VERTEX ENERGY, INC. 8-K


Exhibit 4.1


 


 


Execution Version 


Confidential


 


WARRANT AGREEMENT


 


THIS
WARRANT AGREEMENT (as amended from time to time in accordance with the terms hereof, this “Agreement”), dated
as of May 26, 2022, is by and between Vertex Energy Inc., a Nevada corporation (the “Company”), and Continental
Stock Transfer & Trust Company, a New York corporation, as warrant agent (together with its successors and assigns, the “Warrant
Agent”).


 


RECITALS


 


WHEREAS,
the Company is party to that certain Loan and Security Agreement (the “Existing Loan Agreement”), dated as of
April 1, 2022, by and among the Company, Vertex Refining Alabama LLC, a Delaware limited liability company (“Borrower”),
certain direct and indirect subsidiaries of the Company from time to time party thereto and Cantor Fitzgerald Securities, as administrative
and collateral agent for the Lenders, pursuant to which the Lenders agreed to lend to the Borrower an aggregate of $125,000,000;
and


 


WHEREAS,
in connection with the transactions contemplated by the Existing Loan Agreement and pursuant to an exemption from registration
provided by Section 4(a)(2), and Rule 506 thereunder, of the Securities Act, the Company issued to the Initial Lenders (or Affiliates
or Approved Funds of the Initial Lenders, as applicable) an aggregate of 2,750,000 warrants (the “Original Warrants”)
in accordance with that certain Warrant Agreement (the “Original Warrant Agreement”), dated as of April 1, 2022,
by and between the Company and the Warrant Agent (as defined therein), with each Original Warrant entitling the holder thereof
to purchase one share of Common Stock (as may be adjusted in accordance with the Original Warrant Agreement, the “Original
Warrant Shares”) at the Exercise Price (as defined in the Original Warrant Agreement); and


 


WHEREAS,
the Company has entered into that certain Amendment Number One to Loan and Security Agreement (the “Loan Amendment”
and the Existing Loan Agreement, as amended by the Loan Amendment, the “Loan Agreement”), dated as of the date
hereof, pursuant to which the Initial Lenders agreed to lend to Borrower an additional aggregate amount of $40,000,000 (the “Incremental
Term Loan”) and to make certain related changes to the Existing Loan Agreement; and


 


WHEREAS,
in connection with the transactions contemplated by the Loan Amendment and pursuant to an exemption from registration provided
by Section 4(a)(2), and Rule 506 thereunder, of the Securities Act, the Company is issuing to certain Initial Lenders (or Affiliates
or Approved Funds of such Initial Lenders, as applicable) an aggregate of 250,000 warrants (the “Warrants”),
with each Warrant entitling the holder thereof to purchase one share of Common Stock (as may be adjusted in accordance herewith,
the “Warrant Shares”) at the Exercise Price (as defined herein); and


 


WHEREAS,
the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and may be
exercised and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent and the registered
holders of the Warrants (the “Holders”); and


 


WHEREAS,
the Company desires for the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance, transfer, exchange and exercise of the Warrants and other matters as provided herein; and


 


WHEREAS,
all acts and things have been done and performed which are necessary to make the Warrants, when issued, the valid, binding and
legal obligations of the Company, and to authorize the execution and delivery of this Agreement.


 


NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:








 




     


     


    

 


ARTICLE
I 

DEFINITIONS


 


Section
1.1          Definition of Terms. In addition to the terms defined elsewhere in this Agreement, the following terms shall
have the meanings indicated in this Section 1.1.


 


(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 Article V) of shares of Common
Stock 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)          “Affiliate” means, with respect to any specified Person, at any time, a Person that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person at such
time. For purposes of this definition, “control,” when used with respect to any specified Person, shall mean (i) the
direct or indirect ownership of more than 50% of the total voting power of securities or other evidences of ownership interest
in such Person or (ii) the power to direct or cause the direction of the management and policies of such Person, directly or indirectly,
whether through ownership of voting securities, by contract or otherwise.


 


(c)          “Aggregate Warrant Exercise Price” means, with respect to a Warrant, the product of the Exercise Price
multiplied by the number of Warrant Shares issuable upon exercise thereof.


 


(d)          “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.


 


(e)          “Black
Scholes Value” means the value of the unexercised Warrants subject to a Put Notice or a Call Notice at the time
such Put Notice or Call Notice is delivered, which value is to be 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 Stock 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 that the Put Notice or Call Notice is delivered and (2) the sum of the price per share
being offered in cash in the applicable Fundamental Transaction (if any) plus the Fair Market 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 that the Put Notice or Call Notice is delivered, (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 the Warrants as of the date that a Put Notice or Call Notice is delivered and (2) the remaining term of the Warrants as of
the date of consummation of the applicable Fundamental Transaction, (iv)     a
zero cost of borrow and (v) an expected volatility equal to the 90 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) in the case of the exercise of a Put Right, the date on which
the applicable Holder was first notified by the Company in writing of the execution and delivery of a definitive agreement
with respect to the applicable Fundamental Transaction.


 


(f)           “Bloomberg” means Bloomberg Financial Markets or, to the extent Bloomberg Financial Markets is not in
existence as of any date of determination, an equivalent, reliable reporting service reasonably acceptable to the Super-Majority
Holders and the Company.


 


(g)          “Board” means the board of directors of the Company.


 


(h)          “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.


 




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(i)          “Closing Date” means the date of this Agreement (such date being the date of the making of the Incremental
Term Loan and the consummation of the other transactions contemplated by the Loan Amendment).


 


(j)          “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 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last
closing 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 do not apply, the last trade price of such security in the Over the Counter Bulletin
Board (the “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 bid prices, or the ask prices, respectively, of any market makers for such security
as reported in the “pink sheets” (or any successor) by the OTC Markets Group, Inc. 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 shall be the fair market
value for such security as determined by an independent, reputable appraiser selected in good faith by the Board, notice of whose
selection shall be provided in writing to each Holder; provided, however, that if the Majority Holders object in writing to such
selection within ten (10) Business Days after the Company gives written notice thereof to each Holder, the appraiser shall be selected
jointly by the Company and the Majority Holders. The fees and expenses of such appraiser shall be paid by the Company. All such
determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.


 


(k)          “Commission” means the Securities and Exchange Commission, or any governmental or regulatory authority
succeeding to any of its principal functions.


 


(l)      
     “Common Stock” means (i) the Company’s shares of common stock, $0.001
par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital
resulting from a reclassification of such common stock.


 


(m)         “Common Stock Equivalent” means any security or obligation which is by its terms convertible or exchangeable
into shares of Common Stock or another Common Stock Equivalent, and any option, warrant or other subscription or purchase right
with respect to Common Stock.


 


(n)          “Convertible Note Indenture” means that certain Indenture, dated as of November 1, 2021, by and between
the Company and U.S. Bank National Association.


 


(o)          “Convertible Securities” means any capital stock 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 shares of Common Stock.


 


(p)          “DTC” means The Depository Trust Company.


 


(q)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time.


 


(r)           “Excluded Issuance” means the issuance or deemed issuance of (i) shares of Common Stock, Options or Convertible
Securities issued or issuable to directors, officers, employees or consultants of the Company in connection with their service
as directors of the Company, their employment by the Company or their retention as consultants by the Company pursuant to an equity
compensation program or arrangement approved by the Board or the compensation committee of the Board; (ii) shares of Common Stock
issued or issuable upon the conversion or exercise of Options or Convertible Securities issued prior to the Closing Date (including
without limitation, the Existing Convertible Notes and the Original Warrants), provided that neither the conversion price or exercise
price nor number of shares issuable under such Options or Convertible
Securities is amended, modified or changed after the Closing Date other than pursuant to the provisions of such Options or Convertible
Securities as they exist as of the Closing Date; (iii) shares of Common Stock issued in exchange for the Existing Convertible Notes,
provided that any such exchange (including the payment of any cash or other consideration paid or delivered by the Company as consideration
in such exchange) complies with the Loan Agreement (as in effect on the date of this Agreement); (iv) shares of Common Stock issued
or issuable pursuant to any event for which adjustment is made pursuant to Article V; (v) shares of Common Stock, Options
or Convertible Securities issued or issuable pursuant to and as consideration for (A) the acquisition of another corporation or
other entity by the Company, by merger, purchase of stock or other equity interests, purchase of substantially all of the assets
or other reorganization approved by the Board, or (B) an acquisition of assets from another corporation or other entity approved
by the Board; (vi) shares of Common Stock, Options or Convertible Securities issued or issuable as consideration in connection
with a strategic transaction or joint venture approved by the Board or (vii) shares of Common Stock issued upon the exercise of
the Warrants.


 




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(s)          “Existing Convertible Notes” means the 6.25% Convertible Senior Notes Due 2027 issued under the Convertible
Note Indenture.


 


(t)          “Fair Market Value” means (i) in the case of cash, the amount of such cash, (ii) in the case of a security,
the Market Price of such security, or (iii) in the case of any consideration other than cash or securities, the amount as agreed
between the Company and the Majority Holders; or if the Company and the Majority Holders do not agree on such amount within fifteen
(15) Business Days, the fair value of such consideration as determined in good faith by the Board, notice of which shall be provided
in writing to each Holder; provided, however, that if the Majority Holders object in writing to the fair value as determined by
the Board within ten (10) Business Days after the Company gives written notice thereof to each Holder, the Company shall engage
an independent, reputable appraiser selected in good faith by the Board, notice of whose selection shall be provided in writing
to each Holder, to determine the fair value of such consideration (provided, however, that if the Majority Holders object in writing
to the appraiser selected by the Board within ten (10) Business Days after the Company gives written notice of the selection to
each Holder, the appraiser shall be selected jointly by the Company and the Majority Holders). The determination of such appraiser
shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by
the Company.


 


(u)          “Form of Assignment” means a certificate in substantially the form attached hereto as Exhibit C
accounting for the transfer of Warrants.


 


(v)          “Fund” means any Person (other than a natural Person), fund, commingled investment vehicle or managed
account that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar
extensions of credit in the ordinary course of its activities.


 


(w)          “Fundamental Transaction” means any of the following transactions, whether effected directly or indirectly
in one or a series of related transactions: (i) any merger or consolidation of the Company with or into another person, (ii) any
sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the assets of the Company
and its subsidiaries, (iii) the consummation of any purchase offer, tender offer or exchange offer (whether by the Company or another
person) pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities,
cash or property, (iv) any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange
by the Company pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property
and (v) the consummation of a stock or share purchase agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another person or group of persons; provided,
however, only those transactions described in clauses (i), (iii), (iv) and (v) that result in (a) a
person or group (as such term is used in Section 13(d) of the Exchange Act) becoming beneficial owners of a majority of the outstanding
Common Stock or (b) the holders of the Company’s outstanding Common Stock as of immediately prior to the transaction (or
series of related transactions) beneficially owning less than a majority by voting power of the outstanding shares of common stock
of the surviving or successor entity as of immediately after the transaction, shall be considered
a Fundamental Transaction for purposes of the Put Right and Call Right.


 




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(x)       
   “Governmental Authority” means any government of any nation or any federation,
province or state or any other political subdivision thereof, any entity, authority or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to government, including any governmental
authority, agency, department, board, commission or instrumentality, or any political subdivision thereof, any court,
tribunal or arbitrator, and any self-regulatory organization.


