Exhibit 4.1


 


DEHAIER MEDICAL SYSTEMS LIMITED


 


Warrant To Purchase Common
Shares


 


Warrant No.: 2014-__


 


Date of Issuance: February 21, 2014 (“Issuance
Date”)


 


Dehaier Medical Systems
Limited, a British Virgin Islands company (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, ____________________,
the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set
forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant
to Purchase Common Shares (including any Warrants to Purchase Common Shares issued in exchange, transfer or replacement hereof,
the “Warrant”), at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time,
on the Expiration Date (as defined below), _________________ (subject to adjustment as provided herein) fully paid and non-assessable
Common Shares (as defined below) (the “Warrant Shares”, and such number of Warrant Shares, the “Warrant
Number”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 18. This Warrant is one of the Warrants to Purchase Common Shares (the “SPA Warrants”) issued pursuant
to (a) Section 1 of that certain Securities Purchase Agreement, dated as of February 21, 2014, by and among the Company and
the investors (the “Buyers”) referred to therein, as amended from time to time (the “Securities Purchase
Agreement”) and (b) the Company’s Registration Statement
on Form S-3 (File number 333-178268) (the “Registration
Statement”.


 


1.                 
EXERCISE OF WARRANT.


 


(a)               
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations
set forth in Section 1(e)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise
Date”), in whole or in part, by delivery via e-mail of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading
Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the
Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so
exercised (the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the
Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined
in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise
hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same
effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining
number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have
the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms
hereof. On or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice,
the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached
hereto as Exhibit B, to the Holder and the Company’s transfer agent (the “Transfer Agent”).
On or before the third (3rd) Trading Day following the date on which the Company has received such Exercise Notice,
the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of Common Shares to which
the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s
agent or designee, in each case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice,
a certificate, registered in the Company’s share register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of Common Shares to which the Holder is entitled pursuant to such exercise. Upon delivery
of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the
Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If
this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented
by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then, at the
request of the Holder, the Company shall as soon as practicable and in no event later than three (3) Business Days after any exercise
and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d))
representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant,
less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Common Shares are to be issued
upon the exercise of this Warrant, but rather the number of Common Shares to be issued shall be rounded up to the nearest whole
number. The Company shall pay any and all taxes and fees which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant. Notwithstanding the foregoing, except in the case where an exercise of this Warrant is validly
made pursuant to a Cashless Exercise (as defined in Section 1(d)), the Company’s failure to deliver Warrant Shares to
the Holder on or prior to the second (2nd) Trading Day after the Company’s receipt of the Aggregate Exercise Price shall
not be deemed to be a breach of this Warrant.


 






    	 



    	 



    

 


(b)              
Exercise Price. For purposes of this Warrant, “Exercise Price” means $ 11.86, subject to adjustment
as provided herein.


 


(c)               
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason,
to issue to the Holder within the later of (i) three (3) Trading Days after receipt of the applicable Exercise Notice and (ii)
two (2) Trading Days after the Company’s receipt of the Aggregate Exercise Price (or valid notice of a Cashless Exercise)
(such later date, the “Share Delivery Deadline”), a certificate for the number of Common Shares to which the
Holder is entitled and register such Common Shares on the Company’s share register or to credit the Holder’s balance
account with DTC for such number of Common Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant
(as the case may be) (a “Delivery Failure”), then, in addition to all other remedies available to the Holder,
the Company shall pay in cash to the Holder on each day after such Share Delivery Deadline that the issuance of such Common Shares
are not timely effected an amount equal to 0.5% of the product of (A) the aggregate number of Common Shares not issued to the Holder
on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the Common Shares on the Trading Day immediately
preceding the last possible date on which the Company could have issued such Common Shares to the Holder without violating Section 1(a).
In addition to the foregoing, if on or prior to the Share Delivery Deadline, the Company shall fail to issue and deliver a certificate
to the Holder and register such Common Shares on the Company’s share register or credit the Holder’s balance account
with DTC for the number of Common Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case
may be), and if on or after such Share Delivery Deadline the Holder purchases (in an open market transaction or otherwise) Common
Shares to deliver in satisfaction of a sale by the Holder of all or any portion of the number of Common Shares, or a sale of a
number of Common Shares equal to all or any portion of the number of Common Shares, issuable upon such exercise that the Holder
so anticipated receiving from the Company, then, in addition to all other remedies available to the Holder, the Company shall,
within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (I) pay cash to the
Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any) for the Common Shares so purchased (including, without limitation, by any other Person in respect, or on behalf, of the
Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
or credit the Holder’s balance account with DTC for the number of Common Shares to which the Holder is entitled upon the
Holder’s exercise hereunder (as the case may be) (and to issue such Common Shares) shall terminate, or (II) promptly honor
its obligation to so issue and deliver to the Holder a certificate or certificates representing such Common Shares or credit the
Holder’s balance account with DTC for the number of Common Shares to which the Holder is entitled upon the Holder’s
exercise hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of Common Shares multiplied by (B) the lowest Closing Sale Price of the Common Shares on any
Trading Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance
and payment under this clause (II).


