Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of October 19, 2021, by and among Eastside Distilling,
Inc., a Nevada corporation (the “Company”), and the subscribers identified on the signature page hereto (each a “Subscriber”
and collectively “Subscribers”).


 


WHEREAS,
the Company and the Subscribers are executing and delivering this Agreement in reliance upon an exemption from securities registration
afforded by the provisions of Section 4(a)(2), Section 4(a)(6) and/or Regulation D (“Regulation D”) as promulgated
by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended
(the “1933 Act”).


 


WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Subscribers,
as provided herein, and the Subscribers, in the aggregate, shall purchase up to Two Million Five Hundred Thousand (2,500,000) shares
(the “Preferred Shares”) of the Company’s Series B Preferred Stock, $0.0001 par value per share (the “Series
B Preferred Stock”) at a purchase price of $1.00 per Preferred Share (the “Purchase Price”), which Preferred
Shares are convertible into shares (“Conversion Shares”) of the Company’s common stock, par value $0.0001 per
share (“Common Stock”) pursuant to the terms and conditions set forth in the Certificate of Designation of Series
and Determination of Rights and Preferences of its Series B Preferred Stock (the “Certificate”) with an initial conversion
price of $3.10, and in connection with the purchase of such Shares, each Subscriber shall receive a warrant (a “Warrant”),
in the form annexed hereto as Exhibit A, to purchase a number of shares of Common Stock (“Warrant Shares”)
equal to 17.5% of the number of Conversion Shares initially underlying the Preferred Shares issued to such Subscriber, at an exercise
price equal to $3.75. The Preferred Shares, the Conversion Shares, the Warrants, and the Warrant Shares are collectively referred to
herein as the “Securities.”


 


NOW,
THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Subscribers
hereby agree as follows:


 


1.
Conditions to Closing. Subject to the satisfaction or waiver of the terms and conditions of this Agreement, on one or more Closing
Dates (as defined in Section 2) in respect of one or more Closings, (i) each Subscriber shall purchase, and the Company shall
sell to each Subscriber, that number of Preferred Shares designated on the signature page hereto at the Purchase Price, and (ii) and
each Subscriber that purchases Preferred Shares shall receive a Warrant to purchase a number of Warrant Shares equal to 17.5% of the
number of Conversion Shares initially underlying any Preferred Shares issued to such Subscriber, at an exercise price equal to $3.75.
Notwithstanding anything to the contrary contained herein, the parties agree that up to $15,000, representing legal fees of the Subscribers
for this Agreement and the transactions related thereto, shall be deducted from the Purchase Price to be paid by the Subscribers to the
Company on the date of the first Closing Date to occur.


 




    	 



    	 



    

 


2.
Closing Date. The “Closing Date” for any Closing shall be the date that any subscriber funds representing the
amount due the Company for the purchase and sale of any Preferred Shares is transmitted by cash, cancellation of indebtedness, wire transfer
or check, subject to collection to the escrow account as directed by the Company. Each Subscriber understands and acknowledges that this
subscription is part of a proposed placement by the Company of up to 2,500,000 Preferred Shares (the “Offering”).
During the Offering, funds will be held in an escrow account established by the Company and released at the discretion of the Company
from time to time. If a subscription is not accepted, whether in whole or in part, the subscription funds held therein will be returned
to the Subscriber without interest or deduction. The consummation of the transactions contemplated herein for all Closings shall take
place electronically via email, upon the satisfaction of all conditions to Closing set forth in this Agreement.


 


3.
Subscriber’s Representations and Warranties. Each Subscriber hereby represents and warrants to and agrees with the Company
only as to such Subscriber the following:


 


(a)
Organization and Standing of the Subscribers. If the Subscriber is an entity, such Subscriber is a corporation, limited liability
company, partnership, or other entity duly incorporated or organized, validly existing, and in good standing under the laws of the jurisdiction
of its incorporation or organization.


 


(b)
Authorization and Power. Each Subscriber has the requisite power and authority to enter into and perform this Agreement and to
purchase the Preferred Shares being sold to it hereunder. The execution, delivery, and performance of this Agreement by such Subscriber
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or
partnership action, and no further consent or authorization of such Subscriber or its Board of Directors, stockholders, partners, members,
as the case may be, is required. This Agreement has been duly authorized, executed, and delivered by such Subscriber and constitutes,
or shall constitute when executed and delivered, a valid and binding obligation of the Subscriber enforceable against the Subscriber
in accordance with the terms thereof, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar
laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity.


 


(c)
No Conflicts. The execution, delivery, and performance of this Agreement and the consummation by such Subscriber of the transactions
contemplated hereby or relating hereto do not and will not (i) result in a violation of such Subscriber’s charter documents or
bylaws or other organizational documents or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement,
indenture or instrument or obligation to which such Subscriber is a party or by which its properties or assets are bound, or result in
a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to such
Subscriber or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have
a material adverse effect on such Subscriber). Such Subscriber is not required to obtain any consent, authorization or order of, or make
any filing or registration with, any court or governmental agency in order for it to execute, deliver, or perform any of its obligations
under this Agreement or to purchase the Preferred Shares or acquire the Warrants in accordance with the terms hereof, provided that for
purposes of the representation made in this sentence, such Subscriber is assuming and relying upon the accuracy of the relevant representations
and agreements of the Company herein.


 




    	2



    	 



    

 


(d)
Information on Company. The Subscriber has been furnished with or has had access at the EDGAR Website of the Commission to the
Company’s Form 10-K for the year ended December 31, 2020 and all reports, schedules, forms, statements and other documents required
to be filed by it with the Commission pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the
“1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements,
notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “Reports”).
In addition, the Subscriber has received in writing from the Company such other information concerning its operations, financial condition,
and other matters as the Subscriber has requested in writing (such other information is collectively, the “Other Written Information”),
and considered all factors the Subscriber deems material in deciding on the advisability of investing in the Securities.


 


(e)
Information on Subscriber. The Subscriber is, and will be at the time of the conversion of the Preferred Shares and exercise of
the Warrants, an “accredited investor”, as such term is defined in Regulation D promulgated by the Commission under the 1933
Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of
United States publicly-owned companies in private placements in the past and, with its representatives, has such knowledge and experience
in financial, tax, and other business matters as to enable the Subscriber to utilize the information made available by the Company to
evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents
a speculative investment. The Subscriber has the authority and is duly and legally qualified to purchase and own the Securities. The
Subscriber is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof. The information
set forth on the signature page hereto regarding the Subscriber is accurate.


 


(f)
Purchase of Preferred Shares. Subscriber further represents the address set forth in the Confidential Purchaser Questionnaire
is his/her principal residence (or, if Subscriber is a company, partnership or other entity, the address of its principal place of business),
that Subscriber is purchasing the Securities for Subscriber’s own account and not, in whole or in part, for the account of any
other person, that Subscriber is purchasing the Securities for investment and not with a view to resale or distribution, and that Subscriber
has not formed any entity for the purpose of purchasing the Securities.


 


(g)
Compliance with Securities Act. The Subscriber understands and agrees that the Securities have not been registered under the 1933
Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the
1933 Act (based in part on the accuracy of the representations and warranties of Subscriber contained herein), and that such Securities
must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or
is exempt from such registration.


 




    	3



    	 



    

 


(h)
Preferred Share Legend. The certificates evidencing the Preferred Shares shall bear the following or similar legend:


 


“THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO [THE COMPANY] THAT SUCH REGISTRATION IS NOT REQUIRED.”


 


(i)
Warrants Legend. The Warrants shall bear the following or similar legend:


 


“THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO [THE COMPANY] THAT SUCH REGISTRATION IS NOT REQUIRED.”


 


(j)
Conversion Shares and Warrant Shares Legend. The Conversion Shares and Warrant Shares shall bear the following or similar legend:


 


“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO [THE COMPANY] THAT SUCH REGISTRATION IS NOT REQUIRED.”


 


(k)
Communication of Offer. The offer to sell the Securities was directly communicated to the Subscriber by the Company. At no time
was the Subscriber presented with or solicited by any leaflet, newspaper, or magazine article, radio or television advertisement, or
any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently
with such communicated offer.


 


(l)
No Governmental Review. Each Subscriber understands that no United States federal or state agency or any other governmental or
state agency has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the Securities,
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.


 




    	4



    	 



    

 


(m)
Correctness of Representations. Each Subscriber represents as to such Subscriber that the foregoing representations and warranties
in this Agreement and the Confidential Purchaser Questionnaire are true and correct as of the date hereof and, unless a Subscriber otherwise
notifies the Company prior to each Closing Date, shall be true and correct as of each Closing Date.


 


(n)
Review of Documents. Subscriber has carefully read this Agreement, the other Transaction Documents (as hereinafter defined), and
the Reports, and Subscriber has accurately completed the Confidential Purchaser Questionnaire which accompanies this Agreement.


 


(o)
Completion of Questionnaire. The Confidential Purchaser Questionnaire has been completed, signed, and delivered to the Company
by the Subscriber and is, as of the date hereof, true, complete, and correct in all respects.


 


4.
Company Representations and Warranties. The Company represents and warrants to and agrees with each Subscriber the following,
except as set forth in the Reports (but (i) without giving effect to any amendment thereof filed with, or furnished to the Commission
on or after the date hereof and (ii) except as set forth on Schedule 4, excluding any disclosures contained under the heading
“Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or in any
other section to the extent they are forward-looking statements or cautionary, predictive or forward-looking in nature) and as otherwise
qualified in the Transaction Documents or the Disclosure Schedules to this Agreement:


 


(a)
Due Incorporation. The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power to own its properties and to carry on its business as disclosed
in the Reports. The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which
the failure to so qualify would not have a Material Adverse Effect. For purpose of this Agreement, a “Material Adverse Effect”
shall mean a material adverse effect on the financial condition, results of operations, properties or business of the Company taken as
a whole.


