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 May 2024
Commission File Number: 001-38773
CHINA SXT PHARMACEUTICALS, INC.
(Translation of registrant’s name into English)
178 Taidong Rd North, Taizhou
Jiangsu, China
(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 ☐
May 2024 Note
On
May 9, 2024, China SXT Pharmaceuticals, Inc., a British Virgin Islands company (the “Company”) entered into a securities
purchase agreement (the “May 2024 Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company
(the “Investor”), pursuant to which the Company issued the Investor an unsecured promissory note on May 9, 2024 in
the original principal amount of $797,500.00 (the “May 2024 Note”), convertible into ordinary shares, $0.08 par value
per share, of the Company (the “Ordinary Shares”), for $750,000.00 in gross proceeds.
The May 2024 Note bears
interest at a rate of 6% per annum compounding daily. All outstanding principal and accrued interest on May 2024 Note will become due
and payable twelve months after the purchase price of May 2024 Note is delivered by Purchaser to the Company (the “May 2024 Note
Closing Date”). The May 2024 Note includes an original issue discount of $47,500.00 along with $20,000.00 for Investor’s
fees, costs and other transaction expenses incurred in connection with the purchase and sale of the May 2024 Note. The Company may prepay
all or a portion of the May 2024 Note at any time by paying 120% of the outstanding balance elected for pre-payment. The Investor has
the right to redeem the May 2024 Note at on the earlier of the date that is six (6) months from the May 2024 Note Closing Date and the
effective date of the first prospectus supplement filed in connection with the May 2024 Note, subject to maximum monthly redemption amount
of $300,000.00. Redemptions may be satisfied in cash or Ordinary Shares at the Company’s election. However, the Company will be
required to pay the redemption amount in cash, in the event there is an Equity Conditions Failure (as defined in the May 2024 Note). If
Company chooses to satisfy a redemption in Ordinary Shares, such Ordinary Shares shall be issued at a redemption conversion price of the
lower of (i) the Lender Conversion Price (as defined in the May 2024 Note) which is initially $3.00 and (ii) 80% of the average of the
lowest VWAP during the fifteen (15) trading days immediately preceding the redemption notice is delivered. In addition, the Investor agreed
that in any given calendar week (being from Sunday to Saturday of that week), the number of Ordinary Shares sold by it in the open market
will not be more than fifteen percent (15%) of the weekly trading volume for the Ordinary Shares during any such week.
Under the May 2024 Purchase
Agreement, while the May 2024 Note is outstanding, the Company agreed to keep adequate public information available and maintain its Nasdaq
listing. Upon the occurrence of a Trigger Event (as defined in the May 2024 Note), the Investor shall have the right to increase the balance
of the May 2024 Note by 15% for Major Trigger Event (as defined in the May 2024 Note ) and 5% for Minor Trigger Event (as defined in the
May 2024 Note).
In addition, the May 2024
Note provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance at the rate equal
to the lesser of 15% per annum or the maximum rate permitted under applicable law.
On May 13, 2024, the transaction
contemplated by the May 2024 Purchase Agreement was closed as all the closing conditions of as set forth therein have been satisfied.
March 2024 Note
On
March 27, 2024, the Company entered into a securities purchase agreement (the “March 2024 Purchase Agreement”) with
the Investor, pursuant to which the Company issued the Investor an unsecured promissory note on March 27, 2024 in the original principal
amount of $531,666.67 (the “March 2024 Note”), convertible into Ordinary Shares of the Company, for $500,000.00 in
gross proceeds.
The March 2024 Note bears
interest at a rate of 6% per annum compounding daily. All outstanding principal and accrued interest on the March 2024 Note will become
due and payable twelve months after the purchase price of the March 2024 Note is delivered by Purchaser to the Company (the “March
2024 Note Closing Date”). The March 2024 Note includes an original issue discount of $ $31,666.67 along with $20,000.00 for
Investor’s fees, costs and other transaction expenses incurred in connection with the purchase and sale of the March 2024 Note.
The Company may prepay all or a portion of the March 2024 Note at any time by paying 120% of the outstanding balance elected for pre-payment.
The Investor has the right to redeem the March 2024 Note at on the earlier of the date that is six (6) months from the March 2024 Note
Closing Date and the effective date of the first prospectus supplement filed in connection with the March 2024 Note, subject to maximum
monthly redemption amount of $200,000.00. Redemptions may be satisfied in cash or Ordinary Shares at the Company’s election. However,
the Company will be required to pay the redemption amount in cash, in the event there is an Equity Conditions Failure (as defined in the
March 2024 Note). If Company chooses to satisfy a redemption in Ordinary Shares, such Ordinary Shares shall be issued at a redemption
conversion price of the lower of (i) the Lender Conversion Price (as defined in the March 2024 Note) which is initially $3.00 and (ii)
80% of the average of the lowest VWAP during the fifteen (15) trading days immediately preceding the redemption notice is delivered. In
addition, the Investor agreed that in any given calendar week (being from Sunday to Saturday of that week), the number of Ordinary Shares
sold by it in the open market will not be more than fifteen percent (15%) of the weekly trading volume for the Ordinary Shares during
any such week.
Under the March 2024 Purchase
Agreement, while the March 2024 Note is outstanding, the Company agreed to keep adequate public information available and maintain its
Nasdaq listing. Upon the occurrence of a Trigger Event (as defined in the March 2024 Note), the Investor shall have the right to increase
the balance of the March 2024 Note by 15% for Major Trigger Event (as defined in the March 2024 Note) and 5% for Minor Trigger Event (as
defined in the March 2024 Note).
In addition, the March 2024
Note provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance at the rate equal
to the lesser of 15% per annum or the maximum rate permitted under applicable law.
On March 29, 2024, the transaction
contemplated by the March 2024 Purchase Agreement was closed as all the closing conditions of as set forth therein have been satisfied.
December 2023 Note
On
December 13, 2023, the Company entered into a securities purchase agreement (the “December 2023 Purchase Agreement”,
together with “March 2024 Purchase Agreement”, and “May 2024 Purchase Agreement”, the “Purchase
Agreements”) with the Investor, pursuant to which the Company issued the Investor an unsecured promissory note on December 13,
2023 in the original principal amount of $531,666.67 (the “December 2023 Note,” together with “March 2024
Note”, and “May 2024 Note”, the “Notes”), convertible into Ordinary Shares, for $500,000.00
in gross proceeds.
The December 2023 Note bears
interest at a rate of 6% per annum compounding daily. All outstanding principal and accrued interest on the December 2023 Note will become
due and payable twelve months after the purchase price of the December 2023 Note is delivered by Purchaser to the Company (the “December
2023 Note Closing Date”). The December 2023 Note includes an original issue discount of $ $31,666.67 along with $20,000.00 for
Investor’s fees, costs and other transaction expenses incurred in connection with the purchase and sale of the March 2024 Note.
The Company may prepay all or a portion of the December 2023 Note at any time by paying 120% of the outstanding balance elected for pre-payment.
The Investor has the right to redeem the Note at on the earlier of the date that is six (6) months from the December 2023 Note Closing
Date and the effective date of the first prospectus supplement filed in connection with the December 2023 Note, subject to maximum monthly
redemption amount of $200,000.00. Redemptions may be satisfied in cash or Ordinary Shares at the Company’s election. However, the
Company will be required to pay the redemption amount in cash, in the event there is an Equity Conditions Failure (as defined in the December
2023 Note). If Company chooses to satisfy a redemption in Ordinary Shares, such Ordinary Shares shall be issued at a redemption conversion
price of the lower of (i) the Lender Conversion Price (as defined in the December 2023 Note) which is initially $3.00 and (ii) 80% of
the average of the lowest VWAP during the fifteen (15) trading days immediately preceding the redemption notice is delivered. In addition,
the Investor agreed that in any given calendar week (being from Sunday to Saturday of that week), the number of Ordinary Shares sold by
it in the open market will not be more than fifteen percent (15%) of the weekly trading volume for the Ordinary Shares during any such
week.
Under the December 2023
Purchase Agreement, while the December 2023 Note is outstanding, the Company agreed to keep adequate public information available and
maintain its Nasdaq listing. Upon the occurrence of a Trigger Event (as defined in the December 2023 Note), the Investor shall have the
right to increase the balance of the December 2023 Note by 15% for Major Trigger Event (as defined in the December 2023 Note) and 5% for
Minor Trigger Event (as defined in the December 2023 Note).
In addition, the December
2023 Note provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance at the rate
equal to the lesser of 15% per annum or the maximum rate permitted under applicable law.
On December 16, 2023, the
transaction contemplated by the December 2023 Purchase Agreement was closed as all the closing conditions of as set forth therein have
been satisfied.
The issuances of the Notes
were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. The foregoing
descriptions of the Purchase Agreements and the Notes are summaries of the material terms of such agreements, do not purport to be complete
and are qualified in their entirety by reference to the Purchase Agreements and the Notes, which are attached hereto as Exhibits 10.1,
10.2, 10.3, 10.4, 10.5 and 10.6.
Exhibits
SIGNATURE
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: May 14, 2024
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China SXT Pharmaceuticals, Inc. |
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By: |
/s/ Feng Zhou |
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Name: |
Feng Zhou |
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Title: |
Chief Executive Officer |
5
Exhibit 10.1
Securities Purchase Agreement
This
Securities Purchase Agreement (this “Agreement”), dated as of May 9, 2024, is entered into by and between China
SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (“Company”), and Streeterville
Capital, LLC, a Utah limited liability company, its successors and/or assigns (“Investor”).
A. Company
and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities
Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by the United States
Securities and Exchange Commission (the “SEC”).
B. Investor
desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a Convertible Promissory
Note (the “Note”), in the form attached hereto as Exhibit A, in the original principal amount of $797,500.00
(the “Initial Principal Balance”), convertible into ordinary shares, $0.08 par value per share, of Company (the “Ordinary
Shares”), upon the terms and subject to the limitations and conditions set forth in such Note.
C. This
Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in
connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction
Documents”.
D. For
purposes of this Agreement: “Conversion Shares” means all Ordinary Shares issuable upon conversion of all or any portion
of the Note; and “Securities” means the Note and the Conversion Shares.
NOW, THEREFORE, in
consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Company and Investor hereby agree as follows:
1. Purchase
and Sale of Securities.
1.1. Purchase
of Securities. Company shall issue and sell to Investor and Investor shall purchase from Company the Note. In consideration thereof,
Investor shall pay the Purchase Price (as defined below) to Company.
1.2. Form
of Payment. On the Closing Date (as defined below), Investor shall wire the Purchase Price in immediately available funds to a bank
account designated by Company against delivery of the Note.
1.3. Closing
Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the closing of
the transactions contemplated by this Agreement (the “Closing”) shall be no later than May 8, 2024 (the “Closing
Date”), or another mutually agreed upon date. The Closing shall occur on the Closing Date by means of the exchange by email
of signed .pdf documents, but shall be deemed for all purposes to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC
in Lehi, Utah.
1.4. Collateral
for the Note. The Note shall be unsecured.
1.5. Original
Issue Discount; Transaction Expense Amount. The Note carries an original issue discount of $47,500.00 (the “OID”).
In addition, Company agrees to pay $20,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence, monitoring
and other transaction costs incurred in connection with the purchase and sale of the Securities (the “Transaction Expense Amount”).
The Transaction Expense Amount will be reduced from the amount funded at Closing. The “Purchase Price”, therefore,
shall be $750,000.00, computed as follows: $797,500.00 Initial Principal Balance, less the OID.
2. Investor’s
Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date: (i) this Agreement has been
duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with
its terms; and (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of the 1933
Act.
3. Company’s
Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a corporation
duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate power
to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such
qualification necessary; (iii) Company has registered its Ordinary Shares under Section 12(b) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of
the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly
authorized by Company and all necessary actions have been taken; (v) this Agreement, the Note, and the other Transaction Documents have
been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with
their terms; (vi) the execution and delivery of the Transaction Documents by Company, the issuance of Securities in accordance with the
terms hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not
conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s
formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation, any
listing agreement for the Ordinary Shares, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment,
or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having
jurisdiction over Company or any of Company’s properties or assets; (vii) no further authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company
is required to be obtained by Company for the issuance of the Securities to Investor or the entering into of the Transaction Documents;
(viii) none of Company’s filings with the SEC contained, at the time they were filed, any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading; (ix) Company has filed all reports, schedules, forms, statements and other documents required
to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and
has filed any such report, schedule, form, statement or other document prior to the expiration of any such extension; (x) there is no
action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of Company,
threatened against or affecting Company before or by any governmental authority or non-governmental department, commission, board, bureau,
agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect
on Company or which would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations
under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that has not been disclosed in a periodic
filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12)
months, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xiii)
with respect to any commissions, placement agent or finder’s fees or similar payments that will or would become due and owing by
Company to any person or entity as a result of this Agreement or the transactions contemplated hereby (“Broker Fees”),
any such Broker Fees will be made in full compliance with all applicable laws and regulations and only to a person or entity that is a
registered investment adviser or registered broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees or
with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due in
connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s
employees, officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates, from and against
all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect of
any such claimed Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents
or representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or representatives
except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by
the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors,
members, managers, employees, agents or representatives other than as set forth in the Transaction Documents; (xvi) Company acknowledges
that the State of Utah has a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction Documents
and any dispute that may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section
9.2 below, shall be applicable to the Transaction Documents and the transactions contemplated therein; (xvii) Company has notified Nasdaq
of its intention to be subject to the home country practice of the British Virgin Islands, has made all applicable filings with the SEC
with respect to relying on home country practice and thus Nasdaq Listing Rule 5635(d) does not apply to Company; (xviii) Company has consulted
with counsel and conducted its own due diligence, and understands that Investor is not registered as a ‘dealer’ under the
1934 Act, and agrees that the parties’ performance of the obligations under the Transaction Documents and the transactions contemplated
by the Transaction Documents do not violate Section 15 of the 1934 Act or any other applicable securities laws; and (xix) Company has
performed due diligence and background research on Investor and its affiliates and has received and reviewed the due diligence packet
provide by Investor. Company, being aware of the matters and legal issues described in subsections (xviii) and (xix) above, acknowledges
and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the Transaction Documents and
covenants and agrees it will not use any such information or legal theory as a defense to performance of its obligations under the Transaction
Documents or in any attempt to avoid, modify, reduce, rescind or void such obligations.
4. Company
Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full, Company
will at all times comply with the following covenants: (i) so long as Investor beneficially owns any of the Securities and for at least
twenty (20) Trading Days (as defined in the Note) thereafter, Company will timely file on the applicable deadline all reports required
to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control
to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is
publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would permit such termination; (ii) when issued, the Conversion Shares will be duly authorized, validly
issued, fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; (iii) the Ordinary Shares shall
be listed or quoted for trading on NYSE or Nasdaq; (iv) trading in Company’s Ordinary Shares will not be suspended, halted, chilled,
frozen, reach zero bid or otherwise cease trading on Company’s principal trading market; (v) Company will not make any Restricted
Issuances (as defined below) without Investor’s prior written consent, which consent may be granted or withheld in Investor’s
sole and absolute discretion; (vi) Company shall not enter into any agreement or otherwise agree to any covenant, condition, or obligation
that locks up, restricts in any way or otherwise prohibits Company: (a) from entering into a variable rate transaction with Investor or
any affiliate of Investor, or (b) from issuing Ordinary Shares, preferred stock, warrants, convertible notes, other debt securities, or
any other Company securities to Investor or any affiliate of Investor; and (vii) Company hereby grants to Investor a participation right,
whereby Investor shall have the right to participate in Investor’s discretion in up to thirty percent (30%) of the amount raised
in any equity or debt financing of Company to any U.S. Person as defined in Regulation S of the Securities Act in the U.S. In furtherance
thereof, should Company seek to raise capital via any transaction covered by the foregoing participation right it shall provide Investor
written notice of such proposed transaction, along with copies of the proposed transaction documents. Investor shall then have up to two
(2) calendar days to elect to purchase up to thirty percent (30%) of the securities proposed to be issued in such transaction on the most
favorable terms and conditions offered to any other purchaser of the same securities. The parties agree that in the event Company breaches
the covenant set forth in Section 4(vii) above, Investor’s sole and exclusive remedy shall be to receive, as liquidated damages,
an amount equal to twenty percent (20%) of the amount Investor would have been entitled to invest under the participation right, which
may be added to the Outstanding Balance (as defined in the Note) of the Note if not otherwise paid in cash by Company. For purposes
hereof, the term “Restricted Issuance” means (1) the issuance, incurrence or guaranty of any debt obligations other
than trade payables in the ordinary course of business that have or may have conversion rights of any kind, contingent, conditional or
otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Ordinary
Shares, or (2) the issuance of any securities (x) that are or may become convertible into Ordinary Shares (including without limitation
convertible debt, warrants or convertible preferred shares), with a conversion price that varies with the market price of the Ordinary
Shares, even if such security only becomes convertible following an event of default, the passage of time, or another trigger event or
condition; or with a fixed conversion price or exchange price that is subject to being reset at some future date at any time after the
initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of Company and (y) the number of warrant shares purchasable under a warrant is subject to reset or adjustment (other than
in connection with a stock split, stock combination, or other similar event). For avoidance of doubt, the issuance of Ordinary Shares
under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Restricted
Issuance for purposes hereof if the number of Ordinary Shares to be issued is based upon or related in any way to the market price of
the Ordinary Shares, including, but not limited to, Ordinary Shares issued in connection with a Section 3(a)(9) exchange, a Section 3(a)(10)
settlement, or any other similar settlement or exchange. For the further avoidance of doubt, Ordinary Share issued pursuant to an ATM
facility or a primary offering with no variable pricing features will not be considered to be a Restricted Issuance.
5. Conditions
to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities to Investor at the Closing
is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:
5.1. Investor
shall have executed this Agreement and delivered the same to Company.
5.2. Investor
shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.
6. Conditions
to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities at the Closing is subject
to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Investor’s
sole benefit and may be waived by Investor at any time in its sole discretion:
6.1. Company
shall have executed this Agreement and the Note and delivered the same to Investor.
6.2. Company shall have delivered
to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA Letter”) substantially
in the form attached hereto as Exhibit B acknowledged
and agreed to in writing by Company’s transfer agent (the “Transfer
Agent”).
6.3. Company
shall have delivered to Investor a fully executed Officer’s Certificate substantially in the form attached hereto as Exhibit
C evidencing Company’s approval of the Transaction Documents.
In the event any of the conditions
in Sections 5 and 6 is not satisfied or waived by the Closing Date, the Agreement will be cancelled and deemed void ab initio.
7. Reservation
of Shares. On the date hereof, Company will reserve 3,250,000 Ordinary Shares from its authorized and unissued Ordinary Shares to
provide for all issuances of Ordinary Shares under the Note (the “Share Reserve”). Company further agrees to add additional
Ordinary Shares to the Share Reserve in increments of 10,000 shares as and when requested by Investor if as of the date of any such request
the number of shares being held in the Share Reserve is less than three (3) times the number of Ordinary Shares obtained by dividing the
Outstanding Balance as of the date of the request by the Redemption Conversion Price (as defined in the Note). Company shall further require
the Transfer Agent to hold the Ordinary Shares reserved pursuant to the Share Reserve exclusively for the benefit of Investor and to issue
such shares to Investor promptly upon Investor’s delivery of a Redemption Notice under the Note. Finally, Company shall require
the Transfer Agent to issue Ordinary Shares pursuant to the Note to Investor out of its authorized and unissued shares, and not the Share
Reserve, to the extent Ordinary Shares have been authorized, but not issued, and are not included in the Share Reserve. The Transfer Agent
shall only issue shares out of the Share Reserve to the extent there are no other authorized shares available for issuance and then only
with Investor’s written consent.
8. OFAC;
Patriot Act.
8.1. OFAC
Certification. Company certifies that (i) it is not acting on behalf of any person, group, entity, or nation named by any Executive
Order or the United States Treasury Department, through its Office of Foreign Assets Control (“OFAC”) or otherwise,
as a terrorist, “Specially Designated Nation”, “Blocked Person”, or other banned or blocked person, entity, nation,
or transaction pursuant to any law, order, rule or regulation that is enforced or administered by OFAC or another department of the United
States government, and (ii) Company is not engaged in this transaction on behalf of, or instigating or facilitating this transaction on
behalf of, any such person, group, entity or nation.
8.2. Foreign
Corrupt Practices. Neither Company, nor any of its subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of Company or any subsidiary has, in the course of his actions for, or on behalf of, Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
8.3. Patriot
Act. Company shall not (i) be or become subject at any time to any law, regulation, or list of any government agency (including, without
limitation, the OFAC) that prohibits or limits Investor from making any advance or extension of credit to Company or from otherwise conducting
business with Company, or (ii) fail to provide documentary and other evidence of Company’s identity as may be requested by Investor
at any time to enable Investor to verify Company’s identity or to comply with any applicable law or regulation, including, without
limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. Company shall comply with all requirements of law relating
to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect. Upon Investor’s request
from time to time, Company shall certify in writing to Investor that Company’s representations, warranties and obligations under
this Section 8.3 remain true and correct and have not been breached. Company shall immediately notify Investor in writing if any of such
representations, warranties or covenants are no longer true or have been breached or if Company has a reasonable basis to believe that
they may no longer be true or have been breached. In connection with such an event, Company shall comply with all requirements of law
and directives of governmental authorities and, at Investor’s request, provide to Investor copies of all notices, reports and other
communications exchanged with, or received from, governmental authorities relating to such an event. Company shall also reimburse Investor
any expense incurred by Investor in evaluating the effect of such an event on the loan secured hereby, in obtaining any necessary license
from governmental authorities as may be necessary for Investor to enforce its rights under the Transaction Documents, and in complying
with all requirements of law applicable to Investor as the result of the existence of such an event and for any penalties or fines imposed
upon Investor as a result thereof.
9. Miscellaneous.
The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction Documents as if these terms
were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in this Section
9 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.
9.1. Arbitration
of Claims. The parties shall submit all Claims (as defined in Exhibit D) arising under this Agreement or any other Transaction
Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding
arbitration pursuant to the arbitration provisions set forth in Exhibit D attached hereto (the “Arbitration Provisions”).
For the avoidance of doubt, the parties agree that the injunction described in Section 9.3 below may be pursued in an arbitration that
is separate and apart from any other arbitration regarding all other Claims arising under the Transaction Documents. The parties hereby
acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable from all other
provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration
Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration
Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations
set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company
acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.
9.2. Governing
Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees that the exclusive venue for
arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of the parties or their affiliates
shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes hereunder pursuant to the Arbitration
Provisions, for any litigation arising in connection with any of the Transaction Documents (and notwithstanding the terms (specifically
including any governing law and venue terms) of any transfer agent services agreement or other agreement between the Transfer Agent and
Company, such litigation specifically includes, without limitation any action between or involving Company and the Transfer Agent under
the TA Letter or otherwise related to Investor in any way (specifically including, without limitation, any action where Company seeks
to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares to Investor
for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or
federal court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof,
(iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction,
temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares to Investor for any reason) outside
of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction
or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company covenants and agrees to name Investor
as a party in interest in, and provide written notice to Investor in accordance with Section 9.10 below prior to bringing or filing, any
action (including without limitation any filing or action against any person or entity that is not a party to this Agreement, including
without limitation the Transfer Agent) that is related in any way to the Transaction Documents or any transaction contemplated herein
or therein, including without limitation any action brought by Company to enjoin or prevent the issuance of any Ordinary Shares to Investor
by the Transfer Agent, and further agrees to timely name Investor as a party to any such action. Company acknowledges that the governing
law and venue provisions set forth in this Section 9.2 are material terms to induce Investor to enter into the Transaction Documents and
that but for Company’s agreements set forth in this Section 9.2 Investor would not have entered into the Transaction Documents.
9.3. Specific
Performance. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that Company fails to perform
any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It is accordingly
agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of this Agreement or such
other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other
remedy to which the Investor may be entitled under the Transaction Documents, at law or in equity. Company specifically agrees that: (a)
following an Event of Default (as defined in the Note) under the Note, Investor shall have the right to seek and receive injunctive relief
from a court or an arbitrator prohibiting Company from issuing any of its common or preferred stock to any party unless the Note is being
paid in full simultaneously with such issuance; and (b) following a breach of Section 4(vi) above, Investor shall have the right to seek
and receive injunctive relief from a court or arbitrator invalidating such lock-up. Company specifically acknowledges that Investor’s
right to obtain specific performance constitutes bargained for leverage and that the loss of such leverage would result in irreparable
harm to Investor. For the avoidance of doubt, in the event Investor seeks to obtain an injunction from a court or an arbitrator against
Company or specific performance of any provision of any Transaction Document, such action shall not be a waiver of any right of Investor
under any Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms
of the Transaction Documents, nor shall Investor’s pursuit of an injunction prevent Investor, under the doctrines of claim preclusion,
issues preclusion, res judicata or other similar legal doctrines, from pursuing other Claims in the future in a separate arbitration.
