SECURITIES AMENDMENT AGREEMENT (this “Agreement”), dated as of September 22, 2020, is entered into by and among
EMI Holding, Inc, a Delaware corporation (the “Company”), Emmaus Life Sciences, Inc., a Delaware corporation
and the parent company of EMI (“Emmaus”), and the parties identified as “Holders” on the signature
page hereto (the “Holders”).
pursuant to the Securities Purchase Agreement, dated as of September 13, 2018, as amended by the respective Securities Amendment
Agreements dated on or as of September 28, 2018, March 5, 2019 and February 21, 2020, respectively (as so amended, the “Purchase
Agreement”), among the Company, Emmaus and the purchasers thereunder, the Company sold and issued to the Holders or
their predecessors, among other “Securities,” the Company’s outstanding Second Amended and Restated 10% Senior
Secured Debentures Due April 21, 2021 (the “Debentures”); and
the Company and Emmaus desire that the Debentures be further amended to extend the Maturity Date thereof to August 31, 2021 and
to reduce by 50% the respective Monthly Redemption Amounts thereunder as set forth in an Allonge Amendment No. 1 to the Debentures
in substantially the form attached hereto as Exhibit A (each, an “Allonge” and collectively, the “Allonges”);
as an inducement to the Holders to agree to amend the Debentures as set forth in the Allonge, Emmaus is willing to issue to the
Holders five-year warrants to purchase a total of up to 1,840,000 shares of common stock of Emmaus (“Common Stock”)
at an exercise price of $2.00 per share and otherwise on the terms and in substantially the form attached hereto as Exhibit
B (“Inducement Warrants”);
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, Emmaus
and the Holders hereby agree as follows:
Terms used as defined terms herein and not otherwise defined shall have the meanings provided therefor in the Purchase Agreement
or the other Transaction Documents. In addition, subject to the terms and conditions herein, the Purchase Agreement as it pertains
to the Holders is amended to include the following definitions:
Deliveries. As soon as is practicable following the execution and delivery of this Agreement, (a) the Company shall execute
and deliver to each of the Holders an Allonge to such Holder’s Debenture and (b) Emmaus shall execute and deliver to each
of the Holders an Inducement Warrant to purchase the number of shares of Common Stock equal to 40% of the quotient determined
by dividing the outstanding principal balance of the Holders’ respective Debentures by $2.00 (i.e., the current Conversion
Price of the Debentures). The Debentures, as amended by the respective Allonges, are referred to herein as the “Amended
and Warranties. Emmaus and the Company hereby represent and warrant to the Holders as of the date hereof the following:
Organization and Qualification. Each of Emmaus and its direct and indirect subsidiaries, including the Company (collectively,
the “Subsidiaries”) is an entity duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted. None of Emmaus and the Subsdiaries
is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of Emmaus and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may
be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of this Agreement, the Amended Debentures or Inducement Warrants, (ii) a material adverse effect on the results of operations,
assets, business, prospects or condition (financial or otherwise) of Emmaus and the Subsidiaries, taken as a whole, or (iii) a
material adverse effect on Emmaus’s or the Company’s ability to perform in any material respect on a timely basis
its obligations hereunder or under the Amended Debentures or Inducement Warrants (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or qualification.
Authorization; Enforcement. Each of Emmaus and the Company has the requisite corporate power and authority to enter into
and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and under
the Amended Debentures and Inducement Warrants. The execution and delivery by Emmaus and the Company of this Agreement and of
Amended Debentures and Inducement Warrants, as the case may be, and the consummation by Emmaus and the Company of the transactions
contemplated hereby and thereby have been duly authorized by all necessary action on the part of Emmaus and the Company and no
further action is required by Emmaus, the Company or their respective boards of directors or stockholders in connection herewith
or therewith. This Agreement has been, and the Amended Debentures and Inducement Warrants, when delivered hereunder will be, duly
executed by Emmaus and the Company and, when this Agreement is executed and delivered by the Holders in accordance with the terms
hereof, will constitute the valid and binding obligations of Emmaus and the Company, enforceable against Emmaus and the Company
in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
No Conflicts. The execution, delivery and performance of this Agreement by each of Emmaus aand the Company and the consummation
by it of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of Emmaus’s
or the Company’s certificate of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with,
or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation
of any Lien upon any of the properties or assets of Emmaus, the Company or any other Subsidiary, or give to others any rights
of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement,
credit facility, debt or other material instrument (evidencing an Emmaus, Company or other Subsidiary debt or otherwise) or, except
as set forth on Schedule 4(c) hereto, other material understanding to which Emmaus, the Company or any other Subsidiary
is a party or by which any property or asset of Emmaus, the Company or any other Subsidiary is bound or affected, or (iii) conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which Emmaus the Company or any other Subsidiary is subject, or by which any property or asset of
Emmaus, the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.
