Exhibit 4.2


 





[FORM OF WARRANT]


 


NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


Net
Element, INC.


 


Warrant
To Purchase Common Stock


 


Warrant No.:                   


Number of Shares of Common Stock:_____________


Date of Issuance: [           ]1
("Issuance Date")


 


Net Element, Inc., a Delaware
corporation (the "Company"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted
assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, at any time or times on or after the Issuance Date, but not after 11:59 p.m.,
New York time, on the Expiration Date, (as defined below), ______________ (_____________)2 fully paid nonassessable
shares of Common Stock, subject to adjustment as provided herein (the "Warrant Shares"). Except as otherwise
defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued
in exchange, transfer or replacement hereof, this "Warrant"), shall have the meanings set forth in Section 17.
This Warrant is one of the Warrants to purchase Common Stock (the "SPA Warrants") issued pursuant to Section 1
of that certain Securities Purchase Agreement, dated as of April 30, 2015 (the "Subscription Date"), by and among
the Company and the investors (the "Buyers") referred to therein (the "Securities Purchase Agreement").
Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Securities Purchase
Agreement.


 





 






1 [INSERT IN INITIAL WARRANTS:
April 30, 2015] [INSERT IN ADDITIONAL WARRANTS: the applicable Additional Closing Date (as defined in the Securities
Purchase Agreement)]


 


2 [INSERT
IN INITIAL NOTES: Insert 88% of the number of shares of Common Stock issuable upon conversion of the Initial Notes purchased
by the Holder pursuant to the Securities Purchase Agreement.] [INSERT IN ADDITIONAL NOTES: Insert 88% of the number of shares
of Common Stock issuable upon conversion of the Additional Notes purchased by the Holder pursuant to the Securities Purchase Agreement.]


 




    	 



    	 



    

  


1.          EXERCISE
OF WARRANT.


 


(a)         Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date, in whole or in part, by
(i) delivery of a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"),
of the Holder's election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise
Price") in cash by wire transfer of immediately available funds or (B) if the provisions of Section 1(d) are applicable,
by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The
Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of
the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the
first (1st) Trading Day following the date on which the Company has received the Exercise Notice, the Company shall
transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's transfer
agent (the "Transfer Agent"). On or before the third (3rd) Trading Day following the date on which the Company
has received the Exercise Notice, so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise)
on or prior to the second (2nd) Trading Day following the date on which the Company has received the Exercise Notice (the "Share
Delivery Date") (provided that if the Aggregate Exercise Price has not been delivered by such date, the Share Delivery
Date shall be one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered), the Company
shall (x) provided that the Warrant Shares are subject to an effective resale registration statement in favor of the Holder or,
if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the
Holder, or (Y) if the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder and,
if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the
Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's
or its designee's balance account with The Depository Trust Company ("DTC") through its Deposit / Withdrawal At
Custodian system, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall
be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant
Shares via DTC, if any. Upon delivery of the Exercise Notice, 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 such
Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares,
as applicable. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant
Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own
expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares
issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant
is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant
Shares to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company's obligations to issue and
deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination.


 




    	- 2 -



    	 



    

  


(b)         Exercise
Price. For purposes of this Warrant, "Exercise Price" means $[ ]3, subject to adjustment as provided
herein.


 


(c)          Company's
Failure to Timely Deliver Securities. If the Company for any reason or for no reason shall fail (I) on or prior to the Share
Delivery Date to credit the Holder's balance account with DTC if the Warrant Shares are subject to an effective resale registration
statement in favor of the Holder or, if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate
resale of the Warrant Shares by the Holder, or issue and deliver to the Holder a certificate if the Warrant Shares are not subject
to an effective resale registration statement in favor of the Holder and, if exercised via Cashless Exercise, at a time when Rule
144 would not be available for immediate resale of the Warrant Shares by the Holder, for such number of shares of Common Stock
to which the Holder is entitled upon the Holder's exercise of this Warrant or (II) if the Registration Statement (as defined in
the Registration Rights Agreement) covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the "Unavailable
Warrant Shares") is not available for the resale of such Unavailable Warrant Shares, to promptly, but in no event later
than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system (the
event described in the immediately foregoing clause (II) is hereinafter referred as a "Notice Failure" and together
with the event described in clause (I) above, an "Exercise Failure"), then, in addition to all other remedies
available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and during such
Exercise Failure an amount equal to 1.5% of the product of (A) the sum of the number of shares of Common Stock not issued to the
Holder on or prior to the Share Delivery Date and to which the Holder is entitled, and (B) any trading price of the Common Stock
selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending
on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with
respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company's obligations to make any payments
which have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing, if
on or prior to the Share Delivery Date the Company shall fail to credit the Holder's balance account with DTC if the Warrant Shares
are subject to an effective resale registration statement in favor of the Holder or, if exercised via Cashless Exercise, at a time
when Rule 144 would be available for immediate resale of the Warrant Shares by the Holder, or to issue and deliver a certificate
to the Holder if the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder and, if
exercised via Cashless Exercise, at a time when Rule 144 would not be available for immediate resale of the Warrant Shares by the
Holder, for the number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise hereunder or pursuant
to the Company's obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a "Buy-In"),
then the Company shall, within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay
cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Company's
obligation to credit such Holder's balance account with DTC or issue and deliver such certificate, as applicable, for such shares
of Common Stock shall terminate, or (ii) promptly honor its obligation to credit such Holder's balance account with DTC or issue
and deliver to the Holder a certificate, as applicable, for such shares of Common Stock and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable
Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit the 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 certificates representing shares of Common Stock (or to electronically
deliver such shares of Common Stock) upon the exercise of this Warrant as required pursuant to the terms hereof.