9.4. Calculation
Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic calculation under
the Transaction Documents, including without limitation, calculating the Outstanding Balance, Redemption Conversion Price, Conversion
Shares (as defined in the Note), or VWAP (as defined in the Note) (each, a “Calculation”), Company or Investor (as
the case may be) shall submit any disputed Calculation via email or facsimile with confirmation of receipt (i) within two (2) Trading
Days after receipt of the applicable notice giving rise to such dispute to Company or Investor (as the case may be) or (ii) if no notice
gave rise to such dispute, at any time after Investor learned of the circumstances giving rise to such dispute. If Investor and Company
are unable to agree upon such Calculation within two (2) Trading Days of such disputed Calculation being submitted to Company or Investor
(as the case may be), then Investor will promptly submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar
Systems”). Investor shall cause Unkar Systems to perform the Calculation and notify Company and Investor of the results no later
than ten (10) Trading Days from the time it receives such disputed Calculation. Unkar Systems’ determination of the disputed Calculation
shall be binding upon all parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be paid by
the incorrect party, or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined
by Unkar Systems. In the event Company is the losing party, no extension of the Delivery Date (as defined in the Note) shall be granted
and Company shall incur all effects for failing to deliver the applicable shares in a timely manner as set forth in the Transaction Documents.
Notwithstanding the foregoing, Investor may, in its sole discretion, designate an independent, reputable investment bank or accounting
firm other than Unkar Systems to resolve any such dispute and in such event, all references to “Unkar Systems” herein will
be replaced with references to such independent, reputable investment bank or accounting firm so designated by Investor.
9.5. Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
9.6. Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this
Agreement.
9.7. Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule
of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.
9.8. Entire
Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor makes
any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term sheets
or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated by the Transaction
Documents (collectively, “Prior Agreements”), that may have been entered into between Company and Investor, or any
affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents. To the extent there
is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the Transaction Documents
shall govern.
9.9. Amendments.
No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties hereto.
9.10. Notices.
Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to
an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation which is
kept by sending party), (ii) the earlier of the date delivered or the fifth (5th) Trading Day after deposit, postage prepaid,
with an international courier, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with
delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or
at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of
the other parties hereto):
If to Company:
China SXT Pharmaceuticals, Inc.
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
Email: fzhou@sxtchina.com
With a copy to (which copy shall not constitute notice):
Hunter Taubman Fischer & Li LLC
Attn: Joan Wu
48 Wall Street, Suite 1100
New York, NY 10005
Email: jwu@htflawyers.com
If to Investor:
Streeterville Capital, LLC
Attn: John Fife and Chris Stalcup
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
Email: jfife@chicagoventure.com and cstalcup@chicagoventure.com
With a copy to (which copy shall not constitute notice):
Hansen Black Anderson Ashcraft PLLC
Attn: Jonathan Hansen
3051 West Maple Loop Drive, Suite 325
Lehi, Utah 84043
Email: jhansen@hbaa.law
9.11. Successors
and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Investor
hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the need to obtain Company’s
consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties hereunder, whether directly
or indirectly, without the prior written consent of Investor, and any such attempted assignment or delegation shall be null and void.
9.12. Survival.
The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing hereunder
notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and hold harmless Investor
and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of or related to any breach or
alleged breach by Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants
and obligations under this Agreement, including advancement of expenses as they are incurred.
9.13. Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
9.14. Investor’s
Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and the Transaction Documents are cumulative
and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that Investor may
have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in equity, or by statute,
and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor may deem expedient.
9.15. Attorneys’
Fees and Cost of Collection. In the event any suit, action or arbitration is filed by either party against the other to interpret
or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing party all costs and
expenses, including attorneys’ fees incurred therein, including the same with respect to an appeal. The “prevailing party”
shall be the party in whose favor a judgment is entered, regardless of whether judgment is entered on all claims asserted by such party
and regardless of the amount of the judgment; or where, due to the assertion of counterclaims, judgments are entered in favor of and against
both parties, then the judge or arbitrator shall determine the “prevailing party” by taking into account the relative dollar
amounts of the judgments or, if the judgments involve nonmonetary relief, the relative importance and value of such relief. Nothing herein
shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous or bad faith pleading.
If (i) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings,
or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes action to collect amounts due under
the Note or to enforce the provisions of the Note, or (ii) there occurs any bankruptcy, reorganization, receivership of Company or
other proceedings affecting Company’s creditors’ rights and involving a claim under the Note; then Company shall pay the costs
incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or
other proceeding, including, without limitation, attorneys’ fees, expenses, deposition costs, and disbursements.
9.16. Waiver.
No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to
any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a
party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
9.17. Waiver
of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES
HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE
STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.
9.18. Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the other
Transaction Documents.
9.19. Voluntary
Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions needed
for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents and
fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing, or has waived the
right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or undue
influence by Investor or anyone else.
9.20. Document
Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements, instruments,
documents, and items and records governing, arising from or relating to any of Company’s loans, including, without limitation, this
Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals. The parties hereto (i) waive
any right to insist or require that Investor produce paper originals, (ii) agree that such images shall be accorded the same force and
effect as the paper originals, (iii) agree that Investor is entitled to use such images in lieu of destroyed or archived originals for
any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that any executed
facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other Transaction Document shall be deemed to be of
the same force and effect as the original manually executed document.
[Remainder of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF, the undersigned
Investor and Company have caused this Agreement to be duly executed as of the date first above written.
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INVESTOR: |
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Streeterville Capital, LLC |
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By: |
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John M. Fife, President |
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COMPANY: |
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China SXT Pharmaceuticals, Inc. |
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By: |
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Feng Zhou, CEO |
[Signature Page to Securities
Purchase Agreement]
ATTACHED EXHIBITS:
| Exhibit A |
|
Note |
| Exhibit B |
|
Irrevocable Transfer Agent Instructions |
| Exhibit C |
|
Officer’s Certificate |
| Exhibit D |
|
Arbitration Provisions |
Exhibit
D
ARBITRATION PROVISIONS
1. Dispute
Resolution. For purposes of this Exhibit D, the term “Claims” means any disputes, claims, demands, causes
of action, requests for injunctive relief, requests for specific performance, questions regarding severability of any provisions of the
Transaction Documents, liabilities, damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions
contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any
claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability,
failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate
the Agreement (or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. The term “Claims”
specifically excludes a dispute over Calculations. The parties to this Agreement (the “parties”) hereby agree that
the Claims may be arbitrated in one or more Arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions
and a separate one for all other Claims). The parties hereby agree that the arbitration provisions set forth in this Exhibit D
(“Arbitration Provisions”) are binding on each of them. As a result, any attempt to rescind the Agreement (or these
Arbitration Provisions) or any other Transaction Document) or declare the Agreement (or these Arbitration Provisions) or any other Transaction
Document invalid or unenforceable pursuant to Section 29 of the 1934 Act or for any other reason is subject to these Arbitration Provisions.
These Arbitration Provisions shall also survive any termination or expiration of the Agreement. Any capitalized term not defined in these
Arbitration Provisions shall have the meaning set forth in the Agreement.
2. Arbitration.
Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted exclusively
in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration appeal right
provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the arbitrator rendered
pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding upon the parties, (b) the sole
and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator,
and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Subject to the
Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident to enforcing
the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Arbitration
Award shall include default interest (as defined or otherwise provided for in the Note, “Default Interest”) (with respect
to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon
the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake County, Utah.
3. The
Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration Act,
U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”). Notwithstanding
the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event of conflict or variation
between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions
shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict
with or vary from these Arbitration Provisions.
4. Arbitration
Proceedings. Arbitration between the parties will be subject to the following:
4.1 Initiation
of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by giving
written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under Section
9.10 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed
initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 9.10 of the Agreement (the
“Service Date”). After the Service Date, information may be delivered, and notices may be given, by email or fax pursuant
to Section 9.10 of the Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy,
the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent
with the Utah Rules of Civil Procedure.
4.2 Selection
and Payment of Arbitrator.
(a) Within ten (10) calendar
days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that are designated as “neutrals”
or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three (3) designated persons hereunder are referred
to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed Arbitrator must be qualified as
a “neutral” with Utah ADR Services. Within five (5) calendar days after Investor has submitted to Company the names of the
Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators to act as the arbitrator
for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators in writing within such
5-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written notice of such selection to Company.
(b) If Investor fails
to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a) above,
then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators that
are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may then,
within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice to
Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor
fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company
may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to
Investor.
(c) If a Proposed Arbitrator
chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such Proposed Arbitrator
may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the chosen Proposed Arbitrator
declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are otherwise
unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this Paragraph 4.2.
(d) The date that the
Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties to serve
as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator resigns
or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to continue
the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then the arbitrator
shall be selected under the then prevailing rules of the American Arbitration Association.
(e) Subject to Paragraph
4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one party refuses or
fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default
Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.
4.3 Applicability
of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules of Civil
Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation, to the
filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah Rules of Evidence
shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing, it is the parties’
intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the event of any conflict between
the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these Arbitration Provisions shall control.
4.4 Answer
and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating the
Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required deadline,
the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against such
party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within
the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration
Notice, against a party that fails to submit an answer within such time period.
4.5 Related
Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent legal
proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject to
the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration
Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party
files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will
be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails
to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall
be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal
or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined
in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation
Proceedings pursuant to the Arbitration Act.
4.6 Discovery.
Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:
(a) Written discovery
will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written
discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration.
The party seeking written discovery shall always have the burden of showing that all of the standards and limitations set forth in these
Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:
(i) To
facts directly connected with the transactions contemplated by the Agreement.
(ii) To
facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or less
expensive than in the manner requested.
(b) No party shall be
allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission (including
discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three (3) depositions
(excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions will be borne by
the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition of the estimated
attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending the deposition
fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice, then such party
shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must pay the party defending
the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is deemed to be waived as set
forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated attorneys’ fees are
unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken in Utah.
(c) All discovery requests
(including document production requests included in deposition notices) must be submitted in writing to the arbitrator and the other party.
The party submitting the written discovery requests must include with such discovery requests a detailed explanation of how the proposed
discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure. The receiving party
will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the arbitrator an estimate
of the attorneys’ fees and costs associated with responding to such written discovery requests and a written challenge to each applicable
discovery request. After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to one or more discovery requests,
consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding as to the likely attorneys’
fees and costs associated with responding to the discovery requests and issue an order that (i) requires the requesting party to prepay
the attorneys’ fees and costs associated with responding to the discovery requests, and (ii) requires the responding party to respond
to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s finding with respect
to such discovery requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or a challenge to discovery
requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’ fees or costs
associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests (as may be
limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests.
Any party submitting any written discovery requests, including without limitation interrogatories, requests for production subpoenas to
a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before the responding
party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.
(d) In order to allow
a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration
Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not
satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify
such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.
(e) Each party may submit
expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration Commencement
Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete statement of
all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name and qualifications, including
a list of all the expert’s publications within the preceding ten (10) years, and a list of any other cases in which the expert has
testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation to be paid
for the expert’s report and testimony. The parties are entitled to depose any other party’s expert witness one (1) time for
no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter not fairly disclosed in
the expert report.
4.6 Dispositive
Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil Procedure
(a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to, deliver to the arbitrator
and to the other party a memorandum in support (the “Memorandum in Support”) of the Dispositive Motion. Within seven
(7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other party a memorandum
in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within seven (7) calendar days of delivery
of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to the arbitrator and
to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”). If the applicable party
shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the Reply Memorandum as required
above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion shall proceed regardless.
4.7 Confidentiality.
All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation
information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each party
agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration process (including
without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure such information becomes
public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party or its agents, (b) such
information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other
party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior
to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives and legal counsel on a need
to know basis who each agree in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration
Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information
and confidential information upon the written request of either party.
4.8 Authorization;
Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct the
arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the Arbitration proceedings
to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration Award must
be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and
directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a
scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable
the arbitrator to render a decision prior to the end of such 120-day period.
4.9 Relief.
The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which the arbitrator
deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator
may not award exemplary or punitive damages.
4.10 Fees
and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being awarded
the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration, and
(b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.
5. Arbitration
Appeal.
5.1 Initiation
of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period of
thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant elects
to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel of arbitrators
as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein as the “Appeal
Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph 4.1 above with respect
to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee, the Appellant must also
pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond in the amount of 110% of
the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing. In the event an Appellant
delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of
this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will not be further conditioned.
In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within
the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an
Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described in this Paragraph
5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’
agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.
5.2 Selection
and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of
the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person arbitration
panel (the “Appeal Panel”).
(a) Within ten (10)
calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators that are
designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such five (5) designated
persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the avoidance of doubt, each Proposed
Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall not be the arbitrator who rendered the
Arbitration Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after the Appellee has
submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice to the Appellee,
three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select three (3) of
the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators from the
Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.
(b) If the Appellee
fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the Appeal Date pursuant
to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed Appeal Arbitrators, identify
the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service (none of
whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five (5) calendar days after the
Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such
selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of the
arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant may select the three (3) members
of the Appeal Panel from the Appellant’s list of five (5) arbitrators by providing written notice of such selection to the Appellee.
(c) If a selected
Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator may
select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen Proposed
Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3) of the five (5)
designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator selection process
shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators who have already
agreed to serve shall remain on the Appeal Panel.
(d) The date that
all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email) delivered to
both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal Commencement
Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in writing (including
via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel to serve as the lead
arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration
Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon
the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal
Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings,
a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel.
If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected
under the then prevailing rules of the American Arbitration Association.
(d) Subject to Paragraph
5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.
5.3 Appeal
Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall conduct
a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and all other provisions
of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate for a fair and expeditious
disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous evidence and discovery,
together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents filed with the Appeal
Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal Panel shall not permit
the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new witnesses or affidavits,
and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the Arbitration Award.
5.4 Timing.
(a) Within
seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal Panel
copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents
filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may,
but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning
or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7)
calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal
Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s
delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply Memorandum
to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of this subparagraph
(a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final. If the Appellee shall
fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply Memorandum as required
above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed
regardless.
(b) Subject
to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days
of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal
is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).
5.5 Appeal
Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator on
the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety and
make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall
remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive
remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d)
be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees,
including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall,
to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include
Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration
Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.
5.6 Relief.
The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems proper
under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal Panel may
not award exemplary or punitive damages.
5.7 Fees
and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being awarded
the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration and
the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal Panel, which,
for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any
part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery costs, and other
expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including without limitation
in connection with the Appeal).
6. Miscellaneous.
6.1 Severability.
If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall be modified
to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration Provisions
shall remain unaffected and in full force and effect.
6.2 Governing
Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws principles
therein.
6.3 Interpretation.
The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation
of, these Arbitration Provisions.
6.4 Waiver.
No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the party
granting the waiver.
6.5 Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.
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Exhibit 10.2
Securities Purchase Agreement
This
Securities Purchase Agreement (this “Agreement”), dated as of March 27, 2024, is entered into by and between
China SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (“Company”),
and Streeterville Capital, LLC, a Utah limited liability company, its successors and/or
assigns (“Investor”).
A. Company
and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities
Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by the United States
Securities and Exchange Commission (the “SEC”).
B. Investor desires to purchase
and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a Convertible Promissory Note (the “Note”),
in the form attached hereto as Exhibit A, in the original principal amount of $531,666.67 (the “Initial Principal Balance”),
convertible into ordinary shares, $0.08 par value per share, of Company (the “Ordinary Shares”), upon the terms and
subject to the limitations and conditions set forth in such Note.
C. This
Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in
connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction
Documents”.
D. For
purposes of this Agreement: “Conversion Shares” means all Ordinary Shares issuable upon conversion of all or any portion
of the Note; and “Securities” means the Note and the Conversion Shares.
NOW, THEREFORE, in
consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Company and Investor hereby agree as follows:
1. Purchase
and Sale of Securities.
1.1. Purchase
of Securities. Company shall issue and sell to Investor and Investor shall purchase from Company the Note. In consideration thereof,
Investor shall pay the Purchase Price (as defined below) to Company.
1.2. Form
of Payment. On the Closing Date (as defined below), Investor shall wire the Purchase Price in immediately available funds to a bank
account designated by Company against delivery of the Note.
1.3. Closing
Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the closing of
the transactions contemplated by this Agreement (the “Closing”) shall be no later than March 27, 2024 (the “Closing
Date”), or another mutually agreed upon date. The Closing shall occur on the Closing Date by means of the exchange by email
of signed .pdf documents, but shall be deemed for all purposes to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC
in Lehi, Utah.
1.4. Collateral
for the Note. The Note shall be unsecured.
1.5. Original
Issue Discount; Transaction Expense Amount. The Note carries an original issue discount of $31,666.67 (the “OID”).
In addition, Company agrees to pay $20,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence, monitoring
and other transaction costs incurred in connection with the purchase and sale of the Securities (the “Transaction Expense Amount”).
The Transaction Expense Amount will be reduced from the amount funded at Closing. The “Purchase Price”, therefore,
shall be $500,000.00, computed as follows: $531,666.67 Initial Principal Balance, less the OID.
2. Investor’s
Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date: (i) this Agreement has been
duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with
its terms; and (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of the 1933
Act.
3. Company’s
Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a corporation
duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate power
to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such
qualification necessary; (iii) Company has registered its Ordinary Shares under Section 12(b) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of
the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly
authorized by Company and all necessary actions have been taken; (v) this Agreement, the Note, and the other Transaction Documents have
been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with
their terms; (vi) the execution and delivery of the Transaction Documents by Company, the issuance of Securities in accordance with the
terms hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not
conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s
formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation, any
listing agreement for the Ordinary Shares, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment,
or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having
jurisdiction over Company or any of Company’s properties or assets; (vii) no further authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company
is required to be obtained by Company for the issuance of the Securities to Investor or the entering into of the Transaction Documents;
(viii) none of Company’s filings with the SEC contained, at the time they were filed, any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading; (ix) Company has filed all reports, schedules, forms, statements and other documents required
to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and
has filed any such report, schedule, form, statement or other document prior to the expiration of any such extension; (x) there is no
action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of Company,
threatened against or affecting Company before or by any governmental authority or non-governmental department, commission, board, bureau,
agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect
on Company or which would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations
under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that has not been disclosed in a periodic
filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12)
months, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xiii)
with respect to any commissions, placement agent or finder’s fees or similar payments that will or would become due and owing by
Company to any person or entity as a result of this Agreement or the transactions contemplated hereby (“Broker Fees”),
any such Broker Fees will be made in full compliance with all applicable laws and regulations and only to a person or entity that is a
registered investment adviser or registered broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees or
with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due in
connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s
employees, officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates, from and against
all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect of
any such claimed Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents
or representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or representatives
except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by
the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors,
members, managers, employees, agents or representatives other than as set forth in the Transaction Documents; (xvi) Company acknowledges
that the State of Utah has a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction Documents
and any dispute that may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section
9.2 below, shall be applicable to the Transaction Documents and the transactions contemplated therein; (xvii) Company has notified Nasdaq
of its intention to be subject to the home country practice of the British Virgin Islands, has made all applicable filings with the SEC
with respect to relying on home country practice and thus Nasdaq Listing Rule 5635(d) does not apply to Company; (xviii) Company has consulted
with counsel and conducted its own due diligence, and understands that Investor is not registered as a ‘dealer’ under the
1934 Act, and agrees that the parties’ performance of the obligations under the Transaction Documents and the transactions contemplated
by the Transaction Documents do not violate Section 15 of the 1934 Act or any other applicable securities laws; and (xix) Company has
performed due diligence and background research on Investor and its affiliates and has received and reviewed the due diligence packet
provide by Investor. Company, being aware of the matters and legal issues described in subsections (xviii) and (xix) above, acknowledges
and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the Transaction Documents and
covenants and agrees it will not use any such information or legal theory as a defense to performance of its obligations under the Transaction
Documents or in any attempt to avoid, modify, reduce, rescind or void such obligations.
4. Company
Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full, Company
will at all times comply with the following covenants: (i) so long as Investor beneficially owns any of the Securities and for at least
twenty (20) Trading Days (as defined in the Note) thereafter, Company will timely file on the applicable deadline all reports required
to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control
to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is
publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would permit such termination; (ii) when issued, the Conversion Shares will be duly authorized, validly
issued, fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; (iii) the Ordinary Shares shall
be listed or quoted for trading on NYSE or Nasdaq; (iv) trading in Company’s Ordinary Shares will not be suspended, halted, chilled,
frozen, reach zero bid or otherwise cease trading on Company’s principal trading market; (v) Company will not make any Restricted
Issuances (as defined below) without Investor’s prior written consent, which consent may be granted or withheld in Investor’s
sole and absolute discretion; (vi) Company shall not enter into any agreement or otherwise agree to any covenant, condition, or obligation
that locks up, restricts in any way or otherwise prohibits Company: (a) from entering into a variable rate transaction with Investor or
any affiliate of Investor, or (b) from issuing Ordinary Shares, preferred stock, warrants, convertible notes, other debt securities, or
any other Company securities to Investor or any affiliate of Investor; and (vii) Company hereby grants to Investor a participation right,
whereby Investor shall have the right to participate in Investor’s discretion in up to thirty percent (30%) of the amount raised
in any equity or debt financing of Company to any U.S. Person as defined in Regulation S of the Securities Act in the U.S. In furtherance
thereof, should Company seek to raise capital via any transaction covered by the foregoing participation right it shall provide Investor
written notice of such proposed transaction, along with copies of the proposed transaction documents. Investor shall then have up to two
(2) calendar days to elect to purchase up to thirty percent (30%) of the securities proposed to be issued in such transaction on the most
favorable terms and conditions offered to any other purchaser of the same securities. The parties agree that in the event Company breaches
the covenant set forth in Section 4(vii) above, Investor’s sole and exclusive remedy shall be to receive, as liquidated damages,
an amount equal to twenty percent (20%) of the amount Investor would have been entitled to invest under the participation right, which
may be added to the Outstanding Balance (as defined in the Note) of the Note if not otherwise paid in cash by Company. For purposes
hereof, the term “Restricted Issuance” means (1) the issuance, incurrence or guaranty of any debt obligations other
than trade payables in the ordinary course of business that have or may have conversion rights of any kind, contingent, conditional or
otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Ordinary
Shares, or (2) the issuance of any securities (x) that are or may become convertible into Ordinary Shares (including without limitation
convertible debt, warrants or convertible preferred shares), with a conversion price that varies with the market price of the Ordinary
Shares, even if such security only becomes convertible following an event of default, the passage of time, or another trigger event or
condition; or with a fixed conversion price or exchange price that is subject to being reset at some future date at any time after the
initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of Company and (y) the number of warrant shares purchasable under a warrant is subject to reset or adjustment (other than
in connection with a stock split, stock combination, or other similar event). For avoidance of doubt, the issuance of Ordinary Shares
under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Restricted
Issuance for purposes hereof if the number of Ordinary Shares to be issued is based upon or related in any way to the market price of
the Ordinary Shares, including, but not limited to, Ordinary Shares issued in connection with a Section 3(a)(9) exchange, a Section 3(a)(10)
settlement, or any other similar settlement or exchange. For the further avoidance of doubt, Ordinary Share issued pursuant to an ATM
facility or a primary offering with no variable pricing features will not be considered to be a Restricted Issuance.
5. Conditions
to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities to Investor at the Closing
is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:
5.1. Investor
shall have executed this Agreement and delivered the same to Company.
5.2. Investor
shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.
6. Conditions
to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities at the Closing is subject
to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Investor’s
sole benefit and may be waived by Investor at any time in its sole discretion:
6.1. Company
shall have executed this Agreement and the Note and delivered the same to Investor.
6.2. Company shall have delivered
to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA Letter”) substantially
in the form attached hereto as Exhibit B acknowledged
and agreed to in writing by Company’s transfer agent (the “Transfer
Agent”).
6.3. Company
shall have delivered to Investor a fully executed Officer’s Certificate substantially in the form attached hereto as Exhibit
C evidencing Company’s approval of the Transaction Documents.
In the event any of the conditions
in Sections 5 and 6 is not satisfied or waived by the Closing Date, the Agreement will be cancelled and deemed void ab initio.