 






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(d)              
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(e) below),
if, at the time of exercise hereof, the Registration Statement is not effective (or the prospectus contained therein is not available
for use) for the issuance by the Company to the Holder of all of the Warrant Shares, then the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number”
of Common Shares determined according to the following formula (a “Cashless Exercise”):


 


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


D


 


For purposes of the
foregoing formula:


 


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


 






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B = the quotient
of (x) the sum of the VWAP of the Common Stock of each of the twenty (20) Trading Days ending at the close of business on the Principal
Market immediately prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (y) twenty (20).


 


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


 


D = as applicable:
(i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice
if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or
(2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day,
(ii) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such
Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter
pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice
if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section
1(a) hereof after the close of “regular trading hours” on such Trading Day.


 


(e)               
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of
the number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number
of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 15.


 


(f)               
Limitations on Exercises. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall
not be exercisable by the Holder hereof to the extent (but only to the extent) that after giving effect to such exercise the Holder
(together with any of its affiliates) would beneficially own in excess of 4.99% (the “Maximum Percentage”) of
the Common Shares. To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis
other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities
shall be convertible, exercisable or exchangeable (as the case may be, as among all such securities owned by the Holder) shall,
subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion,
exercise or exchange (as the case may be). No prior inability to exercise this Warrant pursuant to this paragraph shall have any
effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.
For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation,
with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act
(as defined in the Securities Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions of this
paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership
limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage
limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The holders of Common
Shares shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of
holders of a majority of its Common Shares. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing to the Holder the number of Common Shares then outstanding, including
by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Shares, including, without limitation,
pursuant to this Warrant or securities issued pursuant to the Securities Purchase Agreement. By written notice to the Company,
any Holder may increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice;
provided that (i) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and
(ii) any such increase or decrease will apply only to the Holder sending such notice and not to any other holder of SPA Warrants.


 






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(g)              
Insufficient Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number
of Common Shares at least equal to 125% of the maximum number of Common Shares as shall be necessary to satisfy the Company’s
obligation to issue Common Shares hereunder (without regard to any limitation otherwise contained herein with respect to the number
of Common Shares that may be acquirable upon exercise of this Warrant). If, notwithstanding the foregoing, and not in limitation
thereof, at any time while any of the SPA Warrants remain outstanding the Company does not have a sufficient number of authorized
and unreserved Common Shares to satisfy its obligation to reserve for issuance upon exercise of the SPA Warrants at least a number
of Common Shares (the “Required Reserve Amount”) equal to the number of Common Shares as shall from time to
time be necessary to effect the exercise of all of the SPA Warrants then outstanding (an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company’s authorized Common Shares to an amount
sufficient to allow the Company to reserve the Required Reserve Amount for all the SPA Warrants then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than ninety (90) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting
of its shareholders for the approval of an increase in the number of authorized Common Shares. In connection with such meeting,
the Company shall provide each shareholder with a proxy statement and shall use its best efforts to solicit its shareholders’
approval of such increase in authorized Common Shares and to cause its board of directors to recommend to the shareholders that
they approve such proposal. In the event that the Company is prohibited from issuing Common Shares upon an exercise of this Warrant
due to the failure by the Company to have sufficient Common Shares available out of the authorized but unissued Common Shares (such
unavailable number of Common Shares, the “Authorization Failure Shares”), in lieu of delivering such Authorization
Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable
into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure
Shares and (y) the greatest Closing Sale Price of the Common Shares on any Trading Day during the period commencing on the date
the Holder delivers the applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending
on the date of such issuance and payment under this Section 1(g) and (ii) to the extent the Holder purchases (in an open market
transaction or otherwise) Common Shares to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any
brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith.