 





 






3 [INSERT IN INITIAL WARRANTS:
Insert $1.74.]


[INSERT IN ADDITIONAL WARRANTS: Insert price equal to 150%
of the lowest of (i) the arithmetic average of the Weighted Average Prices of the Common Stock during the thirty (30) Trading Days
immediately prior to the date of the applicable Buyer Additional Closing Notice (as defined in the Securities Purchase Agreement),
(ii) the arithmetic average of the Weighted Average Prices of the Common Stock during the fifteen (15) Trading Days immediately
prior to the date of the applicable Buyer Additional Closing Notice and (iii) the last Closing Bid Price of the Common Stock immediately
prior to the date of the applicable Buyer Additional Closing Notice.]


 




    	- 3 -



    	 



    

 


(d)         Cashless
Exercise.  Notwithstanding anything contained herein to the contrary, if the Registration Statement (as defined in the
Registration Rights Agreement) covering the resale of the Unavailable Warrant Shares is not available for the resale of such Unavailable
Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula
(a "Cashless Exercise"):


 


Net Number = (A
x B) - (A x C)


D


 


For purposes of
the foregoing formula:


 


A= the total
number of shares with respect to which this Warrant is then being exercised.


 


B= the arithmetic
average of the Closing Sale Prices of the Common Stock for the five (5) consecutive Trading Days ending on the date immediately
preceding the date of the Exercise Notice.


 


C= the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.


 


D= the Closing
Sale Price of the Common Stock on the date of the Exercise Notice.


 


For purposes of Rule 144(d)
promulgated under the 1933 Act, as in effect on the date hereof, it is intended that the Warrant Shares issued in a Cashless Exercise
shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced,
on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement.


 


(e)         Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.


 




    	- 4 -



    	 



    

  


(f)           Limitations
on Exercises.


 


(i)          Beneficial Ownership.
Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant,
and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant
and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise,
the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the "Maximum
Percentage") of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For
purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other
Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus
the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any
convertible notes or convertible preferred stock or warrants, including the other SPA Warrants) beneficially owned by the Holder
or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 1(f)(i). For purposes of this Section 1(f)(i), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "1934 Act"). For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the
Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most
recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities
and Exchange Commission (the "SEC"), as the case may be, (y) a more recent public announcement by the Company
or (z) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding
(the "Reported Outstanding Share Number"). If the Company receives an Exercise Notice from the Holder at a time
when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall
(i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise
Notice would otherwise cause the Holder's beneficial ownership, as determined pursuant to this Section 1(f)(i), to exceed the Maximum
Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise
Notice (the number of shares by which such purchase is reduced, the "Reduction Shares") and (ii) as soon as reasonably
practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason
at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in
writing or by electronic mail 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 and any other Attribution Party since the date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder
and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number
of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which
the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the "Excess
Shares") shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote
or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null
and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of
a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of
9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the
sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply
only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is not an Attribution Party
of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of
the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section
13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any
effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 1(f)(i) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f)(i) or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived
and shall apply to a successor holder of this Warrant.


 




    	- 5 -



    	 



    

  


(ii)          Principal Market
Regulation. The Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant and the Holder
shall not have the right to receive upon exercise of this Warrant any shares of Common Stock if the issuance of such shares of
Common Stock would exceed that number of shares of Common Stock which the Company may issue upon exercise of the SPA Warrants or
otherwise without breaching the Company's obligations under any applicable rules or regulations of any applicable Eligible Market
(the "Exchange Cap"), except that such limitation shall not apply in the event that the Company (x) obtains the
approval of its stockholders as required by the applicable rules of the Eligible Market for issuances of shares of Common Stock
in excess of such amount or (y) obtains a written opinion from outside counsel to the Company that such approval is not required,
which opinion shall be reasonably satisfactory to the Required Holders. Until such approval or written opinion is obtained, no
Holder shall be issued in the aggregate, upon exercise of any SPA Warrants, shares of Common Stock in an amount greater than the
product of the Exchange Cap multiplied by a fraction, the numerator of which is the total number of shares of Common Stock underlying
the SPA Warrants issued to such Holder pursuant to the Securities Purchase Agreement on the Issuance Date and the denominator of
which is the aggregate number of shares of Common Stock underlying the SPA Warrants issued to the Buyers pursuant to the Securities
Purchase Agreement on the Issuance Date (with respect to each Holder, the "Exchange Cap Allocation"). In the event
that any Holder shall sell or otherwise transfer any of such Holder's SPA Warrants, the transferee shall be allocated a pro rata
portion of such Holder's Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with
respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of SPA Warrants
shall exercise all of such holder's SPA Warrants into a number of shares of Common Stock which, in the aggregate, is less than
such holder's Exchange Cap Allocation, then the difference between such holder's Exchange Cap Allocation and the number of shares
of Common Stock actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders
of SPA Warrants on a pro rata basis in proportion to the shares of Common Stock underlying the SPA Warrants then held by each such
holder. In the event that the Company is prohibited from issuing any Warrant Shares for which an Exercise Notice has been received
as a result of the operation of this Section 1(f)(ii), then unless the Holder elects to void such exercise, the Holder may require
the Company to pay to the Holder within three (3) Trading Days of the applicable attempted exercise, cash in an amount equal to
the product of (i) the quotient determined by dividing (x) the number of Warrant Shares that the Company is unable to deliver pursuant
to this Section 1(f)(ii), by (y) the total number of Warrant Shares issuable upon exercise of this Warrant (without regard to any
limitations or restrictions on exercise of this Warrant) and (ii) the Black Scholes Value; provided, that (x) references to "the
day immediately following the public announcement of the applicable Fundamental Transaction" in the definition of "Black
Scholes Value" shall instead refer to "the date the Holder exercises this Warrant and the Company cannot deliver the
required number of Warrant Shares because of the Exchange Cap" and (y) clause (iii) of the definition of "Black Scholes
Value" shall instead refer to "the underlying price per share used in such calculation shall be the highest Weighted
Average Price during the period beginning on the date of the applicable date of exercise and the date that the Company makes the
applicable cash payment."