Representations and Warranties of the Holder. Each Holder hereby represents and warrants to Emmaus and the Company as of
the date hereof as follows:
Organization; Authorization. The Holder is either an individual or an entity duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporated or formed with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and
performance by the Holder of the transactions contemplated herein have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of the Holder. This Agreement has been duly executed by
the Holder, and when delivered by the Holder in accordance with the terms hereof, will constitute the valid and legally binding
obligation of the Holder, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
Bring Down of Representations and Warranties. Each Holder expressly reaffirms that each of the Holder’s representations
and warranties set forth in the Purchase Agreement continues to be true, accurate and complete in all material respects as of
the date hereof and the Holder hereby remakes and incorporates herein by reference each such representation and warranty as though
made on the date of this Agreement (unless as of a specific date therein).
and the Company acknowledge and agree that the representations contained in this Section 4 shall not modify, amend or affect the
Holder’s right to rely on Emmaus’s or the Company’s representations and warranties contained in this Agreement
or any other document or instrument executed or delivered in connection with this Agreement or the consummation of the transaction
Company Acknowledgements. The Company hereby acknowledges and agrees that (a) the Allonges delivered to the Holders pursuant
to this Agreement are to amend in certain respects the Debentures, (b) the security interests granted to the Holders pursuant
to the Security Agreement by and among the Company and the Holders, dated as of September 7, 2018, apply to and cover the obligations
of the Company to the Holders evidenced by the Amended Debentures and (b) all references to Debentures in the Transaction Documents
shall include the Amended Debentures.
Negative Covenants. As long as any portion of the Amended Debentures remains outstanding, unless the holders of at least
67% in principal amount of the then outstanding Amended Debentures shall have otherwise given prior written consent, Emmaus shall
not and shall not permit any of the Subsidiaries to, directly or indirectly, take any of the actions described in Section 7 of
the Amended Debentures, with appropriate adjustments therein to the “Company” and “Common Stock” and “Common
Stock Equivalents” to refer to Emmaus and to common stock and common stock equivalents of Emmaus.
Intercreditor or Subordination Agreement. As a material inducement to Emmaus and the Company to enter into this Agreement
and to issue the Allonges and Inducement Warrants hereunder, each of the Holders agrees that, at Emmaus’s request at any
time and from time to time while the Amended Debentures are outstanding, such Holder will enter into a customary form of intercreditor
or subordination agreement with Amegy Bank Business Credit (“ABBC”) by which the Lien under the Security Agreement
on and any right to repayment of the Debentures from an aggregate amount of accounts receivable and inventory of the Company or
other Subsidiaries with respect to not more than $4 million of indebtedness at any time is subordinated to and in favor of ABBC’s
lien on and right of payment from such accounts receivable and inventory.
This Agreement may be executed in two or more counterparts and by facsimile signature or otherwise, and each of such counterparts
shall be deemed an original and all of such counterparts together shall constitute one and the same agreement. Each party shall
pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by
such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
Except as expressly set forth herein, all of the terms and conditions of the Transaction Documents shall continue in full force
and effect after the execution of this Agreement and shall not be in any way changed, modified or superseded by the terms set
This Agreement shall be governed by and interpreted in accordance with laws of the State of New York, excluding its choice of
law rules. The parties hereto hereby waive the right to a jury trial in any litigation resulting from or related to this Agreement.
The parties hereto consent to exclusive jurisdiction and venue in the federal courts sitting in the southern district of New York,
unless no federal subject matter jurisdiction exists, in which case the parties hereto consent to exclusive jurisdiction and venue
in the New York state courts in the borough of Manhattan, New York. Each party waives all defenses of lack of personal jurisdiction
and forum non conveniens. Process may be served on any party hereto in the manner authorized by applicable law or court rule.
Subject to and conditioned upon receipt of the Inducement Warrants, each Holder hereby irrevocably waives (a) the Company’s
compliance with the provisions of Section 4.3(a) of the Purchase Agreement as they relate to the Company’s failure to timely
file its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2020 and September 30, 2020, respectively, and (b) the
the Event of Default described in Section 8.a)x of the Amended Debentures by reason of the relegation of trading in the Common
Stock from the OTCQB to the OTC Pink tier of the OTC Markets in July 2020.
WITNESS WHEREOF, this Securities Amendment Agreement is executed as of the date first set forth above.
||/s/ Xxxxxx Xxxxxxx
||Xxxxxx Xxxxxxx, M.D., M.P.H.
||Chief Executive Officer
page of Holder to follow]
PAGE OF HOLDER TO
AND AMONG EMMAUS LIFE SCIENCES, INC., EMI HOLDING, INC. AND
Name of Holder: ____________________________________
EMI HOLDING, INC.
