Exhibit
10.9
WARRANT
AGENT AGREEMENT
WARRANT
AGENT AGREEMENT (this “Warrant Agreement”) dated as of _____________ (the “Issuance Date”)
between ToughBuilt Industries, Inc., a company incorporated under the laws of the State of Nevada (the “Company”),
and VStock Transfer, LLC (the “Warrant Agent”).
WHEREAS,
pursuant to the terms of that certain Underwriting Agreement (“Underwriting Agreement”), dated ___________________,
by and among the Company and Maxim Group LLC, as representative of the underwriters set forth therein, the Company is engaged
in a public offering (the “Offering”) of up to _____________ shares (the “Shares”) of common
stock, par value $0.0001 per share (the “Common Stock”) of the Company and up to _____________ Warrants (the
“Warrants”) to purchase shares of Common Stock (the “Warrant Shares”), including Shares
and Warrants issuable pursuant to the underwriters over-allotment option;
WHEREAS,
the Company has filed with the Securities and Exchange Commission (the “Commission”) a Registration Statement
on Form S-1 (File No. 333-_________) (as the same may be amended from time to time, the “Registration Statement”),
for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the Shares, Warrants
and Warrant Shares, and such Registration Statement was declared effective on;
WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in accordance
with the terms set forth in this Warrant Agreement in connection with the issuance, registration, transfer, exchange and exercise
of the Warrants;
WHEREAS,
the Company desires to provide for the provisions of the Warrants, the terms upon which they shall be issued and exercised, and
the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants;
and
WHEREAS,
all acts and things have been done and performed which are necessary to make the Warrants the valid, binding and legal obligations
of the Company, and to authorize the execution and delivery of this Warrant Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company with respect to the Warrants,
and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and
conditions set forth in this Warrant Agreement (and no implied terms or conditions).
2. Warrants.
2.1. Form
of Warrants. The Warrants shall be registered securities and shall be initially evidenced by a global certificate (“Global
Certificate”) in the form of Exhibit A to this Warrant Agreement, which shall be deposited on behalf of the Company
with a custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., a nominee
of DTC. If DTC subsequently ceases to make its settlement system available for the Warrants, the Company may instruct the Warrant
Agent regarding making arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no
longer necessary to have the Warrants available in, registration to the name of Cede & Co., a nominee of DTC, the Company
may instruct the Warrant Agent to provide written instructions to DTC to deliver to the Warrant Agent for cancellation the Global
Certificate, and the Company shall instruct the Warrant Agent to deliver to each Holder (as defined below) separate certificates
evidencing Warrants (“Definitive Certificates” and, together with the Global Certificate, “Warrant
Certificates”) , in the form of [Exhibit C] to this Warrant Agreement. The Warrants represented by the Global Certificate
are referred to as “Global Warrants.”
2.2. Issuance
and Registration of Warrants.
2.2.1. Warrant
Register. The Warrant Agent shall maintain books (“Warrant Register”) for the registration of original
issuance and the registration of transfer of the Warrants. Any Person in whose name ownership of a beneficial interest in the
Warrants evidenced by a Global Certificate is recorded in the records maintained by DTC or its nominee shall be deemed the “beneficial
owner” thereof, provided that all such beneficial interests shall be held through a Participant (as defined below), which
shall be the registered holder of such Warrants.
2.2.2. Issuance
of Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue the Global Certificate and deliver the
Warrants in the DTC settlement system in accordance with written instructions delivered to the Warrant Agent by the Company. Ownership
of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records
maintained (i) by DTC and (ii) by institutions that have accounts with DTC (each, a “Participant”), subject
to a Holder’s right to elect to receive a Warrant in certificated form in the form of [Exhibit C] to this Warrant Agreement.
Any Holder desiring to elect to receive a Warrant in certificated form shall make such request in writing delivered to the Warrant
Agent pursuant to Section 2.2.8, and shall surrender to the Warrant Agent the interest of the Holder on the books of the Participant
evidencing the Warrants which are to be represented by a Definitive Certificate through the DTC settlement system. Thereupon,
the Warrant Agent shall countersign and deliver to the person entitled thereto a Warrant Certificate or Warrant Certificates,
as the case may be, as so requested.
2.2.3. Beneficial
Owner; Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may
deem and treat the person in whose name that Warrant shall be registered on the Warrant Register (the “Holder”)
as the absolute owner of such Warrant for purposes of any exercise thereof, and for all other purposes, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by DTC governing the exercise of the rights of a holder of a beneficial interest in any
Warrant. The rights of beneficial owners in a Warrant evidenced by the Global Certificate shall be exercised by the Holder or
a Participant through the DTC system, except to the extent set forth herein or in the Global Certificate.