 


(b)
Authority; Enforceability. This Agreement, the Warrant, the Registration Rights Agreement (as defined herein) and any other agreements
delivered together with this Agreement or in connection herewith (collectively “Transaction Documents”) have been
duly authorized, executed, and delivered by the Company and are valid and binding agreements enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors’ rights generally and to general principles of equity. The Company has full corporate power and authority
necessary to enter into and deliver the Transaction Documents and to perform its obligations thereunder, including, without limitation,
the issuance of the Preferred Shares and the reservation for issuance and issuance of the Conversion Shares issuable upon conversion
of the Preferred Shares, and the issuance of the Warrants, and the reservation for issuance and issuance of the Warrant Shares issuable
upon exercise of the Warrants.


 




    	5



    	 



    

 


(c)
Capitalization. The Company is authorized to issue (i) 35,000,000 shares of Common Stock of which, as of the date of this Agreement,
14,087,028 shares were issued and outstanding and approximately 2,711,364 shares are reserved for issuance pursuant to securities (other
than the Notes and the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock, and (ii) 100,000,000 shares
of preferred stock, par value $0.0001 per share (“Preferred Stock”), of which, as of the date of this Agreement, no
shares were issued and outstanding. All outstanding shares of Common Stock have been duly authorized and validly issued, and are fully
paid, nonassessable, and free of any preemptive rights. (i) None of the Company’s capital stock is subject to preemptive rights
or any other similar rights or any liens or encumbrances suffered or permitted by the Company; (ii) except as disclosed in Schedule
4(c)(ii), there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company, or contracts,
commitments, understandings or arrangements by which the Company is or may become bound to issue additional capital stock of the Company
or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the Company; (iii) except as disclosed in Schedule 4(c)(iii),
there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness of the Company or by which the Company is or may become bound; (iv) except as disclosed in Schedule 4(c)(iv), there
are no financing statements securing obligations in any amounts filed in connection with the Company; (v) except as disclosed in Schedule
4(c)(v), there are no agreements or arrangements under which the Company is obligated to register the sale of any of their securities
under the 1933 Act; (vi) there are no outstanding securities or instruments of the Company which contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security
of the Company; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by
the issuance of the Securities; (viii) the Company does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement; and (ix) the Company does not have any liabilities or obligations required to be disclosed
in the Reports which are not so disclosed in the Reports, other than those incurred in the ordinary course of the Company’s business
and which, individually or in the aggregate, do not or could not have a Material Adverse Effect.


 


(d)
Consents. No consent, approval, authorization, or order of any court, governmental agency or body or arbitrator having jurisdiction
over the Company, or any of its Affiliates, any Principal Market, or the Company’s stockholders is required for the execution by
the Company of the Transaction Documents and compliance and performance by the Company of its obligations under the Transaction Documents,
including, without limitation, the issuance and sale of all of the Securities. The Company is not in violation of the requirements of
the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the
Common Stock in the foreseeable future.


 




    	6



    	 



    

 


(e)
No Violation or Conflict. Assuming the representations and warranties of the Subscribers in Section 3 are true and correct,
except as set forth in Schedule 4(e), neither the issuance and sale of the Securities nor the performance of the Company’s
obligations under this Agreement and the Transaction Documents will violate, conflict with, result in a breach of, or constitute a default
(or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default in any material
respect) of a material nature under (A) the articles or certificate of incorporation, charter or bylaws of the Company or (B) to the
Company’s knowledge, any decree, judgment, order, law, treaty, rule, regulation or determination applicable to the Company of any
court, governmental agency or body, or arbitrator having jurisdiction over the Company or over the properties or assets of the Company
or any of its Affiliates.


 


(f)
The Securities. The Securities upon issuance:


 


(i)
are, or will be, free and clear of any preemptive or similar rights, security interests, liens, claims or other encumbrances, other than
restrictions upon transfer under the 1933 Act and any applicable state securities laws;


 


(ii)
have been, or will be, duly and validly authorized, and upon either conversion of the Preferred Shares, the Conversion Shares, or the
exercise of the Warrants, the Warrant Shares, will be duly and validly issued, fully paid and nonassessable, and, if (A) registered pursuant
to the 1933 Act, (B) prospectus delivery requirements have been complied with, and (C) resold pursuant to an effective registration statement,
will be free trading and unrestricted;


 


(iii)
will not have been issued or sold in violation of any preemptive or other similar rights of the holders of any securities of the Company;


 


(iv)
will not subject the holders thereof to personal liability by reason of being such holders provided Subscriber’s representations
herein are true and accurate and Subscribers take no actions or fail to take any actions required for their purchase of the Securities
to be in compliance with all applicable laws and regulations; and


 


(v)
will not result in a violation of Section 5 under the 1933 Act, provided Subscriber’s representations herein are true and accurate
and Subscribers take no actions or fail to take any actions required by Subscriber for Subscriber’s purchase of the Securities
to be in compliance with all applicable laws and regulations.


 


As
of the Closing, the Company shall have reserved from its duly authorized capital stock not less than (i) 100% of the maximum number of
Conversion Shares initially issuable upon conversion of the Preferred Shares (assuming for purposes hereof that the Preferred Shares
are convertible at the initial Conversion Price (as defined in the Certificate) and without taking into account any limitations on the
conversion of the Preferred Shares set forth in the Certificate), and (ii) 100% of the maximum number of Warrant Shares initially issuable
upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein).


 




    	7



    	 



    

 


(g)
Litigation. Except as set forth in the Reports, there is no pending or, to the best knowledge of the Company, threatened action,
suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company,
or any of its Affiliates that would affect the execution by the Company of, or the performance by the Company of its obligations under,
the Transaction Documents. Except as disclosed in the Reports, there is no pending or, to the best knowledge of the Company, basis for
or threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction
over the Company, or any of its Affiliates which litigation, if adversely determined, would have a Material Adverse Effect.


 


(h)
Information Concerning Company. During the two (2) years prior to the date hereof, the Company has timely filed all Reports required
to be filed by it with the Commission pursuant to the reporting requirements of the 1934 Act. The Reports contain all the information
required to be disclosed therein as of their respective dates. As of their respective dates, the financial statements of the Company
included in the Reports complied as to form in all material respects with applicable accounting requirements and the published rules
and regulations of the Commission with respect thereto as in effect as of the time of filing. Such financial statements have been prepared
in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent
they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate). Since
the last day of the fiscal year of the most recent audited financial statements included in the Reports (“Latest Financial Date”),
and except as modified in the Reports or Other Written Information or in the Schedules hereto, there has been no Material Adverse Event
relating to the Company’s business, financial condition, or affairs not disclosed in the Reports. The Reports do not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances when made. No other information provided by or on behalf of the Company to any of
the Subscribers which is not included in the Reports (including, without limitation, information referred to in Section 3(d) of
this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements
therein not misleading, in the light of the circumstance under which they are or were made.


 


(i)
Defaults. The Company is not in violation of its articles of incorporation or bylaws. Except as disclosed on Schedule 4(i),
the Company is (i) not in default under or in violation of any other material agreement or instrument to which it is a party or by which
it or any of its properties are bound or affected, which default or violation would have a Material Adverse Effect, (ii) not in default
with respect to any order of any court, arbitrator or governmental body or subject to or party to any order of any court or governmental
authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint of trade,
unfair competition or similar matters, or (iii) not in violation of any statute, rule or regulation of any governmental authority which
violation would have a Material Adverse Effect.


 




    	8



    	 



    

 


(j)
No General Solicitation. Neither the Company, nor any of its Affiliates, nor to its knowledge, any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the 1933 Act)
in connection with the offer or sale of the Securities.


 


(k)
Absence of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form
10-K except as disclosed in the Reports filed subsequent to such Form 10-K, there has been no material adverse change and no material
adverse development in the business, assets, liabilities, properties, operations (including results thereof), condition (financial or
otherwise) or prospects of the Company taken as a whole. Since the Latest Financial Date, except as disclosed in the Reports filed subsequent
to such Form 10-K, the Company has not (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside
of the ordinary course of business, or (iii) made any material capital expenditures, individually or in the aggregate, outside the ordinary
course of business. The Company has not taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency,
reorganization, receivership, liquidation or winding up, nor does the Company have any knowledge or reason to believe that any of its
creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor
to do so. The Company is not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing,
will not be, Insolvent (as defined below). For purposes of this Section 4(k), “Insolvent” means, with respect
to the Company, (i) the present fair saleable value of the Company’s assets is less than the amount required to pay the Company’s
total Indebtedness (as defined below), (ii) the Company is unable to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured or (iii) the Company intends to incur or believes that it will incur debts
that would be beyond its ability to pay as such debts mature. The Company has not engaged in any business or in any transaction and is
not about to engage in any business or in any transaction, for which the Company’s remaining assets constitute unreasonably small
capital.


 


(l)
Intellectual Property. The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the Reports and which the failure to so
have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and the Company
has not received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated, or been abandoned,
or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. The Company has not received,
since the Latest Financial Date, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate
or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.
To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company has taken reasonable security measures to protect the secrecy, confidentiality,
and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. The Company has no knowledge of any facts that would preclude it from having valid license
rights or clear title to the Intellectual Property Rights. The Company has no knowledge that it lacks or will be unable to obtain any
rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business.


 




    	9



    	 



    

 


(m)
Transactions With Affiliates and Employees. None of the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction with the Company (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in
excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred
on behalf of the Company, and (iii) other employee benefits, including stock option agreements or other stock-based awards under any
stock incentive plan of the Company.