 






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2.                 
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise
Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth
in this Section 2.


 


(a)               
Share Dividends and Splits. Without limiting any provision of Section 2(b) or Section 4, if the Company,
at any time on or after the date of the Securities Purchase Agreement, (i) pays a share dividend on one or more classes of its
then outstanding Common Shares or otherwise makes a distribution on any class of share capital that is payable in Common Shares,
(ii) subdivides (by any share split, share dividend, recapitalization or otherwise) one or more classes of its then outstanding
Common Shares into a larger number of shares or (iii) combines (by combination, reverse share split or otherwise) one or more classes
of its then outstanding Common Shares into a smaller number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of Common Shares outstanding immediately before such event and of which
the denominator shall be the number of Common Shares outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective
immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph
occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted
appropriately to reflect such event.


 


(b)              
Adjustment Upon Issuance of Shares of Common Shares. If and whenever on or after the date of the Securities Purchase
Agreement, the Company issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any Common
Shares (including the issuance or sale of Common Shares owned or held by or for the account of the Company, but excluding any Excluded
Securities issued or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such
Exercise Price then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount
equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise
Price and the New Issuance Price under this Section 2(b)), the following shall be applicable:


 


(i)                
Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for
which one Common Share is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange of
any Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price, then such Common Share
shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option
for such price per share. For purposes of this Section 2(b)(i), the “lowest price per share for which one Common Share
is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one Common Share upon the granting or sale of such Option, upon
exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option
and (y) the lowest exercise price set forth in such Option for which one Common Share is issuable upon the exercise of any such
Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option minus
(2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the
actual issuance of such Common Shares or of such Convertible Securities upon the exercise of such Options or upon the actual issuance
of such Common Shares upon conversion, exercise or exchange of such Convertible Securities.


 






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(ii)              
Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the
lowest price per share for which one Common Share is at any time issuable upon the conversion, exercise or exchange thereof is
less than the Applicable Price, then such Common Share shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(b)(ii),
the “lowest price per share for which one Common Share is issuable upon the conversion, exercise or exchange thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one Common Share upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange
of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which one Common Share
is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable to the holder of such
Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the value of any other consideration
received or receivable by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Common Shares upon conversion,
exercise or exchange of such Convertible Securities, and if any such issuance or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(b),
except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.


 


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


 






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(iv)            
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued
in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the
Holder, the “Primary Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary
Securities”), together comprising one integrated transaction, the aggregate consideration per Common Share with respect
to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one Common Share
was issued (or was deemed to be issued pursuant to Section 2(b)(i) or 2(b)(ii) above, as applicable) in such integrated transaction
(or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the Company either (A) have
at least one investor or purchaser in common, (B) are consummated in reasonable proximity to each other and/or (C) are consummated
under the same plan of financing) solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities,
the sum of (I) the Black Scholes Consideration Value of each such Option, if any, (II) the fair market value (as determined by
the Holder) or the Black Scholes Consideration Value, as applicable, of such Adjustment Right, if any, and (III) the fair market
value (as determined by the Holder) of such Convertible Security, if any, in each case, as determined on a per share basis in accordance
with this Section 2(b)(iv). If any Common Shares, Options or Convertible Securities are issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor (for the purpose of determining the consideration paid for such Common Shares,
Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed
to be the net amount of consideration received by the Company therefor. If any Common Shares, Options or Convertible Securities
are issued or sold for a consideration other than cash, the amount of such consideration received by the Company (for the purpose
of determining the consideration paid for such Common Shares, Option or Convertible Security, but not for the purpose of the calculation
of the Black Scholes Consideration Value) will be the fair value of such consideration, except where such consideration consists
of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be the
arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt.
If any Common Shares, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with
any merger in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining the
consideration paid for such Common Shares, Option or Convertible Security, but not for the purpose of the calculation of the Black
Scholes Consideration Value) will be deemed to be the fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such Common Shares, Options or Convertible Securities, as the case may be. The fair value of any consideration
other than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable
to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th) day following
such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of
such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall
be borne by the Company.


 






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


 


(c)               
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs (a), (b),
(d) or (e) of this Section 2, 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).