2.2.4. Execution.
The Warrant Certificates shall be executed on behalf of the Company by any authorized officer of the Company (an “Authorized
Officer”), which need not be the same authorized signatory for all of the Warrant Certificates, either manually or by
facsimile signature. The Warrant Certificates shall be countersigned by an authorized signatory of the Warrant Agent, which need
not be the same signatory for all of the Warrant Certificates, and no Warrant Certificate shall be valid for any purpose unless
so countersigned. In case any Authorized Officer of the Company that signed any of the Warrant Certificates ceases to be an Authorized
Officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates,
nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person
who signed such Warrant Certificates had not ceased to be such officer of the Company; and any Warrant Certificate may be signed
on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be an Authorized
Officer of the Company authorized to sign such Warrant Certificate, although at the date of the execution of this Warrant Agreement
any such person was not such an Authorized Officer.
2.2.5. Registration
of Transfer. At any time at or prior to the Expiration Date (as defined below), a transfer of any Warrants may be registered
and any Warrant Certificate or Warrant Certificates may be split up, combined or exchanged for another Warrant Certificate or
Warrant Certificates evidencing the same number of Warrants as the Warrant Certificate or Warrant Certificates surrendered. Any
Holder desiring to register the transfer of Warrants or to split up, combine or exchange any Warrant Certificate shall make such
request in writing delivered to the Warrant Agent, and shall surrender to the Warrant Agent the Warrant Certificate or Warrant
Certificates evidencing the Warrants the transfer of which is to be registered or that is or are to be split up, combined or exchanged
and, in the case of registration of transfer, shall provide a signature guarantee. Thereupon, the Warrant Agent shall countersign
and deliver to the person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested.
The Warrant Agent may require payment, by the Holder requesting a registration of transfer of Warrants or a split-up, combination
or exchange of a Warrant Certificate (but, for purposes of clarity, not upon the exercise of the Warrants and issuance of Warrant
Shares to the Holder), of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with such
registration of transfer, split-up, combination or exchange, together with reimbursement to the Warrant Agent of all reasonable
expenses incidental thereto.
2.2.6. Loss,
Theft and Mutilation of Warrant Certificates. Upon receipt by the Company and the Warrant Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Warrant Certificate, and, in case of loss, theft or destruction, of
indemnity or security in customary form and amount, and reimbursement to the Company and the Warrant Agent of all reasonable expenses
incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Warrant
Agent shall, on behalf of the Company, countersign and deliver a new Warrant Certificate of like tenor to the Holder in lieu of
the Warrant Certificate so lost, stolen, destroyed or mutilated. The Warrant Agent may charge the Holder an administrative fee
for processing the replacement of lost Warrant Certificates, which shall be charged only once in instances where a single surety
bond obtained covers multiple certificates. The Warrant Agent may receive compensation from the surety companies or surety agents
for administrative services provided to them.
2.2.7. Proxies.
The Holder of a Warrant may grant proxies or otherwise authorize any person, including the Participants and beneficial holders
that may own interests through the Participants, to take any action that a Holder is entitled to take under this Agreement or
the Warrants; provided, however, that at all times that Warrants are evidenced by a Global Certificate, exercise
of those Warrants shall be effected on their behalf by Participants through DTC in accordance the procedures administered by DTC.
3. Terms
and Exercise of Warrants.
3.1. Exercise
Price. Each Warrant shall entitle the Holder, subject to the provisions of the applicable Warrant Certificate and of
this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of
$_____ per whole share, subject to the subsequent adjustments provided in Section 4 hereof. The term “Exercise
Price” as used in this Warrant Agreement refers to the price per share at which shares of Common Stock may be
purchased at the time a Warrant is exercised.
3.2. Duration
of Warrants. Warrants may be exercised only during the period (“Exercise Period”) commencing on the Issuance
Date and terminating at 5:00 P.M., Eastern Time (the “close of business”) on 2024 (“Expiration Date”).
Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect
thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date.
3.3. Exercise
of Warrants.
3.3.1. Exercise
and Payment. Exercise of a Warrant may be made, in whole or in part, at any time or times on or after the Issuance Date and
on or before close of business on the Expiration Date by delivery to the Company of the Notice of Exercise in the form annexed
as Exhibit B hereto (the “Notice of Exercise”). Within three (3) Trading Days 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 3.3.7 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 form be required. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender a Warrant Certificate to the Company
until the Holder has purchased all of the Warrant Shares available thereunder and the Warrant has been exercised in full, in which
case, the Holder shall surrender such Warrant to the Company for cancellation within three (3) Trading Days of the date the final
Notice of Exercise is delivered to the Company. Partial exercises of a Warrant resulting in purchases of a portion of the total
number of Warrant Shares available thereunder 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 a 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 thereof.
Notwithstanding
the foregoing in this Section 3.3.1, a holder whose interest in a Warrant is a beneficial interest in certificate(s) representing
such Warrant held in registered form through DTC (or another established clearing corporation performing similar functions), shall
effect exercises made pursuant to this Section 3.3.1 by delivering to DTC (or such other clearing corporation, as applicable)
the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such
other clearing corporation, as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form
pursuant to the terms of the Warrant Agent Agreement, in which case this sentence shall not apply.