7. Reservation
of Shares. On the date hereof, Company will reserve 1,250,000 Ordinary Shares from its authorized and unissued Ordinary Shares to
provide for all issuances of Ordinary Shares under the Note (the “Share Reserve”). Company further agrees to add additional
Ordinary Shares to the Share Reserve in increments of 10,000 shares as and when requested by Investor if as of the date of any such request
the number of shares being held in the Share Reserve is less than three (3) times the number of Ordinary Shares obtained by dividing the
Outstanding Balance as of the date of the request by the Redemption Conversion Price (as defined in the Note). Company shall further require
the Transfer Agent to hold the Ordinary Shares reserved pursuant to the Share Reserve exclusively for the benefit of Investor and to issue
such shares to Investor promptly upon Investor’s delivery of a Redemption Notice under the Note. Finally, Company shall require
the Transfer Agent to issue Ordinary Shares pursuant to the Note to Investor out of its authorized and unissued shares, and not the Share
Reserve, to the extent Ordinary Shares have been authorized, but not issued, and are not included in the Share Reserve. The Transfer Agent
shall only issue shares out of the Share Reserve to the extent there are no other authorized shares available for issuance and then only
with Investor’s written consent.
8. OFAC;
Patriot Act.
8.1. OFAC
Certification. Company certifies that (i) it is not acting on behalf of any person, group, entity, or nation named by any Executive
Order or the United States Treasury Department, through its Office of Foreign Assets Control (“OFAC”) or otherwise,
as a terrorist, “Specially Designated Nation”, “Blocked Person”, or other banned or blocked person, entity, nation,
or transaction pursuant to any law, order, rule or regulation that is enforced or administered by OFAC or another department of the United
States government, and (ii) Company is not engaged in this transaction on behalf of, or instigating or facilitating this transaction on
behalf of, any such person, group, entity or nation.
8.2. Foreign
Corrupt Practices. Neither Company, nor any of its subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of Company or any subsidiary has, in the course of his actions for, or on behalf of, Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
8.3. Patriot
Act. Company shall not (i) be or become subject at any time to any law, regulation, or list of any government agency (including, without
limitation, the OFAC) that prohibits or limits Investor from making any advance or extension of credit to Company or from otherwise conducting
business with Company, or (ii) fail to provide documentary and other evidence of Company’s identity as may be requested by Investor
at any time to enable Investor to verify Company’s identity or to comply with any applicable law or regulation, including, without
limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. Company shall comply with all requirements of law relating
to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect. Upon Investor’s request
from time to time, Company shall certify in writing to Investor that Company’s representations, warranties and obligations under
this Section 8.3 remain true and correct and have not been breached. Company shall immediately notify Investor in writing if any of such
representations, warranties or covenants are no longer true or have been breached or if Company has a reasonable basis to believe that
they may no longer be true or have been breached. In connection with such an event, Company shall comply with all requirements of law
and directives of governmental authorities and, at Investor’s request, provide to Investor copies of all notices, reports and other
communications exchanged with, or received from, governmental authorities relating to such an event. Company shall also reimburse Investor
any expense incurred by Investor in evaluating the effect of such an event on the loan secured hereby, in obtaining any necessary license
from governmental authorities as may be necessary for Investor to enforce its rights under the Transaction Documents, and in complying
with all requirements of law applicable to Investor as the result of the existence of such an event and for any penalties or fines imposed
upon Investor as a result thereof.
9. Miscellaneous.
The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction Documents as if these terms
were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in this Section
9 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.
9.1. Arbitration
of Claims. The parties shall submit all Claims (as defined in Exhibit D) arising under this Agreement or any other Transaction
Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding
arbitration pursuant to the arbitration provisions set forth in Exhibit D attached hereto (the “Arbitration Provisions”).
For the avoidance of doubt, the parties agree that the injunction described in Section 9.3 below may be pursued in an arbitration that
is separate and apart from any other arbitration regarding all other Claims arising under the Transaction Documents. The parties hereby
acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable from all other
provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration
Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration
Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations
set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company
acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.
9.2. Governing
Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees that the exclusive venue for
arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of the parties or their affiliates
shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes hereunder pursuant to the Arbitration
Provisions, for any litigation arising in connection with any of the Transaction Documents (and notwithstanding the terms (specifically
including any governing law and venue terms) of any transfer agent services agreement or other agreement between the Transfer Agent and
Company, such litigation specifically includes, without limitation any action between or involving Company and the Transfer Agent under
the TA Letter or otherwise related to Investor in any way (specifically including, without limitation, any action where Company seeks
to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares to Investor
for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or
federal court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof,
(iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction,
temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares to Investor for any reason) outside
of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction
or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company covenants and agrees to name Investor
as a party in interest in, and provide written notice to Investor in accordance with Section 9.10 below prior to bringing or filing, any
action (including without limitation any filing or action against any person or entity that is not a party to this Agreement, including
without limitation the Transfer Agent) that is related in any way to the Transaction Documents or any transaction contemplated herein
or therein, including without limitation any action brought by Company to enjoin or prevent the issuance of any Ordinary Shares to Investor
by the Transfer Agent, and further agrees to timely name Investor as a party to any such action. Company acknowledges that the governing
law and venue provisions set forth in this Section 9.2 are material terms to induce Investor to enter into the Transaction Documents and
that but for Company’s agreements set forth in this Section 9.2 Investor would not have entered into the Transaction Documents.
9.3. Specific
Performance. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that Company fails to perform
any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It is accordingly
agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of this Agreement or such
other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other
remedy to which the Investor may be entitled under the Transaction Documents, at law or in equity. Company specifically agrees that: (a)
following an Event of Default (as defined in the Note) under the Note, Investor shall have the right to seek and receive injunctive relief
from a court or an arbitrator prohibiting Company from issuing any of its common or preferred stock to any party unless the Note is being
paid in full simultaneously with such issuance; and (b) following a breach of Section 4(vi) above, Investor shall have the right to seek
and receive injunctive relief from a court or arbitrator invalidating such lock-up. Company specifically acknowledges that Investor’s
right to obtain specific performance constitutes bargained for leverage and that the loss of such leverage would result in irreparable
harm to Investor. For the avoidance of doubt, in the event Investor seeks to obtain an injunction from a court or an arbitrator against
Company or specific performance of any provision of any Transaction Document, such action shall not be a waiver of any right of Investor
under any Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms
of the Transaction Documents, nor shall Investor’s pursuit of an injunction prevent Investor, under the doctrines of claim preclusion,
issues preclusion, res judicata or other similar legal doctrines, from pursuing other Claims in the future in a separate arbitration.
9.4. Calculation
Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic calculation under
the Transaction Documents, including without limitation, calculating the Outstanding Balance, Redemption Conversion Price, Conversion
Shares (as defined in the Note), or VWAP (as defined in the Note) (each, a “Calculation”), Company or Investor (as
the case may be) shall submit any disputed Calculation via email or facsimile with confirmation of receipt (i) within two (2) Trading
Days after receipt of the applicable notice giving rise to such dispute to Company or Investor (as the case may be) or (ii) if no notice
gave rise to such dispute, at any time after Investor learned of the circumstances giving rise to such dispute. If Investor and Company
are unable to agree upon such Calculation within two (2) Trading Days of such disputed Calculation being submitted to Company or Investor
(as the case may be), then Investor will promptly submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar
Systems”). Investor shall cause Unkar Systems to perform the Calculation and notify Company and Investor of the results no later
than ten (10) Trading Days from the time it receives such disputed Calculation. Unkar Systems’ determination of the disputed Calculation
shall be binding upon all parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be paid by
the incorrect party, or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined
by Unkar Systems. In the event Company is the losing party, no extension of the Delivery Date (as defined in the Note) shall be granted
and Company shall incur all effects for failing to deliver the applicable shares in a timely manner as set forth in the Transaction Documents.
Notwithstanding the foregoing, Investor may, in its sole discretion, designate an independent, reputable investment bank or accounting
firm other than Unkar Systems to resolve any such dispute and in such event, all references to “Unkar Systems” herein will
be replaced with references to such independent, reputable investment bank or accounting firm so designated by Investor.
9.5. Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
9.6. Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this
Agreement.
9.7. Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule
of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.
9.8. Entire
Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor makes
any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term sheets
or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated by the Transaction
Documents (collectively, “Prior Agreements”), that may have been entered into between Company and Investor, or any
affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents. To the extent there
is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the Transaction Documents
shall govern.
9.9. Amendments.
No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties hereto.
9.10. Notices.
Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to
an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation which is
kept by sending party), (ii) the earlier of the date delivered or the fifth (5th) Trading Day after deposit, postage prepaid,
with an international courier, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with
delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or
at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of
the other parties hereto):
If to Company:
China SXT Pharmaceuticals, Inc.
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
Email: fzhou@sxtchina.com
With a copy to (which copy shall not constitute notice):
Hunter Taubman Fischer & Li LLC
Attn: Joan Wu
48 Wall Street, Suite 1100
New York, NY 10005
Email: jwu@htflawyers.com
If to Investor:
Streeterville Capital, LLC
Attn: John Fife and Chris Stalcup
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
Email: jfife@chicagoventure.com and cstalcup@chicagoventure.com
With a copy to (which copy shall not constitute notice):
Hansen Black Anderson Ashcraft PLLC
Attn: Jonathan Hansen
3051 West Maple Loop Drive, Suite 325
Lehi, Utah 84043
Email: jhansen@hbaa.law
9.11. Successors
and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Investor
hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the need to obtain Company’s
consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties hereunder, whether directly
or indirectly, without the prior written consent of Investor, and any such attempted assignment or delegation shall be null and void.
9.12. Survival.
The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing hereunder
notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and hold harmless Investor
and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of or related to any breach or
alleged breach by Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants
and obligations under this Agreement, including advancement of expenses as they are incurred.
9.13. Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
9.14. Investor’s
Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and the Transaction Documents are cumulative
and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that Investor may
have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in equity, or by statute,
and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor may deem expedient.
9.15. Attorneys’
Fees and Cost of Collection. In the event any suit, action or arbitration is filed by either party against the other to interpret
or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing party all costs and
expenses, including attorneys’ fees incurred therein, including the same with respect to an appeal. The “prevailing party”
shall be the party in whose favor a judgment is entered, regardless of whether judgment is entered on all claims asserted by such party
and regardless of the amount of the judgment; or where, due to the assertion of counterclaims, judgments are entered in favor of and against
both parties, then the judge or arbitrator shall determine the “prevailing party” by taking into account the relative dollar
amounts of the judgments or, if the judgments involve nonmonetary relief, the relative importance and value of such relief. Nothing herein
shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous or bad faith pleading.
If (i) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings,
or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes action to collect amounts due under
the Note or to enforce the provisions of the Note, or (ii) there occurs any bankruptcy, reorganization, receivership of Company or
other proceedings affecting Company’s creditors’ rights and involving a claim under the Note; then Company shall pay the costs
incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or
other proceeding, including, without limitation, attorneys’ fees, expenses, deposition costs, and disbursements.
9.16. Waiver.
No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to
any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a
party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
9.17. Waiver
of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES
HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE
STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.
9.18. Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the other
Transaction Documents.
9.19. Voluntary
Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions needed
for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents and
fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing, or has waived the
right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or undue
influence by Investor or anyone else.
9.20. Document
Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements, instruments,
documents, and items and records governing, arising from or relating to any of Company’s loans, including, without limitation, this
Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals. The parties hereto (i) waive
any right to insist or require that Investor produce paper originals, (ii) agree that such images shall be accorded the same force and
effect as the paper originals, (iii) agree that Investor is entitled to use such images in lieu of destroyed or archived originals for
any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that any executed
facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other Transaction Document shall be deemed to be of
the same force and effect as the original manually executed document.
[Remainder of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF, the undersigned
Investor and Company have caused this Agreement to be duly executed as of the date first above written.
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INVESTOR: |
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Streeterville Capital, LLC |
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By: |
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John M. Fife, President |
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COMPANY: |
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China SXT Pharmaceuticals, Inc. |
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By: |
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Feng Zhou, CEO |
[Signature Page to Securities
Purchase Agreement]
ATTACHED EXHIBITS:
| Exhibit A |
|
Note |
| Exhibit B |
|
Irrevocable Transfer Agent Instructions |
| Exhibit C |
|
Officer’s Certificate |
| Exhibit D |
|
Arbitration Provisions |
Exhibit
D
ARBITRATION PROVISIONS
1. Dispute
Resolution. For purposes of this Exhibit D, the term “Claims” means any disputes, claims, demands, causes
of action, requests for injunctive relief, requests for specific performance, questions regarding severability of any provisions of the
Transaction Documents, liabilities, damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions
contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any
claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability,
failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate
the Agreement (or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. The term “Claims”
specifically excludes a dispute over Calculations. The parties to this Agreement (the “parties”) hereby agree that
the Claims may be arbitrated in one or more Arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions
and a separate one for all other Claims). The parties hereby agree that the arbitration provisions set forth in this Exhibit D
(“Arbitration Provisions”) are binding on each of them. As a result, any attempt to rescind the Agreement (or these
Arbitration Provisions) or any other Transaction Document) or declare the Agreement (or these Arbitration Provisions) or any other Transaction
Document invalid or unenforceable pursuant to Section 29 of the 1934 Act or for any other reason is subject to these Arbitration Provisions.
These Arbitration Provisions shall also survive any termination or expiration of the Agreement. Any capitalized term not defined in these
Arbitration Provisions shall have the meaning set forth in the Agreement.
2. Arbitration.
Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted exclusively
in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration appeal right
provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the arbitrator rendered
pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding upon the parties, (b) the sole
and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator,
and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Subject to the
Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident to enforcing
the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Arbitration
Award shall include default interest (as defined or otherwise provided for in the Note, “Default Interest”) (with respect
to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon
the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake County, Utah.
3. The
Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration Act,
U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”). Notwithstanding
the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event of conflict or variation
between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions
shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict
with or vary from these Arbitration Provisions.
4. Arbitration
Proceedings. Arbitration between the parties will be subject to the following:
4.1 Initiation
of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by giving
written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under Section
9.10 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed
initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 9.10 of the Agreement (the
“Service Date”). After the Service Date, information may be delivered, and notices may be given, by email or fax pursuant
to Section 9.10 of the Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy,
the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent
with the Utah Rules of Civil Procedure.
4.2 Selection
and Payment of Arbitrator.
(a) Within ten (10) calendar
days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that are designated as “neutrals”
or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three (3) designated persons hereunder are referred
to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed Arbitrator must be qualified as
a “neutral” with Utah ADR Services. Within five (5) calendar days after Investor has submitted to Company the names of the
Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators to act as the arbitrator
for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators in writing within such
5-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written notice of such selection to Company.
(b) If Investor fails
to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a) above,
then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators that
are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may then,
within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice to
Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor
fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company
may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to
Investor.
(c) If a Proposed Arbitrator
chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such Proposed Arbitrator
may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the chosen Proposed Arbitrator
declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are otherwise
unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this Paragraph 4.2.
(d) The date that the
Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties to serve
as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator resigns
or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to continue
the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then the arbitrator
shall be selected under the then prevailing rules of the American Arbitration Association.
(e) Subject to Paragraph
4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one party refuses or
fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default
Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.
4.3 Applicability
of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules of Civil
Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation, to the
filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah Rules of Evidence
shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing, it is the parties’
intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the event of any conflict between
the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these Arbitration Provisions shall control.
4.4 Answer
and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating the
Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required deadline,
the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against such
party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within
the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration
Notice, against a party that fails to submit an answer within such time period.
4.5 Related
Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent legal
proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject to
the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration
Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party
files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will
be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails
to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall
be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal
or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined
in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation
Proceedings pursuant to the Arbitration Act.
4.6 Discovery.
Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:
(a) Written discovery
will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written
discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration.
The party seeking written discovery shall always have the burden of showing that all of the standards and limitations set forth in these
Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:
(i) To
facts directly connected with the transactions contemplated by the Agreement.
(ii) To
facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or less
expensive than in the manner requested.
(b) No party shall be
allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission (including
discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three (3) depositions
(excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions will be borne by
the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition of the estimated
attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending the deposition
fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice, then such party
shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must pay the party defending
the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is deemed to be waived as set
forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated attorneys’ fees are
unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken in Utah.
(c) All discovery requests
(including document production requests included in deposition notices) must be submitted in writing to the arbitrator and the other party.
The party submitting the written discovery requests must include with such discovery requests a detailed explanation of how the proposed
discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure. The receiving party
will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the arbitrator an estimate
of the attorneys’ fees and costs associated with responding to such written discovery requests and a written challenge to each applicable
discovery request. After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to one or more discovery requests,
consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding as to the likely attorneys’
fees and costs associated with responding to the discovery requests and issue an order that (i) requires the requesting party to prepay
the attorneys’ fees and costs associated with responding to the discovery requests, and (ii) requires the responding party to respond
to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s finding with respect
to such discovery requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or a challenge to discovery
requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’ fees or costs
associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests (as may be
limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests.
Any party submitting any written discovery requests, including without limitation interrogatories, requests for production subpoenas to
a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before the responding
party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.
(d) In order to allow
a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration
Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not
satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify
such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.
(e) Each party may submit
expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration Commencement
Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete statement of
all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name and qualifications, including
a list of all the expert’s publications within the preceding ten (10) years, and a list of any other cases in which the expert has
testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation to be paid
for the expert’s report and testimony. The parties are entitled to depose any other party’s expert witness one (1) time for
no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter not fairly disclosed in
the expert report.
4.6 Dispositive
Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil Procedure
(a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to, deliver to the arbitrator
and to the other party a memorandum in support (the “Memorandum in Support”) of the Dispositive Motion. Within seven
(7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other party a memorandum
in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within seven (7) calendar days of delivery
of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to the arbitrator and
to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”). If the applicable party
shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the Reply Memorandum as required
above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion shall proceed regardless.
4.7 Confidentiality.
All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation
information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each party
agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration process (including
without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure such information becomes
public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party or its agents, (b) such
information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other
party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior
to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives and legal counsel on a need
to know basis who each agree in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration
Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information
and confidential information upon the written request of either party.
4.8 Authorization;
Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct the
arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the Arbitration proceedings
to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration Award must
be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and
directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a
scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable
the arbitrator to render a decision prior to the end of such 120-day period.
4.9 Relief.
The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which the arbitrator
deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator
may not award exemplary or punitive damages.
4.10 Fees
and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being awarded
the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration, and
(b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.
5. Arbitration
Appeal.
5.1 Initiation
of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period of
thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant elects
to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel of arbitrators
as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein as the “Appeal
Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph 4.1 above with respect
to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee, the Appellant must also
pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond in the amount of 110% of
the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing. In the event an Appellant
delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of
this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will not be further conditioned.
In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within
the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an
Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described in this Paragraph
5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’
agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.
5.2 Selection
and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of
the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person arbitration
panel (the “Appeal Panel”).
(a) Within ten (10)
calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators that are
designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such five (5) designated
persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the avoidance of doubt, each Proposed
Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall not be the arbitrator who rendered the
Arbitration Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after the Appellee has
submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice to the Appellee,
three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select three (3) of
the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators from the
Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.
(b) If the Appellee
fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the Appeal Date pursuant
to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed Appeal Arbitrators, identify
the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service (none of
whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five (5) calendar days after the
Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such
selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of the
arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant may select the three (3) members
of the Appeal Panel from the Appellant’s list of five (5) arbitrators by providing written notice of such selection to the Appellee.
(c) If a selected
Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator may
select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen Proposed
Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3) of the five (5)
designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator selection process
shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators who have already
agreed to serve shall remain on the Appeal Panel.
(d) The date that
all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email) delivered to
both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal Commencement
Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in writing (including
via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel to serve as the lead
arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration
Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon
the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal
Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings,
a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel.
If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected
under the then prevailing rules of the American Arbitration Association.
(d) Subject to Paragraph
5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.
5.3 Appeal
Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall conduct
a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and all other provisions
of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate for a fair and expeditious
disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous evidence and discovery,
together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents filed with the Appeal
Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal Panel shall not permit
the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new witnesses or affidavits,
and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the Arbitration Award.
5.4 Timing.
(a) Within
seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal Panel
copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents
filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may,
but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning
or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7)
calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal
Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s
delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply Memorandum
to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of this subparagraph
(a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final. If the Appellee shall
fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply Memorandum as required
above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed
regardless.
(b) Subject
to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days
of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal
is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).
5.5 Appeal
Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator on
the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety and
make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall
remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive
remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d)
be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees,
including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall,
to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include
Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration
Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.
5.6 Relief.
The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems proper
under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal Panel may
not award exemplary or punitive damages.
5.7 Fees
and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being awarded
the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration and
the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal Panel, which,
for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any
part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery costs, and other
expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including without limitation
in connection with the Appeal).
6. Miscellaneous.
6.1 Severability.
If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall be modified
to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration Provisions
shall remain unaffected and in full force and effect.
6.2 Governing
Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws principles
therein.
6.3 Interpretation.
The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation
of, these Arbitration Provisions.
6.4 Waiver.
No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the party
granting the waiver.
6.5 Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.
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Exhibit 10.3
securities
purchase agreement
This
Securities Purchase Agreement (this “Agreement”), dated as of December 13, 2023, is entered into by and between
China SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (“Company”),
and Streeterville Capital, LLC, a Utah limited liability company, its successors and/or
assigns (“Investor”).
A. Company
and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities
Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by the United States
Securities and Exchange Commission (the “SEC”).
B. Investor
desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a Convertible Promissory
Note (the “Note”), in the form attached hereto as Exhibit A, in the original principal amount of $531,666.67
(the “Initial Principal Balance”), convertible into ordinary shares, $0.08 par value per share, of Company (the “Ordinary
Shares”), upon the terms and subject to the limitations and conditions set forth in such Note.
C. This
Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in
connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction
Documents”.
D. For
purposes of this Agreement: “Conversion Shares” means all Ordinary Shares issuable upon conversion of all or any portion
of the Note; and “Securities” means the Note and the Conversion Shares.
NOW, THEREFORE, in
consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Company and Investor hereby agree as follows:
1. Purchase
and Sale of Securities.
1.1. Purchase
of Securities. Company shall issue and sell to Investor and Investor shall purchase from Company the Note. In consideration thereof,
Investor shall pay the Purchase Price (as defined below) to Company.
1.2. Form
of Payment. On the Closing Date (as defined below), Investor shall wire the Purchase Price in immediately available funds to a bank
account designated by Company against delivery of the Note.
1.3. Closing Date.
Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the closing of the
transactions contemplated by this Agreement (the “Closing”) shall be no later than December 13, 2023 (the
“Closing Date”), or another mutually agreed upon date. The Closing shall occur on the Closing Date by means of
the exchange by email of signed .pdf documents, but shall be deemed for all purposes to have occurred at the offices of Hansen Black
Anderson Ashcraft PLLC in Lehi, Utah.
1.4. Collateral
for the Note. The Note shall be unsecured.
1.5. Original
Issue Discount; Transaction Expense Amount. The Note carries an original issue discount of $31,666.67 (the “OID”).
In addition, Company agrees to pay $20,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence, monitoring
and other transaction costs incurred in connection with the purchase and sale of the Securities (the “Transaction Expense Amount”).
The Transaction Expense Amount will be reduced from the amount funded at Closing. The “Purchase Price”, therefore,
shall be $500,000.00, computed as follows: $531,666.67 Initial Principal Balance, less the OID.
2. Investor’s
Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date: (i) this Agreement has been
duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with
its terms; and (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of the 1933
Act.