ALLONGE AMENDMENT NO. 1 TO SECOND AMENDED
AND RESTATED 10% SENIOR SECURED CONVERTIBLE DEBENTURE DUE APRIL 21, 2021
This Allonge Amendment No. 1 (this “Amendment”)
is made and entered into by and between EMI Holding, Inc., a Delaware corporation (the “Company”), and the undersigned
holder (the “Holder”) of that certain Second Amended and Restated 10% Senior Secured Convertible Debenture Due
April 21, 2021 of the Company to which this Allonge Amendment No. 1 is attached (the “Debenture”) with reference
to the Securities Amendment Agreement dated as of September __, 2020 among the Company, the Holder and the other parties thereto
(the “Amendment Agreement”);
NOW, THEREFORE, the Company and the Holder
hereby agree as follows:
otherwise defined herein, capitalized terms used herein have the meanings ascribed in the Debenture.
Maturity Date is hereby extended to August 31, 2021.
definitions of Monthly Redemption Amount, Monthly Redemption Date and Permitted Indebtedness in Section 1 of the Debenture are
hereby amended and restated in their entirety as follows:
Redemption Amount” means, as to a Monthly Redemption, $_______ [i.e., 50% of the current stated Monthly Redemption
Amount], plus accrued but unpaid interest and any other amounts then owing to the Holder in respect of this Debenture.
Redemption Date” means September __, 2020 and the 1st of each month thereafter, commencing on October 1, 2020
and terminating upon the full redemption or repayment of this Debenture.
Indebtedness” means (a) the indebtedness evidenced by the Debentures, (b) the Indebtedness existing on the date hereof
and set forth on Schedule 1 attached to this Amendment and any amendment, substitute or replacement of such Indebtedness,
provided that any amendment, substitute or replacement of such Indebtedness that materially changes the terms of such indebtedness
is expressly subordinate to the Debentures pursuant to a written subordination agreement with the Purchasers that is reasonably
acceptable to the Holders of a majority in principal amount of Debentures outstanding, (c) lease obligations and purchase money
indebtedness as set forth on said Schedule 1 and lease obligations and purchase money indebtedness incurred in connection
with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets, and (d) indebtedness
that is expressly subordinate to the Debentures pursuant to a written subordination agreement with the Purchasers that is acceptable
to each Holder in its sole and absolute discretion. For the avoidance of doubt, the Company will be permitted to make payments
when due on the Indebtedness described in clause (b) and to issue amended, substituted or replacement Indebtedness therefor provided
that such amended, substituted or replacement Indebtedness is on substantially similar terms and to incur indebtedness if, in conjunction
therewith, the Debentures are redeemed or repaid in full.”
Section 1 of the Debenture is hereby amended
to add in alphabetical order the following new definition:
“Parent” means Emmaus
Life Sciences, Inc., a Delaware corporation and sole stockholder of the Company.
2(d) of the Debenture is hereby amended and restated to read in its entirety as follows:
“(d) Prepayment. The
Company may prepay any portion of the Principal Amount of the Debentures after the Closing Date with twenty (20) days written notice
to the Holders. In the event of a Capital Event (as hereinafter defined), all or a portion of the net proceeds to the Company shall
first be used to prepay all or a portion of the Principal Amount of the Debentures before any other use is made of such net proceeds.
“Capital Event” means any (i) sale, license or other disposition of any or all assets of the Company, Parent
or any Subsidiary other than the sale of inventory or other assets (other than Intellectual Property) in the ordinary course of
business or (ii) any debt or equity financing or refinancing by the Company, Parent or any Subsidiary other than Permitted Indebtedness.
The Company shall notify the Holders not less than ten (10) days prior to the closing of any Capital Event.”
as set forth above, the terms and provisions of each of the Convertible Notes held by the Holder shall remain in full force and
IN WITNESS WHEREOF, the Company has executed
this Allonge Amendment No. 1 as of this 22nd day of September 2020.
||Xxxxxx Xxxxxxx, M.D., M.P.H.|
||Chief Executive Officer|
EMI Holding, Inc.
|[Convertible Debenture Holder Signature Page Follows]|
CONVERTIBLE DEBENTURE HOLDER SIGNATURE PAGE
TO ALLONGE AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED 10% SENIOR SECURED CONVERTIBLE DEBENTURE DUE APRIL 21, 2021
AGREED AND ACCEPTED:
Dated: __________________________, 2020
Name of individual holder, custodian, corporation, partnership
or other entity or trust (please print)
Signature of individual holder, authorized person or trustee
NEITHER THIS SECURITY
NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
LIFE SCIENCES, INC.
||Initial Exercise Date: September __ 2020|
THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, ______________ its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on
September __, 2025 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Emmaus Life
Sciences, Inc. , a Delaware corporation (the “Company”), up to ____ shares (the “Warrant Shares”)
of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth or incorporated in that certain Securities
Purchase Agreement, dated September 7, 2018, among the Company and the Holders who are signatory thereto, as amended, modified
or supplemented from time to time in accordance with its terms (as so amended, the “Purchase Agreement”).