 


(y)          “Initial Lenders” means the “Initial Lenders” identified in the Loan Agreement.


 


(z)        
  “Initial Holder Representation Letter” means a representation letter substantially in
the form attached hereto as Exhibit D.


 


(aa)         “Lenders” means the “Lenders”
identified in the Loan Agreement.


 


(bb)        “Majority
Holders” means Holders representing more than 50% of the Warrants then outstanding.


 


(cc)         “Market
Price” as of a particular date means: (i) if the security is then listed on the Nasdaq Capital Market or any other national
securities exchange, the Closing Sale Price of one (1) share of such security on such exchange on the last Trading Day for such
security prior to such date; (ii) if the security is then quoted on the Bulletin Board or any similar quotation system or association,
the Closing Sale Price of one (1) share of such security on the Bulletin Board or such other quotation system or association on
the last Trading Day for such security prior to the such date or, if no such Closing Sale Price is available, the average of the
high bid and the low asked price quoted thereon on the last Trading Day for such security prior to such date; or (iii) if the security
is not then listed on a national securities exchange or quoted on the Bulletin Board or such other quotation system or association,
the fair value of one (1) share of such security as of such date, as agreed between the Company and the Majority Holders; provided,
that, if the Company and the Majority Holders do not agree upon such fair value within fifteen (15) Business Days, the Market Price
shall be the fair value of one (1) share of such security as determined in good faith by the Board, notice of which shall be provided
in writing to each Holder; provided, however, that if the Majority Holders object in writing to the fair value as determined by
the Board within ten (10) Business Days after the Company gives written notice thereof to each Holder, the Company shall engage
an independent, reputable appraiser selected in good faith by the Board, notice of whose selection shall be provided in writing
to each Holder, to determine the fair value of one (1) share of such security (provided, however, that if the Majority Holders
object in writing to the appraiser selected by the Board within ten (10) Business Days after the Company gives written notice of
the selection to each Holder, the appraiser shall be selected jointly by the Company and the Majority Holders). The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company.


 


(dd)        “Nasdaq”
means The NASDAQ Capital Market.


 


(ee)         “New Warrant
Certificate” means a new Warrant Certificate issued in accordance with the terms of this Agreement and in substantially
the form attached hereto as Exhibit A.


 


(ff)          “Notice of
Exercise” means the exercise form for the election to exercise the Warrants in substantially the form attached hereto
as Exhibit B.


 


(gg)        “Options”
means any rights, warrants or options to subscribe for, convert or exchange into, or purchase or acquire shares of Common Stock
or Convertible Securities.


 


(hh)        “Person”
means and includes any individual, any partnership, any corporation, any business trust, any joint stock company, any limited liability
company, any unincorporated association or any other entity and any Governmental Authority.


 




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(ii)           “Principal Market” means, with respect to the
Common Stock, the Nasdaq and, with respect to any other security, the principal securities exchange or trading market for
such other security.


 






(jj)           “Securities Act” means the Securities Act of
1933, as amended from time to time.


 





 (kk)         “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Principal Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.


 






(ll)           “Super-Majority Holders” means the Holders
representing at least sixty-six and two-thirds percent (66 2/3%) of the Warrants then outstanding.


 





 (mm)       “Trading Day” means, with respect to any security, any day on which such security is traded 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, provided that “Trading Day” shall not include any day that such security is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the applicable Holder.


 





 (nn)        “Transferee Representation Letter” means a representation letter substantially in the form attached hereto as Exhibit E.


 





 (oo)        “VWAP” means, with respect to any security, as of any day or period of days (as the case may be), the volume-weighted average sale price on the Principal Market as reported by, or based upon data reported by, Bloomberg or, if the Principal Market is not the principal trading market for such security, the volume weighted average sale 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 no volume-weighted average sale price is reported for such security by Bloomberg, then the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security that are listed in the over the counter market by the Financial Industry Regulatory Authority, Inc. or on the Bulletin Board (or any successor) or in the OTCQB market or “pink sheets” (or any successor) by the OTC Markets Group, Inc.; provided, however, that if VWAP cannot be calculated for such security on such date in the manner provided above, the VWAP shall be the fair market value of such security as agreed between the Company and the Majority Holders or, solely for purposes of Section 4.3(b), the exercising Holder or, if the Company and the Majority Holders or exercising Holder, as applicable, do not agree upon such fair market value within fifteen (15) Business Days, the fair market value of such security as determined in good faith by the Board, notice of which shall be provided in writing to each Holder or the exercising Holder, as applicable; provided, however, that if the Majority Holders or the exercising Holder, as applicable, object in writing to the fair market value as determined by the Board within ten (10) Business Days after the Company gives written notice thereof to each Holder or the exercising Holder, as applicable, the Company shall engage an independent, reputable appraiser selected in good faith by the Board, notice of whose selection shall be provided in writing to each Holder or the exercising Holder, as applicable, to determine the fair market value of such security (provided, however, that if the Majority Holders or the exercising Holder, as applicable, object in writing to the appraiser selected by the Board within ten (10) Business Days after the Company gives written notice of the selection to each Holder or the exercising Holder, as applicable, the appraiser shall be selected jointly by the Company and the Majority Holders or the exercising Holder, as applicable). 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.


 





 (pp)        “Warrant Certificate” means a certificate in substantially the form attached hereto as Exhibit A representing such number of Warrants as is indicated on the face thereof. A reference to any Warrant Certificates hereunder shall also include New Warrant Certificates.


 







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Section
1.2        Rules of Construction. The singular form of any word used herein, including the terms defined in Section 1.1
hereof, shall include the plural, and vice versa. The use herein of a word of any gender shall include correlative words of all
genders. Unless otherwise specified, references to Articles, Sections and other subdivisions of this Agreement are to the designated
Articles, Sections and other subdivision of this Agreement as originally executed. The words “hereof,” “herein,”
“hereunder” and words of similar import refer to this Agreement as a whole. References to “$” are to dollars
in lawful currency of the United States of America.


 


ARTICLE
II 

APPOINTMENT OF WARRANT AGENT


 


Section
2.1        Appointment. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the
express terms and subject to the conditions set forth in this Agreement (and no implied terms or conditions), and the Warrant Agent
hereby accepts such appointment and agrees to perform the same in accordance with the express terms and subject to the conditions
set forth in this Agreement.


 


ARTICLE III 

WARRANTS


 


Section
3.1        Issuance of Warrants. On the Closing Date (i) the Company shall issue Warrants entitling each Initial Lender (or,
subject to applicable securities laws, an Affiliate or Approved Fund of such Initial Lender) to purchase the amount of Warrant
Shares set forth opposite the name of such Initial Lender (or such Initial Lender’s Affiliate or Approved Fund) on Schedule
A attached hereto, which in the aggregate entitle the Holders to purchase 250,000 Warrant Shares (subject to adjustment from
time to time as described herein) and (ii) each Initial Lender (or such Affiliate or Approved Fund of such Initial Lender) shall
(as a condition of receipt of the applicable Warrants) execute and deliver to the Company an Initial Holder Representation Letter.
The Warrants shall be dated as of the Closing Date and, subject to the terms hereof, shall evidence the only Warrants issued or
outstanding under this Agreement as of the Closing Date.


 


Section
3.2        Form and Execution of Warrants. The Warrants shall reflect the provisions set forth on Exhibit A and shall
be issued by book-entry registration and reflected by the Warrant Agent on the Warrant Register; provided, however, that, at the
request of any Holder, the Warrants held by such Holder shall be represented by a definitive Warrant Certificate in substantially
the form attached hereto as Exhibit A (except that a Warrant need not bear any legend appearing at the top of such form
from and after such time as all the restrictions to which such legend relates no longer apply), the provisions of which are incorporated
herein. Any Warrant Certificates shall be executed on behalf of the Company by its Chief Executive Officer, its President, its
Chief Financial Officer or its Treasurer, either manually or by electronic signature, and which may be imprinted or otherwise reproduced
on the Warrant Certificates. Warrant Certificates shall be countersigned by the Warrant Agent, either manually or by electronic
signature, and in any case shall not be valid for any purpose unless so countersigned. Such signature by the Warrant Agent upon
any Warrant Certificate executed by the Company shall be conclusive evidence that such Warrant Certificate so countersigned has
been duly issued hereunder. In case any officer of the Company whose signature shall have been placed upon any of the Warrant Certificates
shall cease to be such officer of the Company before issue and delivery thereof, such Warrant Certificates may, nevertheless, be
issued, countersigned by the Warrant Agent and delivered with the same force and effect as though such person had not ceased to
be such officer of the Company, and any Warrant Certificate may be signed on behalf of the Company by such person as, at the actual
date of the execution of such Warrant Certificate, shall be a proper officer of the Company, although at the date of the execution
of this Agreement any such person was not such officer. Any statements reflecting ownership of Warrants issued in book-entry registration
shall conspicuously bear, or shall be deemed to conspicuously bear (even if such statement does not actually bear such legend),
a legend substantially in the form of the legend appearing on the form attached as Exhibit A.


 


Section
3.3        Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”) for the registration
of the original issuances, exercises, exchanges and cancellations of the Warrants, as well as all transfers in accordance with
Section 6.3 below. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in
the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the
Warrant Agent by the Company. The Company and the Warrant Agent may deem and treat the registered Holder of each Warrant as the
absolute owner of the Warrants represented thereby for the purpose of any exercise thereof or any distribution to such Holder,
and for all other purposes, absent actual notice to the contrary.


 




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ARTICLE IV





TERMS AND EXERCISE OF WARRANTS


 


Section
4.1        Exercise Price. Each Warrant shall entitle the registered Holder thereof, subject to the provisions of this Agreement
and applicable law, the right to purchase from the Company one share of Common Stock (subject to adjustment from time to time as
provided in Article V hereof), at a price of $9.25 per share (subject to adjustment from time to time as provided in Article
V, the “Exercise Price”).


 


Section
4.2        Exercise Period. The Warrants may be exercised by the Holder thereof, in whole or in part (but not as to a fractional
Warrant or a fractional share of Common Stock), at any time and from time to time after the Closing Date and prior to 5:00 P.M.,
New York time on November 26, 2027 (such period, the “Exercise Period”). To the extent that a Warrant or portion
thereof is not exercised prior to the expiration of the Exercise Period, such Warrant shall be automatically cancelled and will
become permanently and irrevocably null and void with no action by any Person, and with no further rights hereunder or under any
Warrant Certificate representing such Warrants, upon such expiration and the Holder of such Warrant shall not be entitled to any
distribution, payment or other amount in respect of such Warrant.


 


Section
4.3        Exercise of Warrants.