3. Company’s
Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a corporation
duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate power
to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such
qualification necessary; (iii) Company has registered its Ordinary Shares under Section 12(b) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of
the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly
authorized by Company and all necessary actions have been taken; (v) this Agreement, the Note, and the other Transaction Documents have
been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with
their terms; (vi) the execution and delivery of the Transaction Documents by Company, the issuance of Securities in accordance with the
terms hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not
conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s
formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation, any
listing agreement for the Ordinary Shares, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment,
or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having
jurisdiction over Company or any of Company’s properties or assets; (vii) no further authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company
is required to be obtained by Company for the issuance of the Securities to Investor or the entering into of the Transaction Documents;
(viii) none of Company’s filings with the SEC contained, at the time they were filed, any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading; (ix) Company has filed all reports, schedules, forms, statements and other documents required
to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and
has filed any such report, schedule, form, statement or other document prior to the expiration of any such extension; (x) there is no
action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of Company,
threatened against or affecting Company before or by any governmental authority or non-governmental department, commission, board, bureau,
agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect
on Company or which would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations
under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that has not been disclosed in a periodic
filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12)
months, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xiii)
with respect to any commissions, placement agent or finder’s fees or similar payments that will or would become due and owing by
Company to any person or entity as a result of this Agreement or the transactions contemplated hereby (“Broker Fees”),
any such Broker Fees will be made in full compliance with all applicable laws and regulations and only to a person or entity that is a
registered investment adviser or registered broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees or
with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due in
connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s
employees, officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates, from and against
all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect of
any such claimed Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents
or representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or representatives
except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by
the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors,
members, managers, employees, agents or representatives other than as set forth in the Transaction Documents; (xvi) Company acknowledges
that the State of Utah has a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction Documents
and any dispute that may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section
9.2 below, shall be applicable to the Transaction Documents and the transactions contemplated therein; (xvii) Company has notified Nasdaq
of its intention to be subject to the home country practice of the British Virgin Islands, has made all applicable filings with the SEC
with respect to relying on home country practice and thus Nasdaq Listing Rule 5635(d) does not apply to Company; (xviii) Company has consulted
with counsel and conducted its own due diligence, and understands that Investor is not registered as a ‘dealer’ under the
1934 Act, and agrees that the parties’ performance of the obligations under the Transaction Documents and the transactions contemplated
by the Transaction Documents do not violate Section 15 of the 1934 Act or any other applicable securities laws; and (xix) Company has
performed due diligence and background research on Investor and its affiliates and has received and reviewed the due diligence packet
provide by Investor. Company, being aware of the matters and legal issues described in subsections (xviii) and (xix) above, acknowledges
and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the Transaction Documents and
covenants and agrees it will not use any such information or legal theory as a defense to performance of its obligations under the Transaction
Documents or in any attempt to avoid, modify, reduce, rescind or void such obligations.
4. Company
Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full, Company
will at all times comply with the following covenants: (i) so long as Investor beneficially owns any of the Securities and for at least
twenty (20) Trading Days (as defined in the Note) thereafter, Company will timely file on the applicable deadline all reports required
to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control
to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is
publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would permit such termination; (ii) when issued, the Conversion Shares will be duly authorized, validly
issued, fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; (iii) the Ordinary Shares shall
be listed or quoted for trading on NYSE or Nasdaq; (iv) trading in Company’s Ordinary Shares will not be suspended, halted, chilled,
frozen, reach zero bid or otherwise cease trading on Company’s principal trading market; (v) Company will not make any Restricted
Issuances (as defined below) without Investor’s prior written consent, which consent may be granted or withheld in Investor’s
sole and absolute discretion; (vi) Company shall not enter into any agreement or otherwise agree to any covenant, condition, or obligation
that locks up, restricts in any way or otherwise prohibits Company: (a) from entering into a variable rate transaction with Investor or
any affiliate of Investor, or (b) from issuing Ordinary Shares, preferred stock, warrants, convertible notes, other debt securities, or
any other Company securities to Investor or any affiliate of Investor; and (vii) Company hereby grants to Investor a participation right,
whereby Investor shall have the right to participate in Investor’s discretion in up to thirty percent (30%) of the amount raised
in any equity or debt financing of Company to any U.S. Person as defined in Regulation S of the Securities Act in the U.S. In furtherance
thereof, should Company seek to raise capital via any transaction covered by the foregoing participation right it shall provide Investor
written notice of such proposed transaction, along with copies of the proposed transaction documents. Investor shall then have up to two
(2) calendar days to elect to purchase up to thirty percent (30%) of the securities proposed to be issued in such transaction on the most
favorable terms and conditions offered to any other purchaser of the same securities. The parties agree that in the event Company breaches
the covenant set forth in Section 4(vii) above, Investor’s sole and exclusive remedy shall be to receive, as liquidated damages,
an amount equal to twenty percent (20%) of the amount Investor would have been entitled to invest under the participation right, which
may be added to the Outstanding Balance (as defined in the Note) of the Note if not otherwise paid in cash by Company. For purposes
hereof, the term “Restricted Issuance” means (1) the issuance, incurrence or guaranty of any debt obligations other
than trade payables in the ordinary course of business that have or may have conversion rights of any kind, contingent, conditional or
otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Ordinary
Shares, or (2) the issuance of any securities (x) that are or may become convertible into Ordinary Shares (including without limitation
convertible debt, warrants or convertible preferred shares), with a conversion price that varies with the market price of the Ordinary
Shares, even if such security only becomes convertible following an event of default, the passage of time, or another trigger event or
condition; or with a fixed conversion price or exchange price that is subject to being reset at some future date at any time after the
initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of Company and (y) the number of warrant shares purchasable under a warrant is subject to reset or adjustment (other than
in connection with a stock split, stock combination, or other similar event). For avoidance of doubt, the issuance of Ordinary Shares
under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Restricted
Issuance for purposes hereof if the number of Ordinary Shares to be issued is based upon or related in any way to the market price of
the Ordinary Shares, including, but not limited to, Ordinary Shares issued in connection with a Section 3(a)(9) exchange, a Section 3(a)(10)
settlement, or any other similar settlement or exchange. For the further avoidance of doubt, Ordinary Share issued pursuant to an ATM
facility or a primary offering with no variable pricing features will not be considered to be a Restricted Issuance.
5. Conditions
to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities to Investor at the Closing
is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:
5.1. Investor
shall have executed this Agreement and delivered the same to Company.
5.2. Investor
shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.
6. Conditions
to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities at the Closing is subject
to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Investor’s
sole benefit and may be waived by Investor at any time in its sole discretion:
6.1. Company
shall have executed this Agreement and the Note and delivered the same to Investor.
6.2. Company shall have delivered
to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA Letter”) substantially
in the form attached hereto as Exhibit B acknowledged
and agreed to in writing by Company’s transfer agent (the “Transfer
Agent”).
6.3. Company
shall have delivered to Investor a fully executed Officer’s Certificate substantially in the form attached hereto as Exhibit
C evidencing Company’s approval of the Transaction Documents.
In the event any of the conditions
in Sections 5 and 6 is not satisfied or waived by the Closing Date, the Agreement will be cancelled and deemed void ab initio.
7. Reservation
of Shares. On the date hereof, Company will reserve 1,000,000 Ordinary Shares from its authorized and unissued Ordinary Shares to
provide for all issuances of Ordinary Shares under the Note (the “Share Reserve”). Company further agrees to add additional
Ordinary Shares to the Share Reserve in increments of 10,000 shares as and when requested by Investor if as of the date of any such request
the number of shares being held in the Share Reserve is less than three (3) times the number of Ordinary Shares obtained by dividing the
Outstanding Balance as of the date of the request by the Redemption Conversion Price (as defined in the Note). Company shall further require
the Transfer Agent to hold the Ordinary Shares reserved pursuant to the Share Reserve exclusively for the benefit of Investor and to issue
such shares to Investor promptly upon Investor’s delivery of a Redemption Notice under the Note. Finally, Company shall require
the Transfer Agent to issue Ordinary Shares pursuant to the Note to Investor out of its authorized and unissued shares, and not the Share
Reserve, to the extent Ordinary Shares have been authorized, but not issued, and are not included in the Share Reserve. The Transfer Agent
shall only issue shares out of the Share Reserve to the extent there are no other authorized shares available for issuance and then only
with Investor’s written consent.
8. OFAC;
Patriot Act.
8.1. OFAC
Certification. Company certifies that (i) it is not acting on behalf of any person, group, entity, or nation named by any Executive
Order or the United States Treasury Department, through its Office of Foreign Assets Control (“OFAC”) or otherwise,
as a terrorist, “Specially Designated Nation”, “Blocked Person”, or other banned or blocked person, entity, nation,
or transaction pursuant to any law, order, rule or regulation that is enforced or administered by OFAC or another department of the United
States government, and (ii) Company is not engaged in this transaction on behalf of, or instigating or facilitating this transaction on
behalf of, any such person, group, entity or nation.
8.2. Foreign
Corrupt Practices. Neither Company, nor any of its subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of Company or any subsidiary has, in the course of his actions for, or on behalf of, Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
8.3. Patriot
Act. Company shall not (i) be or become subject at any time to any law, regulation, or list of any government agency (including, without
limitation, the OFAC) that prohibits or limits Investor from making any advance or extension of credit to Company or from otherwise conducting
business with Company, or (ii) fail to provide documentary and other evidence of Company’s identity as may be requested by Investor
at any time to enable Investor to verify Company’s identity or to comply with any applicable law or regulation, including, without
limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. Company shall comply with all requirements of law relating
to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect. Upon Investor’s request
from time to time, Company shall certify in writing to Investor that Company’s representations, warranties and obligations under
this Section 8.3 remain true and correct and have not been breached. Company shall immediately notify Investor in writing if any of such
representations, warranties or covenants are no longer true or have been breached or if Company has a reasonable basis to believe that
they may no longer be true or have been breached. In connection with such an event, Company shall comply with all requirements of law
and directives of governmental authorities and, at Investor’s request, provide to Investor copies of all notices, reports and other
communications exchanged with, or received from, governmental authorities relating to such an event. Company shall also reimburse Investor
any expense incurred by Investor in evaluating the effect of such an event on the loan secured hereby, in obtaining any necessary license
from governmental authorities as may be necessary for Investor to enforce its rights under the Transaction Documents, and in complying
with all requirements of law applicable to Investor as the result of the existence of such an event and for any penalties or fines imposed
upon Investor as a result thereof.
9. Miscellaneous.
The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction Documents as if these terms
were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in this Section
9 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.
9.1. Arbitration
of Claims. The parties shall submit all Claims (as defined in Exhibit D) arising under this Agreement or any other Transaction
Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding
arbitration pursuant to the arbitration provisions set forth in Exhibit D attached hereto (the “Arbitration Provisions”).
For the avoidance of doubt, the parties agree that the injunction described in Section 9.3 below may be pursued in an arbitration that
is separate and apart from any other arbitration regarding all other Claims arising under the Transaction Documents. The parties hereby
acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable from all other
provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration
Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration
Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations
set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company
acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.
9.2. Governing
Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees that the exclusive venue for
arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of the parties or their affiliates
shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes hereunder pursuant to the Arbitration
Provisions, for any litigation arising in connection with any of the Transaction Documents (and notwithstanding the terms (specifically
including any governing law and venue terms) of any transfer agent services agreement or other agreement between the Transfer Agent and
Company, such litigation specifically includes, without limitation any action between or involving Company and the Transfer Agent under
the TA Letter or otherwise related to Investor in any way (specifically including, without limitation, any action where Company seeks
to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares to Investor
for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or
federal court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof,
(iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction,
temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares to Investor for any reason) outside
of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction
or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company covenants and agrees to name Investor
as a party in interest in, and provide written notice to Investor in accordance with Section 9.10 below prior to bringing or filing, any
action (including without limitation any filing or action against any person or entity that is not a party to this Agreement, including
without limitation the Transfer Agent) that is related in any way to the Transaction Documents or any transaction contemplated herein
or therein, including without limitation any action brought by Company to enjoin or prevent the issuance of any Ordinary Shares to Investor
by the Transfer Agent, and further agrees to timely name Investor as a party to any such action. Company acknowledges that the governing
law and venue provisions set forth in this Section 9.2 are material terms to induce Investor to enter into the Transaction Documents and
that but for Company’s agreements set forth in this Section 9.2 Investor would not have entered into the Transaction Documents.
9.3. Specific
Performance. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that Company fails to perform
any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It is accordingly
agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of this Agreement or such
other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other
remedy to which the Investor may be entitled under the Transaction Documents, at law or in equity. Company specifically agrees that: (a)
following an Event of Default (as defined in the Note) under the Note, Investor shall have the right to seek and receive injunctive relief
from a court or an arbitrator prohibiting Company from issuing any of its common or preferred stock to any party unless the Note is being
paid in full simultaneously with such issuance; and (b) following a breach of Section 4(vi) above, Investor shall have the right to seek
and receive injunctive relief from a court or arbitrator invalidating such lock-up. Company specifically acknowledges that Investor’s
right to obtain specific performance constitutes bargained for leverage and that the loss of such leverage would result in irreparable
harm to Investor. For the avoidance of doubt, in the event Investor seeks to obtain an injunction from a court or an arbitrator against
Company or specific performance of any provision of any Transaction Document, such action shall not be a waiver of any right of Investor
under any Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms
of the Transaction Documents, nor shall Investor’s pursuit of an injunction prevent Investor, under the doctrines of claim preclusion,
issues preclusion, res judicata or other similar legal doctrines, from pursuing other Claims in the future in a separate arbitration.
9.4. Calculation
Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic calculation under
the Transaction Documents, including without limitation, calculating the Outstanding Balance, Redemption Conversion Price, Conversion
Shares (as defined in the Note), or VWAP (as defined in the Note) (each, a “Calculation”), Company or Investor (as
the case may be) shall submit any disputed Calculation via email or facsimile with confirmation of receipt (i) within two (2) Trading
Days after receipt of the applicable notice giving rise to such dispute to Company or Investor (as the case may be) or (ii) if no notice
gave rise to such dispute, at any time after Investor learned of the circumstances giving rise to such dispute. If Investor and Company
are unable to agree upon such Calculation within two (2) Trading Days of such disputed Calculation being submitted to Company or Investor
(as the case may be), then Investor will promptly submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar
Systems”). Investor shall cause Unkar Systems to perform the Calculation and notify Company and Investor of the results no later
than ten (10) Trading Days from the time it receives such disputed Calculation. Unkar Systems’ determination of the disputed Calculation
shall be binding upon all parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be paid by
the incorrect party, or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined
by Unkar Systems. In the event Company is the losing party, no extension of the Delivery Date (as defined in the Note) shall be granted
and Company shall incur all effects for failing to deliver the applicable shares in a timely manner as set forth in the Transaction Documents.
Notwithstanding the foregoing, Investor may, in its sole discretion, designate an independent, reputable investment bank or accounting
firm other than Unkar Systems to resolve any such dispute and in such event, all references to “Unkar Systems” herein will
be replaced with references to such independent, reputable investment bank or accounting firm so designated by Investor.
9.5. Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
9.6. Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this
Agreement.
9.7. Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule
of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.
9.8. Entire
Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor makes
any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term sheets
or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated by the Transaction
Documents (collectively, “Prior Agreements”), that may have been entered into between Company and Investor, or any
affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents. To the extent there
is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the Transaction Documents
shall govern.
9.9. Amendments.
No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties hereto.
9.10. Notices.
Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to
an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation which is
kept by sending party), (ii) the earlier of the date delivered or the fifth (5th) Trading Day after deposit, postage prepaid,
with an international courier, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with
delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or
at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of
the other parties hereto):
If to Company:
China SXT Pharmaceuticals, Inc.
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
Email: fzhou@sxtchina.com
With a copy to (which copy shall not constitute notice):
Hunter Taubman Fischer & Li LLC
Attn: Joan Wu
48 Wall Street, Suite 1100
New York, NY 10005
Email: jwu@htflawyers.com
If to Investor:
Streeterville Capital, LLC
Attn: John Fife and Chris Stalcup
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
Email: jfife@chicagoventure.com and cstalcup@chicagoventure.com
With a copy to (which copy shall not constitute notice):
Hansen Black Anderson Ashcraft PLLC
Attn: Jonathan Hansen
3051 West Maple Loop Drive, Suite 325
Lehi, Utah 84043
Email: jhansen@hbaa.law
9.11. Successors
and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Investor
hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the need to obtain Company’s
consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties hereunder, whether directly
or indirectly, without the prior written consent of Investor, and any such attempted assignment or delegation shall be null and void.
9.12. Survival.
The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing hereunder
notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and hold harmless Investor
and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of or related to any breach or
alleged breach by Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants
and obligations under this Agreement, including advancement of expenses as they are incurred.
9.13. Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
9.14. Investor’s
Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and the Transaction Documents are cumulative
and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that Investor may
have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in equity, or by statute,
and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor may deem expedient.
9.15. Attorneys’
Fees and Cost of Collection. In the event any suit, action or arbitration is filed by either party against the other to interpret
or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing party all costs and
expenses, including attorneys’ fees incurred therein, including the same with respect to an appeal. The “prevailing party”
shall be the party in whose favor a judgment is entered, regardless of whether judgment is entered on all claims asserted by such party
and regardless of the amount of the judgment; or where, due to the assertion of counterclaims, judgments are entered in favor of and against
both parties, then the judge or arbitrator shall determine the “prevailing party” by taking into account the relative dollar
amounts of the judgments or, if the judgments involve nonmonetary relief, the relative importance and value of such relief. Nothing herein
shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous or bad faith pleading.
If (i) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings,
or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes action to collect amounts due under
the Note or to enforce the provisions of the Note, or (ii) there occurs any bankruptcy, reorganization, receivership of Company or
other proceedings affecting Company’s creditors’ rights and involving a claim under the Note; then Company shall pay the costs
incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or
other proceeding, including, without limitation, attorneys’ fees, expenses, deposition costs, and disbursements.
9.16. Waiver.
No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to
any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a
party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
9.17. Waiver
of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES
HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE
STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.
9.18. Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the other
Transaction Documents.
9.19. Voluntary
Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions needed
for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents and
fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing, or has waived the
right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or undue
influence by Investor or anyone else.
9.20. Document
Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements, instruments,
documents, and items and records governing, arising from or relating to any of Company’s loans, including, without limitation, this
Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals. The parties hereto (i) waive
any right to insist or require that Investor produce paper originals, (ii) agree that such images shall be accorded the same force and
effect as the paper originals, (iii) agree that Investor is entitled to use such images in lieu of destroyed or archived originals for
any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that any executed
facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other Transaction Document shall be deemed to be of
the same force and effect as the original manually executed document.
[Remainder of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF, the undersigned
Investor and Company have caused this Agreement to be duly executed as of the date first above written.
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INVESTOR: |
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Streeterville Capital, LLC |
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By: |
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John M. Fife, President |
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COMPANY: |
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China SXT Pharmaceuticals, Inc. |
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By: |
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Feng Zhou, CEO |
[Signature Page to Securities
Purchase Agreement]
ATTACHED EXHIBITS:
| Exhibit A |
|
Note |
| Exhibit B |
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Irrevocable Transfer Agent Instructions |
| Exhibit C |
|
Officer’s Certificate |
| Exhibit D |
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Arbitration Provisions |
Exhibit
D
ARBITRATION PROVISIONS
1. Dispute
Resolution. For purposes of this Exhibit D, the term “Claims” means any disputes, claims, demands, causes
of action, requests for injunctive relief, requests for specific performance, questions regarding severability of any provisions of the
Transaction Documents, liabilities, damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions
contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any
claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability,
failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate
the Agreement (or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. The term “Claims”
specifically excludes a dispute over Calculations. The parties to this Agreement (the “parties”) hereby agree that
the Claims may be arbitrated in one or more Arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions
and a separate one for all other Claims). The parties hereby agree that the arbitration provisions set forth in this Exhibit D
(“Arbitration Provisions”) are binding on each of them. As a result, any attempt to rescind the Agreement (or these
Arbitration Provisions) or any other Transaction Document) or declare the Agreement (or these Arbitration Provisions) or any other Transaction
Document invalid or unenforceable pursuant to Section 29 of the 1934 Act or for any other reason is subject to these Arbitration Provisions.
These Arbitration Provisions shall also survive any termination or expiration of the Agreement. Any capitalized term not defined in these
Arbitration Provisions shall have the meaning set forth in the Agreement.
2. Arbitration.
Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted exclusively
in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration appeal right
provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the arbitrator rendered
pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding upon the parties, (b) the sole
and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator,
and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Subject to the
Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident to enforcing
the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Arbitration
Award shall include default interest (as defined or otherwise provided for in the Note, “Default Interest”) (with respect
to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon
the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake County, Utah.
3. The
Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration Act,
U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”). Notwithstanding
the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event of conflict or variation
between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions
shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict
with or vary from these Arbitration Provisions.
4. Arbitration
Proceedings. Arbitration between the parties will be subject to the following:
4.1 Initiation
of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by giving
written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under Section
9.10 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed
initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 9.10 of the Agreement (the
“Service Date”). After the Service Date, information may be delivered, and notices may be given, by email or fax pursuant
to Section 9.10 of the Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy,
the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent
with the Utah Rules of Civil Procedure.
4.2 Selection
and Payment of Arbitrator.
(a) Within ten (10) calendar
days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that are designated as “neutrals”
or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three (3) designated persons hereunder are referred
to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed Arbitrator must be qualified as
a “neutral” with Utah ADR Services. Within five (5) calendar days after Investor has submitted to Company the names of the
Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators to act as the arbitrator
for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators in writing within such
5-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written notice of such selection to Company.
(b) If Investor fails
to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a) above,
then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators that
are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may then,
within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice to
Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor
fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company
may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to
Investor.
(c) If a Proposed Arbitrator
chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such Proposed Arbitrator
may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the chosen Proposed Arbitrator
declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are otherwise
unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this Paragraph 4.2.
(d) The date that the
Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties to serve
as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator resigns
or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to continue
the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then the arbitrator
shall be selected under the then prevailing rules of the American Arbitration Association.
(e) Subject to Paragraph
4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one party refuses or
fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default
Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.
4.3 Applicability
of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules of Civil
Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation, to the
filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah Rules of Evidence
shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing, it is the parties’
intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the event of any conflict between
the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these Arbitration Provisions shall control.
4.4 Answer
and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating the
Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required deadline,
the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against such
party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within
the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration
Notice, against a party that fails to submit an answer within such time period.
4.5 Related
Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent legal
proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject to
the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration
Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party
files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will
be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails
to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall
be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal
or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined
in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation
Proceedings pursuant to the Arbitration Act.
4.6 Discovery.
Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:
(a) Written discovery
will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written
discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration.
The party seeking written discovery shall always have the burden of showing that all of the standards and limitations set forth in these
Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:
(i) To
facts directly connected with the transactions contemplated by the Agreement.
(ii) To
facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or less
expensive than in the manner requested.
(b) No party shall be
allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission (including
discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three (3) depositions
(excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions will be borne by
the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition of the estimated
attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending the deposition
fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice, then such party
shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must pay the party defending
the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is deemed to be waived as set
forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated attorneys’ fees are
unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken in Utah.
(c) All discovery requests
(including document production requests included in deposition notices) must be submitted in writing to the arbitrator and the other party.
The party submitting the written discovery requests must include with such discovery requests a detailed explanation of how the proposed
discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure. The receiving party
will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the arbitrator an estimate
of the attorneys’ fees and costs associated with responding to such written discovery requests and a written challenge to each applicable
discovery request. After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to one or more discovery requests,
consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding as to the likely attorneys’
fees and costs associated with responding to the discovery requests and issue an order that (i) requires the requesting party to prepay
the attorneys’ fees and costs associated with responding to the discovery requests, and (ii) requires the responding party to respond
to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s finding with respect
to such discovery requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or a challenge to discovery
requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’ fees or costs
associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests (as may be
limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests.
Any party submitting any written discovery requests, including without limitation interrogatories, requests for production subpoenas to
a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before the responding
party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.
(d) In order to allow
a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration
Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not
satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify
such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.
(e) Each party may submit
expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration Commencement
Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete statement of
all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name and qualifications, including
a list of all the expert’s publications within the preceding ten (10) years, and a list of any other cases in which the expert has
testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation to be paid
for the expert’s report and testimony. The parties are entitled to depose any other party’s expert witness one (1) time for
no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter not fairly disclosed in
the expert report.
4.6 Dispositive
Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil Procedure
(a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to, deliver to the arbitrator
and to the other party a memorandum in support (the “Memorandum in Support”) of the Dispositive Motion. Within seven
(7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other party a memorandum
in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within seven (7) calendar days of delivery
of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to the arbitrator and
to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”). If the applicable party
shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the Reply Memorandum as required
above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion shall proceed regardless.
4.7 Confidentiality.
All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation
information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each party
agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration process (including
without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure such information becomes
public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party or its agents, (b) such
information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other
party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior
to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives and legal counsel on a need
to know basis who each agree in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration
Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information
and confidential information upon the written request of either party.
4.8 Authorization;
Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct the
arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the Arbitration proceedings
to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration Award must
be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and
directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a
scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable
the arbitrator to render a decision prior to the end of such 120-day period.
4.9 Relief.
The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which the arbitrator
deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator
may not award exemplary or punitive damages.
4.10 Fees
and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being awarded
the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration, and
(b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.
5. Arbitration
Appeal.