3.3.2. Issuance
of Warrant Shares. (a) The Warrant Agent shall, by 11:00 a.m., New York City time, on the Trading Day following the date of
exercise of any Warrant, advise the Company, the transfer agent and registrar for the Company’s Common Stock, in respect
of (i) the number of Warrant Shares indicated on the Notice of Exercise as issuable upon such exercise with respect to such exercised
Warrants, (ii) the instructions of the Holder or Participant, as the case may be, provided to the Warrant Agent with respect to
the delivery of the Warrant Shares and the number of Warrants that remain outstanding after such exercise and (iii) such other
information as the Company or such transfer agent and registrar shall reasonably request.
(b) 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 Holder or (B) this Warrant is being exercised via cashless exercise, 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 no later than three (3) Trading Days after the delivery to the Company of the Notice of Exercise and provided that payment
in full of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Company one (1) day
prior to such date (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 earlier of (i) one (1) Trading Day
and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If
the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10
per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for
each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed
in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the
date of delivery of the Notice of Exercise.
3.3.3. Valid
Issuance. All Warrant Shares issued by the Company upon the proper exercise of a Warrant in conformity with this Warrant Agreement
shall be validly issued, fully paid and non-assessable.
3.3.4. No
Fractional Exercise. No fractional Warrant Shares will be issued upon the exercise of the Warrant. If, by reason of any adjustment
made pursuant to Section 4, a Holder would be entitled, upon the exercise of such Warrant, to receive a fractional interest in
a share, the Company shall, upon such exercise, round up or down, as applicable, to the nearest whole number the number of Warrant
Shares to be issued to such Holder.
3.3.5. No
Transfer Taxes. 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 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.
3.3.6. [RESERVED]
3.3.7. Restrictive
Legend Events; Cashless Exercise Under Certain Circumstances. (a) The Company shall use it reasonable best efforts to maintain
the effectiveness of the Registration Statement and the current status of the prospectus included therein or to file and maintain
the effectiveness of another registration statement and another current prospectus covering the Warrants and the Warrant Shares
at any time that the Warrants are exercisable. The Company shall provide to the Warrant Agent and each Holder prompt written notice
of any time that the Company is unable to deliver the Warrant Shares via DTC transfer or otherwise without restrictive legend
because (i) the Commission has issued a stop order with respect to the Registration Statement, (ii) the Commission otherwise has
suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, (iii) the Company has
suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, (iv) the prospectus
contained in the Registration Statement is not available for the issuance of the Warrant Shares to the Holder or (v) otherwise
(each a “Restrictive Legend Event”). To the extent that the Warrants cannot be exercised as a result of a Restrictive
Legend Event or a Restrictive Legend Event occurs after a Holder has exercised Warrants in accordance with the terms of the Warrants
but prior to the delivery of the Warrant Shares, the Company shall, at the election of the Holder, which shall be given within
five (5) days of receipt of such notice of the Restrictive Legend Event, either (i) rescind the previously submitted Notice of
Exercise and the Company shall return all consideration paid by registered holder for such shares upon such rescission or (ii)
treat the attempted exercise as a cashless exercise as described in paragraph (b) below and refund the cash portion of the exercise
price to the Holder. (b) If a Restrictive Legend Event has occurred, the Warrant shall only be exercisable on a cashless basis.
Notwithstanding anything herein to the contrary, the Company shall not be required to make any cash payments or net cash settlement
to the Holder in lieu of delivery of the Warrant Shares. Upon a “cashless exercise”, the Holder shall be entitled
to receive the number of Warrant Shares equal to the quotient obtained by dividing (A-B) (X) by (A), where:
| (A)
= |
the
VWAP on the Trading Day immediately preceding the date of exercise giving rise to the applicable “cashless exercise”,
as set forth in the applicable Election to Purchase (to clarify, the “VWAP” will be the last VWAP as calculated
over an entire Trading Day such that, in the event that the Warrant is exercised at a time that the Trading Market is open,
the prior Trading Day’s VWAP shall be used in this calculation); |
| |
|
| (B)
= |
the
Exercise Price of the Warrant, as adjusted as set forth herein; and |
| |
|
| (X)
= |
the
number of Warrant Shares that would be issuable upon exercise of the Warrant in accordance with the terms of the Warrant if
such exercise were by means of a cash exercise rather than a cashless exercise. |
If
the Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that, in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised
and the Company agrees not to take any position contrary thereto. Upon receipt of a Notice of Exercise for a cashless exercise,
the Warrant Agent will promptly deliver a copy of the Notice of Exercise to the Company to confirm the number of Warrant Shares
issuable in connection with the cashless exercise. The Company shall calculate and transmit to the Warrant Agent in a written
notice, and the Warrant Agent shall have no duty, responsibility or obligation under this section to calculate, the number of
Warrant Shares issuable in connection with any cashless exercise. The Warrant Agent shall be entitled to rely conclusively on
any such written notice provided by the Company, and the Warrant Agent shall not be liable for any action taken, suffered or omitted
to be taken by it in accordance with such written instructions or pursuant to this Warrant Agreement.
Notwithstanding
anything herein to the contrary, on the Termination Date, the Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 3.3.7.
3.3.8. Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant
Shares issuable in connection with any exercise, the Company shall promptly deliver to the Holder the number of Warrant Shares
that are not disputed.
3.3.9. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
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 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.