 


(n)
No Integrated Offering. Assuming the accuracy of the Subscribers’ representations and warranties set forth herein, neither
the Company nor any Person acting on its behalf has, directly or indirectly, made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings
by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of
the Company are listed or designated.


 


(o)
No Undisclosed Events, Liabilities, Developments, or Circumstances. Except as disclosed in the Reports, no event, liability, development
or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company or any of its businesses,
properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i) would be required
to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the Commission relating
to an issuance and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could have a material adverse
effect on any Subscriber’s investment hereunder, or (iii) could have a Material Adverse Effect.


 


(p)
Foreign Corrupt Practices. Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee or
other Person acting on behalf of the Company has, in the course of its actions for, or on behalf of, the Company (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.


 


(q)
Sarbanes-Oxley Act. The Company is in material compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 that
are effective as of the date hereof, and all applicable rules and regulations promulgated by the Commission thereunder that are effective
as of the date hereof.


 




    	10



    	 



    

 


(r)
Indebtedness and Other Contracts. The Company (i) except as disclosed on Schedule 4(r), does not have any outstanding Indebtedness
(as defined below), (ii) is not a party to any contract, agreement or instrument, the violation of which, or default under which, by
the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii)
is not in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is not a party
to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s
officers, has or is expected to have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as
the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with generally
accepted accounting principles) (other than trade payables entered into in the ordinary course of business), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property,
assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred
as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property),
(F) all monetary obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles,
consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A)
through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any mortgage, claim, lien, tax, right of first refusal, pledge, charge, security interest or other encumbrance upon or in any property
or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has
not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations
of others of the kinds referred to in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to
any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend
or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect
thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with
respect thereto.


 


(s)
Rule 144(i). The Company is not an issuer under Rule 144(i) of the 1933 Act.


 


5.
Registration Rights Granted to Subscriber. If the Company determines to register any of its securities, either for its own account
or the account of a security holder or holders, other than (i) a registration relating solely to employee benefit plans on Form S-8 (or
any successor form) or (ii) a registration relating solely to a Commission Rule 145 transaction on Form S-4 (or any successor form),
the Company will include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting
involved therein, the Conversion Shares underlying the Preferred Shares and the Warrant Shares underlying the Warrants delivered pursuant
to this Agreement, subject to any reductions required due to the Commission’s interpretation of Rule 415 of the 1933 Act, in accordance
with the terms of that certain Registration Rights Agreement entered into between the Company and the Subscribers (the “Registration
Rights Agreement”).


 




    	11



    	 



    

 


6.
Regulation D Offering. The offer and issuance of the Securities to the Subscribers is being made pursuant to the exemption from
the registration provisions of the 1933 Act afforded by Section 4(a)(2) or Section 4(a)(6) of the 1933 Act and/or Rule 506 of Regulation
D promulgated thereunder. The Company will provide, at the Company’s expense, such other legal opinions in the future as are reasonably
necessary for the issuance and resale of the Common Stock issuable upon conversion of the Preferred Shares and exercise of the Warrants
pursuant to an effective registration statement.


 


7.
Covenants.


 


(a)
Reporting Status. Until the date on which the Subscribers shall have sold all of the Securities (the “Reporting Period”),
the Company shall timely file all reports required to be filed with the Commission pursuant to the 1934 Act, and the Company shall not
terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would no longer require or otherwise permit such termination.


 


(b)
Reservation of Shares. So long as any Preferred Shares or Warrants remain outstanding, the Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, no less than (i) 100% of the maximum number of Conversion
Shares initially issuable upon conversion of the Preferred Shares (assuming for purposes hereof that the Preferred Shares are convertible
at the initial Conversion Price (as defined in the Certificate) and without taking into account any limitations on the conversion of
the Preferred Shares set forth in the Certificate), and (ii) 100% of the maximum number of Warrant Shares initially issuable upon exercise
of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein).


 


8.
Patriot Act Compliance. (Terms used in this section are defined in paragraph (d) below.)


 


To
induce the Company to accept the undersigned’s investment, the undersigned hereby makes the following representations, warranties,
and covenants to the Company:


 


(a)
The undersigned represents and warrants that no holder of any beneficial interest in the undersigned’s equity securities of the
Company (each a “Beneficial Interest Holder”) and, no Related Person (in the case the undersigned is an entity) is
or will be:


 


(1)
A person or entity whose name appears on the list of specially designated nationals and blocked persons maintained by the Office of Foreign
Asset Control from time to time;


 


(2)
A Foreign Shell Bank; or


 




    	12



    	 



    

 


(3)
A person or entity resident in or whose subscription funds are transferred from or through an account in a Non-Cooperative Jurisdiction.


 


(b)
The undersigned represents that the bank or other financial institution (the “Wiring Institution”) from which the
undersigned’s funds will be wired is located in a FATF Country.


 


(c)
The undersigned represents that:


 


(1)
Neither it, any Beneficial Interest Holder nor any Related Person (in the case of the undersigned is an entity) is a Senior Foreign Political
Figure, any member of a Senior Foreign Political Figure’s Immediate Family or any Close Associate of a Senior Foreign Political
Figure;


 


(2)
Neither it, any Beneficial Interest Holder nor any Related Person (in the case the undersigned is an entity) is resident in, or organized
or chartered under the laws of, a jurisdiction designated by the Secretary of the Treasury under Section 311 or 312 of the USA PATRIOT
Act as warranting special measures due to money laundering concerns; and


 


(3)
Its investment funds do not originate from, nor will they be routed through, an account maintained at a Foreign Shell Bank, an “offshore
bank,” or a bank organized or chartered under the laws of a Non-Cooperative Jurisdiction.


 


(d)
Definitions:


 


Affiliate:
As applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.
For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as applied to any Person, means possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise.


 


Close
Associate: With respect to a Senior Foreign Political Figure, a person who is widely and publicly known internationally to maintain
an unusually close relationship with the Senior Foreign Political Figure and includes a person who is in a position to conduct substantial
domestic and international financial transactions on behalf of the Senior Foreign Political Figure.


 


FATF:
The Financial Action Task Force on Money Laundering.


 


FATF
Country: A country that is a member of FATF. As of September 1, 2003, the countries which are members of FATF are: Argentina; Australia;
Austria; Belgium; Brazil; Canada; Denmark; Finland; France; Germany; Greece; Hong Kong; Iceland; Ireland; Italy; Japan; Luxembourg; Mexico;
Kingdom of the Netherlands; New Zealand; Norway; Portugal; Singapore; South Africa; Spain; Sweden; Switzerland; Turkey; United Kingdom
and United States. For a current list of FATF members see http://www1.oecd.org/fatf/Members_en.htm.


 




    	13



    	 



    

 


Foreign
Bank: An organization which (i) is organized under the laws of a country outside the United States; (ii) engages in the business
of banking; (iii) is recognized as a bank by the bank supervisory or monetary authority of the country of its organization or principal
banking operations; (iv) receives deposits to a substantial extent in the regular course of its business; and (v) has the power to accept
demand deposits, but does not include the U.S. branches or agencies of a foreign bank.


 


Foreign
Shell Bank: A Foreign Bank without a Physical Presence in any country, but does not include a Regulated Affiliate.


 


Government
Entity: Any government or any state, department or other political subdivision thereof, or any governmental body, agency, authority
or instrumentality in any jurisdiction exercising executive, legislative, regulatory or administrative functions of or pertaining to
government.


 


Immediate
Family: With respect to a Senior Foreign Political Figure, typically includes the political figure’s parents, siblings, spouse,
children and in-laws.


 


Non-Cooperative
Jurisdiction: Any foreign country or territory that has been designated as non-cooperative with international anti-money laundering
principles or procedures by an intergovernmental group or organization, such as FATF, of which the United States is a member and with
which designation the United States representative to the group or organization continues to concur. See http://www1.oecd.org/fatf/NCCT_en.htm
for FATF’s list of non-cooperative countries and territories.


 


Physical
Presence: A place of business maintained by a Foreign Bank and is located at a fixed address, other than solely a post office box
or an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities, at which location the Foreign
Bank: (a) employs one or more individuals on a full-time basis; (b) maintains operating records related to its banking activities; and
(c) is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities.


 


Publicly
Traded Company: An entity whose securities are listed on a recognized securities exchange or quoted on an automated quotation system
in the U.S. or country other than a Non-Cooperative Jurisdiction or a wholly-owned subsidiary of such an entity.


 


Qualified
Plan: A tax qualified pension or retirement plan in which at least 100 employees participate that is maintained by an employer organized
in the U.S. or is a U.S. Government Entity.


 


Regulated
Affiliate: A Foreign Shell Bank that: (a) is an affiliate of a depository institution, credit union or Foreign Bank that maintains
a Physical Presence in the U.S. or a foreign country, as applicable; and (b) is subject to supervision by a banking authority in the
country regulating such affiliated depository institution, credit union or Foreign Bank.


 


Related
Person: With respect to any entity, any interest holder, director, senior officer, trustee, beneficiary or grantor of such entity;
provided that in the case of an entity that is a Publicly Traded Company or a Qualified Plan, the term “Related Person” shall
exclude any interest holder holding less than 5% of any class of securities of such Publicly Traded Company and beneficiaries of such
Qualified Plan.


 




    	14



    	 



    

 


Senior
Foreign Political Figure: A senior official in the executive, legislative, administrative, military or judicial branches of a non-U.S.
government (whether elected or not), a senior official of a major non-U.S. political party, or a senior executive of a non-U.S. government-owned
corporation. In addition, a Senior Foreign Political Figure includes any corporation, business or other entity that has been formed by,
or for the benefit of, a Senior Foreign Political Figure.