5.1 Initiation
of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period of
thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant elects
to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel of arbitrators
as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein as the “Appeal
Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph 4.1 above with respect
to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee, the Appellant must also
pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond in the amount of 110% of
the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing. In the event an Appellant
delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of
this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will not be further conditioned.
In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within
the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an
Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described in this Paragraph
5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’
agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.
5.2 Selection
and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of
the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person arbitration
panel (the “Appeal Panel”).
(a) Within ten (10)
calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators that are
designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such five (5) designated
persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the avoidance of doubt, each Proposed
Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall not be the arbitrator who rendered the
Arbitration Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after the Appellee has
submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice to the Appellee,
three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select three (3) of
the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators from the
Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.
(b) If the Appellee
fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the Appeal Date pursuant
to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed Appeal Arbitrators, identify
the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service (none of
whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five (5) calendar days after the
Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such
selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of the
arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant may select the three (3) members
of the Appeal Panel from the Appellant’s list of five (5) arbitrators by providing written notice of such selection to the Appellee.
(c) If a selected
Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator may
select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen Proposed
Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3) of the five (5)
designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator selection process
shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators who have already
agreed to serve shall remain on the Appeal Panel.
(d) The date that
all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email) delivered to
both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal Commencement
Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in writing (including
via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel to serve as the lead
arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration
Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon
the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal
Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings,
a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel.
If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected
under the then prevailing rules of the American Arbitration Association.
(d) Subject to Paragraph
5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.
5.3 Appeal
Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall conduct
a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and all other provisions
of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate for a fair and expeditious
disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous evidence and discovery,
together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents filed with the Appeal
Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal Panel shall not permit
the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new witnesses or affidavits,
and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the Arbitration Award.
5.4 Timing.
(a) Within
seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal Panel
copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents
filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may,
but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning
or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7)
calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal
Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s
delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply Memorandum
to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of this subparagraph
(a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final. If the Appellee shall
fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply Memorandum as required
above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed
regardless.
(b) Subject
to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days
of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal
is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).
5.5 Appeal
Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator on
the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety and
make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall
remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive
remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d)
be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees,
including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall,
to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include
Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration
Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.
5.6 Relief.
The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems proper
under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal Panel may
not award exemplary or punitive damages.
5.7 Fees
and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being awarded
the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration and
the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal Panel, which,
for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any
part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery costs, and other
expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including without limitation
in connection with the Appeal).
6. Miscellaneous.
6.1 Severability.
If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall be modified
to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration Provisions
shall remain unaffected and in full force and effect.
6.2 Governing
Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws principles
therein.
6.3 Interpretation.
The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation
of, these Arbitration Provisions.
6.4 Waiver.
No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the party
granting the waiver.
6.5 Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.
[Remainder of page intentionally left blank]
Exhibit 10.4
CONVERTIBLE PROMISSORY NOTE
| May 9, 2024 | U.S. $797,500.00 |
FOR VALUE RECEIVED, China
SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (“Borrower”), promises to pay to Streeterville
Capital, LLC, a Utah limited liability company, or its successors or assigns (“Lender”), $797,500.00 and any
interest, fees, charges, and late fees accrued hereunder on the date that is twelve (12) months after the Purchase Price Date (the “Maturity
Date”) in accordance with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of six percent
(6%) per annum from the Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the
basis of a 360-day year comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance
with the terms of this Note. This Convertible Promissory Note (this “Note”) is issued and made effective as of the
date set forth above (the “Effective Date”). This Note is issued pursuant to that certain Securities Purchase Agreement
dated May 9, 2024, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”).
Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.
This Note carries an OID of
$47,500.00 all of which amount is fully earned as of the Effective Date and included in the initial principal balance. In addition, Borrower
agrees to pay $20,000.00 to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction
costs incurred in connection with the purchase and sale of this Note (the “Transaction Expense Amount”), which amount
will be deducted from the amount funded. The purchase price for this Note shall be $750,000.00 (the “Purchase Price”),
computed as follows: $797,500.00 original principal balance, less the OID. The Purchase Price shall be payable by Lender by wire transfer
of immediately available funds.
1.
Payment; Prepayment; Balance Increase.
1.1.
Payment. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as
defined below), as provided for herein, and delivered to Lender at the address or bank account furnished to Borrower for that purpose.
All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to (c) accrued and
unpaid interest, and thereafter, to (d) principal.
1.2. Prepayment. So
long as no Event of Default (as defined below) has occurred, Borrower shall have the right, exercisable on not less than five (5)
Trading Days prior written notice to Lender to prepay the Outstanding Balance (less such portion of the Outstanding Balance for
which Borrower has received a Conversion Notice (as defined below) from Lender where the applicable Conversion Shares have not yet
been delivered) of this Note, in part or in full, in accordance with this Section 1.2. Any notice of prepayment hereunder (an
“Optional Prepayment Notice”) shall be delivered to Lender at its registered address or through email and shall
state: (i) that Borrower is exercising its right to prepay this Note, and (ii) the date of prepayment, which shall be not less than
five (5) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order
of Lender as may be specified by Lender in writing to Borrower. For the avoidance of doubt, Lender shall be entitled to exercise its
Conversion (as defined below) rights until the Optional Prepayment Date. If Borrower exercises its right to prepay this Note,
Borrower shall make payment to Lender of an amount in cash equal to 120% multiplied by the then Outstanding Balance of this Note
being prepaid (the “Optional Prepayment Amount”). In the event Borrower delivers the Optional Prepayment Amount
to Lender prior to the Optional Prepayment Date, the Optional Prepayment Amount shall not be deemed to have been paid to Lender
until the Optional Prepayment Date. In the event Borrower delivers the Optional Prepayment Amount without an Optional Prepayment
Notice, then the Optional Prepayment Date will be deemed to be the date that is five (5) Trading Days from the date that the
Optional Prepayment Amount was delivered to Lender and Lender shall be entitled to exercise its conversion rights set forth herein
during such five (5) Trading Day period. In addition, if Borrower delivers an Optional Prepayment Notice and fails to pay the
Optional Prepayment Amount due to Lender within five (5) Trading Days following the Optional Prepayment Date, Borrower shall forever
forfeit its right to prepay this Note.
2. Security. This
Note is unsecured.
3. Lender Optional
Conversion.
3.1. Lender
Conversions. Lender has the right at any time after the date that is six (6) months from the Purchase Price Date until the
Outstanding Balance has been paid in full, at its election, to convert (“Lender Conversion”) all or any portion
of the Outstanding Balance into fully paid and non-assessable ordinary shares (“Lender Conversion Shares”), $0.08
par value per share (the “Ordinary Shares”), of Borrower as per the following conversion formula: the amount
being converted (the “Conversion Amount”) divided by the Lender Conversion Price (as defined below). Conversion
notices in the form attached hereto as Exhibit A (each, a “Lender Conversion Notice”) may be effectively
delivered to Borrower by any method set forth in the “Notices” Section of the Purchase Agreement, and all Lender
Conversions shall be cashless and not require further payment from Lender. Borrower shall deliver the Lender Conversion Shares from
any Lender Conversion to Lender in accordance with Section 9 below.
3.2. Lender Conversion
Price. Subject to adjustment as set forth in this Note, the price at which Lender has the right to convert all or any portion of
the Outstanding Balance into Ordinary Shares is $3.00 per share (the “Lender Conversion Price”).
4. Trigger Events,
Defaults and Remedies.
4.1. Trigger
Events. The following are trigger events under this Note (each, a “Trigger Event”): (a) Borrower fails to
deliver any Conversion Shares (as defined below) in accordance with the terms hereof; (b) Borrower fails to pay any principal,
interest, fees, charges, or any other amount when due and payable hereunder; (c) a receiver, trustee or other similar official shall
be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or
shall not be dismissed or discharged within sixty (60) days; (d) Borrower becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (e) Borrower makes a
general assignment for the benefit of creditors; (f) Borrower files a petition for relief under any bankruptcy, insolvency or
similar law (domestic or foreign); (g) an involuntary bankruptcy proceeding is commenced or filed against Borrower; (h) the
occurrence of a Fundamental Transaction without Lender’s prior written consent unless this Note is paid in full in connection
with such Fundamental Transaction, in which case no consent will be required; (i) Borrower fails to observe or perform any covenant
set forth in Section 4 of the Purchase Agreement (other than Section 4(vii) of the Purchase Agreement); (j) Borrower fails to
maintain the Share Reserve (as defined in the Purchase Agreement); (k) Borrower defaults or otherwise fails to observe or perform
any covenant, obligation, condition or agreement of Borrower contained herein or in any other Transaction Document (as defined in
the Purchase Agreement) in any material respect, other than those specifically set forth in this Section 4.1 and Section 4 of the
Purchase Agreement; (l) any representation, warranty or other statement made or furnished by or on behalf of Borrower to Lender
herein, in any Transaction Document, or otherwise in connection with the issuance of this Note is false, incorrect, incomplete or
misleading in any material respect when made or furnished; (m) Borrower effectuates a reverse split of its Ordinary Shares without
ten (10) Trading Days prior written notice to Lender unless the reverse split is required to maintain compliance with the minimum
bid price requirements of the principal market; (n) any money judgment, writ or similar process is entered or filed against Borrower
or any of its property or other assets for more than $500,000.00, and shall remain unvacated, unbonded or unstayed for a period of
twenty (20) calendar days unless otherwise consented to by Lender; (o) Borrower fails to be DWAC Eligible; or (p) Borrower breaches
any covenant or other term or condition contained in any Other Agreements in any material aspects.
4.2. Trigger Event
Remedies. At any time following the occurrence of any Trigger Event, Lender may, at its option, increase the Outstanding Balance
by applying the Trigger Effect (subject to the limitation set forth below).
4.3. Defaults. At
any time following the occurrence of a Trigger Event, Lender may, at its option, send written notice to Borrower demanding that
Borrower cure the Trigger Event within five (5) Trading Days following the date of such written notice. If Borrower fails to cure
the Trigger Event within the required five (5) Trading Day cure period, the Trigger Event will automatically become an event of
default hereunder (each, an “Event of Default”).
4.4. Default
Remedies. At any time and from time to time following the occurrence of any Event of Default, Lender may accelerate this Note by
written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default
Amount.). Notwithstanding the foregoing, upon the occurrence of any Trigger Event described in clauses 4.1(c) – 4.1(g), an
Event of Default will be deemed to have occurred and the Outstanding Balance as of the date of the occurrence of such Trigger Event
shall become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice
required by Lender for the Trigger Event to become an Event of Default.. At any time following the occurrence of any Event of
Default, upon written notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the
applicable Event of Default occurred at an interest rate equal to the lesser of fifteen percent (15%) per annum or the maximum rate
permitted under applicable law (“Default Interest”). For the avoidance of doubt, Lender may continue making
Conversions at any time following a Trigger Event or an Event of Default until such time as the Note is paid in full. In connection
with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other
notice of any kind, and Lender 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
Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as
Lender receives full payment pursuant to this Section 4.4. No such rescission or annulment shall affect any subsequent Trigger Event
or Event of Default or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other
remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to Borrower’s failure to timely deliver Conversion Shares upon Conversion of the Note as required pursuant
to the terms hereof.
5. Unconditional
Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of
Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may
have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions called for herein in
accordance with the terms of this Note.
6. Waiver. No
waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent
to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or
commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
7. Rights Upon
Issuance of Securities.
7.1. Subsequent Equity
Sales. If Borrower or any subsidiary thereof, as applicable, at any time this Note is outstanding, shall sell, issue or grant
any Ordinary Shares, option to purchase Ordinary Shares, right to reprice, preferred shares convertible into Ordinary Shares, debt,
warrants, options or other instruments or securities which are convertible into or exercisable or exchangeable for Ordinary Shares
to Lender or any third party (collectively, the “Equity Securities”) other than Exempt Issuances, including
without limitation any Deemed Issuance, at an effective price per share less than the then effective Lender Conversion Price (such
issuance is referred to herein as a “Dilutive Issuance”), then, the Lender Conversion Price shall be
automatically reduced and only reduced to equal such lower effective price per share, provided that the Lender Conversion Price
shall in no event be less than the Floor Price. If the holder of any Equity Securities so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options, or rights per share which are issued in connection with such Dilutive Issuance, be entitled to receive Ordinary
Shares at an effective price per share that is less than the Lender Conversion Price, such issuance shall be deemed to have occurred
for less than the Lender Conversion Price on the date of such Dilutive Issuance, and the then effective Lender Conversion Price
shall be reduced and only reduced to equal such lower effective price per share. Such adjustments described above to the Lender
Conversion Price shall be permanent (subject to additional adjustments under this section), and shall be made whenever such Equity
Securities are issued. Borrower shall notify Lender, in writing, no later than the Trading Day following the issuance of any Equity
Securities subject to this Section 7.1, indicating therein the applicable issuance price, or applicable reset price, exchange price,
conversion price, or other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarity,
whether or not Borrower provides a Dilutive Issuance Notice pursuant to this Section 7.1, upon the occurrence of any Dilutive
Issuance, on the date of such Dilutive Issuance the Lender Conversion Price shall be lowered to equal the applicable effective price
per share regardless of whether Borrower or Lender accurately refers to such lower effective price per share in any subsequent
Installment Notice or Lender Conversion Notice.
7.2. Adjustment of
Lender Conversion Price upon Subdivision or Combination of Ordinary Shares. Without limiting any provision hereof, if Borrower
at any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or
more classes of its outstanding Ordinary Shares into a greater number of shares, the Lender Conversion Price in effect immediately
prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Borrower at any time on or
after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding Ordinary
Shares into a smaller number of shares, the Lender Conversion Price in effect immediately prior to such combination will be
proportionately increased. Any adjustment pursuant to this Section 7.2 shall become effective immediately after the effective date
of such subdivision or combination. If any event requiring an adjustment under this Section 7.2 occurs during the period that a
Redemption Conversion Price is calculated hereunder, then the calculation of such Redemption Conversion Price shall be adjusted
appropriately to reflect such event.
7.3. Other Events.
In the event that Borrower (or any subsidiary) shall take any action to which the provisions hereof are not strictly applicable, or,
if applicable, would not operate to protect Lender from dilution or if any event occurs of the type contemplated by the provisions
of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features), then Borrower’s board of directors shall in
good faith determine and implement an appropriate adjustment in the Lender Conversion Price so as to protect the rights of Lender,
provided that no such adjustment pursuant to this Section 7.3 will increase the Lender Conversion Price as otherwise determined
pursuant to this Section 7, provided further that if Lender does not accept such adjustments as appropriately protecting its
interests hereunder against such dilution, then Borrower’s board of directors and Lender shall agree, in good faith, upon an
independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be
final and binding and whose fees and expenses shall be borne by Borrower.
8. Redemptions.
8.1. Redemption
Conversion Price. Subject to the adjustments set forth herein, the conversion price for each Redemption Conversion (the
“Redemption Conversion Price”) shall be the lesser of (a) the Lender Conversion Price, and (b) the Market
Price.
8.2. Redemptions.
Beginning on the date that is six (6) months from the Purchase Price Date, Lender shall have the right, exercisable at any time in
its sole and absolute discretion, to redeem all or any portion of the Note (such amount, the “Redemption
Amount”), subject to the Maximum Monthly Redemption Amount, by providing Borrower with a notice substantially in the form
attached hereto as Exhibit B (each, a “Redemption Notice”, and each date on which Lender delivers a
Redemption Notice, a “Redemption Date”). For the avoidance of doubt, Lender may submit to Borrower one (1) or
more Redemption Notices in any given calendar month; provided that the aggregate Redemption Amounts in such calendar month do not
exceed the Maximum Monthly Redemption Amount. Payments of each Redemption Amount may be made (a) in cash, or (b) by converting such
Redemption Amount into Ordinary Shares (“Redemption Conversion Shares”, and together with the Lender Conversion
Shares, the “Conversion Shares”) in accordance with this Section 8.2 (each, a “Redemption
Conversion”) per the following formula: the number of Redemption Conversion Shares equals the portion of the applicable
Redemption Amount being converted divided by the Redemption Conversion Price, or (c) by any combination of the foregoing, so long as
the cash is delivered to Lender on the third (3rd) Trading Day immediately following the applicable Redemption Date and
the Redemption Conversion Shares are delivered to Lender on or before the applicable Delivery Date (as defined below).
Notwithstanding the foregoing, Borrower will not be entitled to elect a Redemption Conversion with respect to any portion of any
applicable Redemption Amount and shall be required to pay the Redemption Amount in cash, if on the applicable Redemption Date there
is an Equity Conditions Failure, and such failure is not waived in writing by Lender. Notwithstanding that failure to repay this
Note in full by the Maturity Date is a Trigger Event, the Redemption Dates shall continue after the Maturity Date pursuant to
this Section 8.2 until the Outstanding Balance is repaid in full.
8.3. Allocation of
Redemption Amounts. Following its receipt of a Redemption Notice, Borrower may either ratify Lender’s proposed allocation
in the applicable Redemption Notice or elect to change the allocation by written notice to Lender by email or fax within twenty-four
(24) hours of its receipt of such Redemption Notice, so long as the sum of the cash payments and the amount of Redemption
Conversions equal the applicable Redemption Amount. If Borrower fails to notify Lender of its election to change the allocation
prior to the deadline set forth in the previous sentence, it shall be deemed to have ratified and accepted the allocation set forth
in the applicable Redemption Notice prepared by Lender. Borrower acknowledges and agrees that the amounts and calculations set forth
thereon are subject to correction or adjustment because of error, mistake, or any adjustment resulting from a Trigger Event or other
adjustment permitted under the Transaction Documents (an “Adjustment”). Furthermore, no error or mistake in the
preparation of such notices, or failure to apply any Adjustment that could have been applied prior to the preparation of a
Redemption Notice may be deemed a waiver of Lender’s right to enforce the terms of any Note, even if such error, mistake, or
failure to include an Adjustment arises from Lender’s own calculation. Borrower shall deliver the Redemption Conversion Shares
from any Redemption Conversion to Lender in accordance with Section 9 below on or before each applicable Delivery Date.
9. Method of
Conversion Share Delivery. On or before the close of business on the third (3rd) Trading Day following each
Redemption Date or the third (3rd) Trading Day following the date of delivery of a Lender Conversion Notice, as
applicable (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such time and such Conversion
Shares are eligible for delivery via DWAC, deliver or cause its transfer agent to deliver the applicable Conversion Shares
electronically via DWAC to the account designated by Lender in the applicable Lender Conversion Notice or Redemption Notice. If
Borrower is not DWAC Eligible or such Conversion Shares are not eligible for delivery via DWAC, it shall deliver to Lender or its
broker (as designated in the Lender Conversion Notice or Redemption Notice), via reputable overnight courier, a certificate
representing the number of Ordinary Shares equal to the number of Conversion Shares to which Lender shall be entitled, registered in
the name of Lender or its designee. For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by
the Delivery Date unless Lender or its broker, as applicable, has actually received the certificate representing the applicable
Conversion Shares no later than the close of business on the relevant Delivery Date pursuant to the terms set forth above.
10. Conversion
Delays. If Borrower fails to deliver Conversion Shares in accordance with the timeframe stated in Section 9, Lender may at any
time prior to receiving the applicable Conversion Shares rescind in whole or in part such Conversion, with a corresponding increase
to the Outstanding Balance (any returned amount will tack back to the Purchase Price Date for purposes of determining the holding
period under Rule 144). In addition, for each Conversion, in the event that Conversion Shares are not delivered by the Delivery
Date, a late fee equal to 2% of the applicable Conversion Share Value rounded to the nearest multiple of $100.00 but with a floor of
$500.00 per day (but in any event the cumulative amount of such late fees for each Conversion shall not exceed 200% of the
applicable Conversion Share Value) will be assessed for each day after the Delivery Date until Lender Conversion Share delivery is
made; and such late fees will be added to the Outstanding Balance (such fees, the “Conversion Delay Late
Fees”).
11. Sales
Limitation. Lender agrees and covenants that so long as no Event of Default has occurred, it will not sell Conversion Shares or
the Redemption Conversion Shares on the open market in any given calendar week (being from Sunday to Saturday of that week) that the
aggregate amount of such Conversion Shares and the Redemption Conversion Shares exceed fifteen percent (15%) of the weekly trading
volume for the Ordinary Shares during any such week. For illustration purposes only, if the Ordinary Shares had a weekly trading
volume of 10,000,000 Ordinary Shares in a given calendar week, Lender could only sell 1,500,000 Ordinary Shares during such calendar
week. Borrower’s sole and exclusive remedy in the event of the breach by Lender of the foregoing volume limitation shall be to
be reduce the Outstanding Balance by twice the amount Lender sold that exceeded the volume limitation.
12. Restriction on
Equity Sales. If at any time after the date that is ninety (90) days from the Purchase Price Date, Borrower is unable to issue
Ordinary Shares to Lender as result of any lock-up or other agreement or restriction prohibiting the issuance of Ordinary Shares for
a certain period of time, then the Outstanding Balance will automatically be increased by two percent (2%) for each thirty (30) day
period that Borrower is prohibited from issuing Ordinary Shares (which increase shall be pro-rated for any partial period). For the
avoidance of doubt, such increase to the Outstanding Balance shall be in addition to all other rights and remedies available to
Lender under this Note and the other Transaction Documents and shall not be in lieu of, nor deemed to be a waiver of any other
rights or remedies available to Lender under this Note or any of the other Transaction Documents.
13. Ownership
Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, Borrower shall
not effect any conversion of this Note to the extent that after giving effect to such conversion would cause Lender (together with
its affiliates) to beneficially own a number of shares exceeding 9.99% of the number of Ordinary Shares outstanding on such date
(including for such purpose the Ordinary Shares issuable upon such issuance) (the “Maximum Percentage”). For
purposes of this section, beneficial ownership of Ordinary Shares will be determined pursuant to Section 13(d) of the 1934 Act. By
written notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to itself but any such waiver will not
be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and
non-waivable and shall apply to all affiliates and assigns of Lender.
14. Opinion of
Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to have any
such opinion provided by its counsel.
15. Governing Law;
Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement to
determine the proper venue for any disputes are incorporated herein by this reference.
16. Arbitration of
Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined in
the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.
17. Cancellation.
After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be
deemed canceled, and shall not be reissued.
18. Amendments.
The prior written consent of both parties hereto shall be required for any change or amendment to this Note.
19. Assignments.
Borrower may not assign this Note without the prior written consent of Lender. This Note and any Ordinary Shares issued upon
conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent of Borrower.
20. Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.”
21. Liquidated
Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note,
Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’
inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly,
Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not
penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Lender’s and
Borrower’s expectations that any such liquidated damages will tack back to the Purchase Price Date for purposes of determining
the holding period under Rule 144).
22. Severability.
If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of
Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.
[Remainder of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF, Borrower
has caused this Note to be duly executed as of the Effective Date.
| |
BORROWER: |
| |
|
| |
China SXT Pharmaceuticals, Inc. |
| |
|
| |
By: |
|
| |
|
Feng Zhou, CEO |
| ACKNOWLEDGED, ACCEPTED AND AGREED: |
|
| |
|
| LENDER: |
|
| |
|
| Streeterville Capital, LLC |
|
| |
|
| By: |
|
|
| |
John M. Fife, President |
|
[Signature Page to Convertible
Promissory Note]
ATTACHMENT 1
DEFINITIONS
For purposes of this
Note, the following terms shall have the following meanings:
A1.
“Closing Bid Price” and “Closing Trade Price” means the last closing bid price and last closing
trade price, respectively, for the Ordinary Shares on its principal market, as reported by Bloomberg, or, if its principal market begins
to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then
the last bid price or last trade price, respectively, of the Ordinary Shares prior to 4:00:00 p.m., New York time, as reported by
Bloomberg, or, if its principal market is not the principal securities exchange or trading market for the Ordinary Shares, the last closing
bid price or last trade price, respectively, of the Ordinary Shares on the principal securities exchange or trading market where the Ordinary
Shares is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price,
respectively, of the Ordinary Shares in the over-the-counter market on the electronic bulletin board for the Ordinary Shares as reported
by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for the Ordinary Shares by Bloomberg, the average
of the bid prices, or the ask prices, respectively, of any market makers for the Ordinary Shares as reported by Nasdaq and any successor
thereto. If the Closing Bid Price or the Closing Trade Price cannot be calculated for the Ordinary Shares on a particular date on any
of the foregoing bases, the Closing Bid Price or the Closing Trade Price (as the case may be) of the Ordinary Shares on such date shall
be the fair market value as mutually determined by Lender and Borrower. All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction during such period.
A2.
“Conversion” means a Lender Conversion under Section 3 or a Redemption Conversion under Section 8.
A3.