 


(d)              
Holder's Right of Alternative Exercise Price Following Issuance of Certain Variable Price Securities. In addition
to and not in limitation of the other provisions of this Section 2, if after the Subscription Date the Company in any manner
issues or sells or enters into any agreement to issue or sell, any Common Shares or Options or Convertible Securities (any such
securities, “Variable Price Securities”) that are issuable or convertible into or exchangeable or exercisable
for Common Shares, as applicable, at a price which varies or may vary with the market price of the Common Shares, including by
way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions
(such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable
price being herein referred to as, the “Variable Price”), the Company shall provide written notice thereof via
facsimile and overnight courier to the Holder on the date of issuance of such Common Shares, Convertible Securities or Options.
From and after the date the Company issues any such Common Shares, Convertible Securities or Options with a Variable Price, the
Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price
upon exercise of this Warrant by designating in the Exercise Notice delivered upon any exercise of this Warrant that solely for
purposes of such exercise the Holder is relying on the Variable Price rather than the Exercise Price then in effect. The Holder's
election to rely on a Variable Price for a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable
Price for any future exercises of this Warrant.


 






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(e)               
Share Combination Event Adjustment. If at any time and from time to time on or after the Issuance Date there
occurs any share split, share dividend, share combination recapitalization or other similar transaction involving the Common Shares
(each, a “Share Combination Event”) and the product of (i) the quotient determined by dividing (x) the Exercise
Price in effect immediately prior to the Share Combination Event by (y) the quotient determined by dividing (A) the sum of the
VWAP of the Common Shares on each day of the fifteen (15) Trading Day period immediately prior to the Share Combination Event,
divided by (B) fifteen (15); and (ii) the quotient determined by dividing (x) the sum of the VWAP of the Common Shares on each
day of the fifteen (15) Trading Day period immediately following the date of such Share Combination Event, divided by (y) fifteen
(15) (each, an “Event Market Price”) is less than the Exercise Price then in effect (after giving effect to
the adjustment in clause (b) above), then on the sixteenth (16th) Trading Day immediately following such Share Combination
Event, the Exercise Price then in effect on such sixteenth (16th) Trading Day (after giving effect to the adjustment
in clause (b) above) shall be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the
adjustment in the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment
shall be made.


 


(f)               
Other Events. In the event that the Company (or any Subsidiary (as defined in the Securities Purchase Agreement))
shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect
the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly
provided for by such provisions (including, without limitation, the granting of share appreciation rights, phantom share rights
or other rights with equity features), then the Company’s board of directors shall in good faith determine and implement
an appropriate adjustment in the Exercise Price and the number of Warrant Shares (if applicable) so as to protect the rights of
the Holder, provided that no such adjustment pursuant to this Section 2(e) will increase the Exercise Price or decrease the
number of Warrant Shares as otherwise determined pursuant to this Section 2, provided further that if the Holder does not
accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Company’s board
of directors and the Holder shall agree, in good faith, upon the advice of an independent investment bank of nationally recognized
standing to make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses shall
be borne by the Company.


 


(g)              
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest
1/100th of a share, as applicable. The number of Common Shares outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale
of Common Shares.


 


3.                 
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the
Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of
Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other
securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement
or other similar transaction) (a “Distribution”), at any time after the initial Issuance Date, then, in each
such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to
any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which
a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Shares
are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right
to participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Distribution to such extent (or the beneficial ownership of any such Common Shares as a result
of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit of the Holder
until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).


 






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4.                 
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.


 


(a)               
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase shares, warrants, securities or other property pro rata
to the record holders of any class of Common Shares (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of Common Shares are to be determined for the grant, issuance or sale of such Purchase Rights (provided, however, to the extent
that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Maximum Percentage,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Common
Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).


 


(b)              
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the
Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents
(as defined in the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written
agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including
agreements to 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, including, without limitation, which is exercisable for a corresponding
number of shares of share capital equivalent to the Common Shares 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 share capital (but taking into account the relative value of the Common
Shares pursuant to such Fundamental Transaction and the value of such shares of share capital, such adjustments to the number of
shares of share capital 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 (ii) the Successor Entity (including its Parent Entity) is
a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation
of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date
of the applicable 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. Upon consummation of each Fundamental Transaction, the Successor Entity
shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction, in lieu of the Common Shares (or other securities, cash, assets or other property (except
such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon
the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its
equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the
happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental
Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions
of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(e) hereof, the Holder may elect, at its sole option,
by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the
assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of
each Fundamental Transaction pursuant to which holders of Common Shares are entitled to receive securities or other assets with
respect to or in exchange for Common Shares (a “Corporate Event”), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Shares (or other
securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall
continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares
of shares, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights)
which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant
been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of
this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the
Holder.