 


Trading
Market: Any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question:
the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange
or the OTC Markets QB Tier (or any successors to any of the foregoing).


 


USA
PATRIOT Act: The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT Act) Act of 2001 (Pub. L. No. 107-56).


 


9.
Miscellaneous.


 


(a)
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable overnight air courier service with charges prepaid, or (iv) transmitted
by hand delivery or email, addressed as set forth below or to such other address as such party shall have specified most recently by
written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand
delivery or delivery by email, with accurate confirmation generated by the transmitting email machine, at the address or number designated
below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on
the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Company, to: Eastside
Distilling, Inc., 8911 NE Marx Drive, Suite A2, Portland, Oregon 97220, Attn: Geoffrey Gwin, email: ggwin@eastsidedistilling.com, with
a copy by email only to: Indeglia PC, 13274 Fiji Way, Suite 250, Marina del Rey, CA 90292, Attn: Marc A. Indeglia, Esq., email: marc@indegliapc.com,
and (ii) if to the Subscribers, to: the one or more addresses and email addresses indicated on the signature pages hereto.


 




    	15



    	 



    

 


(b)
Preemptive Rights. So long as 17.5% of the Preferred Shares issued to Subscribers on the last Closing Date to occur remain outstanding,
if the Company offers to sell Covered Securities (as defined below) in a public or private offering of Covered Securities solely for
cash (a “Qualified Offering”), each Subscriber shall be afforded the opportunity to acquire from the Company, for
the same price and on the same terms as such Covered Securities are offered, such Subscriber’s pro rata portion (determined by
dividing the number of Preferred Shars purchased by such Subscriber in this Offering by the total number of Preferred Shares issued in
this Offering) of 6.25% of the amount of Covered Securities so offered. “Covered Securities” means Preferred Stock
and any rights, options, or warrants to purchase or securities convertible into or exercisable or exchangeable for Preferred Stock, other
than (i) securities issuable upon conversion of any of the Preferred Shares or upon exercise of the Warrants; (ii) securities issued
upon the conversion or exercise of any debenture, warrant, option, or other convertible security which is outstanding as of the first
Closing Date to occur; (iii) Preferred Stock issuable upon a stock split, stock dividend, or any subdivision of shares of Preferred Stock
approved by Company stockholders; (iv) shares of Preferred Stock (or options, convertible securities, or other rights to purchase such
shares of Preferred Stock) issued or issuable to employees or directors of, or consultants providing bona fide services to, the Company
pursuant to an Approved Stock Plan (as defined below), (v) Preferred Stock, options or convertible securities issued to banks, equipment
lessors or other financial institutions pursuant to a debt financing or equipment leasing approved by the board of directors of the Company,
(vi) shares of Preferred Stock, options or convertible securities issued to suppliers or third party service providers in connection
with the provision of goods or services pursuant to transactions approved by the board of directors of the Company, and (vii) shares
of Preferred Stock, options or convertible securities issued as acquisition consideration pursuant to the acquisition of another corporation
by the Company by merger, purchase of substantially all of the assets or other reorganization, each as approved by the board of directors
of the Company and the stockholders of the Company (each an “Excluded Issuance”). “Approved Stock Plan”
means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which shares of Common Stock and standard rights, warrants, or options to subscribe for, purchase, or otherwise acquire Common
Stock may be issued to any employee, officer, or director for services provided to the Company in their capacity as such. Prior to making
any Qualified Offering of Covered Securities, the Company shall give the Subscriber written notice at the address shown on each Subscriber’s
signature page hereto of its intention to make such an offering, describing, to the extent then known, the anticipated amount of securities,
and other material terms then known to the Company upon which the Company proposes to offer the same (such notice, a “Qualified
Offering Notice”). The Subscriber shall then have 10 days after receipt of the Qualified Offering Notice (the “Offer
Period”) to notify the Company in writing that it intends to exercise such preemptive right and as to the amount of Covered
Securities the Subscriber desires to purchase, up to the maximum amount calculated pursuant to this Section 9(b) (the “Designated
Securities”). Such notice constitutes a non-binding indication of interest of the Subscriber to purchase the amount of Designated
Securities specified by the Subscriber (or a proportionately lesser amount if the amount of Covered Securities to be offered in such
Qualified Offering is subsequently reduced) at the price (or range of prices) established in the Qualified Offering and other terms set
forth in the Company’s notice to it. Any failure to respond or to confirm the Subscriber’s interest in purchasing any Covered
Securities to which it is entitled under this Section 9(b) during the Offer Period constitutes a waiver of its preemptive rights
in respect of such offering or as to the Covered Securities as to which no interest in purchasing is received, as applicable. The sale
of the Covered Securities in the Qualified Offering, including any Designated Securities, shall be closed not later than 120 days after
the end of the Offer Period. The Covered Securities to be sold to other investors in such Qualified Offering shall be sold at a price
not less than, and upon terms no more favorable to such other investors than, those specified in the Qualified Offering Notice. If the
Company does not consummate the sale of Covered Securities to other investors within such 120-day period, the right provided hereunder
shall be revived and such securities shall not be offered unless first reoffered to the Subscribers in accordance herewith. Notwithstanding
anything to the contrary set forth herein and unless otherwise agreed by the Subscriber, by not later than the end of such 120-day period,
the Company shall either confirm in writing to the Subscriber that the Qualified Offering has been abandoned or shall publicly disclose
its intention to issue the Covered Securities in the Qualified Offering, in either case in such a manner that the Subscriber will not
be in possession of any material, non-public information thereafter. If the Subscriber exercises its preemptive right provided in this
Section 9(b) with respect to a Qualified Offering that is an underwritten public offering or an offering made to qualified institutional
buyers (as such term is defined in the Commission’s Rule 144A under the 1933 Act) for resale pursuant to Rule 144A under the 1933
Act (a “Rule 144A offering”), a private placement or other offering, whether not registered under the 1933 Act, the
Company shall offer and sell the Subscriber, if any such offering is consummated, the Designated Securities (as adjusted, upward to reflect
the actual size of such offering when priced but not in excess of each Subscriber’s Subscriber Percentage Interest) at the same
price as the Covered Securities are offered to third persons (not including the underwriters or the initial purchasers in a Rule 144A
offering that is being reoffered by the initial purchasers) in such offering and shall provide written notice of such price upon the
determination of such price.


 




    	16



    	 



    

 


(c)
Entire Agreement; Assignment. This Agreement and other documents delivered in connection herewith represent the entire agreement
between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties. Neither
the Company nor the Subscribers have relied on any representations not contained or referred to in this Agreement and the documents delivered
herewith. No right or obligation of the Company shall be assigned without prior notice to and the written consent of the Subscribers.


 


(d)
Counterparts/Execution. This Agreement may be executed in any number of counterparts and by the different signatories hereto on
separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument. This Agreement may be executed by electronic signature and delivered by electronic mail transmission.


 


(e)
Law Governing this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada
without regard to conflicts of laws principles that would result in the application of the substantive laws of another jurisdiction.
Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only
in the civil or state courts of Nevada or in the federal courts located in Clark County. The parties and the individuals executing
this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs. If any provision of this Agreement or any other agreement delivered in connection herewith
is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.


 




    	17



    	 



    

 


(f)
Specific Enforcement, Consent to Jurisdiction. The Company and Subscriber acknowledge and agree that irreparable damage would
occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to seek one or more preliminary and final injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any
other remedy to which any of them may be entitled by law or equity. Subject to Section 9(e) hereof, each of the Company, Subscriber
and any signatory hereto in his personal capacity hereby waives, and agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction in Nevada of such court, that the suit, action or proceeding is brought in
an inconvenient forum or that the venue of the suit, action or proceeding is improper. Nothing in this Section shall affect or limit
any right to serve process in any other manner permitted by law.


 


(g)
Equal Treatment of Subscribers. The Company hereby represents, warrants, and covenants that, as of the first Closing Date to occur
and from and after the first Closing Date to occur, none of the terms offered to any other persons or entities (“Persons”)
with respect to any similar transactions as the transactions contemplated hereunder is or will be more favorable to such other Person
than those of the Subscribers under the Transaction Documents. No consideration (including any modification of any Transaction Document)
shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of such Transaction Documents
unless the same consideration is also offered to all of the parties to such Transaction Documents. Further, the Company shall not make
any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding
on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Subscriber
by the Company and negotiated separately by each Subscriber and is intended for the Company to treat the Subscribers as a class and shall
not in any way be construed as the Subscribers acting in concert or as a group with respect to the purchase, disposition or voting of
Securities or otherwise.


 


(h)
Independent Nature of Subscribers. The Company acknowledges that the obligations of each Subscriber under the Transaction Documents
are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance
of the obligations of any other Subscriber under the Transaction Documents. The Company acknowledges that each Subscriber has represented
that the decision of each Subscriber to purchase Securities has been made by such Subscriber independently of any other Subscriber and
independently of any information, materials, statements, or opinions as to the business, affairs, operations, assets, properties, liabilities,
results of operations, condition (financial or otherwise) or prospects of the Company which may have been made or given by any other
Subscriber or by any agent or employee of any other Subscriber, and no Subscriber or any of its agents or employees shall have any liability
to any Subscriber (or any other person) relating to or arising from any such information, materials, statements or opinions. The Company
acknowledges that nothing contained in any Transaction Document, and no action taken by any Subscriber pursuant hereto or thereto shall
be deemed to constitute the Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Subscribers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Documents. The Company acknowledges that each Subscriber shall be entitled to independently protect and enforce its
rights, including without limitation, the rights arising out of the Transaction Documents, and it shall not be necessary for any other
Subscriber to be joined as an additional party in any proceeding for such purpose. The Company acknowledges that it has elected to provide
all Subscribers with the same terms and Transaction Documents for the convenience of the Company and not because Company was required
or requested to do so by the Subscribers. The Company acknowledges that such procedure with respect to the Transaction Documents in no
way creates a presumption that the Subscribers are in any way acting in concert or as a group with respect to the Transaction Documents
or the transactions contemplated thereby.