“Conversion Share Value” means the product of the number of Conversion Shares deliverable pursuant to any Conversion
Notice multiplied by the Closing Trade Price of the Ordinary Shares on the Delivery Date for such Conversion.
A4.
“Deemed Issuance” means an issuance of Ordinary Shares that shall be deemed to have occurred on the latest possible
permitted date pursuant to the terms hereof in the event Borrower fails to deliver Conversion Shares as and when required pursuant to
Section 9 of this Note. For the avoidance of doubt, if Borrower has elected or is deemed under Section 8.3 to have elected to pay a Redemption
Amount in Redemption Conversion Shares and fails to deliver such Redemption Conversion Shares, such failure shall be considered a Deemed
Issuance hereunder even if an Equity Conditions Failure exists at that time or other relevant date of determination.
A5.
“DTC” means the Depository Trust Company or any successor thereto.
A6.
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer program.
A7.
“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.
A8.
“DWAC Eligible” means that (a) Borrower’s Ordinary Shares is eligible at DTC for full services pursuant
to DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system; (b) Borrower has been
approved (without revocation) by DTC’s underwriting department; (c) Borrower’s transfer agent is approved as an agent in the
DTC/FAST Program; (d) the Conversion Shares are otherwise eligible for delivery via DWAC; and (e) Borrower’s transfer agent does
not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.
Attachment 1 to Convertible Promissory Note, Page 1
A9.
“Equity Conditions Failure” means that any of the following conditions has not been satisfied on any given Redemption
Date: (a) with respect to the applicable date of determination all of the Redemption Conversion Shares would be (i) registered for
trading under applicable federal and state securities laws, (ii) freely tradable under Rule 144, or (iii) without the need for registration
under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of this Note); (b) the
applicable Redemption Conversion Shares would be eligible for immediate resale by Lender; (c) no Event of Default shall have occurred;
(d) the average and median daily dollar volume of the Ordinary Share on its principal market for the previous two hundred (200) Trading
Days shall be greater than $200,000.00; and (e) the five (5) day VWAP of the Ordinary Share is greater than or equal to $0.01.
A10.
“Exempt Issuance” means (i) any conventional bank loans not involving any convertible or other security of the
Company; (ii) private placements of unregistered, restricted Ordinary Shares of the Company, not involving any investment bank with no
registration rights and not eligible for voluntary registration by the Company for a period of ninety (90) days from the Closing Date;
(iii) Ordinary Shares or options issued to employees, officers or directors of the Company pursuant to the Company’s equity incentive
plan or pursuant to the compensation agreements previously authorized by the Board of Directors; (iv) securities issued upon the exercise
or exchange of or conversion of securities exercisable or exchangeable for or convertible into ordinary shares issued and outstanding
on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than by virtue of this
Offering or in connection with stock splits or combinations) or to extend the term of such securities; (v) securities issued pursuant
to acquisitions or strategic transactions and the payment of contractor invoices in the ordinary course of business approved by a majority
of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith
during the ninety-day period following the Closing Date and provided that any such issuance shall only be to a Person (or to the equityholders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with
the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.
A11.
“Floor Price” means $0.10.
A12.
“Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving
corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more
related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective
properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall, directly or indirectly, in
one or more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted by the
holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held
by the person or persons making or party to, or associated or affiliated with the persons or entities making or party to, such purchase,
tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions,
consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding
shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities making
or party to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement
or other business combination), or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related
transactions, reorganize, recapitalize or reclassify the Ordinary Shares, other than an increase in the number of authorized shares of
Borrower’s Ordinary Shares, or (b) any “person” or “group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding voting stock of Borrower.
Attachment 1 to Convertible Promissory Note, Page 2
A13.
“Major Trigger Event” means any Trigger Event occurring under Sections 4.1(b) – 4.1(j).
A14.
“Mandatory Default Amount” means the Outstanding Balance following the application of the Trigger Effect.
A15.
“Market Capitalization” means a number equal to (a) the average VWAP of the Ordinary Shares for the immediately
preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of outstanding Ordinary Shares as reported on Borrower’s
most recently filed Form 10-Q or Form 10-K.
A16.
“Market Price” means 80% multiplied by the lowest daily VWAP during the fifteen (15) Trading Days immediately
preceding the applicable Redemption Conversion.
A17.
“Maximum Monthly Redemption Amount” means $300,000.00 per calendar month.
A18.
“Minor Trigger Event” means any Trigger Event that is not a Major Trigger Event.
A19.
“OID” means an original issue discount.
A20.
“Other Agreements” means, collectively, all existing and future agreements and instruments between, among or
by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand.
A21.
“Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as
the case may be, pursuant to the terms hereof for payment, Conversion, offset, or otherwise, plus the OID, accrued but unpaid interest,
collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes and
fees related to Conversions, and any other fees or charges (including without limitation Conversion Delay Late Fees) incurred under this
Note.
A22.
“Purchase Price Date” means the date the Purchase Price is delivered by Lender to Borrower.
A23.
“Trading Day” means any day on which Borrower’s principal market is open for trading.
A24.
“Trigger Effect” means multiplying the Outstanding Balance as of the date the applicable Trigger Event occurred
by (a) fifteen percent (15%) for each occurrence of any Major Trigger Event, or (b) five percent (5%) for each occurrence of any Minor
Trigger Event, and then adding the resulting product to the Outstanding Balance as of the date the applicable Trigger Event occurred,
with the sum of the foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Trigger Event occurred;
provided that the Trigger Effect may only be applied three (3) times hereunder with respect to Major Trigger Events and three (3) times
hereunder with respect to Minor Trigger Events; and provided further that the Trigger Effect shall not apply to any Trigger Event pursuant
to Section 4.1(a) hereof.
A25.
“VWAP” means the volume weighted average price of the Ordinary Shares on the principal market for a particular
Trading Day or set of Trading Days, as the case may be, as reported by Bloomberg.
[Remainder of page intentionally
left blank]
Attachment 1 to Convertible Promissory Note, Page 3
EXHIBIT A
Streeterville Capital, LLC
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
| China SXT Pharmaceuticals, Inc. | Date: | |
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
LENDER CONVERSION NOTICE
The above-captioned Lender hereby gives notice
to China SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (the “Borrower”), pursuant to that certain
Convertible Promissory Note made by Borrower in favor of Lender on May 9, 2024 (the “Note”), that Lender elects to
convert the portion of the Note balance set forth below into fully paid and non-assessable Ordinary Shares of Borrower as of the date
of conversion specified below. Said conversion shall be based on the Lender Conversion Price set forth below. In the event of a conflict
between this Lender Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole
discretion, Lender may provide a new form of Lender Conversion Notice to conform to the Note. Capitalized terms used in this notice without
definition shall have the meanings given to them in the Note.
| A. | Date of Conversion: ____________ |
| B. | Lender Conversion #: ____________ |
| C. | Conversion Amount: ____________ |
| D. | Lender Conversion Price: _______________ |
| E. | Lender Conversion Shares: _______________ (C divided by D) |
| F. | Remaining Outstanding Balance of Note: ____________* |
| * | Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control
in the event of any dispute between the terms of this Lender Conversion Notice and such Transaction Documents. |
Please transfer the Lender Conversion Shares
electronically (via DWAC) to the following account:
| Broker: _______________________ |
|
Address: |
____________________________ |
| DTC#: ________________________ |
|
|
____________________________ |
| Account #: _______________________ |
|
|
____________________________ |
| Account Name: ____________________ |
|
|
|
To the extent the Lender
Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender
via reputable overnight courier after receipt of this Lender Conversion Notice (by facsimile transmission or otherwise) to:
_____________________________________
_____________________________________
_____________________________________
[Signature Page Follows]
Exhibit A to Convertible Promissory Note, Page 1
Sincerely, |
|
| |
|
Lender: |
|
| |
|
| Streeterville Capital, LLC |
|
| |
|
| By: |
|
|
| |
John M. Fife, President |
|
Exhibit A to Convertible Promissory Note, Page 2
EXHIBIT B
Streeterville Capital, LLC
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
| China SXT Pharmaceuticals, Inc. | Date: | |
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
REDEMPTION NOTICE
The above-captioned Lender hereby gives notice
to China SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (the “Borrower”), pursuant to that certain
Convertible Promissory Note made by Borrower in favor of Lender on May 9, 2024 (the “Note”), that Lender elects to
redeem a portion of the Note in Redemption Conversion Shares or in cash as set forth below. In the event of a conflict between this Redemption
Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole discretion, Lender may provide
a new form of Redemption Notice to conform to the Note. Capitalized terms used in this notice without definition shall have the meanings
given to them in the Note.
REDEMPTION INFORMATION
| A. | Redemption Date: ____________, 202_ |
| B. | Redemption Amount: ____________ |
| C. | Portion of Redemption Amount to be Paid in Cash: ____________ |
| D. | Portion of Redemption Amount to be Converted into Ordinary Shares: ____________ (B minus C) |
| E. | Redemption Conversion Price: _______________ (lower of (i) Lender Conversion Price in effect and (ii)
Market Price as of Redemption Date) |
| F. | Redemption Conversion Shares: _______________ (D divided by E) |
| G. | Remaining Outstanding Balance of Note: ____________ * |
| * | Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control
in the event of any dispute between the terms of this Redemption Notice and such Transaction Documents. |
Please transfer the Redemption Conversion
Shares, if applicable, electronically (via DWAC) to the following account:
| Broker: _______________________ |
|
Address: |
____________________________ |
| DTC#: ________________________ |
|
|
____________________________ |
| Account #: _______________________ |
|
|
____________________________ |
| Account Name: ____________________ |
|
|
|
To the extent the Redemption
Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender
via reputable overnight courier after receipt of this Redemption Notice (by facsimile transmission or otherwise) to:
_____________________________________
_____________________________________
_____________________________________
Exhibit B to Convertible Promissory Note, Page 1
Sincerely, |
|
| |
|
Lender: |
|
| |
|
| Streeterville Capital, LLC |
|
| |
|
| By: |
|
|
| |
John M. Fife, President |
|
Exhibit B to Convertible Promissory Note, Page 2
Exhibit 10.5
CONVERTIBLE PROMISSORY NOTE
| March 27, 2024 | U.S. $531,666.67 |
FOR VALUE RECEIVED, China
SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (“Borrower”), promises to pay to Streeterville
Capital, LLC, a Utah limited liability company, or its successors or assigns (“Lender”), $531,666.67 and any
interest, fees, charges, and late fees accrued hereunder on the date that is twelve (12) months after the Purchase Price Date (the “Maturity
Date”) in accordance with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of six percent
(6%) per annum from the Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the
basis of a 360-day year comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance
with the terms of this Note. This Convertible Promissory Note (this “Note”) is issued and made effective as of the
date set forth above (the “Effective Date”). This Note is issued pursuant to that certain Securities Purchase Agreement
dated March 27, 2024, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”).
Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.
This Note carries an OID of
$31,666.67 all of which amount is fully earned as of the Effective Date and included in the initial principal balance. In addition, Borrower
agrees to pay $20,000.00 to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction
costs incurred in connection with the purchase and sale of this Note (the “Transaction Expense Amount”), which amount
will be deducted from the amount funded. The purchase price for this Note shall be $500,000.00 (the “Purchase Price”),
computed as follows: $531,666.67 original principal balance, less the OID. The Purchase Price shall be payable by Lender by wire transfer
of immediately available funds.
1.
Payment; Prepayment; Balance Increase.
1.1.
Payment. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as
defined below), as provided for herein, and delivered to Lender at the address or bank account furnished to Borrower for that purpose.
All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to (c) accrued and
unpaid interest, and thereafter, to (d) principal.
1.2. Prepayment. So
long as no Event of Default (as defined below) has occurred, Borrower shall have the right, exercisable on not less than five (5)
Trading Days prior written notice to Lender to prepay the Outstanding Balance (less such portion of the Outstanding Balance for
which Borrower has received a Conversion Notice (as defined below) from Lender where the applicable Conversion Shares have not yet
been delivered) of this Note, in part or in full, in accordance with this Section 1.2. Any notice of prepayment hereunder (an
“Optional Prepayment Notice”) shall be delivered to Lender at its registered address or through email and shall
state: (i) that Borrower is exercising its right to prepay this Note, and (ii) the date of prepayment, which shall be not less than
five (5) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order
of Lender as may be specified by Lender in writing to Borrower. For the avoidance of doubt, Lender shall be entitled to exercise its
Conversion (as defined below) rights until the Optional Prepayment Date. If Borrower exercises its right to prepay this Note,
Borrower shall make payment to Lender of an amount in cash equal to 120% multiplied by the then Outstanding Balance of this Note
being prepaid (the “Optional Prepayment Amount”). In the event Borrower delivers the Optional Prepayment Amount
to Lender prior to the Optional Prepayment Date, the Optional Prepayment Amount shall not be deemed to have been paid to Lender
until the Optional Prepayment Date. In the event Borrower delivers the Optional Prepayment Amount without an Optional Prepayment
Notice, then the Optional Prepayment Date will be deemed to be the date that is five (5) Trading Days from the date that the
Optional Prepayment Amount was delivered to Lender and Lender shall be entitled to exercise its conversion rights set forth herein
during such five (5) Trading Day period. In addition, if Borrower delivers an Optional Prepayment Notice and fails to pay the
Optional Prepayment Amount due to Lender within five (5) Trading Days following the Optional Prepayment Date, Borrower shall forever
forfeit its right to prepay this Note.
2. Security. This
Note is unsecured.
3. Lender Optional
Conversion.
3.1. Lender
Conversions. Lender has the right at any time after the date that is six (6) months from the Purchase Price Date until the
Outstanding Balance has been paid in full, at its election, to convert (“Lender Conversion”) all or any portion
of the Outstanding Balance into fully paid and non-assessable ordinary shares (“Lender Conversion Shares”), $0.08
par value per share (the “Ordinary Shares”), of Borrower as per the following conversion formula: the amount
being converted (the “Conversion Amount”) divided by the Lender Conversion Price (as defined below). Conversion
notices in the form attached hereto as Exhibit A (each, a “Lender Conversion Notice”) may be effectively
delivered to Borrower by any method set forth in the “Notices” Section of the Purchase Agreement, and all Lender
Conversions shall be cashless and not require further payment from Lender. Borrower shall deliver the Lender Conversion Shares from
any Lender Conversion to Lender in accordance with Section 9 below.
3.2. Lender Conversion
Price. Subject to adjustment as set forth in this Note, the price at which Lender has the right to convert all or any portion of
the Outstanding Balance into Ordinary Shares is $3.00 per share (the “Lender Conversion Price”).
4. Trigger Events,
Defaults and Remedies.
4.1. Trigger
Events. The following are trigger events under this Note (each, a “Trigger Event”): (a) Borrower fails to
deliver any Conversion Shares (as defined below) in accordance with the terms hereof; (b) Borrower fails to pay any principal,
interest, fees, charges, or any other amount when due and payable hereunder; (c) a receiver, trustee or other similar official shall
be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or
shall not be dismissed or discharged within sixty (60) days; (d) Borrower becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (e) Borrower makes a
general assignment for the benefit of creditors; (f) Borrower files a petition for relief under any bankruptcy, insolvency or
similar law (domestic or foreign); (g) an involuntary bankruptcy proceeding is commenced or filed against Borrower; (h) the
occurrence of a Fundamental Transaction without Lender’s prior written consent unless this Note is paid in full in connection
with such Fundamental Transaction, in which case no consent will be required; (i) Borrower fails to observe or perform any covenant
set forth in Section 4 of the Purchase Agreement (other than Section 4(vii) of the Purchase Agreement); (j) Borrower fails to
maintain the Share Reserve (as defined in the Purchase Agreement); (k) Borrower defaults or otherwise fails to observe or perform
any covenant, obligation, condition or agreement of Borrower contained herein or in any other Transaction Document (as defined in
the Purchase Agreement) in any material respect, other than those specifically set forth in this Section 4.1 and Section 4 of the
Purchase Agreement; (l) any representation, warranty or other statement made or furnished by or on behalf of Borrower to Lender
herein, in any Transaction Document, or otherwise in connection with the issuance of this Note is false, incorrect, incomplete or
misleading in any material respect when made or furnished; (m) Borrower effectuates a reverse split of its Ordinary Shares without
ten (10) Trading Days prior written notice to Lender unless the reverse split is required to maintain compliance with the minimum
bid price requirements of the principal market; (n) any money judgment, writ or similar process is entered or filed against Borrower
or any of its property or other assets for more than $500,000.00, and shall remain unvacated, unbonded or unstayed for a period of
twenty (20) calendar days unless otherwise consented to by Lender; (o) Borrower fails to be DWAC Eligible; or (p) Borrower breaches
any covenant or other term or condition contained in any Other Agreements in any material aspects.
4.2. Trigger Event
Remedies. At any time following the occurrence of any Trigger Event, Lender may, at its option, increase the Outstanding Balance
by applying the Trigger Effect (subject to the limitation set forth below).
4.3. Defaults. At
any time following the occurrence of a Trigger Event, Lender may, at its option, send written notice to Borrower demanding that
Borrower cure the Trigger Event within five (5) Trading Days following the date of such written notice. If Borrower fails to cure
the Trigger Event within the required five (5) Trading Day cure period, the Trigger Event will automatically become an event of
default hereunder (each, an “Event of Default”).
4.4. Default
Remedies. At any time and from time to time following the occurrence of any Event of Default, Lender may accelerate this Note by
written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default
Amount.). Notwithstanding the foregoing, upon the occurrence of any Trigger Event described in clauses 4.1(c) – 4.1(g), an
Event of Default will be deemed to have occurred and the Outstanding Balance as of the date of the occurrence of such Trigger Event
shall become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice
required by Lender for the Trigger Event to become an Event of Default.. At any time following the occurrence of any Event of
Default, upon written notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the
applicable Event of Default occurred at an interest rate equal to the lesser of fifteen percent (15%) per annum or the maximum rate
permitted under applicable law (“Default Interest”). For the avoidance of doubt, Lender may continue making
Conversions at any time following a Trigger Event or an Event of Default until such time as the Note is paid in full. In connection
with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other
notice of any kind, and Lender 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
Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as
Lender receives full payment pursuant to this Section 4.4. No such rescission or annulment shall affect any subsequent Trigger Event
or Event of Default or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other
remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to Borrower’s failure to timely deliver Conversion Shares upon Conversion of the Note as required pursuant
to the terms hereof.
5. Unconditional
Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of
Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may
have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions called for herein in
accordance with the terms of this Note.
6. Waiver. No
waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent
to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or
commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
7. Rights Upon
Issuance of Securities.
7.1. Subsequent Equity
Sales. If Borrower or any subsidiary thereof, as applicable, at any time this Note is outstanding, shall sell, issue or grant
any Ordinary Shares, option to purchase Ordinary Shares, right to reprice, preferred shares convertible into Ordinary Shares, debt,
warrants, options or other instruments or securities which are convertible into or exercisable or exchangeable for Ordinary Shares
to Lender or any third party (collectively, the “Equity Securities”) other than Exempt Issuances, including
without limitation any Deemed Issuance, at an effective price per share less than the then effective Lender Conversion Price (such
issuance is referred to herein as a “Dilutive Issuance”), then, the Lender Conversion Price shall be
automatically reduced and only reduced to equal such lower effective price per share, provided that the Lender Conversion Price
shall in no event be less than the Floor Price. If the holder of any Equity Securities so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options, or rights per share which are issued in connection with such Dilutive Issuance, be entitled to receive Ordinary
Shares at an effective price per share that is less than the Lender Conversion Price, such issuance shall be deemed to have occurred
for less than the Lender Conversion Price on the date of such Dilutive Issuance, and the then effective Lender Conversion Price
shall be reduced and only reduced to equal such lower effective price per share. Such adjustments described above to the Lender
Conversion Price shall be permanent (subject to additional adjustments under this section), and shall be made whenever such Equity
Securities are issued. Borrower shall notify Lender, in writing, no later than the Trading Day following the issuance of any Equity
Securities subject to this Section 7.1, indicating therein the applicable issuance price, or applicable reset price, exchange price,
conversion price, or other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarity,
whether or not Borrower provides a Dilutive Issuance Notice pursuant to this Section 7.1, upon the occurrence of any Dilutive
Issuance, on the date of such Dilutive Issuance the Lender Conversion Price shall be lowered to equal the applicable effective price
per share regardless of whether Borrower or Lender accurately refers to such lower effective price per share in any subsequent
Installment Notice or Lender Conversion Notice.
7.2. Adjustment of
Lender Conversion Price upon Subdivision or Combination of Ordinary Shares. Without limiting any provision hereof, if Borrower
at any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or
more classes of its outstanding Ordinary Shares into a greater number of shares, the Lender Conversion Price in effect immediately
prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Borrower at any time on or
after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding Ordinary
Shares into a smaller number of shares, the Lender Conversion Price in effect immediately prior to such combination will be
proportionately increased. Any adjustment pursuant to this Section 7.2 shall become effective immediately after the effective date
of such subdivision or combination. If any event requiring an adjustment under this Section 7.2 occurs during the period that a
Redemption Conversion Price is calculated hereunder, then the calculation of such Redemption Conversion Price shall be adjusted
appropriately to reflect such event.
7.3. Other Events.
In the event that Borrower (or any subsidiary) shall take any action to which the provisions hereof are not strictly applicable, or,
if applicable, would not operate to protect Lender from dilution or if any event occurs of the type contemplated by the provisions
of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features), then Borrower’s board of directors shall in
good faith determine and implement an appropriate adjustment in the Lender Conversion Price so as to protect the rights of Lender,
provided that no such adjustment pursuant to this Section 7.3 will increase the Lender Conversion Price as otherwise determined
pursuant to this Section 7, provided further that if Lender does not accept such adjustments as appropriately protecting its
interests hereunder against such dilution, then Borrower’s board of directors and Lender shall agree, in good faith, upon an
independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be
final and binding and whose fees and expenses shall be borne by Borrower.
8. Redemptions.
8.1. Redemption
Conversion Price. Subject to the adjustments set forth herein, the conversion price for each Redemption Conversion (the
“Redemption Conversion Price”) shall be the lesser of (a) the Lender Conversion Price, and (b) the Market
Price.
8.2. Redemptions.
Beginning on the date that is six (6) months from the Purchase Price Date, Lender shall have the right, exercisable at any time in
its sole and absolute discretion, to redeem all or any portion of the Note (such amount, the “Redemption
Amount”), subject to the Maximum Monthly Redemption Amount, by providing Borrower with a notice substantially in the form
attached hereto as Exhibit B (each, a “Redemption Notice”, and each date on which Lender delivers a
Redemption Notice, a “Redemption Date”). For the avoidance of doubt, Lender may submit to Borrower one (1) or
more Redemption Notices in any given calendar month; provided that the aggregate Redemption Amounts in such calendar month do not
exceed the Maximum Monthly Redemption Amount. Payments of each Redemption Amount may be made (a) in cash, or (b) by converting such
Redemption Amount into Ordinary Shares (“Redemption Conversion Shares”, and together with the Lender Conversion
Shares, the “Conversion Shares”) in accordance with this Section 8.2 (each, a “Redemption
Conversion”) per the following formula: the number of Redemption Conversion Shares equals the portion of the applicable
Redemption Amount being converted divided by the Redemption Conversion Price, or (c) by any combination of the foregoing, so long as
the cash is delivered to Lender on the third (3rd) Trading Day immediately following the applicable Redemption Date and
the Redemption Conversion Shares are delivered to Lender on or before the applicable Delivery Date (as defined below).
Notwithstanding the foregoing, Borrower will not be entitled to elect a Redemption Conversion with respect to any portion of any
applicable Redemption Amount and shall be required to pay the Redemption Amount in cash, if on the applicable Redemption Date there
is an Equity Conditions Failure, and such failure is not waived in writing by Lender. Notwithstanding that failure to repay this
Note in full by the Maturity Date is a Trigger Event, the Redemption Dates shall continue after the Maturity Date pursuant to
this Section 8.2 until the Outstanding Balance is repaid in full.
8.3. Allocation of
Redemption Amounts. Following its receipt of a Redemption Notice, Borrower may either ratify Lender’s proposed allocation
in the applicable Redemption Notice or elect to change the allocation by written notice to Lender by email or fax within twenty-four
(24) hours of its receipt of such Redemption Notice, so long as the sum of the cash payments and the amount of Redemption
Conversions equal the applicable Redemption Amount. If Borrower fails to notify Lender of its election to change the allocation
prior to the deadline set forth in the previous sentence, it shall be deemed to have ratified and accepted the allocation set forth
in the applicable Redemption Notice prepared by Lender. Borrower acknowledges and agrees that the amounts and calculations set forth
thereon are subject to correction or adjustment because of error, mistake, or any adjustment resulting from a Trigger Event or other
adjustment permitted under the Transaction Documents (an “Adjustment”). Furthermore, no error or mistake in the
preparation of such notices, or failure to apply any Adjustment that could have been applied prior to the preparation of a
Redemption Notice may be deemed a waiver of Lender’s right to enforce the terms of any Note, even if such error, mistake, or
failure to include an Adjustment arises from Lender’s own calculation. Borrower shall deliver the Redemption Conversion Shares
from any Redemption Conversion to Lender in accordance with Section 9 below on or before each applicable Delivery Date.