Section 2. Exercise.
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice
of Exercise”). Within the earlier of (i) two (2) Business Days and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver
the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the
applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant
Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to
the Company for cancellation within three (3) Business Days of the date on which the final Notice of Exercise is delivered to the
Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to
the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1)
Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that,
by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
Price. The exercise price per share of the Common Stock under this Warrant shall be $2.00, subject to adjustment hereunder
(the “Exercise Price”).
Exercise. If at any time after the six-month anniversary of the Closing Date, there is no effective registration statement
registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also
be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
||as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;|
||the Exercise Price of this Warrant, as adjusted hereunder; and|
||the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.|
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position
contrary to this Section 2(c).
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on
a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined in good faith by the independent members of the Board of
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the
volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by the independent members of the Board of Directors.
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
d) Mechanics of Exercise.
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale
limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to
which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the
date that is the earliest of (i) two (2) Business Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Business Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Business Days comprising the
Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share
Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have
become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date
of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) two (2) Business Days and (ii) the number of Business Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Business Days, on the Company’s primary Trading Market with
respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the
Holder, upon the Company being listed or quoted for trading on a Trading Market, if the Company fails to cause the Transfer
Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to
purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any,
by which (x) the Holder’s total purchase price (including customary brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company
was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order
giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise
shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the
Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common
Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of
the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees
to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Warrant Shares.
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
Exercise Limitations. Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise,
to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder
(together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s
Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder
or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or
Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.
To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion
of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each
case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e),
in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common
Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may
be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall
within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of
which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99%
of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase
in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the
Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
Equity Sales.If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall
sell, or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any
offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective
price per share less than the Exercise Price then in effect (such lower price, the “Base Share Price” and such
issuances collectively, a “Dilutive Issuance”) (it being understood and agreed that if the holder of the Common
Stock or Common Stock Equivalents 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 issuance, be entitled to receive shares of Common Stock at an effective price per share that is less than
the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive
Issuance at such effective price), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive
Issuance the Exercise Price shall be reduced and only reduced to equal the Base Share Price. The Company shall notify the Holder,
in writing, no later than three Trading Days following the issuance or deemed issuance of any Common Stock or Common Stock Equivalents
subject to this Section 3(b), indicating therein the applicable Base Share Price and other pricing terms (such notice, the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant
to this Section 3(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares
based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise.
Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 3(b) in respect of an Exempt Issuance.
If the Company enters into a Variable Rate Transaction, the Company shall be deemed to have issued Common Stock or Common Stock
Equivalents at the lowest conversion or exercise price at which such securities are actually converted or exercised. For purposes
of this Section 3(b), “Exempt Issuance” means the issuance of (a) shares of Common
Stock or Common Stock Equivalents to employees, officers, directors or consultants of the Company or any Subsidiary pursuant to
any stock or option plan duly adopted for such purpose by a majority of the non-employee members of the Board of Directors or a
majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise
or exchange of or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date hereof, provided
that such securities have not been amended since date hereof to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities and (c) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be an entity (or
to the equity holders of an entity) 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, for the purposes of this clause (c), 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. For
the purpose of this Section 3(b), “Variable Rate Transaction” means a transaction in which the Company (i) issues
or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive,
additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based
upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance
of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future
date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly
or indirectly related to the business of the Company or the market for the Common Stock or (ii) effects a transaction under, any
agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in
such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard
to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the
other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance
reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email
to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least
20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4. Transfer
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within
three (3) Business Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full.
The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial
Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or
current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,
that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any
exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for
distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to
cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder
for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
(Signature Page Follows)
IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
NOTICE OF EXERCISE
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
shall take the form of (check applicable box):
☐ in lawful
money of the United States; or
☐ if permitted
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c),
to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to
the following DWAC Account Number:
(4) Accredited Investor.
The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933,
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory:
(To assign the foregoing Warrant, execute
this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant
and all rights evidenced thereby are hereby assigned to
|Dated: _______________ __, ______
|Holder’s Signature: ______________________
|Holder’s Address: ______________________