 


[THIS
SPACE INTENTIONALLY LEFT BLANK]


 




    	18



    	 



    

 


Signature
Page for Individuals:


 


IN
WITNESS WHEREOF, Subscriber has caused this Securities Purchase Agreement to be executed as of the date indicated below.


 


	 
	Number of Preferred Shares
	 	 	 
	 	 	 
	Print
    or Type Name	 	Print
    or Type Name (Joint-owner)
	 	 	 
	 	 	 
	Signature	 	Signature
    (Joint-owner)
	 	 	 
	 	 	 
	Date	 	Date
    (Joint-owner)
	 	 	 
	 	 	 
	IRS
    Taxpayer Identification Number	 	IRS
    Taxpayer Identification Number (Joint-owner)
	 	 	 
	 	 	 
	Address	 	Address
    (Joint-owner)
	 	 	 
	 	 	 
	Telephone
    Number	 	Telephone
    Number
	 	 	 
	 	 	 
	Fax
    Number	 	Fax
    Number
	 	 	 
	 	 	 
	E-mail
    Address	 	E-mail
    Address





 


Type
of Ownership


 


	 	☐	Individual
	 	☐	Tenants
    in common
	 	☐	Joint
    tenants with right of survivorship
	 	☐	Community
    property (check only if resident of community property state)
	 	☐	Other
    (please specify: ________________)


 




    	19



    	 



    

 


Wiring
Instructions:


 


Bank
Name:


ABA:


SWIFT:


Tel
Number:


Address:


Acct
#:


Acct.
Name:


Reference:


 




    	20



    	 



    

 


Partnerships,
Corporations or Other Entities:


 


IN
WITNESS WHEREOF, Subscriber has caused this Securities Purchase Agreement to be executed as of the date indicated below.


 


	 
	Number of Preferred Shares
	 	 	 
	 	 	 
	Print
    or Type Name of Entity	 	 
	 	 	 
	 	 	 
	Address	 	 
	 	 	 
	 	 	 
	Telephone
    Number	 	 
	 	 	 
	 	 	 
	Fax
    Number	 	 
	 	 	 
	 	 	 
	Email
    Address	 	 
	 	 	 
	 	 	 
	Taxpayer
    I.D. No. (if applicable)	 	Date
	 	 	 
	By:	 	 	 
	Name:	 	 	Print
    or Type Name and Indicate
	Title:	 	 	Title
    or Position with Entity
	 	 	 
	 	 	 
	Signature
    (other authorized signatory)	 	Print
    or Type Name and Indicate Title or Position with Entity





 


Type
of Ownership


 


	 	☐	Corporation
	 	☐	Limited
    Liability Company
	 	☐	Partnership
	 	☐	Trust
	 	☐	Other
    (please specify: ________________)


 




    	21



    	 



    

 


All
subscriptions from partnerships, corporations, trusts or limited liability companies must be accompanied by resolutions of the appropriate
corporate authority (board of directors, trustee or managing partner or members, as applicable) and trust documents evidencing the authorization
and power to make the subscription.


 


Wiring
Instructions:


 


Bank
Name:


ABA:


SWIFT:


Tel
Number:


Address:


Acct
#:


Acct.
Name:


Reference:


 




    	22



    	 



    

 


ACCEPTANCE
BY EASTSIDE DISTILLING, INC.


 


IN
WITNESS WHEREOF, the Company has caused this Securities Purchase Agreement to be executed, and the foregoing subscription accepted, as
of the date indicated below.


 


	 	EASTSIDE
    DISTILLING, INC.
	 	 	 
	 	By:	 
	 	Name:	Geoffrey
    Gwin
	 	Title:	Chief
    Financial Officer


 


Date:__________________
, 2021


 




    	23



    	 



    

 


SECTION
A


 


CONFIDENTIAL
PURCHASER QUESTIONNAIRE


 


Please
review, sign on page 32, and return to:


 


Eastside
Distilling, Inc.


8911
NE Marx Drive, Suite A2


Portland,
Oregon 97220


Email:
ggwin@eastsidedistilling.com


Attention:
Geoffrey Gwin


 


CONFIDENTIAL
PURCHASER QUESTIONNAIRE


 


THIS
QUESTIONNAIRE WILL BE USED IN CONNECTION WITH THE UNDERSIGNED’S EXPRESSED INTEREST IN A PROPOSED INVESTMENT IN EASTSIDE DISTILLING,
INC. (THE “COMPANY”).


 


THE
COMPANY SHALL HAVE THE RIGHT TO FULLY RELY ON THE REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN UNTIL SUCH TIME AS THE UNDERSIGNED
HAS FURNISHED AN AMENDED CONFIDENTIAL PURCHASER QUESTIONNAIRE.


 


THIS
QUESTIONNAIRE MUST BE ANSWERED FULLY AND RETURNED TO THE COMPANY.


 


THE
INFORMATION SUPPLIED IN THIS QUESTIONNAIRE WILL BE HELD IN STRICT CONFIDENCE. NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT THAT
SUCH DISCLOSURE IS REQUIRED BY LAW OR REGULATION, OTHERWISE DEMANDED BY PROPER LEGAL PROCESS OR IN LITIGATION INVOLVING THE COMPANY AND
ITS CONTROLLING PERSONS.


 


	(1)	By
    initialing one of the categories below, the Subscriber represents and warrants that the Subscriber comes within the category so initialed.
    The Subscriber agrees to furnish any additional information which the Company deems necessary in order to verify the answers set
    forth below. The Subscriber must initial AT LEAST ONE CATEGORY BELOW.


 


	(i)	____	The
    undersigned has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and
    risks of an investment in the Preferred Shares and Warrants and protecting the undersigned’s own interests in this transaction,
    and does not desire to utilize the services of any other person in connection with evaluating such merits and risks.
	 	 	 
	(ii)	____	The
                                            undersigned intends to use or has used the services of a purchaser representative acceptable
                                            to the Company (“Purchaser Representative”) in connection with evaluating
                                            the merits and risks of an investment in the Securities. The undersigned hereby acknowledges
                                            the following named person(s) to be the undersigned’s Purchaser Representative in connection
                                            with evaluating the merits and risks of an investment in the Preferred Shares and Warrants
                                            (a properly filled out Purchaser Representative Questionnaire must be provided with this
                                            document):

     

    The
    advisor’s name, address, and occupation are as follows:

	______	 	__________________________________________________________________________________
	 	 	 
	______	 	__________________________________________________________________________________


 




    	24



    	 



    

 


	(2)	By
    initialing one of the categories below, the Subscriber represents and warrants that the Subscriber comes within the category so initialed
    and has truthfully set forth the factual basis or reason the Subscriber comes within that category. All information in response to
    this paragraph will be kept strictly confidential. The Subscriber agrees to furnish any additional information which the Company
    deems necessary in order to verify the answers set forth below. The Subscriber is not required to initial any Category below,
    but should do so if the Subscriber falls within such Category.


 


 


	Category
    I	____	The
    Subscriber is a director or executive officer of the Company.
	 	 	 
	Category
    II	____	The
                                            Subscriber is an individual (not a partnership, corporation, etc.) whose individual net worth,
                                            or joint net worth with the Subscriber’s spouse, presently exceeds $1,000,000, excluding
                                            the value of the primary residence of the Subscriber.

     

    Explanation.
    In calculation of net worth, the Subscriber may include equity in personal property and real estate (other than the primary residence
    of the Subscriber), including the Subscriber’s cash, short term investments, stocks, securities. Equity in personal property
    and real estate should be based on the fair market value of such property less debt secured by such property.

	 	 	 
	Category
    III	____	The
    Subscriber is an individual (not a partnership, corporation, etc.) who had an individual income in excess of $200,000 in each of
    the two most recent years, or joint income with the Subscriber’s spouse in excess of $300,000 in each of the two most recent
    years, and has a reasonable expectation of reaching the same income level in the current year.





 




    	25



    	 



    

 


	Category
    IV	____	The
    undersigned is (i) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Act”);
    (ii) a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual
    or fiduciary capacity; (iii) an insurance company as defined in Section 2(13) of the Act; (iv) an investment company registered under
    the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; (v) a Small Business
    Investment Company (SBIC) licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment
    Act of 1958; or (vi) a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of
    a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000.
	 	 	 
	Category
    V	____	The
    undersigned is an (i) employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment
    decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association,
    insurance company, or registered investment advisor, (ii) an employee benefit plan with total assets in excess of $5,000,000, or
    (iii) a self-directed employee benefit plan (including a self-directed individual retirement account or IRA, Keough or SEP plan)
    with investment decisions made solely by persons that are accredited investors (describe entity).
	 	 	 
	Category
    VI	____	The
    undersigned is a private business development company as defined in Section 202(a) (22) of the Investment Advisors Act of 1940 (describe
    entity).
	 	 	 
	Category
    VII	____	The
    undersigned is either a corporation, limited liability company, partnership, Massachusetts business trust, or non-profit organization
    within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring
    the Securities and with total assets in excess of $5,000,000. (describe entity).
	 	 	 
	Category
    VIII	____	The
    undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities,
    where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act. (Must
    also answer Question 5 below).
	 	 	 
	Category
    IX	____	The
                                            undersigned is an entity (other than a trust) in which all of the equity owners are “accredited
                                            investors” within one or more of the above categories. If relying upon this category
                                            alone, each equity owner must complete a separate copy of this Purchaser. Questionnaire.
                                            (describe entity below)

 

    The
    undersigned agrees that the undersigned will notify the Company at any time in the event that the representations and warranties
    in this Purchaser Questionnaire shall cease to be true, accurate and complete.