 






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(c)               
Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request
of the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction,
(y) the consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through
the date that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company
pursuant to a Current Report on Form 6-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase
this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value.


 






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(d)              
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of share capital registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).


 


5.                 
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate
of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of
any Common Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, (b) shall take all such
actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable
Common Shares upon the exercise of this Warrant, and (c) shall, in accordance with Section 1(g) above, so long as any of the SPA
Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common Shares,
solely for the purpose of effecting the exercise of the SPA Warrants, the maximum number of Common Shares as shall from time to
time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).


 


6.                 
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely
in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely
in its capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of shares, reclassification of shares, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same
notices and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to
the shareholders. For purposes hereof, filing of SEC Documents shall constitute delivery to the Holder of such SEC Documents.


 






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7.                 
REISSUANCE OF WARRANTS.


 


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


 


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


 


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


 


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


 


8.                 
Company Optional Redemption.


 


(a)                General.
If (i) the VWAP of the Common Shares listed on the Principal Market exceeds 200% of the initial Exercise Price (as may be
adjusted pursuant to Section 2(a)) for fifteen (15) consecutive Trading Days (the “Company Optional
Redemption Measuring Period”), and (ii) no Equity Conditions Failure then exists, the Company shall have the right
to redeem all, but not less than all, of this Warrant at a price equal to the product of (A) the difference of (x) the
highest VWAP on any Trading Day during the period commencing as of the first Trading Day of the Company Optional Redemption
Measuring Period and ending on the Trading Day immediately preceding the Company Optional Redemption Notice Date and (y) the
Exercise Price then in effect and (B) the Warrant Number then outstanding (the “Company Optional Redemption
Price”) on the Company Optional Redemption Date (each as defined below) (a “Company Optional
Redemption”). The Company may exercise its right to require redemption under this Section 8(a) by delivering a
written notice thereof by facsimile and overnight courier to all, but not less than all, of the holders of Warrants (the
“Company Optional Redemption Notice” and the date all of the holders of Warrants received such notice is
referred to as the “Company Optional Redemption Notice Date”). The Company may deliver only one Company
Optional Redemption Notice hereunder and such Company Optional Redemption Notice shall be irrevocable. The Company Optional
Redemption Notice shall (x) state the date on which the Company Optional Redemption shall occur (the
“Company Optional Redemption Date”) which date shall not be less than seven (7) Trading Days nor more than
twenty (20) Trading Days following the Company Optional Redemption Notice Date, (y) certify that there has been no Equity
Conditions Failure and (z) state the Company Optional Redemption Price with respect to this Warrant (and analogous provisions
under the other SPA Warrants) on the Company Optional Redemption Date. Notwithstanding anything herein to the contrary, (i)
if no Equity Conditions Failure has occurred as of the Company Optional Redemption Notice Date but an Equity Conditions
Failure occurs at any time prior to the Company Optional Redemption Date, (A) the Company shall provide the Holder a
subsequent notice to that effect and (B) unless the Holder waives the Equity Conditions Failure, the Company Optional
Redemption shall be cancelled and the applicable Company Optional Redemption Notice shall be null and void and (ii) at any
time prior to the date the Company Optional Redemption Price is paid, in full, the Company Optional Redemption Amount may be
exercised, in whole or in part, by the Holders into Common Shares pursuant to Section 1.


 






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(b)              
Pro Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Warrant pursuant
to Section 8(a), then it must simultaneously take the same action with respect to all of the other SPA Warrants.


 


9.                 
NOTICES; Currency Payments.


 


(a)               
Notices. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice
shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such
action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder
(i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail,
and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Shares, (B) with respect to
any grants, issuances or sales of any Options, Convertible Securities or rights to purchase shares, warrants, securities or other
property to holders of Common Shares or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution
or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such
notice being provided to the Holder and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction.
To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company
or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase
Agreement) pursuant to a Current Report on Form 6-K. It is expressly understood and agreed that the time of execution specified
by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company (except to the extent
such Exercise Notice is not provided to the Company on the Trading Day in which such time of execution occurs).


 






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(b)              
Currency. All amounts owing under this Warrant that, in accordance with their terms, are paid in cash shall be paid
in United States dollars (“U.S. Dollars”). All amounts denominated in other currencies (if any) shall be converted
into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange
rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an
amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such period
of time).


 


(c)               
Payments. Whenever any payment is to be made by the Company to any Person pursuant to this Warrant, such payment
shall be made in lawful money of the United States of America via wire transfer of U.S. Dollars in immediately available funds
in accordance with the Holder’s wire transfer instructions delivered to the Company on or prior to such payment date or,
in the absence of such instructions, by a certified check drawn on the account of the Company and sent via overnight courier service
to such Person at such address as previously provided to the Company in writing (which address, in the case of each of the Buyers,
shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement).


 


10.             
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(e))
may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party.


 


11.             
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).


 






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12.             
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 New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. 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 or to enforce a judgment or other court ruling in favor of the Holder. The Company
hereby appoints Vcorp Agent Services, Inc., 25 Robert Pitt Drive, Suite 204, Monsey, NY, 10952, Rockland County, as its agent for
service of process in New York. If service of process is effected pursuant to the above sentence, such service will be deemed sufficient
under New York law and the Company shall not assert otherwise. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. 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.


 


13.             
JUDGMENT CURRENCY.


 


(a)               
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary
to convert into any other currency (such other currency being hereinafter in this Section 13 referred to as the “Judgment
Currency”) an amount due in U.S. Dollars under this Warrant, the conversion shall be made at the Exchange Rate prevailing
on the Trading Day immediately preceding:


 


(i)                
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any
other jurisdiction that will give effect to such conversion being made on such date: or


 


(ii)              
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the
date as of which such conversion is made pursuant to this Section 13(a)(ii) being hereinafter referred to as the “Judgment
Conversion Date”).


 






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(b)              
If in the case of any proceeding in the court of any jurisdiction referred to in Section 13(a)(ii) above, there is a change
in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of U.S. Dollars which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment
Conversion Date.


 


(c)               
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment
being obtained for any other amounts due under or in respect of this Warrant.


 


14.             
CONSTRUCTION; 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 (as defined in the Securities Purchase
Agreement) in such other Transaction Documents unless otherwise consented to in writing by the Holder.


 


15.             
DISPUTE RESOLUTION.


 


(a)               
Submission to Dispute Resolution.


 


(i)                
In the case of a dispute relating to the Exercise Price, the Bid Price, the Closing Sale Price, Black Scholes Consideration
Value, Event of Default Black Scholes Value, Black Scholes Value or fair market value or the arithmetic calculation of the number
of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing),
the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile (A) if by the Company,
within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at
any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to
promptly resolve such dispute relating to such Exercise Price, such Bid Price, such Closing Sale Price, such Black Scholes Consideration
Value, Event of Default Black Scholes Value, Black Scholes Value or such fair market value or such arithmetic calculation of the
number of Warrant Shares (as the case may be), at any time after the second (2nd) Business Day following such initial
notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then
the Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.


 


(ii)              
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required
Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver
all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the
Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation
or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based
solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).
Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither
the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).


 






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(iii)            
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The
fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of
such dispute shall be final and binding upon all parties absent manifest error.


 


(b)              
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 13 constitutes an agreement to
arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York
Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration
pursuant to CPLR § 7503(a) in order to compel compliance with this Section 13, (ii) a dispute relating to the Exercise Price
includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Shares occurred
under Section 2(b), (B) the consideration per share at which an issuance or deemed issuance of Common Shares occurred, (C) whether
any issuance or sale or deemed issuance or sale of Common Shares was an issuance or sale or deemed issuance or sale of Excluded
Securities, (D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security and (E) whether
a Dilutive Issuance occurred, (iii) the terms of this Warrant and each other applicable Transaction Document shall serve as the
basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and
is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are required
to be made by such investment bank in connection with its resolution of such dispute (including, without limitation, determining
(A) whether an issuance or sale or deemed issuance or sale of Common Shares occurred under Section 2(b), (B) the consideration
per share at which an issuance or deemed issuance of Common Shares occurred, (C) whether any issuance or sale or deemed issuance
or sale of Common Shares was an issuance or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement, instrument,
security or the like constitutes and Option or Convertible Security and (E) whether a Dilutive Issuance occurred) and in resolving
such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Warrant and any other
applicable Transaction Documents, (iv) the Holder (and only the Holder), in its sole discretion, shall have the right to submit
any dispute described in this Section 15 to any state or federal court sitting in The City of New York, Borough of Manhattan in
lieu of utilizing the procedures set forth in this Section 15 and (v) nothing in this Section 15 shall limit the Holder from obtaining
any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this
Section 15).


 






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16.             
REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this
Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit
the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this
Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to
all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without
any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested
by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including,
without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated
hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other
costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.


 


17.             
TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.


 


18.             
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:


 


(a)               
“Adjustment Right” means any right granted with respect to any securities issued in connection with,
or with respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 2) of Common Shares (other
than rights of the type described in Section 3 and 4 hereof) that could result in a decrease in the net consideration received
by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights,
cash adjustment or other similar rights).


 


(b)              
 “Approved Share 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 Common Shares and standard options to purchase Common
Shares may be issued to any employee, consultant, officer or director for services provided to the Company in their capacity as
such.


 






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(c)               
“Bid Price” means, for any security as of the particular time of determination, the bid price for such
security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not
the principal securities exchange or trading market for such security, the bid price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or
if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security
by Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported
in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the
Bid Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid
Price of such security as of such time of determination shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved in accordance with the procedures in Section 15. All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction during such period.


 


(d)              
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or
Adjustment Right (as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale
Price of the Common Shares on the Trading Day immediately preceding the public announcement of the execution of definitive documents
with respect to the issuance of such Option or Convertible Security (as the case may be), (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as
the case may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii)
a zero cost of borrow and (iv) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the
HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following
the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be).


 


(e)               
“Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date
of the Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1)
the highest Closing Sale Price of the Common Shares during the period beginning on the Trading Day immediately preceding the announcement
of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending
on the Trading Day of the Holder’s request pursuant to Section 4(c) and (2) the sum of the price per share being offered
in cash in the applicable Fundamental Transaction (if any) plus the value of the non-cash consideration being offered in the applicable
Fundamental Transaction (if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request
pursuant to Section 4(c), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the
greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c) and
(2) the remaining term of this Warrant as of the date of consummation of the applicable Fundamental Transaction or as of the date
of the Holder’s request pursuant to Section 4(c) if such request is prior to the date of the consummation of the applicable
Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100% and the 30 day
volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading
Day immediately following the earliest to occur of (A) the public disclosure of the applicable Fundamental Transaction, (B) the
consummation of the applicable Fundamental Transaction and (C) the date on which the Holder first became aware of the applicable
Fundamental Transaction.


 






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(f)               
“Bloomberg” means Bloomberg, L.P.


 


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


 


(h)              
“Closing Sale Price” means, for any security as of any date, the last closing trade price for such security
on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and
does not designate the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as
reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security,
the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded
as reported by Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security
by Bloomberg, the average of the ask prices of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 15. All such determinations shall
be appropriately adjusted for any share dividend, share split, share combination or other similar transaction during such period.


 


(i)                
“Common Shares” means (i) the Company’s common shares, $0.002731 par value per share, and
(ii) any share capital into which such common shares shall have been changed or any share capital resulting from a reclassification
of such common shares.


 


(j)                
“Convertible Securities” means any shares or other security (other than Options) that is at any time
and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any Common Shares.


 






    	22



    	 



    

 


(k)              
“Eligible Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the
Nasdaq Global Market or the Principal Market.


 


(l)                
“Equity Conditions” means: (i) on each day during the period beginning one month prior to the applicable
date of determination and ending on and including the applicable date of determination the Registration Statement is effective
and the prospectus contained therein shall be available for the issuance by the Company to the Holder of all of the Warrant Shares
(disregarding any limitation on exercise of this Warrant); (ii) on each day during the period beginning three months prior to the
applicable date of determination and ending on and including the applicable date of determination (the “Equity Conditions
Measuring Period”), the Common Shares (including all of the Warrant Shares) is listed or designated for quotation (as
applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions
of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the
Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting
occurring) or pending either (A) in writing by such Eligible Market or (B) by falling below the minimum listing maintenance requirements
of the Eligible Market on which the Common Shares are then listed or designated for quotation (as applicable); (iii) on each day
during the Equity Conditions Measuring Period, the Company shall have delivered all Common Shares issuable upon exercise of this
Warrant on a timely basis as set forth in Section 11(a) hereof and all other shares of share capital required to be delivered by
the Company on a timely basis as set forth in the other Transaction Documents; (iv) any Common Shares to be issued in connection
with the event requiring determination may be issued in full without violating Section 11(f) hereof; (v) any Common Shares to be
issued in connection with the event requiring determination may be issued in full without violating the rules or regulations of
the Eligible Market on which the Common Shares are then listed or designated for quotation (as applicable); (vi) on each day during
the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall
have occurred which has not been abandoned, terminated or consummated; (vii) the Company shall have no knowledge of any fact that
would reasonably be expected to cause the Registration Statement to not be effective or the prospectus contained therein to not
be available for the issuance by the Company to the Holder of all of the Warrant Shares (disregarding any limitation on exercise
of this Warrant); (viii) the Holder shall not be in (and no other Buyer shall be in) possession of any material, non-public information
provided to any of them by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives,
agents or the like; and (ix) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in
compliance with each provision, covenant, representation or warranty of any of the Transaction Documents and shall not have breached
any, provision, covenant, representation or warranty of any of the Transaction Documents.


 


(m)            
“Equity Conditions Failure” means, with respect to a particular date of determination, that on any day
during the period commencing twenty (20) Trading Days immediately prior to such date of determination, the Equity Conditions have
not been satisfied (or waived in writing by the Holder).


 


(n)              
“Excluded Securities” shall have the meaning as set forth in the Securities Purchase Agreement.


 






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(o)              
“Expiration Date” means the date that is the forty-two (42) month anniversary of the Issuance Date or,
if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.


 


(p)              
“Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly,
in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries
is the surviving corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all
or substantially all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase,
tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Shares of the Company
(not including any shares of Voting Shares of the Company held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Shares of the Company
(not including any shares of Voting Shares of the Company 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),
or (5) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize
or reclassify the Common Shares (which shall not include a reverse share split), or (ii) any “person” or “group”
(as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated
thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly,
of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Shares of the Company.


 


(q)              
 “Options” means any rights, warrants or options to subscribe for or purchase Common Shares or Convertible
Securities.


 


(r)                
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person
and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.


 


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


 


(t)                
“Principal Market” means the Nasdaq Capital Market.


 


(u)              
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.


 






    	24



    	 



    

 


(v)              
“Trading Day” means any day on which the Common Shares are traded on the Principal Market, or, if the
Principal Market is not the principal trading market for the Common Shares, then on the principal securities exchange or securities
market on which the Common Shares are then traded, provided that “Trading Day” shall not include any day on which the
Common Shares are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Shares are suspended
from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such
day is otherwise designated as a Trading Day in writing by the Holder.


 


(w)            
“Voting Shares” of a Person means share capital of such Person of the class or classes pursuant to which
the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not at the time share capital of any other class or
classes shall have or might have voting power by reason of the happening of any contingency).


 


(x)              
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security
on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New
York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by
Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers
for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If VWAP cannot
be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the
fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 15.
All such determinations shall be appropriately adjusted for any share dividend, share split, share combination or other similar
transaction during such period.


 


[signature page follows]


 






    	25



    	 



    

 


Warrant No.: 2014-__


 


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


 


DEHAIER MEDICAL SYSTEMS
LIMITED


 


 


 


By:_________________________________


Name: Ping Chen


Title: Chief Executive Officer


 






    	 



    	 



    




 


EXHIBIT A


 


EXERCISE
NOTICE


 


TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK


 


DEHAIER
MEDICAL SYSTEMS LIMITED


 


The undersigned holder
hereby exercises the right to purchase _________________ of the Common Shares (“Warrant Shares”) of Dehaier
Medical Systems Limited, a British Virgin Islands company (the “Company”), evidenced by Warrant to Purchase
Common Shares 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.



 


In the event that the
Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date
set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.


 


 


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:	 
	 	 
	 	 	 


 


Please deliver this Exercise Notice to
chenping@dehaier.com.cn with a copy to awbasch@kaufcan.com or to such other e-mails of the Company and its legal counsel as specified
in writing to the holder in accordance with Section 8(f) of the Securities Purchase Agreement


 


	
        Date: _____________ __, __________

         

        

        Name of Registered Holder

         

         

         

	
        By: _________________________

Name:

Title:




         

        Tax ID:_____________________

         

        Facsimile:___________________

         



 






    	 



    	 



    

 


EXHIBIT B


 


ACKNOWLEDGMENT


 


The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated
number of Common Shares in accordance with the Transfer Agent Instructions dated _________, 201_, from the Company and acknowledged
and agreed to by _______________.


 


 


DEHAIER MEDICAL SYSTEMS
LIMITED


 


 


 


 By:_________________________________


Name:


Title: