest, plus all liquidated damages, if any, and any other
amounts, if any, then owing to the Holder in respect of this Note for an amount in cash equal to the Mandatory Redemption Amount.
The Company shall deliver notice to the Holder of the Change of Control at least five (5) Trading Days prior to the date on which
the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for such Change of
Control (the “Change of Control Redemption Notice Date”). If the Holder exercises its right herein to require a
Mandatory Redemption pursuant to this Section 6(a) by delivering written notice to the Company within five (5) Trading Days of the
Change of Control Redemption Notice Date, the Company shall effect such Mandatory Redemption and pay the Mandatory Redemption Amount
to the Holder on or prior to the fifth (5th) Trading Day following the consummation of the Change of Control. The
Company’s payment of the Mandatory Redemption Amount pursuant to this Section 6(a) shall be applied ratably to all of the
holders of the then outstanding Notes which exercise the right to require such a Mandatory Redemption on the basis of their (or
their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement. Notwithstanding the foregoing, this
Section 6(a) shall not apply with respect to an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt
Issuance
b)
Other Mandatory Redemption. If, at any time while this Note is outstanding, any of the following occurs:
i. the
Registration Statement is not available for the offer and resale of the Conversion Shares covering all of the Securities then issued
prior to each Closing Date and to be issued on such Closing Date;
ii.
the VWAP of the Ordinary Shares on the Trading Day immediately preceding each Closing is less than or equal to US$0.40;
iii.
the average daily dollar volume for the Ordinary Shares during the each of the seven (7) consecutive Trading Days preceding any
Closing is less than US$200,000 per Trading Day (subject to adjustment for forward and reverse share splits, recapitalizations, share
dividends and the like); or
iv.
the Company has breached Section 4.11 of the Purchase Agreement;
and which condition,
in each case, is not cured within thirty (30) calendar days from the date on which the Company has failed to comply with such condition,
at the option of the Holder, this Note shall be redeemed by the Company on the thirty-first (31st) calendar day after the date
of such failure, plus all accrued but unpaid interest, plus all liquidated damages, if any, and any other amounts, if any, then owing
to the Holder in respect of this Note for an amount in cash equal to the Mandatory Redemption Amount.
Section 7.
Negative Covenants. As long as any portion of this Note remains outstanding, unless the Required Holders shall have otherwise
given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly (except to
the extent permitted by the terms of the Purchase Agreement):
a)
enter into, create, incur, assume, guarantee or suffer to exist any Indebtedness (as defined in the Purchase Agreement) for borrowed
money of any kind exceeding US$100,000 in the aggregate, including, but not limited to, a guarantee, on or with respect to any of its
property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom (other than the Indebtedness
evidenced by this Note and the other Notes issued pursuant to the Purchase Agreement), unless such Indebtedness is used to repay the Notes
in full on a pro rata basis;
b)
enter into, create, incur, assume or suffer to exist any new Liens (as defined in the Purchase Agreement, occurring after the date
of issuance of this Note) of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom;
c) amend its
charter or other organizational documents, including, without limitation, its certificate of incorporation, articles of association,
memorandum of association and bylaws, as applicable, in any manner that materially and adversely affects any rights of the Holder,
except for effecting a reverse share split for purposes of maintaining its Nasdaq listing, if so required;
d)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of Ordinary
Shares or Ordinary Share Equivalents other than as to (i) the Conversion Shares or Warrant Shares (as defined in the Warrants) as permitted
or required under the Transaction Documents and (ii) repurchases of Ordinary Shares or Ordinary Share Equivalents of departing officers
and directors of the Company, pursuant to any equity incentive approved by the disinterest member of the Board of Directors, provided
that such repurchases shall not exceed an aggregate of US$50,000 for all officers and directors during the term of this Note;
e)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness other than the Notes on a pro rata basis;
f)
pay cash dividends or distributions on any equity securities of the Company;
g)
subject to the conditions set forth in Section 4.19 of the Purchase Agreement, enter into any transaction with any Affiliate of
the Company or Related Party;
h)
subject to and except for the conditions set forth in Section 4.12 of the Purchase Agreement, enter into any Subsequent Equity
Sales or Variable Rate Transaction so long as any Notes are outstanding; or
i)
enter into any agreement with respect to any of the foregoing.
Section 8.
Events of Default.
a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order
of any court, or any order, rule or regulation of any administrative or governmental body):
i. any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing
to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration
or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within three
(3) Trading Days;
ii.
the Company shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by the
Company of its obligations to deliver Ordinary Shares to the Holder upon conversion, which breach is addressed in clause (xi) below) or
in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days
after notice of such failure sent by the Holder or by any other Holder to the Company and (B) ten (10) Trading Days after the Company
has become or should have become aware of such failure;
iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the
Company or any Subsidiary is obligated (and not covered by clause (vi) below) with a cure period of ten (10) Trading Days of the date
of the occurrence;
iv.
any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect
in any material respect as of the date when made or deemed made, which, if curable, has not been cured within ten (10) Trading Days of
date of the occurrence;
v.
the Company or any significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;
vi.
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any
Indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater
than US$250,000, whether such Indebtedness now exists or shall hereafter be created, and (b) results in such Indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise become due and payable;
vii. the
Ordinary Shares shall not be eligible for listing or quotation for trading on the Principal Market, which ineligibility for trading
is not cured by the Company within five (5) Trading Days;
viii. the
Company (and all of its Subsidiaries, taken as a whole) shall be a party to any Change of Control Transaction or Fundamental
Transaction or shall agree to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related
transactions (whether or not such sale would constitute a Change of Control Transaction);
ix.
the applicable Registration Statement shall not be effective for any reason on a continuous basis for more than ten (10) consecutive
Trading Days (or twenty (20) consecutive Trading Days in the event of any SEC review), or the Company does not meet the current public
information requirements under Rule 144 of the Securities Act in respect of the Conversion Shares and such condition continues and is
not rectified for more than ten (10) consecutive Trading Days (or twenty (20) consecutive Trading Days in the event of any SEC review;
x. if, either
(a) the effectiveness of the Registration Statement lapses for any reason or (b) the Holder shall not be permitted to resell
Conversion Shares under the Registration Statement for a period of more than twenty (20) consecutive Trading Days or thirty (30)
non-consecutive Trading Days during any 12 month period; provided, however, that if the Company is negotiating a
merger, consolidation, acquisition or sale of all or substantially all of its assets or a similar transaction and, in the written
opinion of counsel to the Company, the Registration Statement would be required to be amended to include information concerning such
pending transaction(s) or the parties thereto which information is not available or may not be publicly disclosed at the time, the
Company shall be permitted an additional ten (10) consecutive Trading Days during any twelve (12) month period pursuant to this
Section 8(a)(x);
xi.
the Company shall fail for any reason to deliver Conversion Shares to a Holder prior to the third (3rd) Trading Day
after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public
announcement, of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof;
xii. any
Person shall materially breach any agreement delivered to the initial Holders pursuant to Section 2.2 of the Purchase Agreement;
xiii. the
electronic transfer by the Company of Ordinary Shares through the Depository Trust Company or another established clearing
corporation is no longer available or is subject to a “chill” for a period of five (5) Trading Days;
xiv. any
monetary judgment, writ or similar final process shall be entered or filed against the Company or any Subsidiary or any of their
respective properties or other assets for more than US$250,000, and such judgment, writ or similar final process shall remain
unvacated, unbonded, unstayed or unsatisfied for a period of 45 calendar days;
xv. the
Company shall fail to maintain authorization to issue, and an effective Registration Statement covering, the Required Minimum;
xvi. the
Company shall fail to timely make any filings required under the Exchange Act, accounting for any filing extensions allowed under
the Exchange Act; or
xvii. the
Company fails to satisfy the current public information requirements under Rule 144 of the Securities Act.
b) Remedies
Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid
interest, liquidated damages and other amounts that may be owing in respect thereof through the date of acceleration shall become
immediately due and payable in cash at the Mandatory Default Amount. Upon the payment in full of the Mandatory Default Amount, the
Holder shall promptly surrender this Note to, or as directed by, the Company. In connection with such acceleration described herein,
the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the
Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to
payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full
payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any
right consequent thereon.
Section 9.
Miscellaneous.
a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number, email
address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 9(a),
with such notice or communication to be simultaneously sent to the Company’s counsel. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment,
or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address
of the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on the books
of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached
hereto prior to 5:30 p.m. (New York City time) on any date, (ii) 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 to the email address 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, (iii) the second Trading
Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the
party to whom such notice is required to be given.
b)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the
Company.
c)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such
loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note 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 conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in The City of New York, Borough
of Manhattan, State of New York (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New
York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof 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
Note 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 applicable law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising
out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce
any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion.
Any waiver by the Company or the Holder must be in writing.
f) Severability.
If any provision of this Note is deemed invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if
any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and
circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law
governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest
permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other
law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as
contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance
of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to
the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.
g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note
shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company
covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or
the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach
or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such
breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required.
The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm
the Company’s compliance with the terms and conditions of this Note.
h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day.
i) Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be
deemed to limit or affect any of the provisions hereof.
j)
Rank. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth
herein. This Note and all other Notes now or hereafter issued pursuant to the Purchase Agreement shall be senior to all other Indebtedness
of the Company and its Subsidiaries.
k) Equitable
Adjustment. Trading volume amounts, price/volume amounts, the amount of Warrants, the amount of Ordinary Shares identified
in the Purchase Agreement, Conversion Prices, Exercise Prices (as defined in the Warrants), the number of Conversion Shares and Warrant
Shares, and similar figures in the Transaction Documents shall be equitably adjusted (but without duplication) to offset the effect of
share splits, similar events and as otherwise described in the Purchase Agreement, Notes and Warrants.
l) Secured
Obligations. The obligations of the Company under this Debenture are secured by all assets of the Company and each Subsidiary
pursuant to the Security Agreement, dated as of September 27, 2024 between the Company, the Subsidiaries of the Company and the
Secured Parties (as defined therein).
m) Amendments.
This Note may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the
Holder, on the other hand.
Section
10. Disclosure. Upon receipt or delivery
by the Company of any notice in accordance with the terms of this Note, unless the Company has in good faith determined that the matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries, the Company shall
within two (2) Business Days after such receipt or delivery publicly disclose such material, nonpublic information on a Report on Form
6-K or otherwise as required by all applicable federal securities laws and the laws and regulations of the Principal Market. In the event
that the Company believes that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company
so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder
shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its Subsidiaries.
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
COLOR STAR TECHNOLOGY CO., LTD.
E-mail for delivery of Notices:
ANNEX A
NOTICE OF CONVERSION
The undersigned hereby elects
to convert principal under the Senior Secured Convertible Note due September ___, 2025 (the “Note”) of Color Star Technology
Co., Ltd., a Cayman Islands exempted company (the “Company”), into the number of ordinary shares, par value $0.04 per
share, of the Company set forth below (the “Conversion Shares”) according to the conditions hereof and in accordance
with the Note, as of the date written below. If Conversion Shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such
transfer taxes, if any.
By the delivery of this Notice
of Conversion, the undersigned represents and warrants to the Company that its ownership of such ordinary shares of the Company does not
exceed the amounts specified under Section 4 of the Note, as determined in accordance with Section 13(d) of the Securities and Exchange
Act of 1934, and the rules and regulations promulgated thereunder.
The undersigned agrees to
comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid
ordinary shares of the Company.
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Date to Effect Conversion: |
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Check box to indicate Fixed Conversion Price or Alternate Conversion Price (each as defined in the Notes): |
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☐ Fixed Conversion Price: US$ _________ |
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☐ Alternate Conversion Price: US$ _________ |
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Principal Amount of Note to be Converted: |
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Number of Conversion Shares to be issued: |
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Signature: |
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Name: |
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Address for Delivery of Ordinary Share Certificates: |
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or |
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DWAC Instructions: |
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Broker No.: |
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Account No.: |
Grafico Azioni Color Star Technology (NASDAQ:ADD)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Color Star Technology (NASDAQ:ADD)
Storico
Da Dic 2023 a Dic 2024