 


(a)        Subject to the terms and conditions of this Agreement, the Holder of any Warrants may exercise, in whole or in part, such
Holder’s right to purchase the Warrant Shares by completing, executing and delivering a physical copy or .pdf copy via email
of a Notice of Exercise to the Company with a copy to the Warrant Agent in accordance with Section 8.2. The exercising Holder
shall be required to physically surrender the Warrant Certificate (if any) to the Warrant Agent in connection with any exercise
thereof. Except to the extent that the cashless exercise procedure specified in Section 4.3(b) is specified in the applicable
Notice of Exercise, within the earlier of (i) two (2) Trading Days or (ii) the number of Trading Days comprising the Standard Settlement
Period following the date on which the Company received the Notice of Exercise, the applicable Holder shall pay to the Warrant
Agent on behalf of the Company an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to
which the Warrants are being exercised (the “Aggregate Exercise Price”) in United States dollars by personal,
certified or official bank check payable to the Warrant Agent or by wire transfer to an account specified in writing by the Warrant
Agent to such Holder. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Exercise be required unless required by the Warrant Agent in the case of an issuance
of Warrant Shares to a Person who is not the registered Holder of the Warrant being exercised. Partial exercises of a Warrant resulting
in purchases of a portion of the total number of Warrant Shares available thereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable thereunder in an amount equal to the applicable number of Warrant Shares purchased. Following
the exercise by a Holder of any of its Warrants, the Warrant Agent shall reduce the Warrant Register and such Holder’s position
by the number of Warrants duly exercised. As stated above, if a Warrant Certificate is surrendered by the exercising Holder and
such Warrant Certificate covers a larger number of Warrants than the number exercised, the Warrant Agent shall deliver to the exercising
Holder a New Warrant Certificate for the unexercised portion of such Warrant Certificate. Except as otherwise set forth herein,
any exercise of Warrants pursuant to the terms of this Agreement shall be irrevocable and shall constitute a binding agreement
between the Holder and the Company, enforceable in accordance with the terms of the Warrants and this Agreement. Any Warrant Certificate
surrendered upon exercise to the Company or the Warrant Agent by a Holder shall be promptly cancelled by the Company.


 




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(b)        The Holder of any Warrants may, at such Holder’s option, elect to exercise Warrants, in whole or in part, by means
of a “cashless exercise” in which such Holder shall be entitled to receive a number of Warrant Shares determined pursuant
to the following formula:


 


X = (A – B) * C / A


 


where:


 


 (A) =        the VWAP during the five (5) consecutive Trading Day period ending on the Trading Day immediately preceding the date the applicable Notice of Exercise is delivered to the Company pursuant to Section 4.3(a) hereof;




 


(B) =        the
Exercise Price at the time of such exercise;


 


 (C) =        the number of Warrant Shares issuable upon the exercise of the applicable Warrants being exercised, if such exercise were by means of a cash exercise rather than a cashless exercise; and




 


(X) =        the
number of Warrant Shares to be issued to such Holder.


 


If the foregoing calculation
results in a negative number, then no Warrant Shares shall be issuable via a cashless exercise. If Warrant Shares are issued in
such a cashless exercise the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding
period of the Warrant Shares being issued may be tacked on to the holding period of the applicable Warrants, to the extent permitted
in accordance with Section 3(a)(9) of the Securities Act. The Company agrees not to take any position contrary to this Section
4.3(b).


 


Section
4.4        Issuance of Common Stock. On or before the first Business Day following the date on which the Company has received
the properly completed and duly executed Notice of Exercise, the Company shall transmit by email a confirmation of receipt of the
Notice of Exercise to the applicable Holder and the Warrant Agent. The Company shall cause the Warrant Shares purchased hereunder
to be transmitted by the Warrant Agent to such Holder by crediting such Holder’s (or its specified designee’s) balance
account with DTC through its Deposit or Withdrawal at Custodian (“DWAC”) system, if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by such Holder or (B) the Warrant Shares are eligible for resale by such Holder without volume or
manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the applicable Warrants), and otherwise by physical
delivery of a certificate, registered in the Company’s share register in the name of such Holder or its specified designee,
for the number of Warrant Shares to which such Holder is entitled pursuant to such exercise to the address specified by such Holder
in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the
Notice of Exercise and the Exercise Price, if applicable, and (ii) the Standard Settlement Period after the delivery to the Company
of the Notice of Exercise and the Exercise Price, if applicable (such date, the “Warrant Share Delivery Date”).
Upon delivery of the properly completed and duly executed Notice of Exercise and, if applicable, payment of the Aggregate Exercise
Price in respect thereof, such Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which the applicable Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares.
If the Company fails to cause the Warrant Agent to transmit to such Holder such Warrant Shares on or before the Warrant Share Delivery
Date, then such Holder will have the right to rescind such exercise. The Company reserves the right to reject any and all Notices
of Exercise that it reasonably determines are not in proper form, provided that the Company shall promptly notify the exercising
Holder of any such rejection. The Company reserves the right to waive any of the conditions to any particular exercise of Warrants
or any defects in the Notice(s) of Exercise with respect to any particular exercise of Warrants.


 


Section
4.5        Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock solely for the purpose of issuance upon the exercise of the Warrants, a number
of shares of Common Stock equal to the aggregate Warrant Shares issuable upon the exercise of all outstanding Warrants. The Company
shall take such actions as may be reasonably necessary to assure that all such
shares of Common Stock may be so issued without violating the Company’s governing documents, any agreements to which the
Company is a party, any requirements of any national securities exchange upon which shares of Common Stock may be listed or any
applicable laws. The Company covenants that it will take such actions as may be reasonably necessary or appropriate in order that
all Warrant Shares issued upon exercise of the Warrants will, in accordance with the terms of this Agreement, be fully paid and
non-assessable and free from any and all (i) security interests created by or imposed upon the Company and (ii) taxes, liens and
charges with respect to the issuance thereof.


 




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Section
4.6        Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. If, the Company and Warrant Agent
fail, for any reason or no reason, to deliver or cause to be delivered to the Holder the Warrant Shares in accordance with the
provisions of Section 4.4 above on or before the Warrant Share Delivery Date, and if on or after the Warrant Share Delivery
Date such Holder purchases (in an open market transaction or otherwise) or such Holder’s brokerage firm otherwise purchases
shares of Common Stock to deliver in satisfaction of a sale by such Holder of shares of Common Stock which such Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall, within three (3) Business Days after such
Holder’s request and in such Holder’s sole discretion, either (i) pay cash to such Holder in an amount equal to such
Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased, at which
point the Company’s obligation to deliver such Warrant Shares shall terminate, or (ii) promptly honor its obligation to deliver
to such Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder and pay cash to such Holder in an amount equal to the excess, if any, of the such Holder’s
total purchase price (including brokerage commissions, if any) for such shares of Common Stock so purchased over the product of
(x) such number of shares of Common Stock multiplied by (y) the price at which the sell order giving rise to the Buy-In
obligation was executed. Such Holder shall provide the Company with written or email notice indicating the amount payable to such
Holder in respect of the Buy-In and, upon request of the Company, evidence supporting the calculation of such amount. Nothing herein
shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the failure to timely deliver shares of Common
Stock upon exercise of a Warrant as required pursuant to the terms hereof.


 


Section
4.7       Fractional Shares. No fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall
be issued upon the exercise of a Warrant. As to any fraction of a share of Common Stock which a Holder would otherwise be entitled
to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction
in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share of Common Stock. The Company
shall provide funding to cover cash payment in lieu of fractional shares of Common Stock. The Warrant Agent shall have no obligation
to make cash payments in lieu of fractional shares of Common Stock unless the Company shall have provided the necessary funds to
pay in full all amounts due and payable with respect thereto. Each Holder, by its acceptance of Warrants, expressly waives its
right to any fraction of a share of Common Stock upon its exercise of such Warrant(s).


 


Section
4.8        Close of Books. The Company shall not close its books against the transfer of any Warrants or any Warrant Shares
in any manner which interferes with the timely exercise of such Warrants.


 


Section
4.9       Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to such Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses
shall be paid by the Company. The Company shall pay all fees required for same-day processing of any Notice of Exercise and all
fees to the DTC (or another established clearing corporation performing similar functions) required for same-day electronic delivery
of the Warrant Shares. Notwithstanding the foregoing, in connection with the exercise of any Warrants, the Company shall not be
required to pay any tax or other charge imposed in respect of any transfer involved in the Company’s issuance and delivery
of shares of Common Stock (including certificates therefor) (or any payment of cash or other property in lieu of such shares) to
any recipient other than the Holder of the Warrants being exercised (such tax or other charge, a “Non-Registered Holder
Tax”), and in case of any such Non-Registered Holder Tax, the Warrant Agent and the Company shall not be required to
issue or deliver any such shares (or cash or other property in lieu of such shares) until (a) such Non-Registered Holder Tax has
been paid or an amount sufficient for the payment thereof has been delivered to the Warrant Agent or the Company or (b) it has
been established to the Company’s and the Warrant Agent’s satisfaction that any such Non-Registered Holder Tax that
is or may become due has been paid. The Warrant Agent shall not have any duty or obligation to take any action under any section of this Agreement
that requires the payment of Non-Registered Holder Taxes, unless and until the Warrant Agent is satisfied that all such Non-Registered
Holder Taxes have been paid.


 




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Section
4.10      Investment Unit Allocation. The Company agrees, and by acceptance of any Warrant, each initial Holder is deemed to
have agreed, (i) that the Incremental Term Loan disbursed to the Borrower on the Closing Date and the Warrants issued on the Closing
Date, taken together, comprise an “investment unit” for purposes of Section 1273(c)(2) of the Internal Revenue Code,
(ii) to treat the investment unit as issued by the Company for U.S. federal income tax purposes and (iii) to allocate the purchase
price of such investment unit among the Incremental Term Loan and the Warrants in proportion to their fair market value as of
the Closing Date, in accordance with Treasury Regulations Section 1.1273-2(h) and the values determined pursuant to the side letter
between the Company and Holders, dated May 26, 2022. Unless otherwise required by applicable law, the Company agrees, and, by
acceptance of any Warrant, each initial Holder is deemed to have agreed, to file all tax returns in a manner consistent with this
Section 4.10.


 


Section
4.11       Holder’s Exercise Limitations. Unless otherwise agreed in writing by both the Company and the Holder, the Company
shall not effectuate any exercise of a Warrant, and a Holder shall not have any right to exercise a Warrant, to the extent that
such exercise would result in such Holder (together with such Holder’s Affiliates and any other Persons acting as a group
together with such Holder or any of such Holder’s Affiliates, in each case, to the extent that such Affiliates and persons
acting as a group are required to aggregate their beneficial ownership of Common Stock for purposes of Section 13(d) of the Exchange
Act (“Attribution Parties”)) beneficially owning more than the percentage of Common Stock outstanding set forth
on Schedule A attached hereto opposite the name of such Holder (or for the Affiliate of such Holder that elected such Holder
receive Warrants) as its “Initial Beneficial Ownership Limitation” (subject to adjustment under this Section 4.11,
such Holder’s “Beneficial Ownership Limitation”). For purposes of this Section 4.11, beneficial
ownership and the determination of any group status shall be determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder (it being acknowledged and understood by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and that the Holder is solely responsible
for the preparation of any schedules required to be filed in accordance therewith). To the extent that the limitations contained
in this Section 4.11 apply to a Holder, the determination of whether any Warrants are exercisable, and the portion thereof
that is exercisable in relation to other securities owned by such Holder and such Holder’s Attribution Parties, shall be
in the discretion of the Holder and the submission of a Notice of Exercise shall be deemed to be a determination by such Holder
in relation to other securities owned by such Holder and such Holder’s Attribution Parties that the Warrants set forth in
the applicable Notice of Exercise are exercisable. Neither the Company, nor the Warrant Agent shall be required to independently
confirm whether any exercise of any Warrant by a Holder would result in the violation by such Holder of its applicable Beneficial
Ownership Limitation, and instead the Company and the Warrant Agent shall be able to rely for all purposes on a Notice of Exercise
as such Holder’s determination and confirmation that such exercise set forth therein does not result in such Holder exceeding
its Beneficial Ownership Limitation. Upon the written request of a Holder, the Company shall within two (2) Business Days confirm
in writing to such Holder the number of shares of Common Stock then outstanding. A Holder, upon notice to the Company, may increase
or decrease its Beneficial Ownership Limitation, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of
the Common Stock outstanding and the provisions of this Section 4.11 shall continue to apply. Any change in the Beneficial
Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered to the Company. The
limitations contained in this paragraph shall apply to a successor holder of any Warrants which successor holder shall be subject
to the same Beneficial Ownership Limitation as its transferor unless and until changed in accordance with this Section 4.11.