 




    	- 6 -



    	 



    

  


(g)          Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least
a number of shares of Common Stock equal to 130% of the number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of all of this Warrant then outstanding (the "Required Reserve Amount" and the failure
to have such sufficient number of authorized and unreserved shares of Common Stock, an "Authorized Share Failure"),
then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than seventy-five (75) days after the occurrence of such Authorized Share Failure, the Company shall hold
a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend
to the stockholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure,
the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve
the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent
and submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that upon any exercise of this Warrant,
the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise, then unless the Holder elects
to void such attempted exercise, the Holder may require the Company to pay to the Holder within three (3) Trading Days of the applicable
exercise, cash in an amount equal to the product of (i) the quotient determined by dividing (x) the number of Warrant Shares that
the Company is unable to deliver pursuant to this Section 1(g), by (y) the total number of Warrant Shares issuable upon exercise
of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant) and (ii) the Black Scholes Value;
provided, that (x) references to "the day immediately following the public announcement of the applicable Fundamental Transaction"
in the definition of "Black Scholes Value" shall instead refer to "the date the Holder exercises this Warrant and
the Company cannot deliver the required number of Warrant Shares because of an Authorized Share Failure" and (y) clause (iii)
of the definition of "Black Scholes Value" shall instead refer to "the underlying price per share used in such calculation
shall be the highest Weighted Average Price during the period beginning on the date of the applicable date of exercise and the
date that the Company makes the applicable cash payment."


 




    	- 7 -



    	 



    

  


(h)          Mandatory
Exercise at the Company's Election.


 


(i)          If
at any time and from time to time after the date that no SPA Securities continue to be outstanding (the "Note Termination
Date"), if no Equity Conditions Failure has occurred and the Weighted Average Price of the Common Stock exceeds 125% of
the Exercise Price as in effect on the Issuance Date for forty (40) consecutive Trading Days after the Note Termination Date (the
"Price Condition"), the Company shall have the right, for so long as there is no Equity Conditions Failure and
the Price Condition is satisfied, to require the Holder and all, but not less than all, holders of the other SPA Warrants issued
on [INSERT IN INITIAL WARRANTS: the Initial Closing Date (as defined in the Securities Purchase Agreement)] [INSERT IN
ADDITIONAL WARRANTS: all Additional Closing Dates (as defined in the Securities Purchase Agreement] to exercise on a pro rata
basis this Warrant and such other applicable SPA Warrants for a number of Warrant Shares equal in the aggregate to no more than
25% of the number of Warrant Shares underlying this Warrant and the other applicable SPA Warrants issued on [INSERT IN INITIAL
WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing Dates] (the "Mandatory
Exercise Cap") on the Mandatory Exercise Date (as defined below) into fully paid, validly issued and nonassessable shares
of Common Stock in accordance with Section 1(a) hereof at the Exercise Price in effect as of such Mandatory Exercise Date
(a "Mandatory Exercise"). The Company may exercise its right to require exercise under this Section 1(h) by delivering
a written notice thereof by facsimile or electronic mail and overnight courier to the Holder and all, but not less than all, of
the holders of the other applicable SPA Warrants issued on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT
IN ADDITIONAL WARRANTS: all Additional Closing Date] and the Transfer Agent (a "Mandatory Exercise Notice"
and each date the Holder and all the holders of such applicable other SPA Warrants received such notice is referred to as the "Mandatory
Exercise Notice Date"). Each Mandatory Exercise Notice shall be irrevocable. Each Mandatory Exercise Notice shall (i)
state (a) the Trading Day on which such Mandatory Exercise shall occur, which Trading Day shall be the third (3rd) Trading
Day immediately following such Mandatory Exercise Notice Date (a "Mandatory Exercise Date"), (b) the aggregate
number of Warrant Shares subject to Mandatory Exercise from the Holder and all holders of the other applicable SPA Warrants issued
on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing
Dates], which number, together with the number of Warrant Shares underlying this Warrant and any applicable SPA Warrants issued
on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing
Dates] subject to any Mandatory Exercise preceding the applicable Mandatory Exercise shall not exceed the Mandatory Exercise Cap
(the "Mandatory Exercise Amount") pursuant to this Section 1(h) (and analogous provisions under such other SPA
Warrants), (c) the number of shares of Common Stock to be issued to the Holder on such Mandatory Exercise Date and (d) the number
of issued and outstanding shares as of such Mandatory Exercise Notice Date and (ii) certify that there has been no Equity
Conditions Failure as of such Mandatory Exercise Notice Date and that the Price Condition has been satisfied. If the Company confirmed
that there was no such Equity Conditions Failure as of the Mandatory Exercise Notice Date and that the Price Condition has been
satisfied as of such Mandatory Exercise Notice Date but an Equity Conditions Failure occurs between such Mandatory Exercise Notice
Date and any time through the Mandatory Exercise Date (a "Mandatory Exercise Interim Period") and/or the Price
Condition ceases to be satisfied at any time during such Mandatory Exercise Interim Period (a "Mandatory Exercise Failure"),
the Company shall provide the Holder and each holder of the other applicable SPA Warrants issued on [INSERT IN INITIAL WARRANTS:
the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing Dates] a subsequent notice to that effect.
If there is a Mandatory Exercise Failure (which is not waived in writing by the Holder) during such Mandatory Exercise Interim
Period, then the Mandatory Exercise shall be null and void with respect to all or any part designated by the Holder of the unexercised
Mandatory Exercise Amount subject to the Mandatory Exercise and the Holder shall be entitled to all the rights of a holder of this
Warrant with respect to such Mandatory Exercise Amount of this Warrant. The Company may not effect more than five (5) Mandatory
Exercise under this Warrant and the other applicable SPA Warrants issued on [INSERT IN INITIAL WARRANTS: the Initial Closing
Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing Dates]. Notwithstanding anything to the contrary in this Section
1(h), until the Mandatory Exercise has occurred, the Mandatory Exercise Amount of this Warrant subject to the Mandatory Exercise
may be exercised, in whole or in part, by the Holder into shares of Common Stock pursuant to Section 1(a). All exercises of this
Warrant by the Holder after the Mandatory Exercise Notice Date shall reduce the Mandatory Exercise Amount required to be exercised
on the Mandatory Exercise Date, unless the Holder otherwise indicates in the applicable Exercise Notice.