3.3.10. Beneficial
Ownership Limitation. The Company shall not effect any exercise of a Warrant, and a Holder shall not have the right to exercise
any portion of a Warrant, pursuant to Section 3 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 such 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, non-exercised
portion of such Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or non-converted 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 3.3.10, 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 3.3.10
applies, the determination of whether a Warrant is exercisable (in relation to other securities owned by the Holder together with
any Affiliates and Attribution Parties) and of which portion of a 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 a Warrant
is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and
of which portion of a 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 3.3.10, 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 two Trading Days 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 such 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% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) 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 a Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 3.3.10, 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 3.3.10 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 3.3.10 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.
4. Adjustments.
4.1. Adjustment
upon Subdivisions or Combinations. If the Company at any time while the Warrants are 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 the Warrants), (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 each Warrant shall be proportionately adjusted
such that the aggregate Exercise Price of such Warrant shall remain unchanged. Any adjustment made pursuant to this Section 4.1
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.
4.2. Adjustment
for Other Distributions. (a) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 4.1 above,
if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities
or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of a Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(b) Pro
Rata Distributions. During such time as the Warrants are 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 the Warrants, 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 such 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, 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).
4.3. Reclassification,
Consolidation, Purchase, Combination, Sale or Conveyance. If, at any time while the Warrants are outstanding, (a) the Company,
directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another
Person, (b) 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, (c) 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, (d) 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 (e) 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 a Warrant, each 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 3.3.10 on the exercise of the Warrants), the same amount
and kind of securities, cash or property, if any, 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 each Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 3.3.10 on the exercise of the Warrants). 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 that such Holder receives upon any exercise of each 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 the Warrants in accordance with the provisions
of this Section 4.3 pursuant to written agreements and shall, upon the written request of such Holder, deliver to such Holder
in exchange for the Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form
and substance to the Warrants which are exercisable for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity), equivalent to the number of 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 such 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 Agreement and the Warrants 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 Agreement and the Warrants with the same effect as if
such Successor Entity had been named as the Company herein and therein. The Company shall instruct the Warrant Agent in writing,
which includes facsimile and/or email, to mail by first class mail, postage prepaid, to each Holder, written notice of the execution
of any such amendment, supplement or agreement with the Successor Entity. Any supplemented or amended agreement entered into by
the successor corporation or transferee shall provide for adjustments, which shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 4.3. The Warrant Agent shall have no duty, responsibility or obligation to determine
the correctness of any provisions contained in such agreement or such notice, including but not limited to any provisions relating
either to the kind or amount of securities or other property receivable upon exercise of warrants or with respect to the method
employed and provided therein for any adjustments, and shall be entitled to rely conclusively for all purposes upon the provisions
contained in any such agreement. The provisions of this Section 4.3 shall similarly apply to successive reclassifications, changes,
consolidations, mergers, sales and conveyances of the kind described above.
4.4. (a)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, 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.
(b) Notice
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
five (5) 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.
Notwithstanding the requirement to provide or mail written notice to a Holder set forth in this Section 4.4, the Company shall
not be required to provide or mail a written notice to any Holder, and shall not be required to instruct the Warrant Agent to
provide or mail a written notice if the transaction or transactions described in this Section 4.4 are disclosed publicly via a
press release, Current Report on Form 8-K, other filing with the Commission or other means of public dissemination.
4.5. Other
Events. If any event occurs of the type contemplated by the provisions of Section 4.1 or 4.2 but not expressly provided for
by such provisions (including, without limitation, the granting of stock appreciation rights, Adjustment Rights, phantom stock
rights or other rights with equity features to all holders of Common Stock for no consideration), then the Company’s Board
of Directors will, at its discretion and in good faith, make an adjustment in the Exercise Price and the number of Warrant Shares
or designate such additional consideration to be deemed issuable upon exercise of a Warrant, so as to protect the rights of the
registered Holder. No adjustment to the Exercise Price will be made pursuant to more than one sub-section of this Section 4 in
connection with a single issuance.
4.6. Notices
of Changes in Warrant. Upon every adjustment of the Exercise Price or the number of Warrant Shares issuable upon exercise
of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Exercise Price
resulting from such adjustment and the increase or decrease, if any, in the number of Warrant Shares purchasable at such price
upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation
is based. Upon the occurrence of any event specified in Sections 4.1 or 4.2, then, in any such event, the Company shall give written
notice to each Holder, at the last address set forth for such holder in the Warrant Register, as of the record date or the effective
date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
The Warrant Agent shall be entitled to rely conclusively on, and shall be fully protected in relying on, any certificate, notice
or instructions provided by the Company with respect to any adjustment of the Exercise Price or the number of shares issuable
upon exercise of a Warrant, or any related matter, and the Warrant Agent shall not be liable for any action taken, suffered or
omitted to be taken by it in accordance with any such certificate, notice or instructions or pursuant to this Warrant Agreement.
The Warrant Agent shall not be deemed to have knowledge of any such adjustment unless and until it shall have received written
notice thereof from the Company.
5. Restrictive
Legends; Fractional Warrants. In the event that a Warrant Certificate surrendered for transfer bears a restrictive legend,
the Warrant Agent shall not register that transfer until the Warrant Agent has received an opinion of counsel for the Company
stating that such transfer may be made and indicating whether the Warrants must also bear a restrictive legend upon that transfer.
The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the transfer of
or delivery of a Warrant Certificate for a fraction of a Warrant.
6. Other
Provisions Relating to Rights of Holders of Warrants.
6.1. No
Rights as Stockholder. Except as otherwise specifically provided herein, a Holder, solely in its capacity as a holder of Warrants,
shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor
shall anything contained in this Warrant Agreement be construed to confer upon a Holder, solely in its capacity as the registered
holder of Warrants, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate
action (whether any reorganization, issue of stock, reclassification of share capital, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights or rights to participate in new issues of shares, or otherwise,
prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of Warrants.
6.2. Reservation
of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares
of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant
Agreement.
7. Concerning
the Warrant Agent and Other Matters.
7.1. Any
instructions given to the Warrant Agent orally, as permitted by any provision of this Warrant Agreement, shall be confirmed in
writing by the Company as soon as practicable. The Warrant Agent shall not be liable or responsible and shall be fully authorized
and protected for acting, or failing to act, in accordance with any oral instructions which do not conform with the written confirmation
received in accordance with this Section 7.1.
7.2.
(a) Whether or not any Warrants are exercised, for the Warrant Agent’s services as agent for the Company hereunder, the
Company shall pay to the Warrant Agent such fees as may be separately agreed between the Company and Warrant Agent and the Warrant
Agent’s out of pocket expenses in connection with this Warrant Agreement, including, without limitation, the fees and expenses
of the Warrant Agent’s counsel. While the Warrant Agent endeavors to maintain out-of-pocket charges (both internal and external)
at competitive rates, these charges may not reflect actual out-of-pocket costs, and may include handling charges to cover internal
processing and use of the Warrant Agent’s billing systems. (b) All amounts owed by the Company to the Warrant Agent under
this Warrant Agreement are due within 30 days of the invoice date. Delinquent payments are subject to a late payment charge of
one and one-half percent (1.5%) per month commencing 45 days from the invoice date. The Company agrees to reimburse the Warrant
Agent for any attorney’s fees and any other costs associated with collecting delinquent payments. (c) No provision of this
Warrant Agreement shall require Warrant Agent to expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties under this Warrant Agreement or in the exercise of its rights.
7.3. As
agent for the Company hereunder the Warrant Agent: (a) shall have no duties or obligations other than those specifically set forth
herein or as may subsequently be agreed to in writing by the Warrant Agent and the Company; (b) shall be regarded as making no
representations and having no responsibilities as to the validity, sufficiency, value, or genuineness of the Warrants or any Warrant
Shares; (c) shall not be obligated to take any legal action hereunder; if, however, the Warrant Agent determines to take any legal
action hereunder, and where the taking of such action might, in its judgment, subject or expose it to any expense or liability
it shall not be required to act unless it has been furnished with an indemnity reasonably satisfactory to it; (d) may rely on
and shall be fully authorized and protected in acting or failing to act upon any certificate, instrument, opinion, notice, letter,
telegram, telex, facsimile transmission or other document or security delivered to the Warrant Agent and believed by it to be
genuine and to have been signed by the proper party or parties; (e) shall not be liable or responsible for any recital or statement
contained in the Registration Statement or any other documents relating thereto; (f) shall not be liable or responsible for any
failure on the part of the Company to comply with any of its covenants and obligations relating to the Warrants, including without
limitation obligations under applicable securities laws; (g) may rely on and shall be fully authorized and protected in acting
or failing to act upon the written, telephonic or oral instructions with respect to any matter relating to its duties as Warrant
Agent covered by this Warrant Agreement (or supplementing or qualifying any such actions) of officers of the Company, and is hereby
authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Company or counsel
to the Company, and may apply to the Company, for advice or instructions in connection with the Warrant Agent’s duties hereunder,
and the Warrant Agent shall not be liable for any delay in acting while waiting for those instructions; any applications by the
Warrant Agent for written instructions from the Company may, at the option of the Agent, set forth in writing any action proposed
to be taken or omitted by the Warrant Agent under this Warrant Agreement and the date on or after which such action shall be taken
or such omission shall be effective; the Warrant Agent shall not be liable for any action taken by, or omission of, the Warrant
Agent in accordance with a proposal included in such application on or after the date specified in such application (which date
shall not be less than five business days after the date such application is sent to the Company, unless the Company shall have
consented in writing to any earlier date) unless prior to taking any such action, the Warrant Agent shall have received written
instructions in response to such application specifying the action to be taken or omitted; (h) may consult with counsel satisfactory
to the Warrant Agent, including its in-house counsel, and the advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered, or omitted by it hereunder in good faith and in accordance with the advice
of such counsel; (i) may perform any of its duties hereunder either directly or by or through nominees, correspondents, designees,
or subagents, and it shall not be liable or responsible for any misconduct or negligence on the part of any nominee, correspondent,
designee, or subagent appointed with reasonable care by it in connection with this Warrant Agreement; (j) is not authorized, and
shall have no obligation, to pay any brokers, dealers, or soliciting fees to any person; and (k) shall not be required hereunder
to comply with the laws or regulations of any country other than the United States of America or any political subdivision thereof.
7.4. (a)
In the absence of gross negligence or willful or illegal misconduct on its part, the Warrant Agent shall not be liable for any
action taken, suffered, or omitted by it or for any error of judgment made by it in the performance of its duties under this Warrant
Agreement. Anything in this Warrant Agreement to the contrary notwithstanding, in no event shall Warrant Agent be liable for special,
indirect, incidental, consequential or punitive losses or damages of any kind whatsoever (including but not limited to lost profits),
even if the Warrant Agent has been advised of the possibility of such losses or damages and regardless of the form of action.
Any liability of the Warrant Agent will be limited in the aggregate to the amount of fees paid by the Company hereunder. The Warrant
Agent shall not be liable for any failures, delays or losses, arising directly or indirectly out of conditions beyond its reasonable
control including, but not limited to, acts of government, exchange or market ruling, suspension of trading, work stoppages or
labor disputes, fires, civil disobedience, riots, rebellions, storms, electrical or mechanical failure, computer hardware or software
failure, communications facilities failures including telephone failure, war, terrorism, insurrection, earthquakes, floods, acts
of God or similar occurrences. (b) In the event any question or dispute arises with respect to the proper interpretation of the
Warrants or the Warrant Agent’s duties under this Warrant Agreement or the rights of the Company or of any Holder, the Warrant
Agent shall not be required to act and shall not be held liable or responsible for its refusal to act until the question or dispute
has been judicially settled (and, if appropriate, it may file a suit in interpleader or for a declaratory judgment for such purpose)
by final judgment rendered by a court of competent jurisdiction, binding on all persons interested in the matter which is no longer
subject to review or appeal, or settled by a written document in form and substance satisfactory to Warrant Agent and executed
by the Company and each such Holder. In addition, the Warrant Agent may require for such purpose, but shall not be obligated to
require, the execution of such written settlement by all the Holders and all other persons that may have an interest in the settlement.
7.5. The
Company covenants to indemnify the Warrant Agent and hold it harmless from and against any loss, liability, claim or expense (“Loss”)
arising out of or in connection with the Warrant Agent’s duties under this Warrant Agreement, including the costs and expenses
of defending itself against any Loss, unless such Loss shall have been determined by a court of competent jurisdiction to be a
result of the Warrant Agent’s gross negligence or willful misconduct.
7.6. Unless
terminated earlier by the parties hereto, this Agreement shall terminate 90 days after the earlier of the Expiration Date and
the date on which no Warrants remain outstanding (the “Termination Date”). On the business day following the
Termination Date, the Agent shall deliver to the Company any entitlements, if any, held by the Warrant Agent under this Warrant
Agreement. The Agent’s right to be reimbursed for fees, charges and out-of-pocket expenses as provided in this Section 8
shall survive the termination of this Warrant Agreement.
7.7. If
any provision of this Warrant Agreement shall be held illegal, invalid, or unenforceable by any court, this Warrant Agreement
shall be construed and enforced as if such provision had not been contained herein and shall be deemed an Agreement among the
parties to it to the full extent permitted by applicable law.
7.8. The
Company represents and warrants that: (a) it is duly incorporated and validly existing under the laws of its jurisdiction of incorporation;
(b) the offer and sale of the Warrants and the execution, delivery and performance of all transactions contemplated thereby (including
this Warrant Agreement) have been duly authorized by all necessary corporate action and will not result in a breach of or constitute
a default under the articles of association, bylaws or any similar document of the Company or any indenture, agreement or instrument
to which it is a party or is bound; (c) this Warrant Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid, binding and enforceable obligation of the Company; (d) the Warrants will comply in all material respects with
all applicable requirements of law; and (e) to the best of its knowledge, there is no litigation pending or threatened as of the
date hereof in connection with the offering of the Warrants.
7.9. In
the event of inconsistency between this Warrant Agreement and the descriptions in the Registration Statement, as they may from
time to time be amended, the terms of this Warrant Agreement shall control.
7.10. Set
forth in Exhibit C hereto is a list of the names and specimen signatures of the persons authorized to act for the Company
under this Warrant Agreement (the “Authorized Representatives”). The Company shall, from time to time, certify
to you the names and signatures of any other persons authorized to act for the Company under this Warrant Agreement.
7.11. Except
as expressly set forth elsewhere in this Warrant Agreement, all notices, instructions and communications under this Agreement
shall be in writing, shall be effective upon receipt and shall be addressed, if to the Company, to its address set forth beneath
its signature to this Agreement, or, if to the Warrant Agent, to VStock Transfer, LLC 00 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000,
or to such other address of which a party hereto has notified the other party.
7.12.
(a) This Warrant Agreement shall be governed by and construed in accordance with the laws of the State of New York. All actions
and proceedings relating to or arising from, directly or indirectly, this Warrant Agreement may be litigated in courts located
within the Borough of Manhattan in the City and State of New York. The Company hereby submits to the personal jurisdiction of
such courts and consents that any service of process may be made by certified or registered mail, return receipt requested, directed
to the Company at its address last specified for notices hereunder. Each of the parties hereto hereby waives the right to a trial
by jury in any action or proceeding arising out of or relating to this Warrant Agreement. (b) This Warrant Agreement shall inure
to the benefit of and be binding upon the successors and assigns of the parties hereto. This Warrant Agreement may not be assigned,
or otherwise transferred, in whole or in part, by either party without the prior written consent of the other party, which the
other party will not unreasonably withhold, condition or delay; except that (i) consent is not required for an assignment or delegation
of duties by Warrant Agent to any affiliate of Warrant Agent and (ii) any reorganization, merger, consolidation, sale of assets
or other form of business combination by Warrant Agent or the Company shall not be deemed to constitute an assignment of this
Warrant Agreement. (c) No provision of this Warrant Agreement may be amended, modified or waived, except in a written document
signed by both parties. The Company and the Warrant Agent may amend or supplement this Warrant Agreement without the consent of
any Holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein
or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may
deem necessary or desirable and that the parties determine, in good faith, shall not adversely affect the interest of the Holders.
All other amendments and supplements shall require the vote or written consent of Holders of at least 50.1% of the then outstanding
Warrants, provided that adjustments may be made to the Warrant terms and rights in accordance with Section 4 without the consent
of the Holders.
7.13. Payment
of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the
Warrant Agent in respect of the issuance or delivery of Warrant Shares upon the exercise of Warrants, but the Company may require
the Holders to pay any transfer taxes in respect of the Warrants or such shares. The Warrant Agent may refrain from registering
any transfer of Warrants or any delivery of any Warrant Shares unless or until the persons requesting the registration or issuance
shall have paid to the Warrant Agent for the account of the Company the amount of such tax or charge, if any, or shall have established
to the reasonable satisfaction of the Company and the Warrant Agent that such tax or charge, if any, has been paid.
7.14. Resignation
of Warrant Agent.
7.14.1. Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving thirty (30) days’ notice in writing to the Company, or such
shorter period of time agreed to by the Company. The Company may terminate the services of the Warrant Agent, or any successor
Warrant Agent, after giving thirty (30) days’ notice in writing to the Warrant Agent or successor Warrant Agent, or such
shorter period of time as agreed. If the office of the Warrant Agent becomes vacant by resignation, termination or incapacity
to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company
shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity
by the Warrant Agent, then the Warrant Agent or any Holder may apply to any court of competent jurisdiction for the appointment
of a successor Warrant Agent at the Company’s cost. Pending appointment of a successor to such Warrant Agent, either by
the Company or by such a court, the duties of the Warrant Agent shall be carried out by the Company. Any successor Warrant Agent
(but not including the initial Warrant Agent), whether appointed by the Company or by such court, shall be a person organized
and existing under the laws of any state of the United States of America, in good standing, and authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any
successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor
Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed, and except
for executing and delivering documents as provided in the sentence that follows, the predecessor Warrant Agent shall have no further
duties, obligations, responsibilities or liabilities hereunder, but shall be entitled to all rights that survive the termination
of this Warrant Agreement and the resignation or removal of the Warrant Agent, including but not limited to its right to indemnity
hereunder. If for any reason it becomes necessary or appropriate or at the request of the Company, the predecessor Warrant Agent
shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall
make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
7.14.2. Notice
of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof
to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
7.14.3. Merger
or Consolidation of Warrant Agent. Any person into which the Warrant Agent may be merged or converted or with which it may
be consolidated or any person resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party
or any person succeeding to the shareowner services business of the Warrant Agent or any successor Warrant Agent shall be the
successor Warrant Agent under this Warrant Agreement, without any further act or deed. For purposes of this Warrant Agreement,
“person” shall mean any individual, firm, corporation, partnership, limited liability company, joint venture, association,
trust or other entity, and shall include any successor (by merger or otherwise) thereof or thereto.
8. Miscellaneous
Provisions.
8.1. Persons
Having Rights under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be implied from
any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than
the parties hereto and the Holders any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant,
condition, stipulation, promise, or agreement hereof.
8.2. Examination
of the Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the
Warrant Agent designated for such purpose for inspection by any Holder. Prior to such inspection, the Warrant Agent may require
any such holder to provide reasonable evidence of its interest in the Warrants.
8.3. Counterparts.
This Warrant Agreement may be executed in any number of original, facsimile or electronic counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
8.4. Effect
of Headings. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not
affect the interpretation thereof.
9. Certain
Definitions. As used herein, the following terms shall have the following meanings:
(a) “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance,
sale or delivery (or deemed issuance, sale or delivery in accordance with Section 4) of Common Stock (other than rights of the
type described in Section 4.2 and 4.3 hereof) that could result in a decrease in the net consideration received by the Company
in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment
or other similar rights) but excluding anti-dilution and other similar rights (including pursuant to Section 4.4 of this Agreement).