 




    	26



    	 



    

 


	(3)	Suitability
    (please answer each question)


 


	 	(a)	For
    an individual, please describe your current employment, including the company by which you are employed and its principal business:
	 	 	 
	 	(b)	For
    an individual, please describe any college or graduate degrees held by you:
	 	 	 
	 	(c)	For
    all subscribers, please list types of prior investments:
	 	 	 
	 	(d)	For
    all subscribers, please state whether you have participated in other private placements before:


 


	 	Yes
    ________	No
    ________


 


	 	(e)	If
    your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements
    of:


 


	 	Public
                                                                     Companies
	 	Private
                                                                     Companies

	Frequently	 	 	 
	Occasionally	 	 	 
	Never	 	 	 


 


	 	(f)	For
    individuals, do you expect your current level of income to significantly decrease in the foreseeable future?


 


	 	Yes
    ________	No
    ________


 


	 	(g)	For
    trust, corporate, partnership and other institutional subscribers, do you expect your total assets to significantly decrease in the
    foreseeable future?


 


	 	Yes
    ________	No
    ________


 




    	27



    	 



    

 


	 	(h)	For
    all subscribers, do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to need
    sudden cash requirements in excess of cash readily available to you?


 


	 	Yes
    ________	No
    ________


 


	 	(i)	For
    all subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the Securities for which you
    seek to purchase?


 


	 	Yes
    ________	No
    ________


 


	 	(j)	For
    all subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of
    losing your entire investment?


 


	 	Yes
    ________	No
    ________


 


	(4)	Manner
    in which title is to be held: (circle one)


 


Individual
Ownership


Community
Property


Joint
Tenant with Right of Survivorship (both parties must sign)


Partnership


Tenants
in Common


Limited
Liability Company


Corporation


Trust


Other


 


	(5)	FINRA
    Affiliation.


 


Are
you affiliated or associated with an FINRA member firm (please check one):


 


	 	Yes
    ________	No
    ________


 


If
Yes, please describe:


 


	___________________________________________________________________
	___________________________________________________________________
	___________________________________________________________________









 


*If
subscriber is a Registered Representative with an FINRA member firm, have the following acknowledgment signed by the appropriate party:


 




    	28



    	 



    

 


The
undersigned FINRA member firm acknowledges receipt of the notice required by the FINRA Conduct Rules.


 


	 
	Name
    of FINRA Member Firm	 
	 	 	 
	By:	 	 
	 	Authorized
    Officer	 
	 	 	 
	Date: 	 	 


 


	(6)	Trust
    Subscribers


 


A.
Certain trusts generally may not qualify as accredited investors except under special circumstances. Therefore, if you intend to hold
securities in whole or in part through a trust, please answer each of the following questions.


 


Is
the trustee of the trust a national or state bank that is acting in its fiduciary capacity in making the investment on behalf of the
trust?


 


	 	Yes
    ☐	No
    ☐


 


B.
If the trust is a revocable trust, please complete Question 1 below. If the trust is an irrevocable trust, please complete Question 2
below.


 


1.
REVOCABLE TRUSTS


 


Can
the trust be amended or revoked at any time by its grantors:


 


	 	Yes
    ☐	No
    ☐


 


If
yes, please answer the following questions relating to each grantor (please add sheets if necessary):


 


Grantor
Name: ________________


 


Net
worth of grantor (including spouse, if applicable), including home, home furnishings and automobiles exceeds $1,000,000?


 


	 	Yes
    ☐	No
    ☐
	 	OR


 




    	29



    	 



    

 


Income
(exclusive of any income attributable to spouse) was in excess of $200,000 for the prior two taxable years and is reasonably expected
to be in excess of $200,000 for the current taxable year?


 


	 	Yes
    ☐	No
    ☐
	 	OR


 


Income
(including income attributable to spouse) was in excess of $300,000 for the prior two taxable years and is reasonably expected to be
in excess of $300,000 for the current taxable year?


 


	 	Yes
    ☐	No
    ☐


 


2.
IRREVOCABLE TRUSTS


 


If
the trust is an irrevocable trust, please answer the following questions:


 


Please
provide the name of each trustee:


 


	Trustee
    Name: 	 _____________________________________________________
	 	 
	Trustee
    Name: 	 _____________________________________________________


 


Does
the trust have assets greater than $5 million?


 


	 	Yes
    ☐	No
    ☐


 


Indicate
how often you invest in:


 


	Marketable
    Securities
	Often
    ☐	Occasionally
    ☐	Seldom
    ☐	Never
    ☐ 
	 	 	 	 
	Restricted
                                            Securities
	Often
    ☐	Occasionally
                  ☐	Seldom
    ☐	Never
    ☐
	 	 	 	 
	Venture
    Capital Companies
	Often
    ☐	Occasionally
    ☐	Seldom
    ☐	Never
    ☐


 


This
completes the questions applicable to Trust Investors. Please sign below.


 




    	30



    	 



    

 


The
undersigned has been informed of the significance of the foregoing representations and answers contained in this Confidential Purchaser
Questionnaire and such representations and answers have been provided with the understanding that the Company, will rely on them.


 


	 	Individual
	 	 
	 	 
	 	Name
                                            of Individual

    (Please
    type or print)

	 	 
	 	 
	 	Signature
    of Individual
	 	 
	 	 
	 	Name
                                            of Joint Owner

    (Please
    type or print)

	 	 
	 	 
	 	Signature
    (Joint Owner)





 


	 	Partnership,
                                            Corporation or Other Entity



	 	 	 
	 	 
	 	Print
    or Type Entity Name
	 	 	 
	 	 	                    
	 	By:	 
	 	Name     	 
	 	Title:	 



 




    	31



    	 



    

 


EXHIBIT
A


 


Form
of Warrant


 




    	32



    	 



    

 


NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


Warrant
No. 2021-00__


 


WARRANT


 


EASTSIDE
DISTILLING, INC.


 


	Warrant
    Shares: ________	Initial
    Exercise Date: October __ , 2021


 


THIS
WARRANT (the “Warrant”) certifies that, for value received, _______ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
October ___ , 2021 (the “Initial Exercise Date”) and on or prior to the close of business on the four year anniversary
of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Eastside
Distilling, Inc., a Nevada corporation (the “Company”), up to ____ shares of Common Stock (“Warrant Shares”)
having an expiration date four years after the date of issuance. The purchase price of one Warrant Share under this Warrant shall be
equal to the Exercise Price, as defined in Section 2(b).


 


Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated October [___] , 2021, among the Company and the purchasers signatory
thereto.


 


For
purposes of this Warrant, the following terms shall have the following meanings:


 


“Affiliate”
means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as applied to any Person, means possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise.


 




    	33



    	 



    

 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States, or any day
on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.


 


“Trading
Day” means a day on which the shares of Common Stock are traded on the Trading Market; provided, however, that in the event
that the shares of Common Stock are not listed or quoted on the Trading Market, then Trading Day shall mean any day except Saturday,
Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or State of Nevada
are authorized or required by law or other government action to close.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, or the OTC Markets QB Tier (or any successors to any of the foregoing).


 


“VWAP”
means, for any date, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (“Bloomberg”) (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)).


 


Section
2. Exercise.


 


a)
Exercise of Warrants. Exercise of the purchase rights for Warrant Shares represented by this Warrant may be made, in whole or
in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company
(or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company) of a duly executed Notice of Exercise in the form annexed hereto as Exhibit A (which may
be delivered in a .PDF format via electronic mail pursuant to the notice provisions set forth in the Purchase Agreement). Within two
(2) Trading Days of the date said Notice of Exercise is delivered to the Company (or within three (3) Trading Days of the date said Notice
of Exercise is delivered to the Company if the Notice of Exercise is received after 12 p.m. EST on such day), the Company shall have
received payment of the aggregate Exercise Price of the Warrant Shares thereby purchased by wire transfer or cashier’s check drawn
on a United States bank, unless such exercise is made pursuant to the cashless exercise procedure specified in Section 2(c) below
(if available). No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or
notarization) of any Notice of Exercise form be required. The Company shall be entitled to conclusively assume the genuineness of any
signature on any Notice of Exercise delivered to the Company pursuant to this Section 2(a), the legal capacity and competency
of all natural persons signing any Notice of Exercise so delivered, the authenticity of any Notice of Exercise so delivered, the conformity
to an authentic original of any Notice of Exercise so delivered as certified, authenticated, conformed, photostatic, facsimile, or electronic
and the authenticity of the original of such Notice of Exercise. Notwithstanding anything herein to the contrary, the Holder shall not
be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder
and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting
in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and
the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases, and the Company shall
be entitled to conclusively assume that its records of the number of Warrant Shares purchased and the date of such purchases are accurate,
absent actual notice to the contrary. The Company shall deliver any objection to any Notice of Exercise within two (2) Business Days
of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions
of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on the face hereof.


 




    	34



    	 



    

 


b)
Exercise Price. The exercise price per Warrant Share under this Warrant shall be $3.75, subject to adjustment hereunder (the “Exercise
Price”).


 


c)
Cashless Exercise. If at any time after the six month anniversary of the date of the Purchase Agreement, there is no effective
Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this
Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall
be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:


 


	 	(A)
    = 	as
    applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of
    Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both
    executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours”
    (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the
    option of the Holder, either (y) the VWAP on the Trading day immediately preceding the date of the applicable Notice of Exercise
    or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s
    execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours”
    on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular
    trading hours” on a Trading Day) pursuant to Section 2(a) hereof, or (iii) the VWAP on the date of the applicable Notice of
    Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant
    to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
	 	 	 
	 	(B)
    =	the
    Exercise Price of this Warrant, as adjusted hereunder; and
	 	 	 
	 	(X)
    =	the
    number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
    exercise were by means of a cash exercise rather than a cashless exercise.