 


Section
4.12       Warrant Shares Legends. Unless the Warrants or the Warrant Shares are sold pursuant to an effective registration statement
under the Securities Act, the certificates representing or statements evidencing the Warrant Shares will bear a conspicuous legend
in substantially the form set forth below:


 


“THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.”


 




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Section
4.13      Cap on Shares of Common Stock. Notwithstanding anything herein to the contrary, the maximum number of Warrant Shares
eligible to be issued in connection with the exercise of the Warrants upon adjustment in accordance Sections 5.3, 5.4
or 5.5 hereof, shall not, when combined with the maximum number of Original Warrant Shares eligible to be issued in connection
with the exercise of the Original Warrants pursuant to the Original Warrant Agreement, exceed (i) 19.9% of the outstanding shares
of Common Stock immediately prior to the initial entry into the Original Warrant Agreement, or (ii) 19.9% of the combined voting
power of the then outstanding voting securities of the Company immediately prior to the initial entry into the Original Warrant
Agreement (the “Share Cap”), unless the Company has previously obtained the approval of the Company’s
shareholders under applicable rules and requirements of the NASDAQ Capital Market for the issuance of shares of Common Stock in
excess of the Share Cap (the “Shareholder Approval”), prior to issuing any Excess Shares (as defined below).
In the event the number of shares of Common Stock to be issued to Holders hereunder in connection with the exercise of the Warrants
exceeds the Share Cap, then the Company shall, in lieu of issuing such shares in excess of the Share Cap, pay the Holders the cash
value of such shares of Common Stock which exceed the Share Cap (the “Excess Shares”), upon exercise of the
applicable Warrants by the Holders thereof, with the value of each such Excess Share being the Fair Market Value thereof. For the
sake of clarity, in the event Shareholder Approval has been received, or there is no limit on the number of Warrant Shares which
may be issued under applicable Nasdaq Stock Market rules pursuant to the terms of this Warrant Agreement, there shall be no Excess
Shares, this Section 4.13 shall have no effect, and the requirement to pay cash for any Excess Shares shall apply only if,
and to the extent that, the exercise of the Warrants would result in a number of Warrant Shares being issued in excess of the Share
Cap. To the extent that any concurrent exercise of Warrants by multiple Holders results in the Share Cap being exceeded, the maximum
number of Warrant Shares issuable without exceeding the Share Cap shall be issued pro rata to each exercising Holder. Nothing herein
shall prevent or limit the Company’s ability to issue a number of Warrant Shares up to, but without exceeding, the Share
Cap.


 


ARTICLE V


 ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES


 


Section
5.1        General. In order to prevent dilution of the rights granted under the Warrants, the Exercise Price and number of
shares of Common Stock issuable upon exercise of each Warrant shall be subject to adjustment from time to time as provided in this
Article V; provided, that if more than one subsection of this Article V is applicable to a single event, the subsection
shall be applied that produces the largest adjustment in favor of the Holders and no single event shall cause an adjustment under
more than one subsection of this Article V so as to result in duplication.


 


Section
5.2        Stock Dividends and Splits. If the Company, at any time while a Warrant is outstanding: (a)     pays
a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company upon exercise of a Warrant), (b) subdivides outstanding shares of Common Stock
into a larger number of shares, (c) combines (including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (d) issues by reclassification of shares of the Common Stock any shares of capital stock
of the Company, then in each case (i) the Exercise Price of each outstanding Warrant shall be increased or decreased to an
amount determined by multiplying (x) the Exercise Price in effect immediately prior to such event by (y) a fraction, the
numerator of which is the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and the denominator of which is the number of shares of Common Stock outstanding immediately after such event and
(ii) the number of Warrant Shares issuable upon exercise of each outstanding Warrant shall be proportionately adjusted such
that the Aggregate Warrant Exercise Price shall remain unchanged. Any adjustment made pursuant to this Section 5.2
shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification. In the event that such dividend or distribution is not so made, the Exercise Price and the
number of Warrant Shares issuable upon exercise of each outstanding Warrant shall be readjusted, effective as of the date
when the Board determines not to make such dividend or distribution, to the Exercise Price that would then be in effect and the number of Warrant Shares issuable
upon exercise of each outstanding Warrant if such record date had not been fixed.


 




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Section
5.3        Tender or Exchange Offer. If the Company, at any time while a Warrant is outstanding, makes any payment or distribution
in respect of any tender offer or exchange offer for shares of Common Stock where the Fair Market Value of the consideration per
share of Common Stock when paid or distributed by the Company exceeds the Market Price of a share of Common Stock actually acquired
in such tender offer or exchange offer as of the Business Day immediately preceding the first public announcement of the tender
offer or exchange offer (the aggregate excess amount for all Common Stock acquired in such tender offer or exchange offer, the
“Excess Tender Amount”), then, and in each such case, (i) the Exercise Price of each outstanding Warrant shall
be decreased to an amount determined by multiplying (x) the Exercise Price in effect immediately prior to the close of business
on the expiration date of the tender offer or exchange offer by (y) a fraction, (1) the numerator of which is the positive difference
of (A) the Market Price of a share of Common Stock on the Business Day immediately preceding the first public announcement of the
tender offer or exchange offer minus (B) the quotient determined by dividing (I) the Excess Tender Amount by (II) the number
of shares of Common Stock outstanding immediately after the expiration of the tender offer or exchange offer (after giving effect
to the purchase or exchange of Common Stock) and (2) the denominator of which is the Market Price of a share of Common Stock on
the Business Day immediately preceding the first public announcement of the tender offer or exchange offer and (ii) the number
of Warrant Shares issuable upon exercise of each outstanding Warrant shall be proportionately adjusted such that the Aggregate
Warrant Exercise Price shall remain unchanged. Such adjustment shall become effective immediately after any such exchange offer
or tender offer is consummated.


 


Section
5.4        Adjustment of Exercise Price Upon Issuance of Shares of Common Stock. If the Company, at any time while a Warrant
is outstanding, in each case, other than in an Excluded Issuance, grants, issues or sells (or enters into any agreement to grant,
issue or sell), or in accordance with this Section 5.4 is deemed to have granted, issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company) for a consideration
per share less than a price equal to the Exercise Price in effect immediately prior to such granting, issuance or sale or deemed
granting, issuance or sale (such Exercise Price then in effect, the “Applicable Price” and such issuance, a
“Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise Price of each outstanding
Warrant shall be reduced to an amount equal to the quotient determined by dividing (1) the sum of (I) the product of (x) the Applicable
Price multiplied by (y) the number of shares of Common Stock outstanding immediately prior to such Dilutive Issuance plus
(II) the aggregate consideration, if any, received by the Company upon such Dilutive Issuance, by (2) the number of shares
of Common Stock outstanding immediately after such Dilutive Issuance. For all purposes of the foregoing (including, without limitation,
determining the adjusted Exercise Price under this Section 5.4), the following shall be applicable:


 


(a)           Issuance of Options. If the Company shall, at any time or from time to time after the Closing Date, in any manner
(other than in an Excluded Issuance) grant, issue or sell or enter into any agreement to grant, issue or sell (whether directly
or by assumption in a merger or otherwise) any Options, whether or not such Options or the right to convert or exchange any Convertible
Securities issuable upon the exercise of such Options are immediately exercisable, and the price per share (determined as provided
in this paragraph and in Section 5.4(d)) for which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of Convertible Securities issuable upon the exercise of such Options is less than the Applicable Price,
then the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued
as of the date of the granting, issuance or sale (or the date of execution of such agreement to grant, issue or sell, as applicable)
of such Options (and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price under this Section
5.4), at a price per share equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable
consideration received for purposes of this Section 5.4) of (x) the total amount, if any, received or receivable by the
Company as consideration for the granting or sale of all such Options, plus (y) the minimum aggregate amount of additional consideration
payable to the Company upon the exercise of all such Options, plus (z), in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if any, payable to the Company upon the issuance or sale
of all such Convertible Securities and the conversion or exchange of all such Convertible Securities, by (B) the total maximum
number of shares of Common Stock issuable upon the exercise of all such Options or upon the conversion
or exchange of all Convertible Securities issuable upon the exercise of all such Options. Except as otherwise provided in Section
5.4(c), no further adjustment of the Exercise Price shall be made upon the actual issuance of Common Stock or of Convertible
Securities upon exercise of such Options or upon the actual issuance of Common Stock upon conversion or exchange of Convertible
Securities issuable upon exercise of such Options. Simultaneously with any adjustment to the Exercise Price of the Warrants pursuant
this Section 5.4(a), the number of Warrant Shares issuable upon exercise of each outstanding Warrant shall be proportionately
adjusted such that the Aggregate Warrant Exercise Price shall remain unchanged.


 




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(b)          Issuance
of Convertible Securities. If the Company shall, at any time or from time to time after the Closing Date, in any manner
(other than in an Excluded Issuance) grant, issue or sell or enter into any agreement to grant, issue or sell
(whether directly or by assumption in a merger or otherwise) any Convertible Securities, whether or not the right to convert
or exchange any such Convertible Securities is immediately exercisable, and the price per share (determined as provided in
this paragraph and in Section 5.4(d)) for which Common Stock is issuable upon the conversion or exchange of such
Convertible Securities is less than the Applicable Price, then the total maximum number of shares of Common Stock issuable
upon conversion or exchange of the total maximum amount of such Convertible Securities shall be deemed to have been issued as
of the date of the granting, issuance or sale (or the date of execution of such agreement to grant, issue or sell, as
applicable) of such Convertible Securities (and thereafter shall be deemed to be outstanding for purposes of adjusting the
Exercise Price pursuant to this Section 5.4), at a price per share equal to the quotient obtained by dividing (A) the
sum (which sum shall constitute the applicable consideration received for purposes of this Section 5.4) of (x) the
total amount, if any, received or receivable by the Company as consideration for the granting or sale of such Convertible
Securities, plus (y) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the
conversion or exchange of all such Convertible Securities, by (B) the total maximum number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities. Except as otherwise provided in Section 5.4(c), no
further adjustment of the Exercise Price shall be made upon the actual issuance of Common Stock upon conversion or exchange
of such Convertible Securities or the granting, issuance or sale of Convertible Securities upon exercise of any Options to
purchase any such Convertible Securities for which adjustments of the Exercise Price have been made pursuant to the other
provisions of this Section 5.4. Simultaneously with any adjustment to the Exercise Price of the Warrants pursuant this Section
5.4(b), the number of Warrant Shares issuable upon exercise of each outstanding Warrant shall be proportionately adjusted
such that the Aggregate Warrant Exercise Price shall remain unchanged.


 


(c)           Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the consideration, if
any, payable upon the conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than
(i) proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section
5.2, (ii) changes in conversion or exercise prices, as applicable, resulting from anti-dilution provisions contained in the
instruments governing such securities which are in effect as of the Closing Date, and/or (iii) changes in conversion or exercise
prices, as applicable, in respect of securities issued in an Excluded Issuance), then the Exercise Price then in effect shall
be adjusted to an amount equal to the Exercise Price that would have been in effect 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 5.4(c), if the terms of any
Option or Convertible Security (including, without limitation, any Option or Convertible Security that was outstanding as of the
date hereof) are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued
as of the date of such increase or decrease. Simultaneously with any adjustment to the Exercise Price of the Warrants pursuant
this Section 5.4(c), the number of Warrant Shares issuable upon exercise of each outstanding Warrant shall be proportionately
adjusted such that the Aggregate Warrant Exercise Price shall remain unchanged. No adjustment pursuant to this Section 5.4(c)
shall be made if such adjustment would result in an increase of the Exercise Price of the Warrants or a decrease in the number
of Warrant Shares.


 




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(d)    
     Calculation of Consideration Received. If any Option, Convertible Security or Adjustment
Right is issued in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company,
together comprising one integrated transaction, the aggregate amount of consideration therefor shall be deemed to be the Fair
Market Value of such portion of the aggregate consideration received by the Company in such transaction as is attributable to
such Options, Convertible Securities or Adjustment Rights, which portion shall be allocated based on the relative Fair Market
Value of the applicable Options, Convertible Securities or Adjustment Rights and the other securities issued or sold or
deemed to be issued or sold in connection therewith. If any shares of Common Stock, Options or Convertible Securities are
issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the
net amount of consideration received by the Company therefor. If any shares of Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company
will be the Fair Market 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 VWAP of such securities
during the five (5) consecutive Trading Day period applicable to such securities ending on the date immediately preceding the
date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the Fair Market Value of such portion of the net assets and business of the
non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may
be.


 


(e)           Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them to (i)
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (ii) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to
be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the granting of such right of subscription or
purchase (as the case may be), provided, that if before the distribution to its holders of Common Stock the Company legally
abandons its plan to pay or deliver such dividend, distribution, subscription or purchase rights and, to the extent such plan
is publicly disclosed, announces the abandonment of such plan, then thereafter the adjustment previously made in respect
thereof shall be rescinded and annulled.


 


(f)       
   Treatment of Terminated Options or Convertible Securities. Upon the occurrence of any event
(other than any event that (i) constitutes or occurs in connection with a Fundamental Transaction or (ii) involves the
Company making any payment or providing any consideration to the holder of such Option or Convertible Security) that results
in (x) the lapse of any unexercised Option (or any portion thereof) prior to the scheduled expiration date thereof or (y) the
early termination of a conversion or exchange right with respect to any unconverted or unexchanged Convertible Security (or
portion thereof), in each case, for which any adjustment was made pursuant to this Section 5.4, the Exercise Price
then in effect hereunder shall forthwith be changed pursuant to the provisions of this Section 5.4 to the Exercise
Price which would have been in effect at the time of such lapse or early termination had such unexercised Option (or portion
thereof) or unconverted or unexchanged Convertible Security (or portion thereof), to the extent outstanding immediately prior
to such lapse or early termination, never been issued; provided, however, that no such adjustment of the Exercise Price under
this Section 5.4(f) shall be made with respect to any unexercised Option (or portion thereof) or unconverted or
unexchanged Convertible Security (or portion thereof) that lapses or is terminated more than one (1) calendar year after the
date of issuance thereof.


 


Section
5.5           Pro Rata Distributions. If the Company, at any time
while a Warrant is outstanding, shall declare or make any dividend or other distribution of its assets (or rights to acquire
its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock (other than Common Stock) or other securities, assets, property or Options by way of a
dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction, but
excluding (i) any payment by the Company of a cash amount to repurchase shares of Common Stock pursuant to a repurchase plan
designed to comply with Rule 10b-18 promulgated under the Exchange Act of 1934 or (ii) any distribution made upon the
consummation of a Fundamental Transaction to the extent included in the Alternate Consideration) (a
“Distribution”), then, in each such case, effective immediately after the record date mentioned above, (i)
the Exercise Price of each outstanding Warrant shall be decreased to an amount determined by subtracting the (x) then per
share Fair Market Value at such record date of the portion of such Distribution applicable to one (1) outstanding share of
the Common Stock from (y) the amount of such Exercise Price and (ii) the number of Warrant Shares issuable upon exercise of
each outstanding Warrant shall be proportionately adjusted such that the Aggregate Warrant Exercise Price shall remain
unchanged. The adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share of Common Stock.






 




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Section
5.6            Other Events. If the Company (or any subsidiary of
the Company), at any time while a Warrant is outstanding, shall take any action to which the provisions hereof are not
strictly applicable, or, if applicable, would not operate to protect the Holders from dilution or if any event occurs of the
type contemplated by the provisions of this Article V but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features),
then the Board shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number of
Warrant Shares issuable upon exercise of a Warrant so as to protect the rights of the Holders, provided that no such
adjustment pursuant to this Section 5.6 will increase the Exercise Price or decrease the number of Warrant Shares
issuable upon exercise of a Warrant as otherwise determined pursuant to this Article V, provided further that if the
Majority Holders provide written notice in accordance with Section 8.2 to the Company within twenty (20) Business Days
after notice of such adjustment is given by the Company to each Holder in accordance with Section 5.8 that they do not
accept such adjustments as appropriately protecting their interests hereunder against such dilution, then the Board and
the Majority Holders shall agree, in good faith, upon 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.


 


Section 5.7           Fundamental Transaction.


 


(a)          In the event of a Fundamental Transaction, the Warrants shall remain outstanding and each Holder shall have the right thereafter
to receive, upon exercise of a Warrant, the same amount and kind of securities, cash or property as it would have been entitled
to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full of such Warrant (assuming such Holder failed to
exercise its rights of election, if any, as to the kind or amount of securities, cash or property receivable upon such Fundamental
Transaction) (the “Alternate Consideration”). The Aggregate Warrant Exercise Price will not be affected by any
such Fundamental Transaction, but, in the event of any such exercise occurring on or after the effectiveness of such Fundamental
Transaction, the Company shall apportion the Aggregate Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then each Holder shall be given
the same choice as to the Alternate Consideration it receives upon any exercise of a Warrant following such Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Agreement prior to such Fundamental Transaction
and shall, at the option of each Holder, deliver to such Holder in exchange for such Holder’s Warrants a security of the
Successor Entity evidenced by a written instrument (reasonably satisfactory in form and substance to the Majority Holders) on substantially
similar terms and substance to the Warrants which are exercisable for the Alternate Consideration (which, if the Alternate Consideration
consists solely of capital stock of such Successor Entity (or its parent entity), shall represent a corresponding number of shares
of capital stock of such Successor Entity (or its parent entity) equivalent to the Warrant Shares issuable upon exercise of the
Warrants (without regard to any limitations on the exercise of the Warrants) prior to such Fundamental Transaction, and with an
exercise price which applies the Exercise Price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of the Warrants
immediately prior to the consummation of such Fundamental Transaction)). Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction,
the provisions of this Agreement 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 Agreement with the same effect as if such Successor Entity had been named as the Company herein.


 




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(b)          Notwithstanding anything to the contrary contained herein, in the event of a Fundamental Transaction, the Company shall
provide (or cause the Warrant Agent to provide) written notice (a “Fundamental Transaction Notice”) of a Fundamental
Transaction to all Holders reasonably promptly after public announcement by the Company of the execution and delivery of a definitive
agreement with respect to such Fundamental Transaction (and, in any event, not less than thirty (30) days prior to the consummation
of such Fundamental Transaction), which notice shall include the date such Fundamental Transaction is expected to be consummated.


 


(i)           Holder Put Right. At any time on or after a Holder’s receipt of a Fundamental Transaction Notice in accordance
with Section 5.7(b) and before the third Business Day prior to the consummation of such Fundamental Transaction, each Holder
shall have the right (the “Put Right”) to require the Company to repurchase any portion of the Warrants held
by such Holder concurrently with the consummation of such Fundamental Transaction by delivering written notice to the Company (the
“Put Notice”) indicating the portion of the Warrants held by the Holder to which the Put Notice applies. In
the event a Holder exercises the Put Right in accordance with this Section 5.7(b)(i), the Company shall, concurrently with
and subject to the consummation of the Fundamental Transaction, repurchase, or cause another party to such Fundamental Transaction
to purchase, the Warrants to which the Put Notice applies for an amount in cash equivalent to the aggregate value of such Warrants
as determined by the Black Scholes Value.


 


(ii)           Company Call Right. At any time on or after the fifteenth (15th) day following the giving of a Fundamental
Transaction Notice to all Holders of outstanding Warrants in accordance with Section 5.7(b) and before the third Business
Day prior to the consummation of such Fundamental Transaction, the Company shall have the right (the “Call Right”)
to repurchase the Warrants from all Holders thereof concurrently with the consummation of such Fundamental Transaction by delivering
an irrevocable written notice of exercise of the Call Right to all Holders of the Warrants (the “Call Notice”)
indicating the Company’s intent to exercise the Call Right concurrent with and subject to the consummation of such Fundamental
Transaction. In the event the Company exercises the Call Right in accordance with this Section 5.7(b)(ii) the Company shall
repurchase, or cause another party to such Fundamental Transaction to purchase, all of the unexercised Warrants for which a Notice
of Exercise shall not have been delivered to the Company prior to the last Business Day preceding the consummation of such Fundamental
Transaction for an amount in cash equivalent to the aggregate value of such Warrants as determined by the Black Scholes Value.
Notwithstanding the foregoing, the Holders shall retain the right to exercise the Warrants subject to the Call Notice at any time
prior to the last Business Day preceding the consummation of such Fundamental Transaction, and the Company covenants and agrees
that it will honor all Notices of Exercise with respect thereto.


 


Section
5.8       Notice of Adjustments. Whenever the number and/or kind of Warrant Shares
or the Exercise Price is adjusted as provided in this Agreement, the Company shall promptly (i) prepare and deliver to the
Warrant Agent, or cause to be prepared and delivered by the Warrant Agent, a written statement setting forth the adjusted
number and/or kind of shares issuable upon the exercise of Warrants, the Exercise Price of the Warrants after such
adjustment, the facts requiring such adjustment, the computation by which the adjustment was made and the record date or the
effective date of the event and adjustment, and (ii) cause the Warrant Agent to give written notice of the foregoing to each
Holder in the manner provided in Section 8.2 below. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such event or any adjustment therefrom. The Warrant Agent shall be fully protected in
relying upon any such written notice delivered in accordance with this Section 5.8, and on any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received such
written notice.


 


Section
5.9        Calculations; Minimum Adjustments. All adjustment calculations
under this Article V shall be made to the nearest one one-thousandth (1/1,000) of one cent ($0.01) or to the nearest one
one-thousandth (1/1,000) of a share, as the case may be. For purposes of this Article V, subject to the adjustments set
forth in Section 5.4(a) and Section 5.4(b), the number of shares of Common Stock deemed to be issued and outstanding
as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
No adjustment to the Exercise Price or the number of Warrant Shares issuable upon exercise of a Warrant shall be made if the amount
of such adjustment would be less than $0.01 or one-tenth (1/10th) of a share of Common Stock, respectively, but any such amount
shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or 1/10th
of a share of Common Stock, respectively, or more.






 




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Section
5.10       Form of Warrant After Adjustments. The form of Warrant Certificate need not be changed because of any adjustments in
the Exercise Price or the number and/or kind of shares issuable upon exercise of the Warrants, and the Warrant Certificates theretofore
or thereafter issued may continue to express the same price and number and kind of shares as are stated therein, as initially issued;
provided, that such adjustments in the Exercise Price or the number and/or kind of shares issuable upon exercise of the Warrants
pursuant to the terms of this Agreement shall nonetheless have effect upon exercise of the Warrants. The Company, however, may
at any time in its sole discretion make any change in the form of Warrant Certificate that it may deem appropriate to give effect
to such adjustments and that does not affect the substance of the Warrant Certificate or this Agreement (including the rights,
duties, liabilities or obligations of the Warrant Agent), and any Warrant Certificate thereafter issued, whether in exchange or
substitution for an outstanding Warrant Certificate, may be in the form so changed.


 


ARTICLE VI





OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS


 


Section
6.1        No Rights or Liability as Stockholder. The Warrants do not entitle the Holders to any voting rights, dividends or
other rights as a stockholder of the Company prior to the exercise hereof, except as expressly set forth in herein. No provision
thereof and no mere enumeration therein of the rights or privileges of the Holders shall give rise to any liability of any Holder
for the Exercise Price hereunder or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company.


 


Section
6.2         Notice to Allow Exercise by Holder. If (a) the Company shall
declare a dividend (or any other distribution in whatever form) on the Common Stock, (b) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock, (c) the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of
any rights, (d) the approval of any stockholders of the Company shall be required in connection with any reclassification of
the Common Stock, consolidation or merger to which the Company (or any of its subsidiaries) is a party, any sale or transfer
of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (e) the Company shall authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to each Holder
at its last email address as it shall appear upon the Warrant Register, at least fourteen (14) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of
which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or
warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver
such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required
to be specified in such notice. To the extent that any notice provided in this Agreement constitutes, or contains, material,
non-public information regarding the Company or any of its subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The Holders shall remain entitled to exercise the Warrants
during the period commencing on the date of such notice to the effective date of the event triggering such notice except as
may otherwise be expressly set forth herein.


 


Section
6.3         Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in this Section
6.3, the Warrants and all rights hereunder are transferable by the Holders, in whole or in part, on the records
of the Warrant Agent, subject to surrender of the applicable Warrant Certificate (if any) by the applicable Holder, by delivery
of a Form of Assignment properly completed and duly signed, together with funds sufficient to pay any transfer taxes payable upon
the making of such transfer, to the principal office of the Warrant Agent. Upon receipt of the foregoing, to the extent a Warrant
Certificate is requested in writing by the transferee, the Company shall execute and deliver, or shall cause to be executed and
delivered, one or more New Warrant Certificates evidencing the Warrants so transferred to the transferee and, to the extent a Warrant
Certificate is requested by the transferor, a New Warrant Certificate evidencing the remaining portion of the Warrants not so transferred,
if any, to the transferring Holder. Notwithstanding the foregoing, the Company shall not be required to effectuate a transfer that
would result in the issuance of Warrants for the purchase of a fraction of a share of Common Stock. In connection with any transfer
hereunder, the transferee’s acceptance of the transferred Warrants and (if applicable) the New Warrant Certificate shall
be deemed to constitute acceptance by such transferee of all of the rights and obligations of a Holder of a Warrant. If requested
by the Company or the Warrant Agent, in the event that the Warrants are not then covered under an effective registration statement
under the Securities Act, the Holder and, where applicable, the transferee, shall, as a condition to the effectiveness of such
transfer, provide the Company and the Warrant Agent, together with such Form of Assignment, with a duly executed Transferee Representation
Letter or such information, confirmations and acknowledgements as are reasonably necessary for the Company and/or the Warrant Agent
to confirm that an exemption from registration exists for such proposed transfer.


 




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Section
6.4         Registration Rights. The Holders shall be entitled to the benefit of certain registration rights with respect to
the Warrant Shares pursuant to that certain Amended and Restated Registration Rights Agreement, dated as of the date hereof, by
and between the Company and the Initial Lenders, as may be amended, restated, supplemented, replaced or otherwise modified from
time to time (such agreement, the “Registration Rights Agreement”), and such registration rights may only be
assigned to any subsequent Holders in accordance with the terms and provisions thereof.


 


Section
6.5         Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of any Warrant Certificate or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant Certificate or stock certificate, if mutilated, the
Company or Warrant Agent will make and deliver a new Warrant Certificate or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant Certificate or stock certificate.


 


ARTICLE VII


 CONCERNING
THE WARRANT AGENT AND OTHER MATTERS


 


Section 7.1         Resignation, Removal, Consolidation
or Merger of Warrant Agent.


 


(a)         Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the
office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing
a successor Warrant Agent (which successor Warrant Agent may not be the Company or an Affiliate of the Company and must be reasonably
acceptable to the Majority Holders) in place of the Warrant Agent. If the Company shall fail to make such appointment within a
period of sixty (60) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the
Holder of a Warrant, then the Holder of any Warrant may apply to the Supreme Court of the State of New York for the County of
New York for the appointment of a successor Warrant Agent at the Company’s cost. The Company may, at any time and for any
reason, at no cost to the Holders, remove the Warrant Agent and appoint a successor Warrant Agent (which successor Warrant Agent
may not be the Company or an Affiliate of the Company and must be reasonably acceptable to the Majority Holders) by written instrument
signed by the Company and specifying such removal and the date when it is intended to become effective, one copy of which shall
be delivered to the Warrant Agent being removed and one copy to the successor Warrant Agent. Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be a Person organized and existing under the laws of the United States of America,
or any state thereunder, in good standing. After appointment, any successor Warrant Agent shall be vested with all the authority,
powers, rights, immunities, duties and obligations of its predecessor Warrant Agent with like effect as if originally named as
Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor
Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent
all the authority, powers, rights, immunities, duties and obligations of such predecessor Warrant Agent hereunder; and upon request
of any successor Warrant Agent, the Company shall make, execute, acknowledge and deliver any and all instruments in writing for
more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities,
duties and obligations.






 




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(b)         Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall (i)
give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date
of any such appointment, and (ii) cause written or email notice thereof to be delivered to each Holder at such Holder’s address
or email address, as applicable, appearing on the Warrant Register.


 


(c)         Merger or Consolidation of Warrant Agent. Any Person into which the Warrant Agent may be merged or with which it
may be consolidated or any entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall
be the successor Warrant Agent under this Agreement without any further act.


 


Section
7.2         Renumeration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant
Agent hereunder in accordance with a separate fee schedule to be mutually agreed upon by the Company and the Warrant Agent and
shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder.


 


Section
7.3         Further Assurances. The Company agrees to perform, execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing of the provisions of this Agreement.


 


Section 7.4         Liability
of Warrant Agent.


 


(a)         Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent
shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed
to be conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, President,
Executive Vice President, Vice President, Secretary or Chairman of the Board and delivered to the Warrant Agent. The Warrant Agent
may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.


 


(b)         Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad
faith. The Company agrees to indemnify the Warrant Agent and hold it harmless against any and all liabilities, including judgments,
costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except
as a result of the Warrant Agent’s gross negligence, willful misconduct or bad faith.


 


(c)         Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with
respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible
for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall
not be responsible to make any adjustments required under the provisions of Article V hereof or responsible for the manner,
method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment;
nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any
shares of Common Stock shall, when issued, be valid and fully paid and non-assessable.


 




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(d)         Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform
the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect
to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase
of shares of Common Stock through the exercise of the Warrants.


 


ARTICLE VIII 

MISCELLANEOUS


 


Section
8.1         Binding Effects; Benefits. This Agreement shall inure to the benefit of and shall be binding upon the Company and
the Warrant Agent and their respective heirs, legal representatives, successors and assigns. Nothing in this Agreement, expressed
or implied, is intended to or shall confer on any person other than the Company, the Warrant Agent and the Holders, or their respective
heirs, legal representatives, successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this
Agreement.


 


Section
8.2         Notices. All notices, requests, consents, claims, demands,
waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by
hand; (b) when received by the addressee if
sent by a nationally recognized overnight courier; (c) on the date and time sent by email of a PDF document, with receipt
acknowledged, if sent during normal business hours of the recipient, and on the next Business Day if sent after normal
business hours of the recipient; or (d) on the third (3rd) day after the date mailed, by certified or registered mail, return
receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated
below (or at such other address for a party as shall be specified in a notice given in accordance with this Section
8.2).


 


(a)         If to the Warrant Agent, to: Continental Stock Transfer & Trust Company, 1 State Street, 30th Floor, New York, New York
10004, Attention: Compliance Department, Email: compliance@continentalstock.com.


 


(b)         If to the Company, to: Vertex Energy, Inc., 1331 Gemini St., Suite 250, Houston, Texas 77058, Attention: Chief Financial
Officer, Email: chrisc@vertexenergy.com.


 


(c)         If to the Holder of any Warrant, to the address or email address of such Holder as shown on the Warrant Register. Any notice
required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company.


 


Section
8.3         Counterparts. This Agreement may be executed in any number of original or electronic PDF counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one
and the same instrument.


 


Section
8.4         Construction. This Agreement shall be deemed to be jointly drafted by the Company and the Warrant Agent and shall
not be construed against any Person as the drafter hereof. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, Agreement.


 


Section
8.5         Amendments and Waivers. Any provision of this Agreement may be
amended or waived, but only pursuant to a written agreement signed by the Warrant Agent and the Company and consented to in writing
by the Super-Majority Holders, provided that no such amendment or waiver shall, without the written consent of each Holder, (i)
increase the Exercise Price or decrease the number of Warrant Shares receivable upon exercise of the Warrants held by such Holder,
(ii) shorten the Exercise Period of any Warrants held by such Holder, (iii) modify any provision of Article V in a manner
adverse to such Holder, (iv) change any of the provisions of this Section 8.5 or the definitions of “Majority Holders”
or “Super-Majority Holders” or any other provision hereof specifying the number or percentage of Holders required
to amend or waive any rights hereunder or make any determination or grant any consent hereunder or otherwise act with respect
to this Agreement or any Warrants or (v) increase the obligations of such Holder or otherwise materially and adversely affect
the rights and benefits of such Holder under this Agreement. No course of dealing between any Holder or the Company and any other
party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement
shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights
or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies
hereunder by such party.






 




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Section
8.6        No Inconsistent Agreements; No Impairment. The Company shall not, on or after the date hereof, enter into any agreement
with respect to its securities which conflicts with the rights granted to the Holders in this Agreement. The Company represents
and warrants to the Holders that the rights granted hereunder do not in any way conflict with the rights granted to holders of
the Company’s securities under any other agreements. The Company shall not, by amendment of its certificate of incorporation
or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder
by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Agreement and in the
taking of all such action as may be necessary in order to preserve the exercise rights of the Holders against impairment.


 


Section
8.7        Governing Law. This Agreement and each Warrant issued hereunder shall be governed by and construed under the laws
of the State of New York in all respects as such laws are applied to agreements among New York residents entered into and to be
performed entirely within New York, without reference to conflicts of laws or principles thereof. The parties hereto agree that
any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce
any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the exclusive jurisdiction
and venue of, any state or federal court located in the City of New York, borough of Manhattan, 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. Each party hereto hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for notices to it contemplated
by this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives any right it may have to, and agrees not to request, a trial by jury for the adjudication of any action
brought by either party under or in relation to this Agreement.


 


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


 


Section
8.9        Severability. In the event that any one or more of the provisions contained in this Agreement, or the application
thereof in any circumstances, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such
provisions in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.


 


Section
8.10       Binding Effect on Holders. By acceptance of any Warrant, each Holder acknowledges the terms of this Agreement and agrees
to be bound hereby.


 


[Signature Page Follows]


 




    22 


     


    

 


IN WITNESS
WHEREOF, this Agreement has been duly executed by the undersigned parties hereto as of the date first above written.


 


	 

VERTEX ENERGY INC	VERTEX ENERGY INC.
	 	 
	 	By:	/s/ Benjamin P. Cowart	 
	 	Name: 	Benjamin
    P. Cowart
	 	Title:	President and Chief Executive
Officer



 


[Signature
Page to Warrant Agreement]




     


     


    

 





	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as
	 	Warrant Agent
	 	 
	 	By:	/s/ Henry Ferrell	 
	 	Name: 	Henry Ferrell
	 	Title:	Vice President



 


 [Signature
Page to Warrant Agreement]


 




     


     


    

 


EXHIBIT A


 


[Form of Warrant]


 


NEITHER THIS SECURITY NOR
THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER SECTION 4(A)(2) OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND RULE 506 OF REGULATION D THEREUNDER, AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE
ARE SUBJECT TO ADDITIONAL AGREEMENTS SET FORTH IN THE WARRANT AGREEMENT REFERRED TO BELOW. SHARES OF COMMON STOCK OF THE COMPANY
ISSUED OR ISSUABLE UPON EXERCISE OF THE SECURITIES EVIDENCED HEREBY SHALL BE ENTITLED TO CERTAIN REGISTRATION RIGHTS UNDER AN AMENDED
AND RESTATED REGISTRATION RIGHTS AGREEMENT EXECUTED BY THE COMPANY.


 


VERTEX ENERGY INC.


 Common
Stock Purchase Warrant


 


This certifies that,
_______________________ and its registered assigns, is the registered holder of _______________________ warrants evidenced hereby (the “Warrants”)
to purchase shares of common stock, $0.001 par value per share (“Common Stock”), of Vertex Energy Inc., a Nevada
corporation (the “Company”). Each whole Warrant entitles the holder, upon exercise during the period set forth
in that certain Warrant Agreement, dated as of May 26, 2022, by and between the Company and Continental Stock Transfer & Trust
Company, as warrant agent (as amended from time to time in accordance with the terms thereof, the “Warrant Agreement”),
to receive from the Company that number of fully paid and non-assessable shares of Common Stock as set forth below, at the exercise
price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through
“cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon payment of the Exercise
Price, if applicable, to the Warrant Agent on behalf of the Company, subject to the conditions set forth herein and in the Warrant
Agreement. Defined terms used in this Warrant but not defined herein shall have the meanings given to them in the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for
a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company
and the Holders. A copy of the Warrant Agreement may be obtained by the Holder hereof upon written request to the Company.


 


Each Warrant is initially
exercisable for one (1) fully paid and non-assessable share of Common Stock. The initial Exercise Price per share of Common Stock
for any Warrant is equal to $9.25 per share. The Exercise Price and the number of shares of Common Stock issuable upon exercise
of the Warrants are subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement. Subject to
the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent
not exercised by the end of such Exercise Period, the Warrants shall become void.


 


A Warrant Certificate
shall not be valid unless countersigned by the Warrant Agent. This Warrant shall be governed by and construed in accordance with
the internal laws of the State of New York, without regard to conflicts of laws principles thereof.


 


[Signature Page Follows]


 




     


     


    

 


IN WITNESS WHEREOF, this Warrant has been duly executed
by the Company.


 


	 	VERTEX ENERGY INC.
	 	 
	 	By:	 	 
	 	Name: 	 
	 	Title:	 






  





	Countersigned:	 
	 	 
	CONTINENTAL STOCK TRANSFER &	 
	TRUST COMPANY, as Warrant Agent	 
	 	 
	By: _________________________________	 
	Authorized Signatory	 







 

        Dated:__________________,
        _______

[Signature Page to Warrant
Certificate]


 




     


     


    

 


EXHIBIT B


 


NOTICE OF EXERCISE


 


The undersigned holder hereby
exercises the right to purchase _____________ of the shares of Common Stock (“Warrant Shares”) of Vertex Energy
Inc., a Nevada corporation (the “Company”), which it is entitled to purchase under the Warrant Agreement and
the Warrants issued to the undersigned thereunder (the “Warrants”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant Agreement (the “Warrant Agreement”), dated
as of May 26, 2022, by and between the Company and Continental Stock Transfer & Trust Company, a New York corporation, as warrant
agent (the “Warrant Agent”).


 


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


 


[ ] a “cash
exercise” with respect to _____________ Warrants; and/or 


[ ] a “cashless exercise” with respect
to _____________ Warrants.


 


2.          Payment
of Exercise Price. In the event that the Holder has elected a cash exercise with respect to the exercise of some or all
of the Warrants as set forth herein, the Holder shall pay the Aggregate Exercise Price in the sum of $_____________ with
respect to such Warrants to the Company or the Warrant Agent in accordance with the terms of the Warrant Agreement.


 


3.          Surrender of Warrant Certificates. If the Warrants being exercised hereby are evidenced by a Warrant Certificate,
the exercising Holder has caused the original Warrant Certificate to be surrendered for cancellation.


 


4.          Delivery of Warrant Shares. The Holder requests that a certificate for such shares of Common Stock be registered
in the name of _________________, whose address is _____________________ and that such shares of Common Stock be delivered to ____________________ whose
address (or DWAC account number) is _________________.


 


.


 


	Name of Holder:	 	 
	Signature of Authorized Signatory of Investing Entity:	 	 
	Name of Authorized Signatory:	 	 
	Title of Authorized Signatory:	 	 
	   Date: 
	 	 

                                                                                 





     


     


    

 


EXHIBIT C


 


FORM OF ASSIGNMENT


 


(To assign the foregoing
Warrants, execute this form and supply required information. Do not use this form to purchase shares.)


 


FOR VALUE RECEIVED, the undersigned assigns and
transfers   of the Warrants [represented by this Warrant Certificate] to:


 


		Assignee Name:	 	 
		Assignee Address:	 	 
	 	 	 


 


and irrevocably appoints the following____________________as
its agent to transfer such Warrants on the books of the Warrant Agent.


 





		Assignor Name:	 	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	Date:	 	 


  



     


     


    

 


EXHIBIT D


 


FORM OF INITIAL HOLDER REPRESENTATION LETTER


 


May 26, 2022


 


Vertex Energy, Inc.,





1331 Gemini St., Suite 250





Houston, Texas 77058


 


Ladies and Gentlemen:


 


Reference is hereby made
to (a) that certain Amendment Number One to Loan and Security Agreement, dated as of May 26, 2022 (the “Loan Amendment”),
by and among Vertex Refining Alabama LLC, as Borrower thereunder, Vertex Energy, Inc. (the “Company”), as Parent
and Guarantor thereunder, certain direct and indirect subsidiaries of the Company, as Guarantors thereunder, the Lenders from time
to time party thereto and Cantor Fitzgerald Securities as Agent thereunder and (b) that certain Warrant Agreement, dated as of
May 26, 2022 (the “Warrant Agreement”), by and between the Company and Continental Stock Transfer & Trust
Company, as Warrant Agent thereunder. Capitalized terms used but not otherwise defined herein have the meanings ascribed to such
terms in the Warrant Agreement.


 


In connection with the consummation
of the transactions contemplated by the Loan Amendment, the Company has agreed to issue (the “Issuance”) to
the undersigned (“Recipient”) the number of Warrants set forth opposite the name of the Recipient on Schedule
A of the Warrant Agreement. Each such Warrant shall entitle Recipient to purchase one share of the Company’s common stock
at the exercise price set forth in the Warrant Agreement.


 


Recipient acknowledges
and agrees that the Warrants issued pursuant to the Loan Amendment are subject to, and entitled to the benefit of, the terms, provisions
and conditions set forth in the Warrant Agreement.


 


In connection with, and
as a condition to, the Issuance, Recipient hereby represents and warrants to the Company as follows:


 


		1.	It is an “Accredited Investor,” as that term
is defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”).



 


		2.	It has such knowledge, skill and experience in securities,
business and financial matters and investments generally, based on actual participation, that it is capable of evaluating the
merits and risks of an investment in the Company and the Warrants and the suitability thereof as an investment for it.



 


		3.	It is capable of bearing and managing the risk of its
investment in the Warrants.



 


		4.	It has reviewed such documents and information from the
Company that it has requested and has had adequate opportunity to ask questions of and receive answers from the Company’s
officers, directors and representatives concerning the terms and conditions of the Warrants, and the Company’s business,
financial condition, properties, operations and prospects, and, without limiting any of Recipient’s rights under the Loan
Agreement, Loan Amendment or Warrant Agreement, all such questions, if any, have been answered to its satisfaction. The Recipient
is relying on the representations and warranties contained in the Loan Agreement and Loan Amendment and its own investigation
and evaluation of the Company and the Warrants and not on any other information.



 


		5.	It is acquiring the Warrants, and any common stock issuable
upon exercise thereof, for investment for its own account and not with a view to, or for sale or resale in connection with, any
distribution thereof which would require registration under the Securities Act or any state securities laws.



 


		6.	It understands that the Warrants and any common stock
issuable upon exercise thereof have not been registered under applicable state or federal securities laws by reason of certain
exemptions from the registration provisions thereof which depend upon, among other things, the bona fide nature of its
representations and investment intent as expressed herein. The Company has not agreed to register the Warrants or, except as provided
in the Registration Rights Agreement (as defined in the Warrant Agreement), any of the shares of common stock issuable upon the
exercise of the Warrants for distribution in accordance with the provisions of the Securities Act or applicable state securities
laws, or agreed to comply with any exemption from registration under the Securities Act or applicable state securities laws for
the resale of such shares. It understands that by virtue of the provisions of certain rules respecting “restricted securities”
promulgated by the Securities and Exchange Commission, the shares of common stock issuable upon the exercise of the Warrants shall
be required to be held indefinitely, unless and until registered under the Securities Act and applicable state securities laws,
or unless an exemption from the registration requirements of the Securities Act and applicable state securities laws is available,
in which case it may still be limited as to the number of such shares that may be sold. It agrees that the Warrants will not be
offered, sold or transferred except as permitted by the Warrant Agreement.









 




     


     


    

 


Unless sold pursuant
to a registration statement under the Securities Act, the certificates representing the Warrants will bear a conspicuous legend
in substantially the form set forth below:


 


NEITHER THIS SECURITY NOR
THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER SECTION 4(A)(2) OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND RULE 506 OF REGULATION D THEREUNDER, AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE
ARE SUBJECT TO ADDITIONAL AGREEMENTS SET FORTH IN THE WARRANT AGREEMENT DATED AS OF MAY 26, 2022, BY AND BETWEEN THE COMPANY AND
THE WARRANT AGENT (AS DEFINED THEREIN). SHARES OF COMMON STOCK OF THE COMPANY ISSUED OR ISSUABLE UPON EXERCISE OF THE SECURITIES
EVIDENCED HEREBY SHALL BE ENTITLED TO CERTAIN REGISTRATION RIGHTS UNDER AN AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT EXECUTED
BY THE COMPANY.


 


Unless the Warrants or the
common stock issuable upon exercise of the Warrants are sold pursuant to a registration statement under the Securities Act, the
certificates representing or statements evidencing the common stock issuable upon exercise of the Warrants will bear a conspicuous
legend in substantially the form set forth below:


 


THIS SECURITY HAS NOT BEEN
REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 




     


     


    

7.                   






		7.	It has not been offered the Warrants by any form of general
solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published
in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to its knowledge,
those individuals that have attended have been invited by any such or similar means of general solicitation or advertising.



 


	8.	To the extent that the Recipient is not one of the Initial Lenders, the
Recipient represents that it is an affiliate of an Initial Lender, as such term is defined in Rule 405 of the Securities Act, and
that such applicable Initial Lender has requested that the Company issue the Warrants in the name of such affiliated Recipient.



 


	9.	Its principal place of business is as set forth on the signature page to
this letter under the heading “Principal Place of Business”.



 


	10.	Its EIN and its address and email address for notices under the Warrant Agreement that should be
included in the Warrant Register as its record address, are as set forth on the signature page to this letter under the heading
“Notice Information”.



 


	11.	The Warrants will be governed by the Warrant Agreement, a copy of which has been provided to the
Recipient, and, at the written request of the holder, may be evidenced by Warrant Certificates in the form attached to the Warrant
Agreement as Exhibit A thereto.



 


The undersigned Recipient acknowledges
that the Company and its representatives (including its attorneys) will be relying (and authorizes the Company and its representatives
(including its attorneys) to rely) upon the representations set forth above for all purposes, including for the purposes of counsel
to the Company’s legal opinion to the Warrant Agent with respect to the Issuance of the Warrants.


 


[The Remainder
of this Page Left Blank]


 




    


     


    

 





 


	 	Very truly yours,
	 	 
	 	[RECIPIENT]
	 	 	
        

         

	 	By:	
                

        

	 	 	Name:
	 	 	Title:


Principal Place of Business:


 


	[ADDRESS]
	[ADDRESS]
	[ADDRESS]


 


Address, contact and phone number, for delivery of
Warrant Certificate, if any:


 




	[ATTN]
	[ADDRESS]
	[ADDRESS]
	[ADDRESS]
	[PHONE NUMBER]


 


Notice Information:


 


	[ADDRESS]
	[ADDRESS]
	[ADDRESS]
	Attn:
	Email:
	EIN:


 


[Signature Page to Representations Letter]


 




    


     


    

 


EXHIBIT C


 


FORM OF TRANSFEREE REPRESENTATION LETTER


 


[●], 202[●]


 


Vertex Energy, Inc., 


1331 Gemini St., Suite 250 


Houston, Texas 77058


 


Ladies and Gentlemen:


 


Reference is hereby made
to that certain Warrant Agreement, dated as of May 26, 2022 (the “Warrant Agreement”), by and between Vertex
Energy, Inc. (the “Company”) and Continental Stock Transfer & Trust Company, as Warrant Agent thereunder,
pursuant to which the Company issued an aggregate of 250,000 warrants (the “Warrants”), with each Warrant entitling
the holder thereof to purchase one share of the Company’s common stock (subject to adjustment in accordance with the Warrant
Agreement), on the terms set forth in the Warrant Agreement. Capitalized terms used but not otherwise defined herein have the meanings
ascribed to such terms in the Warrant Agreement.


 


The entity set forth on
Schedule I attached hereto under the heading “Transferor” desires to transfer (the “Transfer”)
the number of Warrants set forth on Schedule I attached hereto under the heading “Transferred Warrants” (the
“Transferred Warrants”) to the undersigned (“Transferee”).


 


Transferee acknowledges and
agrees that, upon consummation of the Transfer, the Transferred Warrants shall be subject to, and entitled to the benefit of, the
terms, provisions and conditions set forth in the Warrant Agreement.


 


In connection with, and
as a condition to, the Transfer, Transferee hereby represents and warrants to the Company as follows:


 


	1.	It is an “Accredited Investor,” as that term is defined in Rule
501 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”).



 


	2.	It has such knowledge, skill and experience in securities, business and financial matters and investments
generally, based on actual participation, that it is capable of evaluating the merits and risks of an investment in the Company
and the Warrants and the suitability thereof as an investment for it.



 


	3.	It is capable of bearing and managing the risk of its investment in the Warrants.



 


	4.	It has reviewed such documents and information from the Company that it
has requested and has had adequate opportunity to ask questions of and receive answers from the Company’s officers, directors
and representatives concerning the terms and conditions of the Warrants, and the Company’s business, financial condition,
properties, operations and prospects, and, without limiting any of Transferee’s rights under the Warrant Agreement, all such
questions, if any, have been answered to its satisfaction. The Transferee is relying on its own investigation and evaluation of
the Company and the Warrants and not on any other information.



 


	5.	It is acquiring the Warrants, and any common stock issuable upon exercise
thereof, for investment for its own account and not with a view to, or for sale or resale in connection with, any distribution
thereof which would require registration under the Securities Act or any state securities laws.



 


	6.	It understands that the Warrants [and any common stock issuable upon
                                  exercise thereof]1 have not been registered under applicable state or federal securities laws by reason of certain
                                  exemptions from the registration provisions thereof which depend upon, among other things, the bona fide nature of its
                                  representations and investment intent as expressed herein. The Company has not agreed to register the Warrants [or, except as
                                  provided in the Registration Rights Agreement (as defined in the Warrant Agreement), any of the shares of common stock
                                  issuable upon the exercise of the Warrants]2 for distribution in accordance with the provisions of the Securities
                                  Act or applicable state securities laws, or agreed to comply with any exemption from registration under the Securities Act or
                                  applicable state securities laws for the resale of such shares. It understands
that by virtue of the provisions of certain rules respecting “restricted securities” promulgated by the Securities
and Exchange Commission, the shares of common stock issuable upon the exercise of the Warrants shall be required to be held indefinitely,
unless and until registered under the Securities Act and applicable state securities laws, or unless an exemption from the registration
requirements of the Securities Act and applicable state securities laws is available, in which case it may still be limited as
to the number of such shares that may be sold. It agrees that the Warrants will not be offered, sold or transferred except as permitted
by the Warrant Agreement.



 





 



1 To be omitted
to the extent the common stock issuable upon exercise of the Warrants no longer qualifies as a restricted security. 


2 To be omitted
to the extent the common stock issuable upon exercise of the Warrants no longer qualifies as a restricted security.


 




    


     


    




 


Unless sold pursuant
to a registration statement under the Securities Act, the certificates representing the Warrants will bear a conspicuous legend
in substantially the form set forth below:


 


NEITHER THIS SECURITY NOR
THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER SECTION 4(A)(2) OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND RULE 506 OF REGULATION D THEREUNDER, AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE
ARE SUBJECT TO ADDITIONAL AGREEMENTS SET FORTH IN THE WARRANT AGREEMENT DATED AS OF MAY 26, 2022, BY AND BETWEEN THE COMPANY AND
THE WARRANT AGENT (AS DEFINED THEREIN). SHARES OF COMMON STOCK OF THE COMPANY ISSUED OR ISSUABLE UPON EXERCISE OF THE SECURITIES
EVIDENCED HEREBY SHALL BE ENTITLED TO CERTAIN REGISTRATION RIGHTS UNDER AN AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT EXECUTED
BY THE COMPANY.


 


Unless the Warrants or the
common stock issuable upon exercise of the Warrants are sold pursuant to a registration statement under the Securities Act, the
certificates representing or statements evidencing the common stock issuable upon exercise of the Warrants will bear a conspicuous
legend in substantially the form set forth below:


 


THIS SECURITY HAS NOT BEEN
REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


	7.	It has not been offered the Warrants by any form of general solicitation
or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper,
magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to its knowledge, those individuals
that have attended have been invited by any such or similar means of general solicitation or advertising.



 


	8.	Its principal place of business is as set forth on the signature page to
this letter under the heading “Principal Place of Business”.



 




    


     


    

 


	9.	Its EIN and its address and email address for notices under the Warrant
Agreement that should be included in the Warrant Register as its record address, are as set forth on the signature page to this
letter under the heading “Notice Information”.



 


	10.	The Warrants will be governed by the Warrant Agreement, a copy of which
has been provided to the Transferee, and, at the written request of the holder, may be evidenced by Warrant Certificates in the
form attached to the Warrant Agreement as Exhibit A thereto.



 


	11.	To the extent the Warrants subject to the Transfer are not covered under
an effective registration statement under the Securities Act, the Transferee will provide, and will cause the Transferor to provide,
such information, confirmations and documentation, as may be reasonably requested by the Company and its legal counsel, in order
to confirm that an exemption from registration exists for the Transfer and in order to enable such parties to provide any required
legal opinions to the Warrant Agent in connection therewith.



 


The undersigned Transferee
acknowledges that the Company and its representatives (including its attorneys) will be relying (and authorizes the Company and
its representatives (including its attorneys) to rely) upon the representations set forth above for all purposes, including for
the purposes of counsel to the Company’s legal opinion to the Warrant Agent with respect to the Transfer.


 


[The Remainder of this Page
Left Blank]


 




    


     


    




 


	 	Very truly yours,
	 	 
	 	[TRANSFEREE]
	 	 	 
	 	By:	
        

        

	 	 	
        Name:

        

	 	 	Title:


Principal Place of Business:


 


	[ADDRESS]
	[ADDRESS]
	[ADDRESS]


 


Address, contact and phone number, for delivery of
Warrant Certificate, if any:


 


	[ATTN]
	[ADDRESS]
	[ADDRESS]
	[ADDRESS]
	[PHONE NUMBER]


 


Notice Information:


 


	[ADDRESS]
	[ADDRESS]
	[ADDRESS]
	Attn:
	Email:
	EIN:


 


[Signature Page to Transferee Representation
Letter]


 




    


     


    

 


EXHIBIT D


 


Schedule I


 


	Transferor	Transferee	Transferred Warrants
	 	 	 



 



    


     


    

 


SCHEDULE A


 


WARRANT ALLOCATIONS


 


	
        Initial Holder
	
        Warrant Shares
	Initial Beneficial Ownership 

Limitation
	Whitebox Multi-Strategy Partners, LP	21,875	9.99%
	Whitebox Relative Value Partners, LP	20,625	9.99%
	Whitebox GT Fund, LP	2,500	9.99%
	Highbridge Tactical Credit Master Fund, L.P.	45,000	9.99%
	Global Credit Opportunities II Fund A Master SCSp	56,942	9.99%
	GCO II Fund B (Investment 2), L.P.	35,945	9.99%
	BlackRock Diversified Private Debt Fund Master LP	37,113	9.99%
	Chambers Energy Capital IV, LP	15,000	9.99%
	CrowdOut Credit Opportunities Fund LLC	15,000	4.99%
	TOTAL	250,000	--