 




    	- 8 -



    	 



    

  


(ii)         If
the Company elects to cause a Mandatory Exercise pursuant to Section 1(h)(i), then it must simultaneously take the same action
in the same proportion with respect to all of the other SPA Warrants issued on [INSERT IN INITIAL WARRANTS: the Initial
Closing Date] [INSERT IN ADDITIONAL WARRANTS: any Additional Closing Date]. For the avoidance of doubt, if the Company elects
a Mandatory Exercise of this Warrant pursuant to Section 1(h)(i) (or similar provisions under the other SPA Warrants issued on
[INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: any Additional Closing Date])
with respect to less than all of the Warrant Shares underlying such SPA Warrants then outstanding, then the Company shall require
exercise of a number of Warrant Shares underlying such SPA Warrants from the Holder and each of the holders of the other SPA Warrants
issued on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: any Additional Closing
Date] equal to the product of (i) the aggregate number of Warrant Shares which the Company has elected to cause to be exercised
pursuant to Section 1(h)(i), multiplied by (ii) the fraction, the numerator of which is the sum of the aggregate number of Warrant
Shares underlying the SPA Warrant issued to such holder pursuant to the Securities Purchase Agreement on [INSERT IN INITIAL
WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: any Additional Closing Date] and the denominator
of which is the sum of the aggregate number of Warrant Shares underlying the SPA Warrants issued to all holders pursuant to the
Securities Purchase Agreement on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS:
all Additional Closing Dates] (such fraction with respect to each holder is referred to as its "Exercise Allocation Percentage,"
and such amount with respect to each holder is referred to as its "Pro Rata Exercise Amount"); provided,
however, that in the event that any holder's Pro Rata Exercise Amount exceeds the outstanding number of such applicable
SPA Warrants, then such excess Pro Rata Exercise Amount shall be allocated amongst the remaining holders of SPA Warrants issued
on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing
Dates] in accordance with the foregoing formula. In the event that the initial holder of any SPA Warrants shall sell or otherwise
transfer any of such holder's SPA Warrants, the transferee shall be allocated a pro rata portion of such holder's Exercise Allocation
Percentage and Pro Rata Exercise Amount.


 




    	- 9 -



    	 



    

  


2.          ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:


 


(a)          Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the Subscription Date, the Company issues or sells, or
in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale
of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed to have
been issued or sold by the Company in connection with any Excluded Securities for a consideration per share (the "New Issuance
Price") less than a price (the "Applicable Price") equal to the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale (the foregoing a "Dilutive Issuance"), then immediately
after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price.
Upon each such adjustment of the Exercise Price hereunder, the number of Warrant Shares issuable immediately prior to such Dilutive
Issuance shall be adjusted to the number of shares of Common Stock determined by multiplying the Exercise Price then in effect
immediately prior to such adjustment by the number of Warrant Shares acquirable upon exercise of this Warrant immediately prior
to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. For purposes of determining
the adjusted Exercise Price under this Section 2(a), the following shall be applicable:4


 


(i)          Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(a)(i), the "lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option less any consideration
paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of Common Stock
or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock
upon conversion, exercise or exchange of such Convertible Securities.


 





 






4 NTD: What is provided in this section is a typical
full ratchet provision. Your proposal for adjustments below market price is not.


 




    	- 10 -



    	 



    

  


(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(a)(ii),
the "lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof"
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of
such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common Stock
upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other
provisions of this Section 2(a), no further adjustment of the Exercise Price or number of Warrant Shares shall be made by reason
of such issue or sale.


 


(iii)        Change
in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the Exercise
Price and the number of Warrant Shares, which would have been in effect at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as
the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option
or Convertible Security that was outstanding as of the Subscription Date are increased or decreased in the manner described in
the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment
pursuant to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect
or a decrease in the number of Warrant Shares.


 




    	- 11 -



    	 



    

  


(iv)        Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value of such
Options and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold
for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company
pursuant to the terms of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration other than cash
received therefor will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options
or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by
the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company will be the Closing Sale Price of such publicly traded securities
on the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be
deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such
shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash
or publicly traded securities will be determined jointly by the Company and the Required Holders. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the "Valuation Event"),
the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following
the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company; provided, however, that in the event the determination of such appraiser is identical
to the fair value of such consideration as determined by the Company, the fees and expenses of such appraiser shall be borne equally
among the holders of the SPA Warrants who disputed the valuation of the Company.


 


(v)         Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.


 




    	- 12 -



    	 



    

  


(vi)        No
Readjustments. For the avoidance of doubt, in the event the Exercise Price has been adjusted pursuant to this Section 2(a)
and the Dilutive Issuance that triggered such adjustment does not occur, is not consummated, is unwound or is cancelled after the
fact for any reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise Price that would have been in
effect if such Dilutive Issuance had not occurred or been consummated.