 




    	35



    	 



    

 


A
Notice of Exercise pursuant to this Section 2(c) shall include, as an exhibit, one of the following, as applicable: (i) the VWAP
on the Trading Day immediately preceding the date of such Notice of Exercise; (ii) the VWAP on the date of such Notice of Exercise; or
(iii) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise.


 


Assuming
(i) the Holder is not an Affiliate of the Company, and (ii) all of the applicable conditions of Rule 144 promulgated under the Securities
Act of 1933, as amended (the “Securities Act”) with respect to Holder and the Warrant Shares are met in the case of
such a cashless exercise, the Company agrees that the Company will use its best efforts to cause the removal of the legend from such
Warrant Shares (including by delivering an opinion of the Company’s counsel to the Company’s transfer agent at its own expense
to ensure the foregoing), and the Company agrees that the Holder is under no obligation to sell the Warrant Shares issuable upon the
exercise of the Warrant prior to removing the legend. The Company expressly acknowledges that Rule 144(d)(3)(ii), as currently in effect,
provides that Warrant Shares issued solely upon a cashless exercise shall be deemed to have been acquired at the same time as the Warrant.
The Company agrees not to take any position contrary to this Section 2(c).


 


d)
Mechanics of Exercise.


 


i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Company’s transfer agent (the “Transfer Agent”) to the Holder by crediting the account of the Holder’s
or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”)
if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance
of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder
pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name
of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address
specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the later of (A) the delivery to the
Company of the Notice of Exercise provided that such Notice of Exercise is received by 12 p.m. EST and three (3) Trading Days for any
Notice of Exercise received after 12 p.m. EST, and (B) the Company’s receipt of payment of the aggregate Exercise Price of the
Warrant Shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank, unless such exercise is made
pursuant to the cashless exercise procedure specified in Section 2(c) (such date, the “Warrant Share Delivery Date”).
The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the
Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant
to Section 2(d)(vi) prior to the issuance of such Warrant Shares, having been paid. If the Company fails for any reason to deliver
to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of
the Common Stock on the date of the applicable Notice of Exercise), $5 per Trading Day (increasing to $10 per Trading Day on the fifth
Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant
Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST
program so long as this Warrant remains outstanding and exercisable.


 




    	36



    	 



    

 


ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.


 


iii.
Rescission Rights. If the Holder fails to make payment of the aggregate Exercise Price of the Warrant Shares pursuant to a Notice
of Exercise within two (2) Trading Days of the date said Notice of Exercise is delivered to the Company (or within three (3) Trading
Days of the date said Notice of Exercise is delivered to the Company if the Notice of Exercise is received after 12 p.m. EST on such
day) by wire transfer or cashier’s check drawn on a United States bank, then the Company will have the right to rescind such exercise,
unless such exercise is made pursuant to the cashless exercise procedure specified in Section 2(c). If the Company fails to cause
the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date,
then the Holder will have the right to rescind such exercise.


 


iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which
(x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant Shares for which such exercise was not honored (in which case
such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall
be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise
of the Warrant as required pursuant to the terms hereof.


 




    	37



    	 



    

 


v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.


 


vi.
Charges, Taxes, and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all
fees charged by the Transfer Agent, including any fees assessed to the Transfer Agent by Depository Trust Company (or another established
clearing corporation performing similar functions) required for same-day processing of any Notice of Exercise and for same-day electronic
delivery of the Warrant Shares.


 


vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.


 


e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess
of the Beneficial Ownership Limitation (as defined below). For purposes of this Section 2(e), the foregoing sentence, the number
of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder
or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence,
for purposes of beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be
the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to
any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual
report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written
notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written request
of a Holder (which, for clarity, includes electronic mail), the Company shall within two Trading Days confirm orally and in writing to
the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or
its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase
in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The
limitations contained in this paragraph shall apply to a successor holder of this Warrant.


 




    	38



    	 



    

 


Section
3. Certain Adjustments.


 


a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of
Warrant Shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this
Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or re-classification.


 


b)
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 3(a), the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after
such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).


 


c)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock,
(iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization, or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock
or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off,
merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of
the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental Transaction”), then, the Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations
of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(c) pursuant
to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay)
prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common
Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior
to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in
form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein.


 




    	39



    	 



    

 


d)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.


 


e)
Notice to Holder.


 


i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly mail or deliver via electronic mail to the Holder a notice setting forth the Exercise Price after such adjustment
and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.


 


ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the
Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights, or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. To the
extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company, the
Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.


 




    	40



    	 



    

 


Section
4. Transfer of Warrant.


 


a)
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d)
hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or
in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment
of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to
pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company
assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase
of Warrant Shares without having a new Warrant issued.


 


b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise
Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.


 


c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.


 


d)
Transfer Restrictions. Subject to any limitations imposed by applicable law, this Warrant may be offered for sale, sold, transferred,
or assigned without the consent of the Company.


 


e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.


 




    	41



    	 



    

 


Section
5. Miscellaneous.


 


a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).


 


b)
Loss, Theft, Destruction, or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.


 


c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business
Day.


 


d)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant (the “Required Reserve Amount”). The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of
the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon
the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant
and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid, and nonassessable and free
from all taxes, liens, and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).


 


e)
Jurisdiction. All questions concerning the construction, validity, enforcement, and interpretation of this Warrant shall be determined
in accordance with the provisions of the Purchase Agreement.


 


f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will
have restrictions upon resale imposed by state and federal securities laws.


 




    	42



    	 



    

 


g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers, or remedies, notwithstanding the fact that
all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of
this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.


 


h)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase Agreement.


 


i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.


 


j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages may not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law would be adequate.


 


k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.


 


l)
Amendment. This Warrant (other than Section 2(e)) may be modified or amended or the provisions hereof waived with the written
consent of the Company and the Holder. No waiver shall be effective unless it is in writing and signed by an authorized representative
of the waiving party.


 


m)
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).


 




    	43



    	 



    

 


n)
Headings. This Warrant shall be deemed to be jointly drafted by the Company and the Holder 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. Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings
ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.


 


o)
Governing Law. 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 Nevada,
without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of Nevada. 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 on its signature page to the Purchase Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in Nevada, 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. 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 TO, 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.


 


********************


 


(Signature
Page Follows)


 




    	44



    	 



    

 


IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.


 


	 	EASTSIDE
    DISTILLING, INC.
	 	 	 
	 	By:	 
	 	Name:	Paul
    Block
	 	Title:	CEO


 




    	45



    	 



    

 


EXHIBIT
A


 


NOTICE
OF EXERCISE


 


TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK


 


EASTSIDE
DISTILLING, INC.


 


The
undersigned holder hereby exercises the right to purchase _______ of the shares of Common Stock (“Warrant Shares”)
of Eastside Distilling, Inc., a Nevada corporation (the “Company”), evidenced by Warrant No. ________ (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 Aggregate 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 Holder, or its designee or agent as specified below, ____________ Warrant
Shares in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:


 


☐
Check here if requesting delivery as a certificate to the following name and to the following address:


 


	Issue
    to:	 

	 	 


	 	 




 


☐
Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:


 


	DTC
    Participant:	 

	DTC
    Number:	 

	Account
    Number:	 




 


Date:
____________ __,


 


	Name
    of Registered Holder	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	Tax
    ID:	 
	 	Facsimile:	 
	 	E-mail
    Address:


 




    	 



    	 



    

 


DISCLOSURE
SCHEDULES


 


Schedule
4


 




    	 



    	 



    

 


Schedule
4


 


Risk
Factors Not Excluded from Report Disclosures


 


Failure
to retain & recruit executive management and to build morale and performance


 


Eastside
Distilling’s success depends upon the efforts and abilities of our executive management team, key senior management, and a high-quality
employee base, as well as our ability to attract, motivate, reward, and retain them. If one of our executive officers or critical senior
management terminates his or her employment, we may not be able to replace their expertise, fully integrate new personnel or replicate
the prior working relationships. The loss of critical employees might significantly delay or prevent the achievement of our business
objectives. Qualified individuals with the breadth of skills and experience in our industry that we require are in high demand, and we
may incur significant costs to attract them. Difficulties in hiring or retaining key executive or employee talent, or the unexpected
loss of experienced employees could have an adverse impact on our business performance. In addition, we could experience business disruption
and/or increased costs related to organizational changes, reductions in workforce, or other cost-cutting measures.


 


We
recently hired a new corporate controller and Vice President of Financial Planning and Analysis in the first quarter of 2021.


 


There
is substantial uncertainty relating to our acquisition of the assets of Intersect Beverage, LLC


 


On
September 12, 2019, the Company completed the acquisition of the Azuñia Tequila brand, the direct sales team, existing product
inventory, supply chain relationships and contractual agreements from Intersect Beverage, LLC, an importer and distributor of tequila
and related products. We have encountered integration difficulties since the acquisition, including difficulties in assimilating the
operations and products, failing to realize synergies, unanticipated costs, low profit margins, diversion of management’s attention
from other business concerns, and issues relating to employee transition. Moreover, the Company has discovered a
number of inappropriate and problematic trade and sales practices relating to the Company’s sales of the Azuñia
Tequila brand of products. The Company has commenced an internal investigation into these trade practices and the effects, if any, such
practices may have on the Company’s historical results of operation, as well as any potential violation of laws or regulations
applicable to the Company. The results of the investigation could lead to one or more material adverse effects on the Company, including
actions for violation of law or regulation, penalties or other monetary liability, suspension, or forfeiture of one or more licenses
to operate our business. Moreover, the investigation may result in assertion of one or more claims of indemnification or other legal
action arising out of the acquisition.