(b) “Trading
Day” means any day on which the Common Stock is traded on the Trading Market, or, if the Trading Market is not the principal
trading market for the Common Stock, then on the principal securities exchange or securities market in the United States on which
the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is
are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading
during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00 P.M., Eastern Time).
(c) “Trading
Market” means NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the
New York Stock Exchange.
(d) “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (i) 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. (Eastern Time) to 4:02 p.m. (Eastern Time)); (ii) the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (iii) if the Common Stock are not then listed or
quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the OTCQB maintained 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 Common Stock so reported; or (iv) in all other cases, the fair market value of the Common Stock as determined
by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
[Signature
Page to Follow]
IN
WITNESS WHEREOF, this Warrant Agent Agreement has been duly executed by the parties hereto as of the day and year first above
written.
EXHIBIT
A
[FORM
OF GLOBAL CERTIFICATE]
[UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
TOUGHBUILT
INDUSTRIES, INC.
WARRANT
CERTIFICATE
NOT
EXERCISABLE AFTER __________________
This
certifies that the person whose name and address appears below, or registered assigns, is the registered owner of the number of
Warrants set forth below. Each Warrant entitles its registered holder to purchase from ToughBuilt Industries, Inc., a company
incorporated under the laws of the State of Nevada (the “Company”), at any time prior to 5:00 P.M. (Eastern
Time) on _______________, 2024, one share of common stock, par value $0.0001 per share, of the Company (each, a “Warrant
Share” and collectively, the “Warrant Shares”), at an exercise price of $ per share, subject to possible
adjustments as provided in the Warrant Agreement (as defined below).
This
Warrant Certificate, with or without other Warrant Certificates, upon surrender at the designated office of the Warrant Agent,
may be exchanged for another Warrant Certificate or Warrant Certificates evidencing the same number of Warrants as the Warrant
Certificate or Warrant Certificates surrendered. A transfer of the Warrants evidenced hereby may be registered upon surrender
of this Warrant Certificate at the designated office of the Warrant Agent by the registered holder in person or by a duly authorized
attorney, properly endorsed or accompanied by proper instruments of transfer, a signature guarantee, and such other and further
documentation as the Warrant Agent may reasonably request and duly stamped as may be required by the laws of the State of New
York and of the United States of America.
The
terms and conditions of the Warrants and the rights and obligations of the holder of this Warrant Certificate are set forth in
the Warrant Agent Agreement dated as of , 2020 (the “Warrant Agreement”) between the Company and
VStock Transfer, LLC (the “Warrant Agent”). A copy of the Warrant Agreement is available for inspection during
business hours at the office of the Warrant Agent.
This
Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by an authorized signatory
of the Warrant Agent.
WITNESS
the facsimile signature of a proper officer of the Company.
Dated:
______________
Countersigned:
| VSTOCK TRANSFER, LLC |
|
| |
|
|
| By:
|
|
|
| Name:
|
|
|
| Title: |
|
|
PLEASE
DETACH HERE
_________________________________________________________________________________________
Certificate
No.: Number of Warrants:
WARRANT
CUSIP NO.: _______________
[COMPANY]
EXHIBIT
B
NOTICE
OF EXERCISE
TO:
TOUGHBUILT INDUSTRIES, INC.
(1) The 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, if any.
(2) Payment
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).
(3) Please
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:
________________________________________________
[SIGNATURE
OF HOLDER]
| Name
of Investing Entity: |
|
| Signature
of Authorized Signatory of Investing Entity: |
|
| Name
of Authorized Signatory: |
|
| Title
of Authorized Signatory: |
|
| Date: |
|
EXHIBIT
C
[FORM
OF CERTIFICATED WARRANT]
EXHIBIT
D
AUTHORIZED
REPRESENTATIVES
EXHIBIT
E
FORM
OF WARRANT CERTIFICATE REQUEST NOTICE
WARRANT
CERTIFICATE REQUEST NOTICE
To:
VStock Transfer, LLC, as Warrant Agent for ToughBuilt Industries, Inc. (the “Company”)
The
undersigned Holder of Common Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company
hereby elects to receive a Definitive Certificate evidencing the Warrants held by the Holder as specified below:
1.
Name of Holder of Warrants in form of Global Warrants: _____________________________________
2.
Name of Holder in Definitive Certificate (if different from name of Holder of Warrants in form of Global Warrants): ________________________________________________________
3.
Number of Warrants in name of Holder in form of Global Warrants: __________________________________________
4.
Number of Warrants for which Definitive Certificate shall be issued: __________________________________________
5.
Number of Warrants in name of Holder in form of Global Warrants after issuance of Definitive Certificate, if any: _______________________________________________________
6.
Definitive Certificate shall be delivered to the following address:
The
undersigned hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Definitive Certificate,
the Holder is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to
the number of Warrants evidenced by the Definitive Certificate.
[SIGNATURE
OF HOLDER]
Name
of Investing Entity:
____________________________________
Signature
of Authorized Signatory of Investing Entity:
____________________________________
Name
of Authorized Signatory:
____________________________________
____________________________________
Title
of Authorized Signatory:
Date:
_______________________________