 


(b)          Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant, with the prior written consent of the Required
Holders, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors
of the Company.


 


(c)          Adjustment
Upon Subdivision of Common Stock. If the Company at any time on or after the Subscription Date subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of
Warrant Shares will be proportionately increased. Any adjustment under this Section 2(c) shall become effective at the close
of business on the date the subdivision becomes effective.


 


(d)          Other
Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price and the
number of Warrant Shares, as mutually determined by the Company’s Board of Directors and the Required Holders, so as to protect
the rights of the Holder; provided that no such adjustment pursuant to this Section 2(d) will increase the Exercise Price
or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.


 


3.          RIGHTS
UPON DISTRIBUTION OF ASSETS. 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, options, evidence of indebtedness or any other assets 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 or restrictions on exercise of this Warrant,
including without limitation, the Maximum Percentage) 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 and the other Attribution Parties exceeding the Maximum Percentage, then the
Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted
such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly
in abeyance) to the same extent as if there had been no such limitation).


 




    	- 13 -



    	 



    

  


4.          PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.


 


(a)          Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class 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 this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Maximum Percentage) 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,
that to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent
(and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial
ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until
such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such
initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been
no such limitation).


 




    	- 14 -



    	 



    

  


(b)          Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
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 4(b) pursuant to written agreements in form and substance reasonably satisfactory to the Required Holders
and approved by the Required Holders prior to such Fundamental Transaction, including agreements , if so requested by the Holder,
to deliver to each holder of the SPA Warrants in exchange for such SPA Warrants a security of the Successor Entity evidenced by
a written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted exercise
price equal to the value for the shares of Common Stock reflected by the terms of such Fundamental Transaction, and exercisable
for a corresponding number of shares of capital stock 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
reasonably satisfactory to the Required Holders, 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 adjustments to the 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 occurrence or consummation
of such Fundamental Transaction), and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation
whose common stock is quoted on or listed for trading on an Eligible Market. Any security issuable or potentially issuable to the
Holder pursuant to the terms of this Warrant on the consummation of a Fundamental Transaction shall be registered and freely tradable
by the Holder without any restriction or limitation or the requirement to be subject to any holding period pursuant to any applicable
securities laws. Upon the occurrence or consummation of any Fundamental Transaction, and it shall be a required condition to the
occurrence or consummation of any Fundamental Transaction that, the Company and the Successor Entity or Successor Entities, jointly
and severally, shall succeed to, and the Company shall cause any Successor Entity or Successor Entities to jointly and severally
succeed to, and be added to the term "Company" under this Warrant (so that from and after the date of such Fundamental
Transaction, each and every provision of this Warrant referring to the "Company" shall refer instead to each of the Company
and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor Entity or Successor Entities,
jointly and severally, may exercise every right and power of the Company prior thereto and shall assume all of the obligations
of the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity or Successor Entities,
jointly and severally, had been named as the Company in this Warrant, and, solely at the request of the Holder, if the Successor
Entity and/or Successor Entities is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible
Market, shall deliver (in addition to and without limiting any right under this Warrant) to the Holder in exchange for this Warrant
a security of the Successor Entity and/or Successor Entities evidenced by a written instrument substantially similar in form and
substance to this Warrant and exercisable for a corresponding number of shares of capital stock of the Successor Entity and/or
Successor Entities (the "Successor Capital Stock") 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
(such corresponding number of shares of Successor Capital Stock to be delivered to the Holder shall be equal to the greater of
(A) the quotient of (i) the aggregate dollar value of all consideration (including cash consideration and any consideration other
than cash ("Non-Cash Consideration"), in such Fundamental Transaction, as such values are set forth in any definitive
agreement for the Fundamental Transaction that has been executed at the time of the first public announcement of the Fundamental
Transaction or, if no such value is determinable from such definitive agreement, as determined in accordance with Section 12 with
the term "Non-Cash Consideration" being substituted for the term "Exercise Price") that the Holder would have
been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date
for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental
Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without
regard to any limitations on the exercise of this Warrant) (the "Aggregate Consideration") divided by (ii) the
per share Closing Sale Price of such Successor Capital Stock on the Trading Day immediately prior to the consummation or occurrence
of the Fundamental Transaction and (B) the product of (i) the Aggregate Consideration and (ii) the highest exchange ratio pursuant
to which any stockholder of the Company may exchange Common Stock for Successor Capital Stock) (provided, however, to the extent
that the Holder's right to receive any such shares of publicly traded common stock (or their equivalent) of the Successor Entity
would result in the Holder and its other Attribution Parties exceeding the Maximum Percentage, if applicable, then the Holder shall
not be entitled to receive such shares to such extent (and shall not be entitled to beneficial ownership of such shares of publicly
traded common stock (or their equivalent) of the Successor Entity as a result of such consideration to such extent) and the portion
of such shares shall be held in abeyance for the Holder until such time or times, as its right thereto would not result in the
Holder and its other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be delivered
such shares to the extent as if there had been no such limitation), and such security shall be reasonably satisfactory to the Holder,
and with an identical exercise price to the Exercise Price hereunder (such adjustments to the number of shares of capital stock
and such exercise price being for the purpose of protecting after the consummation or occurrence of such Fundamental Transaction
the economic value of this Warrant that was in effect immediately prior to the consummation or occurrence of such Fundamental Transaction,
as elected by the Holder solely at its option). Upon occurrence or consummation of the Fundamental Transaction, and it shall be
a required condition to the occurrence or consummation of such Fundamental Transaction that, the Company and the Successor Entity
or Successor Entities shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any
time after the occurrence or consummation of the Fundamental Transaction, as elected by the Holder solely at its option, shares
of Common Stock, Successor Capital Stock or, in lieu of the shares of Common Stock or Successor Capital Stock (or other securities,
cash, assets or other property purchasable upon the exercise of this Warrant prior to such Fundamental Transaction), such shares
of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights),
which for purposes of clarification may continue to be shares of Common Stock, if any, that the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event
resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or
the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard to
any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. In addition to
and not in substitution for any other rights hereunder, prior to the occurrence or consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets or other property with respect
to or in exchange for shares of Common Stock (a "Corporate Event"), the Company shall make appropriate provision
to insure that, and any applicable Successor Entity or Successor Entities shall ensure that, and it shall be a required condition
to the occurrence or consummation of such Corporate Event that, the Holder will thereafter have the right to receive upon exercise
of this Warrant at any time after the occurrence or consummation of the Corporate Event, shares of Common Stock or Successor Capital
Stock or, if so elected by the Holder, in lieu of the shares of Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Corporate Event (but not in lieu of such items still issuable under
Sections 3 and 4(a), which shall continue to be receivable on the Common Stock or on the such shares of stock, securities, cash,
assets or any other property otherwise receivable with respect to or in exchange for shares of Common Stock), such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights and any
shares of Common Stock) which the Holder would have been entitled to receive upon the occurrence or consummation of such Corporate
Event or the record, eligibility or other determination date for the event resulting in such Corporate Event, had this Warrant
been exercised immediately prior to such Corporate Event or the record, eligibility or other determination date for the event resulting
in such Corporate Event (without regard to any limitations on exercise of this Warrant). Provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section 4(b) shall apply
similarly and equally to successive Fundamental Transactions and Corporate Events.