9. Method of
Conversion Share Delivery. On or before the close of business on the third (3rd) Trading Day following each
Redemption Date or the third (3rd) Trading Day following the date of delivery of a Lender Conversion Notice, as
applicable (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such time and such Conversion
Shares are eligible for delivery via DWAC, deliver or cause its transfer agent to deliver the applicable Conversion Shares
electronically via DWAC to the account designated by Lender in the applicable Lender Conversion Notice or Redemption Notice. If
Borrower is not DWAC Eligible or such Conversion Shares are not eligible for delivery via DWAC, it shall deliver to Lender or its
broker (as designated in the Lender Conversion Notice or Redemption Notice), via reputable overnight courier, a certificate
representing the number of Ordinary Shares equal to the number of Conversion Shares to which Lender shall be entitled, registered in
the name of Lender or its designee. For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by
the Delivery Date unless Lender or its broker, as applicable, has actually received the certificate representing the applicable
Conversion Shares no later than the close of business on the relevant Delivery Date pursuant to the terms set forth above.
10. Conversion
Delays. If Borrower fails to deliver Conversion Shares in accordance with the timeframe stated in Section 9, Lender may at any
time prior to receiving the applicable Conversion Shares rescind in whole or in part such Conversion, with a corresponding increase
to the Outstanding Balance (any returned amount will tack back to the Purchase Price Date for purposes of determining the holding
period under Rule 144). In addition, for each Conversion, in the event that Conversion Shares are not delivered by the Delivery
Date, a late fee equal to 2% of the applicable Conversion Share Value rounded to the nearest multiple of $100.00 but with a floor of
$500.00 per day (but in any event the cumulative amount of such late fees for each Conversion shall not exceed 200% of the
applicable Conversion Share Value) will be assessed for each day after the Delivery Date until Lender Conversion Share delivery is
made; and such late fees will be added to the Outstanding Balance (such fees, the “Conversion Delay Late
Fees”).
11. Sales
Limitation. Lender agrees and covenants that so long as no Event of Default has occurred, it will not sell Conversion Shares or
the Redemption Conversion Shares on the open market in any given calendar week (being from Sunday to Saturday of that week) that the
aggregate amount of such Conversion Shares and the Redemption Conversion Shares exceed fifteen percent (15%) of the weekly trading
volume for the Ordinary Shares during any such week. For illustration purposes only, if the Ordinary Shares had a weekly trading
volume of 10,000,000 Ordinary Shares in a given calendar week, Lender could only sell 1,500,000 Ordinary Shares during such calendar
week. Borrower’s sole and exclusive remedy in the event of the breach by Lender of the foregoing volume limitation shall be to
be reduce the Outstanding Balance by twice the amount Lender sold that exceeded the volume limitation.
12. Restriction on
Equity Sales. If at any time after the date that is ninety (90) days from the Purchase Price Date, Borrower is unable to issue
Ordinary Shares to Lender as result of any lock-up or other agreement or restriction prohibiting the issuance of Ordinary Shares for
a certain period of time, then the Outstanding Balance will automatically be increased by two percent (2%) for each thirty (30) day
period that Borrower is prohibited from issuing Ordinary Shares (which increase shall be pro-rated for any partial period). For the
avoidance of doubt, such increase to the Outstanding Balance shall be in addition to all other rights and remedies available to
Lender under this Note and the other Transaction Documents and shall not be in lieu of, nor deemed to be a waiver of any other
rights or remedies available to Lender under this Note or any of the other Transaction Documents.
13. Ownership
Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, Borrower shall
not effect any conversion of this Note to the extent that after giving effect to such conversion would cause Lender (together with
its affiliates) to beneficially own a number of shares exceeding 9.99% of the number of Ordinary Shares outstanding on such date
(including for such purpose the Ordinary Shares issuable upon such issuance) (the “Maximum Percentage”). For
purposes of this section, beneficial ownership of Ordinary Shares will be determined pursuant to Section 13(d) of the 1934 Act. By
written notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to itself but any such waiver will not
be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and
non-waivable and shall apply to all affiliates and assigns of Lender.
14. Opinion of
Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to have any
such opinion provided by its counsel.
15. Governing Law;
Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement to
determine the proper venue for any disputes are incorporated herein by this reference.
16. Arbitration of
Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined in
the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.
17. Cancellation.
After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be
deemed canceled, and shall not be reissued.
18. Amendments.
The prior written consent of both parties hereto shall be required for any change or amendment to this Note.
19. Assignments.
Borrower may not assign this Note without the prior written consent of Lender. This Note and any Ordinary Shares issued upon
conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent of Borrower.
20. Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.”
21. Liquidated
Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note,
Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’
inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly,
Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not
penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Lender’s and
Borrower’s expectations that any such liquidated damages will tack back to the Purchase Price Date for purposes of determining
the holding period under Rule 144).
22. Severability.
If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of
Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.
[Remainder of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF, Borrower
has caused this Note to be duly executed as of the Effective Date.
| |
BORROWER: |
| |
|
| |
China SXT Pharmaceuticals, Inc. |
| |
|
| |
By: |
|
| |
|
Feng Zhou, CEO |
| ACKNOWLEDGED, ACCEPTED AND AGREED: |
|
| |
|
| LENDER: |
|
| |
|
| Streeterville Capital, LLC |
|
| |
|
| By: |
|
|
| |
John M. Fife, President |
|
[Signature Page to Convertible
Promissory Note]
ATTACHMENT 1
DEFINITIONS
For purposes of this
Note, the following terms shall have the following meanings:
A1.
“Closing Bid Price” and “Closing Trade Price” means the last closing bid price and last closing
trade price, respectively, for the Ordinary Shares on its principal market, as reported by Bloomberg, or, if its principal market begins
to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then
the last bid price or last trade price, respectively, of the Ordinary Shares prior to 4:00:00 p.m., New York time, as reported by
Bloomberg, or, if its principal market is not the principal securities exchange or trading market for the Ordinary Shares, the last closing
bid price or last trade price, respectively, of the Ordinary Shares on the principal securities exchange or trading market where the Ordinary
Shares is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price,
respectively, of the Ordinary Shares in the over-the-counter market on the electronic bulletin board for the Ordinary Shares as reported
by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for the Ordinary Shares by Bloomberg, the average
of the bid prices, or the ask prices, respectively, of any market makers for the Ordinary Shares as reported by Nasdaq and any successor
thereto. If the Closing Bid Price or the Closing Trade Price cannot be calculated for the Ordinary Shares on a particular date on any
of the foregoing bases, the Closing Bid Price or the Closing Trade Price (as the case may be) of the Ordinary Shares on such date shall
be the fair market value as mutually determined by Lender and Borrower. All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction during such period.
A2.
“Conversion” means a Lender Conversion under Section 3 or a Redemption Conversion under Section 8.
A3.
“Conversion Share Value” means the product of the number of Conversion Shares deliverable pursuant to any Conversion
Notice multiplied by the Closing Trade Price of the Ordinary Shares on the Delivery Date for such Conversion.
A4.
“Deemed Issuance” means an issuance of Ordinary Shares that shall be deemed to have occurred on the latest possible
permitted date pursuant to the terms hereof in the event Borrower fails to deliver Conversion Shares as and when required pursuant to
Section 9 of this Note. For the avoidance of doubt, if Borrower has elected or is deemed under Section 8.3 to have elected to pay a Redemption
Amount in Redemption Conversion Shares and fails to deliver such Redemption Conversion Shares, such failure shall be considered a Deemed
Issuance hereunder even if an Equity Conditions Failure exists at that time or other relevant date of determination.
A5.
“DTC” means the Depository Trust Company or any successor thereto.
A6.
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer program.
A7.
“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.
A8.
“DWAC Eligible” means that (a) Borrower’s Ordinary Shares is eligible at DTC for full services pursuant
to DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system; (b) Borrower has been
approved (without revocation) by DTC’s underwriting department; (c) Borrower’s transfer agent is approved as an agent in the
DTC/FAST Program; (d) the Conversion Shares are otherwise eligible for delivery via DWAC; and (e) Borrower’s transfer agent does
not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.
Attachment 1 to Convertible Promissory Note, Page 1
A9.
“Equity Conditions Failure” means that any of the following conditions has not been satisfied on any given Redemption
Date: (a) with respect to the applicable date of determination all of the Redemption Conversion Shares would be (i) registered for
trading under applicable federal and state securities laws, (ii) freely tradable under Rule 144, or (iii) without the need for registration
under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of this Note); (b) the
applicable Redemption Conversion Shares would be eligible for immediate resale by Lender; (c) no Event of Default shall have occurred;
(d) the average and median daily dollar volume of the Ordinary Share on its principal market for the previous two hundred (200) Trading
Days shall be greater than $200,000.00; and (e) the five (5) day VWAP of the Ordinary Share is greater than or equal to $0.01.
A10.
“Exempt Issuance” means (i) any conventional bank loans not involving any convertible or other security of the
Company; (ii) private placements of unregistered, restricted Ordinary Shares of the Company, not involving any investment bank with no
registration rights and not eligible for voluntary registration by the Company for a period of ninety (90) days from the Closing Date;
(iii) Ordinary Shares or options issued to employees, officers or directors of the Company pursuant to the Company’s equity incentive
plan or pursuant to the compensation agreements previously authorized by the Board of Directors; (iv) securities issued upon the exercise
or exchange of or conversion of securities exercisable or exchangeable for or convertible into ordinary shares issued and outstanding
on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than by virtue of this
Offering or in connection with stock splits or combinations) or to extend the term of such securities; (v) securities issued pursuant
to acquisitions or strategic transactions and the payment of contractor invoices in the ordinary course of business approved by a majority
of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith
during the ninety-day period following the Closing Date and provided that any such issuance shall only be to a Person (or to the equityholders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with
the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.
A11.
“Floor Price” means $0.10.
A12.
“Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving
corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more
related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective
properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall, directly or indirectly, in
one or more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted by the
holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held
by the person or persons making or party to, or associated or affiliated with the persons or entities making or party to, such purchase,
tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions,
consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding
shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities making
or party to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement
or other business combination), or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related
transactions, reorganize, recapitalize or reclassify the Ordinary Shares, other than an increase in the number of authorized shares of
Borrower’s Ordinary Shares, or (b) any “person” or “group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding voting stock of Borrower.
Attachment 1 to Convertible Promissory Note, Page 2
A13.
“Major Trigger Event” means any Trigger Event occurring under Sections 4.1(b) – 4.1(j).
A14.
“Mandatory Default Amount” means the Outstanding Balance following the application of the Trigger Effect.
A15.
“Market Capitalization” means a number equal to (a) the average VWAP of the Ordinary Shares for the immediately
preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of outstanding Ordinary Shares as reported on Borrower’s
most recently filed Form 10-Q or Form 10-K.
A16.
“Market Price” means 80% multiplied by the lowest daily VWAP during the fifteen (15) Trading Days immediately
preceding the applicable Redemption Conversion.
A17.
“Maximum Monthly Redemption Amount” means $200,000.00 per calendar month.
A18.
“Minor Trigger Event” means any Trigger Event that is not a Major Trigger Event.
A19.
“OID” means an original issue discount.
A20.
“Other Agreements” means, collectively, all existing and future agreements and instruments between, among or
by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand.
A21.
“Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as
the case may be, pursuant to the terms hereof for payment, Conversion, offset, or otherwise, plus the OID, accrued but unpaid interest,
collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes and
fees related to Conversions, and any other fees or charges (including without limitation Conversion Delay Late Fees) incurred under this
Note.
A22.
“Purchase Price Date” means the date the Purchase Price is delivered by Lender to Borrower.
A23.
“Trading Day” means any day on which Borrower’s principal market is open for trading.
A24.
“Trigger Effect” means multiplying the Outstanding Balance as of the date the applicable Trigger Event occurred
by (a) fifteen percent (15%) for each occurrence of any Major Trigger Event, or (b) five percent (5%) for each occurrence of any Minor
Trigger Event, and then adding the resulting product to the Outstanding Balance as of the date the applicable Trigger Event occurred,
with the sum of the foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Trigger Event occurred;
provided that the Trigger Effect may only be applied three (3) times hereunder with respect to Major Trigger Events and three (3) times
hereunder with respect to Minor Trigger Events; and provided further that the Trigger Effect shall not apply to any Trigger Event pursuant
to Section 4.1(a) hereof.
A25.
“VWAP” means the volume weighted average price of the Ordinary Shares on the principal market for a particular
Trading Day or set of Trading Days, as the case may be, as reported by Bloomberg.
[Remainder of page intentionally
left blank]
Attachment 1 to Convertible Promissory Note, Page 3
EXHIBIT A
Streeterville Capital, LLC
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
| China SXT Pharmaceuticals, Inc. | Date: | |
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
LENDER CONVERSION NOTICE
The above-captioned Lender hereby gives notice
to China SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (the “Borrower”), pursuant to that certain
Convertible Promissory Note made by Borrower in favor of Lender on March 27, 2024 (the “Note”), that Lender elects to
convert the portion of the Note balance set forth below into fully paid and non-assessable Ordinary Shares of Borrower as of the date
of conversion specified below. Said conversion shall be based on the Lender Conversion Price set forth below. In the event of a conflict
between this Lender Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole
discretion, Lender may provide a new form of Lender Conversion Notice to conform to the Note. Capitalized terms used in this notice without
definition shall have the meanings given to them in the Note.
| A. | Date of Conversion: ____________ |
| B. | Lender Conversion #: ____________ |
| C. | Conversion Amount: ____________ |
| D. | Lender Conversion Price: _______________ |
| E. | Lender Conversion Shares: _______________ (C divided by D) |
| F. | Remaining Outstanding Balance of Note: ____________* |
| * | Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control
in the event of any dispute between the terms of this Lender Conversion Notice and such Transaction Documents. |
Please transfer the Lender Conversion Shares
electronically (via DWAC) to the following account:
| Broker: _______________________ |
|
Address: |
____________________________ |
| DTC#: ________________________ |
|
|
____________________________ |
| Account #: _______________________ |
|
|
____________________________ |
| Account Name: ____________________ |
|
|
|
To the extent the Lender
Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender
via reputable overnight courier after receipt of this Lender Conversion Notice (by facsimile transmission or otherwise) to:
_____________________________________
_____________________________________
_____________________________________
[Signature Page Follows]
Exhibit A to Convertible Promissory Note, Page 1
Sincerely, |
|
| |
|
Lender: |
|
| |
|
| Streeterville Capital, LLC |
|
| |
|
| By: |
|
|
| |
John M. Fife, President |
|
Exhibit A to Convertible Promissory Note, Page 2
EXHIBIT B
Streeterville Capital, LLC
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
| China SXT Pharmaceuticals, Inc. | Date: | |
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
REDEMPTION NOTICE
The above-captioned Lender hereby gives notice
to China SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (the “Borrower”), pursuant to that certain
Convertible Promissory Note made by Borrower in favor of Lender on March 27, 2024 (the “Note”), that Lender elects to
redeem a portion of the Note in Redemption Conversion Shares or in cash as set forth below. In the event of a conflict between this Redemption
Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole discretion, Lender may provide
a new form of Redemption Notice to conform to the Note. Capitalized terms used in this notice without definition shall have the meanings
given to them in the Note.
REDEMPTION INFORMATION
| A. | Redemption Date: ____________, 202_ |
| B. | Redemption Amount: ____________ |
| C. | Portion of Redemption Amount to be Paid in Cash: ____________ |
| D. | Portion of Redemption Amount to be Converted into Ordinary Shares: ____________ (B minus C) |
| E. | Redemption Conversion Price: _______________ (lower of (i) Lender Conversion Price in effect and (ii)
Market Price as of Redemption Date) |
| F. | Redemption Conversion Shares: _______________ (D divided by E) |
| G. | Remaining Outstanding Balance of Note: ____________ * |
| * | Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control
in the event of any dispute between the terms of this Redemption Notice and such Transaction Documents. |
Please transfer the Redemption Conversion
Shares, if applicable, electronically (via DWAC) to the following account:
| Broker: _______________________ |
|
Address: |
____________________________ |
| DTC#: ________________________ |
|
|
____________________________ |
| Account #: _______________________ |
|
|
____________________________ |
| Account Name: ____________________ |
|
|
|
To the extent the Redemption
Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender
via reputable overnight courier after receipt of this Redemption Notice (by facsimile transmission or otherwise) to:
_____________________________________
_____________________________________
_____________________________________
Exhibit B to Convertible Promissory Note, Page 1
Sincerely, |
|
| |
|
Lender: |
|
| |
|
| Streeterville Capital, LLC |
|
| |
|
| By: |
|
|
| |
John M. Fife, President |
|
Exhibit B to Convertible Promissory Note, Page 2
Exhibit 10.6
CONVERTIBLE PROMISSORY NOTE
| December 13, 2023 | U.S. $531,666.67 |
FOR VALUE RECEIVED, China
SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (“Borrower”), promises to pay to Streeterville
Capital, LLC, a Utah limited liability company, or its successors or assigns (“Lender”), $531,666.67 and any
interest, fees, charges, and late fees accrued hereunder on the date that is twelve (12) months after the Purchase Price Date (the “Maturity
Date”) in accordance with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of six percent
(6%) per annum from the Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the
basis of a 360-day year comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance
with the terms of this Note. This Convertible Promissory Note (this “Note”) is issued and made effective as of the
date set forth above (the “Effective Date”). This Note is issued pursuant to that certain Securities Purchase Agreement
dated December 13, 2023, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”).
Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.
This Note carries an OID of
$31,666.67 all of which amount is fully earned as of the Effective Date and included in the initial principal balance. In addition, Borrower
agrees to pay $20,000.00 to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction
costs incurred in connection with the purchase and sale of this Note (the “Transaction Expense Amount”), which amount
will be deducted from the amount funded. The purchase price for this Note shall be $500,000.00 (the “Purchase Price”),
computed as follows: $531,666.67 original principal balance, less the OID. The Purchase Price shall be payable by Lender by wire transfer
of immediately available funds.
1.
Payment; Prepayment; Balance Increase.
1.1.
Payment. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as
defined below), as provided for herein, and delivered to Lender at the address or bank account furnished to Borrower for that purpose.
All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to (c) accrued and
unpaid interest, and thereafter, to (d) principal.
1.2. Prepayment. So
long as no Event of Default (as defined below) has occurred, Borrower shall have the right, exercisable on not less than five (5)
Trading Days prior written notice to Lender to prepay the Outstanding Balance (less such portion of the Outstanding Balance for
which Borrower has received a Conversion Notice (as defined below) from Lender where the applicable Conversion Shares have not yet
been delivered) of this Note, in part or in full, in accordance with this Section 1.2. Any notice of prepayment hereunder (an
“Optional Prepayment Notice”) shall be delivered to Lender at its registered address or through email and shall
state: (i) that Borrower is exercising its right to prepay this Note, and (ii) the date of prepayment, which shall be not less than
five (5) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order
of Lender as may be specified by Lender in writing to Borrower. For the avoidance of doubt, Lender shall be entitled to exercise its
Conversion (as defined below) rights until the Optional Prepayment Date. If Borrower exercises its right to prepay this Note,
Borrower shall make payment to Lender of an amount in cash equal to 120% multiplied by the then Outstanding Balance of this Note
being prepaid (the “Optional Prepayment Amount”). In the event Borrower delivers the Optional Prepayment Amount
to Lender prior to the Optional Prepayment Date, the Optional Prepayment Amount shall not be deemed to have been paid to Lender
until the Optional Prepayment Date. In the event Borrower delivers the Optional Prepayment Amount without an Optional Prepayment
Notice, then the Optional Prepayment Date will be deemed to be the date that is five (5) Trading Days from the date that the
Optional Prepayment Amount was delivered to Lender and Lender shall be entitled to exercise its conversion rights set forth herein
during such five (5) Trading Day period. In addition, if Borrower delivers an Optional Prepayment Notice and fails to pay the
Optional Prepayment Amount due to Lender within five (5) Trading Days following the Optional Prepayment Date, Borrower shall forever
forfeit its right to prepay this Note.
2. Security. This
Note is unsecured.
3. Lender Optional
Conversion.
3.1. Lender
Conversions. Lender has the right at any time after the date that is six (6) months from the Purchase Price Date until the
Outstanding Balance has been paid in full, at its election, to convert (“Lender Conversion”) all or any portion
of the Outstanding Balance into fully paid and non-assessable ordinary shares (“Lender Conversion Shares”), $0.08
par value per share (the “Ordinary Shares”), of Borrower as per the following conversion formula: the amount
being converted (the “Conversion Amount”) divided by the Lender Conversion Price (as defined below). Conversion
notices in the form attached hereto as Exhibit A (each, a “Lender Conversion Notice”) may be effectively
delivered to Borrower by any method set forth in the “Notices” Section of the Purchase Agreement, and all Lender
Conversions shall be cashless and not require further payment from Lender. Borrower shall deliver the Lender Conversion Shares from
any Lender Conversion to Lender in accordance with Section 9 below.
3.2. Lender Conversion
Price. Subject to adjustment as set forth in this Note, the price at which Lender has the right to convert all or any portion of
the Outstanding Balance into Ordinary Shares is $3.00 per share (the “Lender Conversion Price”).
4. Trigger Events,
Defaults and Remedies.
4.1. Trigger
Events. The following are trigger events under this Note (each, a “Trigger Event”): (a) Borrower fails to
deliver any Conversion Shares (as defined below) in accordance with the terms hereof; (b) Borrower fails to pay any principal,
interest, fees, charges, or any other amount when due and payable hereunder; (c) a receiver, trustee or other similar official shall
be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or
shall not be dismissed or discharged within sixty (60) days; (d) Borrower becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (e) Borrower makes a
general assignment for the benefit of creditors; (f) Borrower files a petition for relief under any bankruptcy, insolvency or
similar law (domestic or foreign); (g) an involuntary bankruptcy proceeding is commenced or filed against Borrower; (h) the
occurrence of a Fundamental Transaction without Lender’s prior written consent unless this Note is paid in full in connection
with such Fundamental Transaction, in which case no consent will be required; (i) Borrower fails to observe or perform any covenant
set forth in Section 4 of the Purchase Agreement (other than Section 4(vii) of the Purchase Agreement); (j) Borrower fails to
maintain the Share Reserve (as defined in the Purchase Agreement); (k) Borrower defaults or otherwise fails to observe or perform
any covenant, obligation, condition or agreement of Borrower contained herein or in any other Transaction Document (as defined in
the Purchase Agreement) in any material respect, other than those specifically set forth in this Section 4.1 and Section 4 of the
Purchase Agreement; (l) any representation, warranty or other statement made or furnished by or on behalf of Borrower to Lender
herein, in any Transaction Document, or otherwise in connection with the issuance of this Note is false, incorrect, incomplete or
misleading in any material respect when made or furnished; (m) Borrower effectuates a reverse split of its Ordinary Shares without
ten (10) Trading Days prior written notice to Lender unless the reverse split is required to maintain compliance with the minimum
bid price requirements of the principal market; (n) any money judgment, writ or similar process is entered or filed against Borrower
or any of its property or other assets for more than $500,000.00, and shall remain unvacated, unbonded or unstayed for a period of
twenty (20) calendar days unless otherwise consented to by Lender; (o) Borrower fails to be DWAC Eligible; or (p) Borrower breaches
any covenant or other term or condition contained in any Other Agreements in any material aspects.
4.2. Trigger Event
Remedies. At any time following the occurrence of any Trigger Event, Lender may, at its option, increase the Outstanding Balance
by applying the Trigger Effect (subject to the limitation set forth below).
4.3. Defaults. At
any time following the occurrence of a Trigger Event, Lender may, at its option, send written notice to Borrower demanding that
Borrower cure the Trigger Event within five (5) Trading Days following the date of such written notice. If Borrower fails to cure
the Trigger Event within the required five (5) Trading Day cure period, the Trigger Event will automatically become an event of
default hereunder (each, an “Event of Default”).