 




    	 



    	 



    

 


Our
failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a delisting


 


In
August 2017, our shares of common stock began trading on the Nasdaq Capital Market. If we fail to satisfy the continued listing requirements
of the Nasdaq Capital Market, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may
take steps to delist our common stock. Such a delisting would likely have a negative effect on the price of our common stock and would
impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we would expect to take
actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken
by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent
our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing
requirements. As of August 8, 2019, we failed to comply with Nasdaq’s requirement to have a majority independent Board and independent
audit and compensation committees. Although we regained compliance with the Nasdaq listing requirements in September 2019, we again fell
out of compliance on November 12, 2019 due to a director resignation and the appointment of Lawrence Firestone, a then-independent director,
as our Chief Executive Officer. We promptly came back into compliance on November 18, 2019.


 


On
August 20, 2020, Nasdaq notified the Company that it no longer complied with Nasdaq Listing Rule 5550(b)(1) because its reported stockholder’s
equity of $2.4 million as of June 30, 2020 was below the minimum stockholder’s equity of $2.5 million set forth in the Nasdaq Listing
Rule by $0.1 million. The Company believes it has regained compliance with Nasdaq’s stockholders’ equity requirement based
upon the specific transactions and events as of February 16, 2021. Nasdaq will continue to monitor the Company’s ongoing compliance
with the stockholders’ equity requirement and, if, the Company does not evidence compliance at the time of its next periodic report,
the Company may be subject to delisting.


 


On
January 19, 2021, our board of directors determined that one of its members, Stephanie Kilkenny, had ceased to be independent due to
circumstances beyond her reasonable control resulting in our non-compliance with Nasdaq Listing Rules 5605(b), (c), and (d). The Board
resolved to regain compliance and take commercially reasonable steps, including retaining an executive search firm, to fill a current
vacancy on the Board with a new director who qualifies as independent under these rules as soon as possible but in no event later than
the earlier of our next annual shareholder meeting or 180 days from the date of determination. On March 22, 2021, our board of directors
unanimously consented to a new independent board member bringing us back into compliance.


 




    	 



    	 



    

 


Schedule
4(c)


 


Capitalization


 


(ii)
Options, et. al.


 


A
summary of all stock option activity for the six months ended June 30, 2021 is presented below


 


	Stock
    options outstanding as of December 31, 2020	 	 	134,514	 
	Options
    granted	 	 	5,000	 
	Options
    cancelled	 	 	(62,221	)
	Stock
    options exercisable as of June 30, 2021	 	 	77,710	 
	Warrants
    outstanding as of June 30, 2021	 	 	1,140,278	 



 


In
addition, the Company has outstanding option RSU awards to its officers and directors as set forth in the Company’s proxy statement
for its 2021 annual meeting.


 


See
also Reports.


 


(iii)
Indebtedness


 


See
Balance sheet and footnotes (in particular notes 9 through 11) set forth in the Company’s Quarterly Report on Form 10-Q for the
period ending June 30, 2021.


 


See
Schedule 4(c)(iv) below.


 


(iv)
Financing Statements


 


On
January 15, 2020, the Company entered into a loan agreement (the “Loan Agreement”) between the Company which includes
its wholly-owned subsidiaries MotherLode LLC, an Oregon limited liability company, Big Bottom Distilling, LLC, an Oregon limited liability
company, Craft Canning + Bottling, LLC, an Oregon limited liability company, Redneck Riviera Whiskey Co., LLC, a Tennessee limited liability
company, and Outlandish Beverages LLC, an Oregon limited liability company collectively, (the “Borrowers” and each
a “Borrower”) and Live Oak Banking Company (“Live Oak”), a North Carolina banking corporation (the “Lender”)
to refinance existing debt of the Borrowers and to provide funding for general working capital purposes. Under the Loan Agreement, the
Lender has committed to make up to two loan advances to the Borrowers in an aggregate principal amount not to exceed the lesser of (i)
$8.0 million and (ii) a borrowing base equal to 85% of the appraised value of the Borrowers’ eligible inventory of whisky in barrels
or totes less an amount equal to all service fees or rental payments owed by the Borrowers during the 90 day period immediately succeeding
the date of determination to any warehouses or bailees holding eligible inventory (the “Loan”).


 




    	 



    	 



    

 


The
Loan matured on January 14, 2021 and was amended to April 13, 2021 and then further amended to May 13, 2021 and all amounts outstanding
under the Loan become due and payable. The Lender may at any time demand repayment of the Loan in whole or in part, in which case the
Borrowers will be obligated to repay the Loan (or portion thereof for which repayment is demanded) within 30 days following the date
of demand. The Borrowers may prepay the Loan, in whole or in part, at any time without penalty or premium.


 


The
Loan bears interest at a rate equal to the prime rate plus a spread of 2.49%, adjusted quarterly. Accrued interest is payable monthly,
with the final installment of interest being due and payable on the Maturity Date. The Borrowers are also obligated to pay a servicing
fee, unused commitment fee and origination fee in connection with the Loan.


 


The
Loan Agreement contains affirmative and negative covenants that include covenants restricting each Company’s ability to, among
other things, incur indebtedness, grant liens, dispose of assets, merge or consolidate, make investments, or enter into restrictive agreements,
subject to certain exceptions.


 


The
obligations of the Borrowers under the Loan Agreement are secured by substantially all of their respective assets, except for accounts
receivable and certain other specified excluded property.


 


The
Loan Agreement includes customary events of default that include among other things, non-payment defaults, covenant defaults, inaccuracy
of representations and warranties, cross default to material indebtedness, bankruptcy and insolvency defaults and change in control defaults.
Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default under
the Loan Agreement at a per annum rate equal to 2.00% above the applicable interest rate.


 


In
connection with the Loan Agreement, the Company issued to the Lender a warrant to purchase up to 100,000 shares of the Company’s
common stock at an initial exercise price of $3.94 per share (the “Warrant”). The Warrant expires on January 15, 2025.
In connection with the issuance of the Warrant, the Company granted the Lender piggy-back registration rights with respect to the shares
of common stock issuable upon exercise of the Warrant, subject to certain exceptions.


 


On
April 19, 2021, the Company entered into a securities purchase agreement (“Purchase Agreement”) with accredited investors
(“Subscribers”) for their purchase of up to $3.3 million of principal amount of 6% secured convertible promissory notes of
the Company (“Note” or “Notes”), which notes are convertible into shares (“Conversion Shares”) of
the Company’s common stock, par value $0.0001 per share (“Common Stock”) pursuant to the terms and conditions set forth
in the Notes with an initial conversion price of $2.20, in connection with the purchase of such Notes, each Subscriber shall receive
a warrant (a “Warrant”), to purchase a number of shares of Common Stock (“Warrant Shares”) equal to 60% of the
principal amount of any Note issued to such Subscriber hereunder divided by the conversion price of the Note issued to such Subscriber,
at an exercise price equal to $2.60. In connection with the Purchase Agreement, the Company entered into a Security Agreement under which
it would grant the Subscribers a security interest in certain assets of the Company (the “Security Agreement”) and a Registration
Rights Agreement under which the Company would agree to register for resale the Conversion Shares and the Warrant Shares (the “Registration
Rights Agreement”). Concurrently therewith, the Company and the investors closed $3.3 million of the private offering.


 




    	 



    	 



    

 


Roth
Capital, LLC acted as placement agent (the “Placement Agent”) in the private offering, and the Company paid the Placement
Agent a cash fee of five percent (5%) of the gross proceeds therefrom. The Company received $3.1 million in net proceeds from the closing,
after deducting the fee payable to the Placement Agent and the legal fees of the Subscribers in connection with the transaction. The
Company used the proceeds to repay prior outstanding notes payable and for working capital and general corporate purposes.


 


Interest
on the Notes accrues at a rate of 6% per annum and is payable either in cash or in shares of the Company’s common stock at the
conversion price in the Note on each of the six and twelve month anniversaries of the issuance date and on the maturity date of October
18, 2022 (the “Maturity Date”). The Company paid $0 million in interest during the six months ended June 30, 2021.


 


All
amounts due under the Notes are convertible at any time after the issuance date, in whole or in part (subject to rounding for fractional
shares), at the option of the holders into the Company’s common stock at a fixed conversion price, which is subject to adjustment
as summarized below. The Notes are initially convertible into the Company’s common stock at an initial fixed conversion price of
$2.20 per share. This conversion price is subject to adjustment for stock splits, combinations, or similar events, among other adjustments.


 


The
Company may prepay the Notes at any time in whole or in part by paying a sum of money equal to 100% of the principal amount to be redeemed,
together with accrued and unpaid interest, plus a prepayment fee equal to five percent (5%) of the principal amount to be repaid.


 


The
Notes contain customary triggering events including but not limited to: (i) failure to make payments when due under the Notes; and (ii)
bankruptcy or insolvency of the Company. If a triggering event occurs, each holder may require the Company to redeem all or any portion
of the Notes (including all accrued and unpaid interest thereon), in cash.


 


The
Notes are secured by a subordinated security interest in the Company’s assets pursuant to the terms of a Security Agreement entered
into between the Company and the Subscribers.


 


See
also Reports.


 


(v)
Registration Rights


 


Intersect
Beverage LLC – Asset Purchase Agreement dated September 12, 2019


Bigger
Capital & District 2 – Securities Purchase Agreement dated April 19, 2021


Bigger
Capital & District 2 – Warrant Exercise Inducement Letters dated July 30, 2021


 


See
also Reports