 




    	- 15 -



    	 



    

  


(c)          Notwithstanding
the foregoing, in the event of Fundamental Transaction, at the request of the Holder delivered before the ninetieth (90th)
day after the occurrence or consummation of such Fundamental Transaction, the Company (or the Successor Entity) shall purchase
this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective
date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction.


 


5.          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, 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,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the SPA Warrants, 130% of the number of shares of Common Stock as shall from
time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).


 




    	- 16 -



    	 



    

  


6.          WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity
as a holder of this Warrant, 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 be construed to confer upon the Holder, solely in such Person's
capacity as the Holder of this Warrant, 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 stock, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance
to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.


 


7.          REISSUANCE
OF WARRANTS.


 


(a)          Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.


 


(b)          Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.


 


(c)          Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no SPA
Warrants for fractional Warrant Shares shall be given.


 


(d)          Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.


 




    	- 17 -



    	 



    

  


8.          NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment
of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least
fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such
information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. It is expressly
understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not
be disputed or challenged by the Company.


 


9.          AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders. Any change, amendment or waiver by the Company and the Required Holders shall be binding
on the Holder of this Warrant and all holders of SPA Warrants.


 


10.         GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude
the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's
obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or
other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.


 




    	- 18 -



    	 



    

  


11.         CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.


 


12.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days
of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business
Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two
(2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment
bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the
Company's independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten
(10) Business Days from the time it receives the disputed determinations or calculations; provided, however that
in the event the determination or calculation of the investment bank or the accountant, as the case may be, is identical to the
determination or calculation of the Company, the expenses of such investment bank or accountant, as the case may be, shall be borne
equally among the holders of the SPA Warrants who disputed the determination or calculation of the Company. Such investment bank's
or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.


 


13.         REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.


 




    	- 19 -



    	 



    

  


14.         TRANSFER.
This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of
the Company, except as may otherwise be required by Section 2(f) of the Securities Purchase Agreement.


 


15.         SEVERABILITY.
If any provision of this Warrant 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 Warrant so long as this Warrant 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).


 


16.         DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its Subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.


 


17.         CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:


 


(a)          "1933
Act" means the Securities Act of 1933, as amended.


 


(b)          "Affiliate"
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that "control" of a Person means the power
directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such
Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.


 


(c)          "Attribution
Parties" means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or
any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of
the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common Stock would or could be aggregated
with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.


 




    	- 20 -



    	 



    

  


(d)          "Approved
Stock Plan" means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company's securities may be issued to any employee, officer or director for services provided to the Company.


 


(e)          "Black
Scholes Value" means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the "OV"
function on Bloomberg determined as of the day immediately following the public announcement of the applicable Fundamental Transaction,
or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, for pricing
purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of this Warrant as of such date of request, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the applicable Fundamental
Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated,
(iii) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in the Fundamental Transaction, (iv) a zero cost of borrow
and (v) a 360 day annualization factor.


 


(f)          "Bloomberg"
means Bloomberg Financial Markets.


 


(g)          "Business
Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.


 


(h)          "Closing
Bid Price" and "Closing Sale Price" means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or "pink sheets" by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.


 




    	- 21 -



    	 



    

  


(i)          "Common
Stock" means (i) the Company's shares of Common Stock, par value $0.0001 per share, and (ii) any share capital
into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.


 


(j)          "Convertible
Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.


 


(k)          "Eligible
Market" means the Principal Market, the NYSE MKT LLC, The NASDAQ Global Market, The NASDAQ Global Select Market or The
New York Stock Exchange, Inc.