4.4. Default
Remedies. At any time and from time to time following the occurrence of any Event of Default, Lender may accelerate this Note by
written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default
Amount.). Notwithstanding the foregoing, upon the occurrence of any Trigger Event described in clauses 4.1(c) – 4.1(g), an
Event of Default will be deemed to have occurred and the Outstanding Balance as of the date of the occurrence of such Trigger Event
shall become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice
required by Lender for the Trigger Event to become an Event of Default.. At any time following the occurrence of any Event of
Default, upon written notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the
applicable Event of Default occurred at an interest rate equal to the lesser of fifteen percent (15%) per annum or the maximum rate
permitted under applicable law (“Default Interest”). For the avoidance of doubt, Lender may continue making
Conversions at any time following a Trigger Event or an Event of Default until such time as the Note is paid in full. In connection
with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other
notice of any kind, and Lender 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
Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as
Lender receives full payment pursuant to this Section 4.4. No such rescission or annulment shall affect any subsequent Trigger Event
or Event of Default or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other
remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to Borrower’s failure to timely deliver Conversion Shares upon Conversion of the Note as required pursuant
to the terms hereof.
5. Unconditional
Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of
Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may
have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions called for herein in
accordance with the terms of this Note.
6. Waiver. No
waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent
to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or
commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
7. Rights Upon
Issuance of Securities.
7.1. Subsequent Equity
Sales. If Borrower or any subsidiary thereof, as applicable, at any time this Note is outstanding, shall sell, issue or grant
any Ordinary Shares, option to purchase Ordinary Shares, right to reprice, preferred shares convertible into Ordinary Shares, debt,
warrants, options or other instruments or securities which are convertible into or exercisable or exchangeable for Ordinary Shares
to Lender or any third party (collectively, the “Equity Securities”) other than Exempt Issuances, including
without limitation any Deemed Issuance, at an effective price per share less than the then effective Lender Conversion Price (such
issuance is referred to herein as a “Dilutive Issuance”), then, the Lender Conversion Price shall be
automatically reduced and only reduced to equal such lower effective price per share, provided that the Lender Conversion Price
shall in no event be less than the Floor Price. If the holder of any Equity Securities so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options, or rights per share which are issued in connection with such Dilutive Issuance, be entitled to receive Ordinary
Shares at an effective price per share that is less than the Lender Conversion Price, such issuance shall be deemed to have occurred
for less than the Lender Conversion Price on the date of such Dilutive Issuance, and the then effective Lender Conversion Price
shall be reduced and only reduced to equal such lower effective price per share. Such adjustments described above to the Lender
Conversion Price shall be permanent (subject to additional adjustments under this section), and shall be made whenever such Equity
Securities are issued. Borrower shall notify Lender, in writing, no later than the Trading Day following the issuance of any Equity
Securities subject to this Section 7.1, indicating therein the applicable issuance price, or applicable reset price, exchange price,
conversion price, or other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarity,
whether or not Borrower provides a Dilutive Issuance Notice pursuant to this Section 7.1, upon the occurrence of any Dilutive
Issuance, on the date of such Dilutive Issuance the Lender Conversion Price shall be lowered to equal the applicable effective price
per share regardless of whether Borrower or Lender accurately refers to such lower effective price per share in any subsequent
Installment Notice or Lender Conversion Notice.
7.2. Adjustment of
Lender Conversion Price upon Subdivision or Combination of Ordinary Shares. Without limiting any provision hereof, if Borrower
at any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or
more classes of its outstanding Ordinary Shares into a greater number of shares, the Lender Conversion Price in effect immediately
prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Borrower at any time on or
after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding Ordinary
Shares into a smaller number of shares, the Lender Conversion Price in effect immediately prior to such combination will be
proportionately increased. Any adjustment pursuant to this Section 7.2 shall become effective immediately after the effective date
of such subdivision or combination. If any event requiring an adjustment under this Section 7.2 occurs during the period that a
Redemption Conversion Price is calculated hereunder, then the calculation of such Redemption Conversion Price shall be adjusted
appropriately to reflect such event.
7.3. Other Events.
In the event that Borrower (or any subsidiary) shall take any action to which the provisions hereof are not strictly applicable, or,
if applicable, would not operate to protect Lender from dilution or if any event occurs of the type contemplated by the provisions
of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features), then Borrower’s board of directors shall in
good faith determine and implement an appropriate adjustment in the Lender Conversion Price so as to protect the rights of Lender,
provided that no such adjustment pursuant to this Section 7.3 will increase the Lender Conversion Price as otherwise determined
pursuant to this Section 7, provided further that if Lender does not accept such adjustments as appropriately protecting its
interests hereunder against such dilution, then Borrower’s board of directors and Lender shall agree, in good faith, upon an
independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be
final and binding and whose fees and expenses shall be borne by Borrower.
8. Redemptions.
8.1. Redemption
Conversion Price. Subject to the adjustments set forth herein, the conversion price for each Redemption Conversion (the
“Redemption Conversion Price”) shall be the lesser of (a) the Lender Conversion Price, and (b) the Market
Price.
8.2. Redemptions.
Beginning on the date that is six (6) months from the Purchase Price Date, Lender shall have the right, exercisable at any time in
its sole and absolute discretion, to redeem all or any portion of the Note (such amount, the “Redemption
Amount”), subject to the Maximum Monthly Redemption Amount, by providing Borrower with a notice substantially in the form
attached hereto as Exhibit B (each, a “Redemption Notice”, and each date on which Lender delivers a
Redemption Notice, a “Redemption Date”). For the avoidance of doubt, Lender may submit to Borrower one (1) or
more Redemption Notices in any given calendar month; provided that the aggregate Redemption Amounts in such calendar month do not
exceed the Maximum Monthly Redemption Amount. Payments of each Redemption Amount may be made (a) in cash, or (b) by converting such
Redemption Amount into Ordinary Shares (“Redemption Conversion Shares”, and together with the Lender Conversion
Shares, the “Conversion Shares”) in accordance with this Section 8.2 (each, a “Redemption
Conversion”) per the following formula: the number of Redemption Conversion Shares equals the portion of the applicable
Redemption Amount being converted divided by the Redemption Conversion Price, or (c) by any combination of the foregoing, so long as
the cash is delivered to Lender on the third (3rd) Trading Day immediately following the applicable Redemption Date and
the Redemption Conversion Shares are delivered to Lender on or before the applicable Delivery Date (as defined below).
Notwithstanding the foregoing, Borrower will not be entitled to elect a Redemption Conversion with respect to any portion of any
applicable Redemption Amount and shall be required to pay the Redemption Amount in cash, if on the applicable Redemption Date there
is an Equity Conditions Failure, and such failure is not waived in writing by Lender. Notwithstanding that failure to repay this
Note in full by the Maturity Date is a Trigger Event, the Redemption Dates shall continue after the Maturity Date pursuant to
this Section 8.2 until the Outstanding Balance is repaid in full.
8.3. Allocation of
Redemption Amounts. Following its receipt of a Redemption Notice, Borrower may either ratify Lender’s proposed allocation
in the applicable Redemption Notice or elect to change the allocation by written notice to Lender by email or fax within twenty-four
(24) hours of its receipt of such Redemption Notice, so long as the sum of the cash payments and the amount of Redemption
Conversions equal the applicable Redemption Amount. If Borrower fails to notify Lender of its election to change the allocation
prior to the deadline set forth in the previous sentence, it shall be deemed to have ratified and accepted the allocation set forth
in the applicable Redemption Notice prepared by Lender. Borrower acknowledges and agrees that the amounts and calculations set forth
thereon are subject to correction or adjustment because of error, mistake, or any adjustment resulting from a Trigger Event or other
adjustment permitted under the Transaction Documents (an “Adjustment”). Furthermore, no error or mistake in the
preparation of such notices, or failure to apply any Adjustment that could have been applied prior to the preparation of a
Redemption Notice may be deemed a waiver of Lender’s right to enforce the terms of any Note, even if such error, mistake, or
failure to include an Adjustment arises from Lender’s own calculation. Borrower shall deliver the Redemption Conversion Shares
from any Redemption Conversion to Lender in accordance with Section 9 below on or before each applicable Delivery Date.
9. Method of
Conversion Share Delivery. On or before the close of business on the third (3rd) Trading Day following each
Redemption Date or the third (3rd) Trading Day following the date of delivery of a Lender Conversion Notice, as
applicable (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such time and such Conversion
Shares are eligible for delivery via DWAC, deliver or cause its transfer agent to deliver the applicable Conversion Shares
electronically via DWAC to the account designated by Lender in the applicable Lender Conversion Notice or Redemption Notice. If
Borrower is not DWAC Eligible or such Conversion Shares are not eligible for delivery via DWAC, it shall deliver to Lender or its
broker (as designated in the Lender Conversion Notice or Redemption Notice), via reputable overnight courier, a certificate
representing the number of Ordinary Shares equal to the number of Conversion Shares to which Lender shall be entitled, registered in
the name of Lender or its designee. For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by
the Delivery Date unless Lender or its broker, as applicable, has actually received the certificate representing the applicable
Conversion Shares no later than the close of business on the relevant Delivery Date pursuant to the terms set forth above.
10. Conversion
Delays. If Borrower fails to deliver Conversion Shares in accordance with the timeframe stated in Section 9, Lender may at any
time prior to receiving the applicable Conversion Shares rescind in whole or in part such Conversion, with a corresponding increase
to the Outstanding Balance (any returned amount will tack back to the Purchase Price Date for purposes of determining the holding
period under Rule 144). In addition, for each Conversion, in the event that Conversion Shares are not delivered by the Delivery
Date, a late fee equal to 2% of the applicable Conversion Share Value rounded to the nearest multiple of $100.00 but with a floor of
$500.00 per day (but in any event the cumulative amount of such late fees for each Conversion shall not exceed 200% of the
applicable Conversion Share Value) will be assessed for each day after the Delivery Date until Lender Conversion Share delivery is
made; and such late fees will be added to the Outstanding Balance (such fees, the “Conversion Delay Late
Fees”).
11. Sales
Limitation. Lender agrees and covenants that so long as no Event of Default has occurred, it will not sell Conversion Shares or
the Redemption Conversion Shares on the open market in any given calendar week (being from Sunday to Saturday of that week) that the
aggregate amount of such Conversion Shares and the Redemption Conversion Shares exceed fifteen percent (15%) of the weekly trading
volume for the Ordinary Shares during any such week. For illustration purposes only, if the Ordinary Shares had a weekly trading
volume of 10,000,000 Ordinary Shares in a given calendar week, Lender could only sell 1,500,000 Ordinary Shares during such calendar
week. Borrower’s sole and exclusive remedy in the event of the breach by Lender of the foregoing volume limitation shall be to
be reduce the Outstanding Balance by twice the amount Lender sold that exceeded the volume limitation.
12. Restriction on
Equity Sales. If at any time after the date that is ninety (90) days from the Purchase Price Date, Borrower is unable to issue
Ordinary Shares to Lender as result of any lock-up or other agreement or restriction prohibiting the issuance of Ordinary Shares for
a certain period of time, then the Outstanding Balance will automatically be increased by two percent (2%) for each thirty (30) day
period that Borrower is prohibited from issuing Ordinary Shares (which increase shall be pro-rated for any partial period). For the
avoidance of doubt, such increase to the Outstanding Balance shall be in addition to all other rights and remedies available to
Lender under this Note and the other Transaction Documents and shall not be in lieu of, nor deemed to be a waiver of any other
rights or remedies available to Lender under this Note or any of the other Transaction Documents.
13. Ownership
Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, Borrower shall
not effect any conversion of this Note to the extent that after giving effect to such conversion would cause Lender (together with
its affiliates) to beneficially own a number of shares exceeding 9.99% of the number of Ordinary Shares outstanding on such date
(including for such purpose the Ordinary Shares issuable upon such issuance) (the “Maximum Percentage”). For
purposes of this section, beneficial ownership of Ordinary Shares will be determined pursuant to Section 13(d) of the 1934 Act. By
written notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to itself but any such waiver will not
be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and
non-waivable and shall apply to all affiliates and assigns of Lender.
14. Opinion of
Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to have any
such opinion provided by its counsel.
15. Governing Law;
Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement to
determine the proper venue for any disputes are incorporated herein by this reference.
16. Arbitration of
Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined in
the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.
17. Cancellation.
After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be
deemed canceled, and shall not be reissued.
18. Amendments.
The prior written consent of both parties hereto shall be required for any change or amendment to this Note.
19. Assignments.
Borrower may not assign this Note without the prior written consent of Lender. This Note and any Ordinary Shares issued upon
conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent of Borrower.
20. Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.”
21. Liquidated
Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note,
Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’
inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly,
Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not
penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Lender’s and
Borrower’s expectations that any such liquidated damages will tack back to the Purchase Price Date for purposes of determining
the holding period under Rule 144).
22. Severability.
If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of
Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.
[Remainder of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF, Borrower
has caused this Note to be duly executed as of the Effective Date.
| |
BORROWER: |
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China SXT Pharmaceuticals, Inc. |
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|
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By: |
|
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Feng Zhou, CEO |
| ACKNOWLEDGED, ACCEPTED AND AGREED: |
|
| |
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| LENDER: |
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| Streeterville Capital, LLC |
|
| |
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| By: |
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John M. Fife, President |
|
[Signature Page to Convertible
Promissory Note]
ATTACHMENT 1
DEFINITIONS
For purposes of this
Note, the following terms shall have the following meanings:
A1.
“Closing Bid Price” and “Closing Trade Price” means the last closing bid price and last closing
trade price, respectively, for the Ordinary Shares on its principal market, as reported by Bloomberg, or, if its principal market begins
to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then
the last bid price or last trade price, respectively, of the Ordinary Shares prior to 4:00:00 p.m., New York time, as reported by
Bloomberg, or, if its principal market is not the principal securities exchange or trading market for the Ordinary Shares, the last closing
bid price or last trade price, respectively, of the Ordinary Shares on the principal securities exchange or trading market where the Ordinary
Shares is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price,
respectively, of the Ordinary Shares in the over-the-counter market on the electronic bulletin board for the Ordinary Shares as reported
by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for the Ordinary Shares by Bloomberg, the average
of the bid prices, or the ask prices, respectively, of any market makers for the Ordinary Shares as reported by Nasdaq and any successor
thereto. If the Closing Bid Price or the Closing Trade Price cannot be calculated for the Ordinary Shares on a particular date on any
of the foregoing bases, the Closing Bid Price or the Closing Trade Price (as the case may be) of the Ordinary Shares on such date shall
be the fair market value as mutually determined by Lender and Borrower. All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction during such period.
A2.
“Conversion” means a Lender Conversion under Section 3 or a Redemption Conversion under Section 8.
A3.
“Conversion Share Value” means the product of the number of Conversion Shares deliverable pursuant to any Conversion
Notice multiplied by the Closing Trade Price of the Ordinary Shares on the Delivery Date for such Conversion.
A4.
“Deemed Issuance” means an issuance of Ordinary Shares that shall be deemed to have occurred on the latest possible
permitted date pursuant to the terms hereof in the event Borrower fails to deliver Conversion Shares as and when required pursuant to
Section 9 of this Note. For the avoidance of doubt, if Borrower has elected or is deemed under Section 8.3 to have elected to pay a Redemption
Amount in Redemption Conversion Shares and fails to deliver such Redemption Conversion Shares, such failure shall be considered a Deemed
Issuance hereunder even if an Equity Conditions Failure exists at that time or other relevant date of determination.
A5.
“DTC” means the Depository Trust Company or any successor thereto.
A6.
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer program.
A7.
“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.
A8.
“DWAC Eligible” means that (a) Borrower’s Ordinary Shares is eligible at DTC for full services pursuant
to DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system; (b) Borrower has been
approved (without revocation) by DTC’s underwriting department; (c) Borrower’s transfer agent is approved as an agent in the
DTC/FAST Program; (d) the Conversion Shares are otherwise eligible for delivery via DWAC; and (e) Borrower’s transfer agent does
not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.
Attachment 1 to Convertible Promissory Note, Page 1
A9.
“Equity Conditions Failure” means that any of the following conditions has not been satisfied on any given Redemption
Date: (a) with respect to the applicable date of determination all of the Redemption Conversion Shares would be (i) registered for
trading under applicable federal and state securities laws, (ii) freely tradable under Rule 144, or (iii) without the need for registration
under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of this Note); (b) the
applicable Redemption Conversion Shares would be eligible for immediate resale by Lender; (c) no Event of Default shall have occurred;
(d) the average and median daily dollar volume of the Ordinary Share on its principal market for the previous two hundred (200) Trading
Days shall be greater than $200,000.00; and (e) the five (5) day VWAP of the Ordinary Share is greater than or equal to $0.01.
A10.
“Exempt Issuance” means (i) any conventional bank loans not involving any convertible or other security of the
Company; (ii) private placements of unregistered, restricted Ordinary Shares of the Company, not involving any investment bank with no
registration rights and not eligible for voluntary registration by the Company for a period of ninety (90) days from the Closing Date;
(iii) Ordinary Shares or options issued to employees, officers or directors of the Company pursuant to the Company’s equity incentive
plan or pursuant to the compensation agreements previously authorized by the Board of Directors; (iv) securities issued upon the exercise
or exchange of or conversion of securities exercisable or exchangeable for or convertible into ordinary shares issued and outstanding
on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than by virtue of this
Offering or in connection with stock splits or combinations) or to extend the term of such securities; (v) securities issued pursuant
to acquisitions or strategic transactions and the payment of contractor invoices in the ordinary course of business approved by a majority
of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith
during the ninety-day period following the Closing Date and provided that any such issuance shall only be to a Person (or to the equityholders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with
the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.
A11.
“Floor Price” means $0.10.
A12.
“Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving
corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more
related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective
properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall, directly or indirectly, in
one or more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted by the
holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held
by the person or persons making or party to, or associated or affiliated with the persons or entities making or party to, such purchase,
tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions,
consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding
shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities making
or party to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement
or other business combination), or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related
transactions, reorganize, recapitalize or reclassify the Ordinary Shares, other than an increase in the number of authorized shares of
Borrower’s Ordinary Shares, or (b) any “person” or “group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding voting stock of Borrower.
Attachment 1 to Convertible Promissory Note, Page 2
A13.
“Major Trigger Event” means any Trigger Event occurring under Sections 4.1(b) – 4.1(j).
A14.
“Mandatory Default Amount” means the Outstanding Balance following the application of the Trigger Effect.
A15.
“Market Capitalization” means a number equal to (a) the average VWAP of the Ordinary Shares for the immediately
preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of outstanding Ordinary Shares as reported on Borrower’s
most recently filed Form 10-Q or Form 10-K.
A16.
“Market Price” means 80% multiplied by the lowest daily VWAP during the fifteen (15) Trading Days immediately
preceding the applicable Redemption Conversion.
A17.
“Maximum Monthly Redemption Amount” means $200,000.00 per calendar month.
A18.
“Minor Trigger Event” means any Trigger Event that is not a Major Trigger Event.
A19.
“OID” means an original issue discount.
A20.
“Other Agreements” means, collectively, all existing and future agreements and instruments between, among or
by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand.
A21.
“Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as
the case may be, pursuant to the terms hereof for payment, Conversion, offset, or otherwise, plus the OID, accrued but unpaid interest,
collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes and
fees related to Conversions, and any other fees or charges (including without limitation Conversion Delay Late Fees) incurred under this
Note.
A22.
“Purchase Price Date” means the date the Purchase Price is delivered by Lender to Borrower.
A23.
“Trading Day” means any day on which Borrower’s principal market is open for trading.
A24.
“Trigger Effect” means multiplying the Outstanding Balance as of the date the applicable Trigger Event occurred
by (a) fifteen percent (15%) for each occurrence of any Major Trigger Event, or (b) five percent (5%) for each occurrence of any Minor
Trigger Event, and then adding the resulting product to the Outstanding Balance as of the date the applicable Trigger Event occurred,
with the sum of the foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Trigger Event occurred;
provided that the Trigger Effect may only be applied three (3) times hereunder with respect to Major Trigger Events and three (3) times
hereunder with respect to Minor Trigger Events; and provided further that the Trigger Effect shall not apply to any Trigger Event pursuant
to Section 4.1(a) hereof.
A25.
“VWAP” means the volume weighted average price of the Ordinary Shares on the principal market for a particular
Trading Day or set of Trading Days, as the case may be, as reported by Bloomberg.
[Remainder of page intentionally
left blank]
Attachment 1 to Convertible Promissory Note, Page 3
EXHIBIT A
Streeterville Capital, LLC
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
| China SXT Pharmaceuticals, Inc. | Date: | |
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
LENDER CONVERSION NOTICE
The above-captioned Lender hereby gives notice
to China SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (the “Borrower”), pursuant to that certain
Convertible Promissory Note made by Borrower in favor of Lender on December 13, 2023 (the “Note”), that Lender elects to
convert the portion of the Note balance set forth below into fully paid and non-assessable Ordinary Shares of Borrower as of the date
of conversion specified below. Said conversion shall be based on the Lender Conversion Price set forth below. In the event of a conflict
between this Lender Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole
discretion, Lender may provide a new form of Lender Conversion Notice to conform to the Note. Capitalized terms used in this notice without
definition shall have the meanings given to them in the Note.
| A. | Date of Conversion: ____________ |
| B. | Lender Conversion #: ____________ |
| C. | Conversion Amount: ____________ |
| D. | Lender Conversion Price: _______________ |
| E. | Lender Conversion Shares: _______________ (C divided by D) |
| F. | Remaining Outstanding Balance of Note: ____________* |
| * | Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control
in the event of any dispute between the terms of this Lender Conversion Notice and such Transaction Documents. |
Please transfer the Lender Conversion Shares
electronically (via DWAC) to the following account:
| Broker: _______________________ |
|
Address: |
____________________________ |
| DTC#: ________________________ |
|
|
____________________________ |
| Account #: _______________________ |
|
|
____________________________ |
| Account Name: ____________________ |
|
|
|
To the extent the Lender
Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender
via reputable overnight courier after receipt of this Lender Conversion Notice (by facsimile transmission or otherwise) to:
_____________________________________
_____________________________________
_____________________________________
[Signature Page Follows]
Exhibit A to Convertible Promissory Note, Page 1
Sincerely, |
|
| |
|
Lender: |
|
| |
|
| Streeterville Capital, LLC |
|
| |
|
| By: |
|
|
| |
John M. Fife, President |
|
Exhibit A to Convertible Promissory Note, Page 2
EXHIBIT B
Streeterville Capital, LLC
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
| China SXT Pharmaceuticals, Inc. | Date: | |
Attn: Feng Zhou
178 Taidong Road North, Taizhou
Jiangsu, China
REDEMPTION NOTICE
The above-captioned Lender hereby gives notice
to China SXT Pharmaceuticals, Inc., a British Virgin Islands corporation (the “Borrower”), pursuant to that certain
Convertible Promissory Note made by Borrower in favor of Lender on December 13, 2023 (the “Note”), that Lender elects to
redeem a portion of the Note in Redemption Conversion Shares or in cash as set forth below. In the event of a conflict between this Redemption
Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole discretion, Lender may provide
a new form of Redemption Notice to conform to the Note. Capitalized terms used in this notice without definition shall have the meanings
given to them in the Note.
REDEMPTION INFORMATION
| A. | Redemption Date: ____________, 202_ |
| B. | Redemption Amount: ____________ |
| C. | Portion of Redemption Amount to be Paid in Cash: ____________ |
| D. | Portion of Redemption Amount to be Converted into Ordinary Shares: ____________ (B minus C) |
| E. | Redemption Conversion Price: _______________ (lower of (i) Lender Conversion Price in effect and (ii)
Market Price as of Redemption Date) |
| F. | Redemption Conversion Shares: _______________ (D divided by E) |
| G. | Remaining Outstanding Balance of Note: ____________ * |
| * | Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control
in the event of any dispute between the terms of this Redemption Notice and such Transaction Documents. |
Please transfer the Redemption Conversion
Shares, if applicable, electronically (via DWAC) to the following account:
| Broker: _______________________ |
|
Address: |
____________________________ |
| DTC#: ________________________ |
|
|
____________________________ |
| Account #: _______________________ |
|
|
____________________________ |
| Account Name: ____________________ |
|
|
|
To the extent the Redemption
Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender
via reputable overnight courier after receipt of this Redemption Notice (by facsimile transmission or otherwise) to:
_____________________________________
_____________________________________
_____________________________________
Exhibit B to Convertible Promissory Note, Page 1
Sincerely, |
|
| |
|
Lender: |
|
| |
|
| Streeterville Capital, LLC |
|
| |
|
| By: |
|
|
| |
John M. Fife, President |
|
Exhibit B to Convertible Promissory Note, Page 2
China SXT Pharmaceuticals (NASDAQ:SXTC)
過去 株価チャート
から 11 2024 まで 12 2024
China SXT Pharmaceuticals (NASDAQ:SXTC)
過去 株価チャート
から 12 2023 まで 12 2024