 




    	- 22 -



    	 



    

  


(l)          "Equity
Conditions" means each of the following conditions: (i) on each day during Equity Conditions Measuring Period, either
(x) all Registration Statements filed and required to be filed pursuant to the Registration Rights Agreement shall be effective
and available for the resale of all remaining Registrable Securities, including the shares of Common Stock issuable upon exercise
of the Warrants that is subject to the applicable Mandatory Exercise requiring the satisfaction of the Equity Conditions, in accordance
with the terms of the Registration Rights Agreement and there shall not have been any Grace Periods (as defined in the Registration
Rights Agreement) or (y) all shares of Common Stock issuable pursuant to the terms of the SPA Securities and exercise of the Warrants,
including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise
requiring the satisfaction of the Equity Conditions, shall be eligible for sale without restriction pursuant to Rule 144 and without
the need for registration under any applicable federal or state securities laws; (ii) on each day during the Equity Conditions
Measuring Period, the Common Stock is designated for quotation on the Principal Market or any other Eligible Market and shall not
have been suspended from trading on such exchange or market nor shall delisting or suspension by such exchange or market been threatened,
commenced or pending in writing by such exchange or market (provided, however, that in the event proceedings for
such delisting or suspension have been threatened or commenced, the Company shall have ninety (90) days from such threat or commencement,
whichever is earlier, to cure such failure before it is deemed, for all purposes hereunder, to have failed to satisfy such Equity
Condition); (iii) during the Equity Conditions Measuring Period, the Company shall have delivered the shares of Common Stock pursuant
to the terms of the SPA Securities and Warrant Shares upon exercise of the Warrants to the holders on a timely basis as set forth
in Section 3(c) of the SPA Securities and Section 1(a) of this Warrant (and analogous provisions under the other SPA Warrants);
(iv) the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise requiring
the satisfaction of the Equity Conditions may be issued in full without violating Section 1(f) hereof and the rules or regulations
of the Principal Market or any other applicable Eligible Market; (v) during the Equity Conditions Measuring Period, the Company
shall not have failed to timely make any payments within ten (10) Business Days of when such payment is due pursuant to any Transaction
Document; (vi) during the Equity Conditions Measuring Period, there shall not have occurred either (A) the public announcement
of a pending, proposed or intended Fundamental Transaction which has not been abandoned, terminated or consummated, (B) an Event
of Default (as defined in the SPA Securities) or (C) an event that with the passage of time or giving of notice would constitute
an Event of Default; (vii) the Company shall have no knowledge of any fact that would cause (x) the Registration Statements required
pursuant to the Registration Rights Agreement not to be effective and available for the resale of all remaining Registrable Securities,
including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise
requiring the satisfaction of the Equity Conditions, in accordance with the terms of the Registration Rights Agreement or (y) any
shares of Common Stock issuable pursuant to the terms of the SPA Securities and shares of Common Stock issuable upon exercise of
the Warrants, including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory
Exercise requiring the satisfaction of the Equity Conditions, not to be eligible for sale without restriction pursuant to Rule
144 promulgated under the Securities Act and any applicable state securities laws; (viii) during the Equity Conditions Measuring
Period, the Company otherwise shall have been in compliance with and shall not have breached any provision, covenant, representation
or warranty of any Transaction Document; (ix) on each day during Equity Conditions Measuring
Period, the Holder shall not be in possession of any material, nonpublic information received from the Company, any Subsidiary
or its respective agent or affiliates; (x) the shares of Common Stock issuable upon exercise of the Warrants that is subject to
the applicable Mandatory Exercise requiring the satisfaction of the Equity Conditions are duly authorized and listed and eligible
for trading without restriction on an Eligible Market; (xi) the Company shall have obtained the Stockholder Approval (as defined
in the Securities Purchase Agreement); (xii) the daily dollar trading volume of the Common Stock as reported by Bloomberg shall
be at least $350,000 on no less than ten (10) Trading Days during the twenty (20) consecutive Trading Day immediately preceding
the applicable date of determination; (xiii) the arithmetic average of the daily dollar trading volume of the Common Stock as reported
by Bloomberg during the twenty (20) consecutive Trading Day immediately preceding the applicable date of determination shall be
no less than $350,000; (xiv) the arithmetic average of the Weighted Average Prices of the Common Stock on each Trading Day during
the Equity Conditions Measuring Period exceeds [     ]5 (as adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction occurring after the Subscription Date); and (xv) on
each day during the Equity Conditions Measuring Period, the Company is in compliance with the requirement set forth in Rule 144(c)(1).


 


(m)         "Equity
Conditions Failure" means that on any day during the period commencing ten (10) Trading Days prior to the applicable date
of determination through the applicable date of determination, the Equity Conditions have not each been satisfied (or waived in
writing by the Holder).


 





 






5 [INSERT IN INITIAL NOTES: $0.535.] [INSERT
IN ADDITIONAL NOTES: Insert 50% of the Market Price (as defined in the SPA Securities) as of the date of the applicable Buyer
Additional Closing Notice.]


 




    	- 23 -



    	 



    

  


(n)         "Equity
Conditions Measuring Period" means each day during the period beginning thirty (30) Trading Days prior to the applicable
date of determination and ending on and including the applicable date of determination.


 


(o)         "Excluded
Securities" means no more than an aggregate pursuant to all of the following events of 2,345,564 shares of Common Stock
(as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction after the Subscription
Date) (the "Excluded Securities Cap") issued or issuable or deemed to be issued in accordance with Section 2(a)
hereof by the Company: (A) under any Approved Stock Plan; (B) in accordance with the terms of this Warrant, the other SPA Warrants
and the SPA Securities; provided, that this Warrant, the other SPA Warrants and the SPA Securities are not amended, modified
or changed on or after the Subscription Date; (C) upon conversion, exercise or exchange of any Options or Convertible Securities
which are outstanding on the day immediately preceding the Subscription Date, provided, that such issuance of Common Stock
upon exercise of such Options or Convertible Securities is made pursuant to the terms of such Options or Convertible Securities
in effect on the date immediately preceding the Subscription Date and such Options or Convertible Securities are not amended, modified
or changed on or after the Subscription Date, (D) 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 to an unaffiliated Person
(or to the equity holders of an unaffiliated Person) which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities for the purpose
of raising capital or to an entity whose primary business is investing in securities; or (E) in accordance with the terms of any
securities issued to any of the initial Holders; provided, however, that the Excluded Securities Cap shall not apply
to, and the Excluded Securities Cap shall be calculated irrespective of any restricted shares of Common Stock with respect to which
the Company has not and will not file a registration statement for the issuance or resale of such shares pursuant to the Securities
Act, and which are issued in connection with (i) the acquisition from Maglenta Enterprises Inc. and Champfremont Holding Ltd. of
all of the issued and outstanding equity interests of the PayOnline group of companies consisting of PayOnline System LLC, Innovative
Payment Technologies LLC, Polimore Capital Limited and Brosword Holding Limited, by TOT Group Europe, Ltd., a Subsidiary of the
Company, and (ii) pursuant to the foregoing clause (D).


 


(p)         "Expiration
Date" means the date thirty-six (36) months after the Issuance Date or, if such date falls on a day other than a Business
Day or on which trading does not take place on the Principal Market (a "Holiday"), the next day that is not a
Holiday.


 




    	- 24 -



    	 



    

  


(q)         "Fundamental
Transaction" means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties
or assets of the Company or any of its "significant subsidiaries" (as defined in Rule 1-02 of Regulation S-X) to one
or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or
have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with
any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares
of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such
purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of
at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject
Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding
shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock
held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase
agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject
Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or
indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity
individually or the Subject Entities in the aggregate to be or become the "beneficial owner" (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer,
exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization,
spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of
either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least
50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities
as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other
equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction
requiring other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the
Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents,
the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such instrument or transaction.


 




    	- 25 -



    	 



    

  


(r)          "Group"
means a "group" as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.


 


(s)          "Lead
Investor" means [            ].


 


(t)          "Option
Value" means the value of an Option based on the Black and Scholes Option Pricing model obtained from the "OV"
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable Option,
if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable
Option if the issuance of such Option is not publicly announced, for pricing purposes and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable
date of determination, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT
function on Bloomberg as of (A) the Trading Day immediately following the public announcement of the applicable Option if the issuance
of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the
issuance of such Option is not publicly announced, (iii) the underlying price per share used in such calculation shall be the highest
Weighted Average Price of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive
documentation relating to the issuance of the applicable Option and ending on (A) the Trading Day immediately following the public
announcement of such issuance, if the issuance of such Option is publicly announced or (B) the Trading Day immediately following
the issuance of the applicable Option if the issuance of such Option is not publicly announced, (iv) a zero cost of borrow and
(v) a 360 day annualization factor.


 


(u)         "Options"
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.


 


(v)         "Parent
Entity" of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common shares or common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected
by the Required Holders, any other market, exchange or quotation system), or, if there is more than one such Person or such entity,
the Person or such entity designated by the Required Holders or in the absence of such designation, such Person or entity with
the largest public market capitalization as of the date of consummation of the Fundamental Transaction.


 


(w)         "Person"
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.


 


(x)     
    "Principal Market" means The NASDAQ Capital Market.


 


(y)          "Registrable
Secuirties" shall have the meaning set forth in the Registration Rights Agreement.


 




    	- 26 -



    	 



    

  


(z)          "Registration
Rights Agreement" means that certain Registration Rights Agreement dated as of the Subscription Date by and among the
Company and the Buyers.


 


(aa)        "Registration
Statement" shall have the meaning set forth in the Registration Rights Agreement.


 


(bb)       "Required
Holders" means the holders of the SPA Warrants representing at least sixty-five percent (65%) of the shares of Common
Stock underlying the SPA Warrants then outstanding and shall include the Lead Investor so long as the Lead Investor or any of its
Affiliates holds any SPA Warrants.


 


(cc)       "SPA
Securities" means the Notes issued pursuant to the Securities Purchase Agreement.


 


(dd)       "Subject
Entity" means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.


 


(ee)        "Subsidiary"
shall have the meaning ascribed to such term in the Securities Purchase Agreement.


 


(ff)         "Successor
Entity" means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.


 


(gg)        "Trading
Day" means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded; provided that "Trading Day" shall not include any day on which the Common Stock is 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 4:00:00 p.m., New York time).


 


(hh)        "Weighted
Average Price" means, for any security as of any date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its "Volume at Price" function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or "pink sheets" by OTC Markets
Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 12 with the term "Weighted Average Price" being
substituted for the term "Exercise Price." All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.


 


[Signature Page Follows]


 




    	- 27 -



    	 



    

 


IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.


 


	 	NET ELEMENT, INC.	 
	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title:	 


 




    	 



    	 



    




EXHIBIT A


 


EXERCISE NOTICE


 


TO BE EXECUTED BY THE REGISTERED HOLDER TO
EXERCISE THIS


WARRANT TO PURCHASE COMMON STOCK


 


Net
element, inc. 


 


The
undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares")
of Net Element, Inc., a Delaware corporation (the "Company"), evidenced by
the attached Warrant to Purchase Common Stock (the "Warrant"). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.


 


1. Form of Exercise Price.
The Holder intends that payment of the Exercise Price shall be made as:


 


____________a
"Cash Exercise" with respect to _________________ Warrant Shares; and/or


 


____________a
"Cashless Exercise" with respect to _______________ Warrant Shares.


 


2. Payment of Exercise
Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.


 


3. Delivery of Warrant
Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.


 


Date: _______________ __, ______


 


	 
	Name of Registered Holder
	 	 
	By:	 
	 	Name:
	 	Title:


 




    	 



    	 



    

 


ACKNOWLEDGMENT


 


The Company hereby acknowledges
this Exercise Notice and hereby directs Continental Stock Transfer & Trust Company to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated April [__], 2015 from the Company and acknowledged and
agreed to by Continental Stock Transfer & Trust Company.


 


	 	NET ELEMENT, INC.	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title: