Exhibit
4.4


 


EXECUTION
COPY


 


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


 


TOUGHBUILT
INDUSTRIES, INC.


WARRANT TO PURCHASE COMMON STOCK


 


Warrant
No.: ____


Date
of Issuance: ________________ ___, 2016 (“Issuance Date”)


 


TOUGHBUILT
INDUSTRIES, INC., a Nevada corporation (the “Company”), hereby certifies that, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, _______, the registered holder hereof or its
permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the
Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the
“Warrant”), at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time,
on the Expiration Date (as defined below), __________(subject to adjustment as provided herein) fully paid and non-assessable
shares of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section 16. This Warrant is one of the Warrants to
Purchase Common Stock (the “Warrants”) issued pursuant to that certain Subscription Agreement, dated as
of_______ ___, 2016 (as may be amended from time to time, the “Subscription Agreement”) pursuant to which the
Company has offered and sold to the signatories thereto units (the “Units”) of the
Company’s securities consisting of Class B Convertible Preferred Stock, par value $0.0001 per share (the
“Class B Preferred Stock”), and Warrants.


 




    	 	 	 



    	 



    

 


1.
EXERCISE OF WARRANT.


 


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


 




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(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $6.00, subject to adjustment as
provided herein.




 


(c)
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue
to the Holder within three (3) Business Days after receipt of the applicable Exercise Notice, a certificate for the number of
shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register
or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise of this Warrant (as the case may be), then, in addition to all other remedies available to the
Holder, the Company shall pay in cash to the Holder on each day after such third (3rd) Business Day that the issuance
of such shares of Common Stock is not timely effected, (A) if the Common Stock is not then listed or quoted on an Eligible Market,
an amount equal to $10.00 per Business Day (increasing to $25.00 per Business Day on the third Business Day and increasing to
$50.00 per Business Day on the sixth Business Day after such damages begin to accrue) for each Business Day after the last possible
date on which the Company could have issued such shares of Common Stock to the Holder without violating Section 1(a) until such
shares of Common Stock are delivered or the Holder rescinds such exercise, and (B) if the Common Stock is then listed or quoted
on an Eligible Market, 2.0% of the product of (1) the aggregate number of shares of Common Stock not issued to the Holder on a
timely basis and to which the Holder is entitled and (2) the Closing Sale Price of the Common Stock on the Trading Day immediately
preceding the last possible date on which the Company could have issued such shares of Common Stock to the Holder without violating
Section 1(a). In addition to the foregoing, if within three (3) Business Days after the Company’s receipt of the applicable
Exercise Notice, the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock
on the Company’s share register or credit the Holder’s balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be), and if on or after such
third (3rd) Business Day the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any
portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of
the number of shares of Common Stock, issuable upon such exercise that the Holder so anticipated receiving from the Company, then,
in addition to all other remedies available to the Holder, the Company shall, within three (3) Business Days after the Holder’s
request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total
purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased
(including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as
the case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue
and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s
balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any
Business Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance
and payment under this clause (ii).


 




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(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the
time of exercise hereof a registration statement registering the resale by the Holder of all of the Warrant Shares under the Securities
Act of 1933, as amended (the “Securities Act”), is not effective (or the prospectus contained therein is not
available for use), then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the
following formula (a “Cashless Exercise”):


 


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


     B


 


For
purposes of the foregoing formula:


 


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


 


B=
the VWAP of the Common Stock (as reported by Bloomberg) on the date immediately preceding the date of the Notice of Exercise.


 


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


 


(e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number
of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.


 




    	 	4	 



    	 



    

 


(f)
Limitations on Exercises. Notwithstanding anything to the contrary contained in this Warrant, from and after such date
(the “Registration Date”) that shares of the Company’s Common Stock are registered under Section 12 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Warrant shall not be exercisable
by the Holder hereof to the extent (but only to the extent) that the Holder or any of its affiliates would beneficially own in
excess of 4.99% (the “Maximum Percentage”) of the Common Stock outstanding immediately after giving effect
to such issuance. To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis
other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities
shall be exercisable (as among all such securities owned by the Holder) shall, subject to such Maximum Percentage limitation,
be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No
prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions
of this paragraph with respect to any subsequent determination of exercisability. For the purposes of this paragraph, beneficial
ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership)
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage
beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect
to such Maximum Percentage limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.
The holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not amend or waive this paragraph
without the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request
of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities
into Common Stock, including, without limitation, pursuant to this Warrant or securities issued pursuant to the Subscription Agreement.
By written notice to the Company, at any time the Holder may increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the 61st day
after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder sending such
notice and not to any other holder of Warrants.


 


(g)
Insufficient Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of
shares of Common Stock equal to not less than 150% of the maximum number of shares of Common Stock issuable upon exercise of this
Warrant (without regard to any limitation otherwise contained herein with respect to the number of shares of Common Stock that
may be acquirable upon exercise of this Warrant) (the “Required Reserve Amount”). If, notwithstanding the foregoing,
and not in limitation thereof, at any time while any of the Warrants remain outstanding the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of
this Warrant at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the Warrants then outstanding. Without
limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share
Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold
a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal.


 




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


 


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


 


(b)
Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the date on which no shares of Class B
Preferred Stock shall remain outstanding, the Company issues or sells, or in accordance with this Section 2(b) is deemed to have
issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the
account of the Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration
per share (the “New Issuance Price”) less than a price equal to the Exercise Price in effect immediately prior
to such issue or sale or deemed issuance or sale (such Exercise Price then in effect is referred to as the “Applicable
Price”) (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the
Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing
(including, without limitation, determining the adjusted Exercise Price and consideration per share under this Section 2(b)),
the following shall be applicable:


 




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


 


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


 




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


 


(iv) Calculation
of Consideration Received. 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 value of such consideration, except
where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company
for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Business Days 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 value of such portion of the net assets and business of the non-surviving entity as is attributable
to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other
than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following
such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company.


 


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


 




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(c)
Adjustment of Exercise Price Upon Adjustment of Class B Preferred Stock. If and whenever on or after the date hereof and
so long as any shares of Class B Preferred Stock shall remain outstanding, the Company issues or sells, or is deemed to have issued
or sold, any shares of Common Stock, Options or Convertible Securities resulting in an adjustment in the Conversion Price (as
defined in the Class B Certificate of Designations) or Conversion Rate (as defined in the Class B Certificate of Designations)
for the Class B Preferred Stock pursuant to Section 6 of the Class B Certificate of Designations (each, a “Class B Preferred
Dilutive Event”), then, in each case, immediately after such Class B Preferred Dilutive Event and automatically, without
any further action by the Company or the Holder of this Warrant, the Exercise Price of this Warrant shall be reduced to a price
per share that shall be equal to the product of (I) the Conversion Price of the Class B Preferred Shares, as so adjusted, multiplied
by (II) 1.20. For the purposes of clarity, the provisions of this Section 2(c) shall apply in lieu of Section 2(b) for so long
as any shares of Class B Preferred Stock shall remain outstanding, and the provisions of Section 2(b) shall apply in lieu of this
Section 2(c) from and after the date on which no shares of Class B Preferred Stock shall remain outstanding.


 


(d)
Other Events. In the event that the Company or any Subsidiary shall take any action to which the provisions hereof are
not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the
type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without limitation,
the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number
of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this
Section 2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this
Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder
against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent
investment bank to make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses
shall be borne fifty percent (50%) by the Holder and fifty percent (50%) by the Company.


 


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


 




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


 


4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.


 


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


 




    	 	10	 



    	 



    

 


(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor
Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined
in the Subscription Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and
substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to
deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number
of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which
applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares
of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the
number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction) and (ii) the Successor Entity (including its Parent Entity)
is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation
of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date
of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor
Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the
consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter))
issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common
stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the
provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of
each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets
with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate
provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after
the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common
Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above,
which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction,
such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had
this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on
the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in form and substance reasonably satisfactory
to the Holder.


 


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


 


 




    	 	11	 



    	 



    

 


5.
 NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its articles
of incorporation or bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as
may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not
increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then
in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally
issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any
of the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares
of Common Stock, solely for the purpose of effecting the exercise of the Warrants, 150% of the maximum number of shares of Common
Stock as shall from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations
on exercise).


 


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


 


7.
REISSUANCE OF WARRANTS.


 


(a)
Transfer of Warrant. Subject to Section 15, if this Warrant is to be transferred, the Holder shall surrender this Warrant
to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance
with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred,
a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares
not being transferred.


 




    	 	12	 



    	 



    

 


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


 


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


 


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


 


8.
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall
be given in the manner and to the addresses set forth in the Subscription Agreement. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder
(i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail,
and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with
respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to all or substantially all of the holders of shares of Common Stock or (C) for determining rights to vote with
respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made
known to the public prior to or in conjunction with such notice being provided to the Holder and (iii) at least ten (10) Business
Days prior to the consummation of any Fundamental Transaction. From and after the Registration Date, to the extent that any notice
provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries,
the Company shall simultaneously file such notice with the Commission (as defined in the Subscription Agreement) pursuant to a
Current Report on Form 8-K.


 




    	 	13	 



    	 



    

 


9.
AMENDMENT AND WAIVER. Except as otherwise expressly set forth herein, the provisions of this Warrant (other than Section
1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Holder. The Holder shall be entitled, at its option, to the
benefit of any amendment of (i) any other similar warrant issued under the Subscription Agreement or (ii) any other similar warrant.
Except as otherwise expressly set forth herein, no waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.


 


10.
SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).


 


11.
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.
The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New
York, County of New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall (i) be deemed or
operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to
collect on the Company’s obligations to the Holder or to enforce a judgment or other court ruling in favor of the Holder
or (ii) limit, or be deemed to limit, any provision of Section 13. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT
OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 




    	 	14	 



    	 



    

 


12.
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not
be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall
not form part of, or affect the interpretation of, this Warrant.


 


13.
DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation
of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via email or facsimile
within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder.
If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant
Shares within five (5) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then
the Company shall, within two (2) Business Days submit via email or facsimile (a) the disputed determination of the Exercise Price
to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause the investment
bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder
of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties
absent demonstrable error. The expenses of the investment bank and accountant will be borne by the Company unless the investment
bank or accountant determines that the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares
by the Holder was incorrect, in which case the expenses of the investment bank and accountant will be borne by the Holder.




 


14.
REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall
be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or
in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right
of the Holder to pursue damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants
to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder
to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without
limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon
the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in
respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.


 




    	 	15	 



    	 



    

 


15.
RESTRICTIONS ON TRANSFER; LEGENDS.




 


(a)
Registration or Exemption Required. Assuming the accuracy of the representations and warranties of the Holder contained
in the Subscription Agreement, this Warrant has been issued in a transaction exempt from the registration requirements of the
Securities Act by virtue of Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and exempt from state
registration or qualification under applicable state laws. The Holder acknowledges that the Holder has been advised by the Company
that this Warrant and the Warrant Shares issuable upon exercise thereof have not been registered under the Securities Act. Neither
this Warrant nor the Warrant Shares may be pledged, transferred, sold or assigned except pursuant to an effective registration
statement or an exemption to the registration requirements of the Securities Act and applicable state laws. If, at the time of
the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws,
the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case
may be, will furnish to the Company such documentation as reasonably requested to enable the Company to obtain an opinion of counsel
(at the Company’s expense) to the effect that such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment
letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as
defined in Rule 501(a) promulgated under the Securities Act or a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.


 


(b)
Representation of Holder. The Holder represents and warrants that the Holder has acquired this Warrant and will acquire
the Warrant Shares for the Holder’s own account for investment and not with a view to the sale or distribution thereof or
the granting of any participation therein, and that the holder has no present intention of distributing or selling to others any
of such interest or granting any participation therein. The Holder acknowledges that the Warrant and Warrant Shares must be held
indefinitely unless a subsequent disposition thereof is registered under the Securities Act or registered or qualified under any
applicable state securities or “blue-sky” laws or is exempt from registration or qualification. The Holder has no
need for liquidity in its investment in the Company, and is able to bear the economic risk of such investment for an indefinite
period and to afford a complete loss thereof. The Holder is an “accredited investor” as such term is defined in Rule
501 (the provisions of which are known to the Holder) promulgated under the Securities Act.


 


(c)
Restrictive Legend. The Holder understands that until such time as the Warrant Shares have been registered under the Securities
Act, or otherwise may be sold pursuant to Rule 144 under the Securities Act or an exemption from registration under the Securities
Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, this Warrant
and the Warrant Shares, as applicable, shall bear a restrictive legend in substantially the form set forth on the cover page of
this Warrant (and a stop-transfer order may be placed against transfer of the certificates for such securities).


 




    	 	16	 



    	 



    

 


(d)
Disposition of Warrant or Warrant Shares. With respect to any offer, sale or other disposition of this Warrant or any Warrant
Shares prior to registration of such Warrant Shares, the Holder agrees to give written notice to the Company prior thereto, describing
briefly the manner thereof, together with evidence, reasonably satisfactory to the Company (which shall include such representation
of the transferee regarding investment intent as the Company may request), to the effect that such offer, sale or other disposition
may be effected without registration or qualification (under the Securities Act as then in effect or any federal or state securities
law then in effect) of this Warrant or such Warrant Shares and indicating whether or not under the Securities Act certificates
for this Warrant or Warrant Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions
on transferability in order to ensure compliance with such law. Upon receiving such written notice and reasonably satisfactory
evidence, the Company, as promptly as practicable but no later than seven (7) days after receipt of the written notice, shall
notify the Holder that the Holder may sell or otherwise dispose of this Warrant or Warrant Shares, all in accordance with the
terms of the notice delivered to the Company. If the Company determines that the evidence is not reasonably satisfactory to the
Company, the Company shall so notify the Holder promptly with details thereof after such determination has been made. Notwithstanding
the foregoing, any Warrant Shares may be offered, sold or otherwise disposed of in accordance with Rule 144 under the Securities
Act and in compliance with the applicable statutory resale restrictions imposed by state securities laws, provided that the Company
shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the
provisions of Rule 144 and the applicable resale restrictions imposed by state securities laws have been satisfied. Each certificate
representing this Warrant or the Warrant Shares thus transferred shall bear a legend as to the applicable restrictions on transferability
in order to ensure compliance with such laws, unless pursuant to an opinion of counsel for the Holder, such legend is not required
in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in connection
with such restrictions.


 


(e)
Removal of Restrictive Legends. The certificates evidencing the Warrant Shares shall not contain any legend restricting
the transfer thereof: (A) while a registration statement covering the sale or resale of the Warrant Shares is effective under
the Securities Act and such legend removal is permitted under applicable securities laws (including compliance with the prospectus
delivery requirements of the Securities Act), or (B) following any sale of such Warrant Shares pursuant to Rule 144, or (C) if
such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission) and the Company shall have received an opinion of counsel to the Holder in form reasonably
acceptable to the Company to such effect (collectively, the “Unrestricted Conditions”); provided that the Company
shall bear the reasonable expense of any legal opinions relating to (I) sales of Warrants or Warrant Shares made in reliance on
Rule 144 by any Purchaser that is not an “affiliate” as defined in Rule 144 made after the first anniversary of the
Closing Date or (II) any private sale or other transfer of this Warrant or the Warrant Shares. The Company shall cause its counsel
to issue a legal opinion to its transfer agent if required by the transfer agent to effect the issuance of the Warrant Shares,
as applicable, without a restrictive legend or removal of the legend hereunder. The Company agrees that at such time as the Unrestricted
Conditions are met, it will, no later than three (3) Business Days following the delivery by the Holder to the Company or the
transfer agent of a certificate representing Warrant Shares, issued with a restrictive legend, deliver or cause to be delivered
to such Holder a certificate (or electronic transfer) representing such Warrant Shares that is free from all restrictive and other
legends.


 




    	 	17	 



    	 



    

 


16.
REGISTRATION RIGHTS. This Warrant shall be subject to the registration rights set forth in the Subscription Agreement.




 


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




 


(a)
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of
the Company and existing prior to the date hereof and disclosed in the Memorandum, pursuant to which shares of Common Stock and
standard options to purchase Common Stock may be issued to any employee, officer, consultant or director for services provided
to the Company in their capacity as such.


 


(b)
“Bid Price” means, for any security as of the particular time of determination, the bid price for such security
on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing
does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of
such time of determination, the average of the bid prices of any market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. as of such time of determination. If the Bid Price cannot be calculated for a security
as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in
Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.


 


(c)
“Bloomberg” means Bloomberg, L.P.




 


(d)
“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.


 


(e)
“Class B Certificate of Designations” means that certain Certificate of Designations of Preferences,
Rights and Limitations of Class B Convertible Preferred Stock, dated July ____, 2016, a form of which is included as Exhibit D to
the Memorandum.


 




    	 	18	 



    	 



    

 


(f)
“Closing Sale Price” means, for any security as of any date, the last trade price for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does
not designate the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last
trade price of such security on the principal securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security
by Bloomberg, the average of the ask prices of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction during such period.


 


(g)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 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.


 


(h)
“Convertible Securities” means any stock, note, debenture or other security (other than Options) that is,
or may become, 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.


 


(i)
“Eligible Market” means The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market,
the New York Stock Exchange, the NYSE MKT, the NYSE Arca, or the OTCQB or OTCQX operated by the OTC Markets Group, Inc. (or any
nationally recognized successor to any of the foregoing).


 


(j)
“Excluded Securities” shall have the meaning ascribed thereto in the Class B Certificate of Designations.




 


(k)
“Expiration Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if
such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.


 




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


 


(m)
“Memorandum” means the Company’s Confidential Private Placement Memorandum, dated July 11, 2016, as may
be amended and/or supplemented, from time to time, setting forth the terms of the sale of the units under the Subscription Agreement.


 


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


 


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


 


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


 


(q)
“Principal Market” means The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market,
the New York Stock Exchange, the NYSE MKT, the NYSE Arca, or the OTCQB or OTCQX operated by the OTC Markets Group, Inc. (or any
nationally recognized successor to any of the foregoing), whichever is at the time the principal trading exchange or market for
the Common Stock.


 


(r)
“Subsidiary” or
“Subsidiaries” of any Person means (i) any corporation with respect to which more than 50% of the issued and outstanding
voting equity interests of such corporation is at the time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries, or (ii) any partnership
or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether
in the form of voting or participation in profits or capital contribution) of more than 50% or of which any such Person is a general
partner or may exercise the powers of a general partner.


 




    	 	20	 



    	 



    

 


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


 


(t)
“Trading Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock,
any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then
traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such
exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of
trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on
such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as
a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the
Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.


 


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


 


(v)
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Common Stock is then listed or quoted on an Eligible Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Eligible Market on which the Common Stock is then listed or quoted as reported
by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common
Stock is not then listed or quoted for trading on an Eligible Market and if prices for the Common Stock are then reported in the
“Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section
13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.


 


[signature
page follows]


 




    	 	21	 



    	 



    

 


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


 


	 	TOUGHBUILT
    INDUSTRIES, INC.
	 	 	 
	 	By:	                      
	 	Name:	 
	 	Title:	 


 




    	 	 	 



    	 



    

 


EXHIBIT
A


 


EXERCISE
NOTICE


 


TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS


WARRANT
TO PURCHASE COMMON STOCK


 


TOUGHBUILT
INDUSTRIES, INC.


 


The
undersigned holder hereby exercises the right to purchase _______________of the shares of Common Stock (“Warrant
Shares”) of TOUGHBUILT INDUSTRIES, INC., a Nevada corporation (the “Company”), evidenced by Warrant
to Purchase Common Stock No. _____ (the “Warrant”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.


 


	 	1.	Form
                                         of Exercise Price. The Holder intends that payment of the Exercise Price shall be
                                         made as:
	 	 	 
	 	 	__________
                                                            
                                         a “Cash Exercise” with respect to ______________Warrant Shares;
                                         and/or
	 	 	 
	 	 	__________
                                                             a
                                         “Cashless Exercise” with respect to ___________Warrant Shares.



 


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


 


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


     


 
3. Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee
or agent as specified below, _____Warrant Shares in accordance with the terms of the Warrant. Delivery shall be made to
Holder, or for its benefit, to the following address:




 


	 	_______________________	 
	 	_______________________	 
	 	_______________________	 
	 	_______________________	 



 


Date:
____________ __________, _______


 


___________________________________


Name
of Registered Holder


 


	By:	 	 
	Name:	 	 
	Title:	 	 


 




    	 	 	 



    	 



    

 


EXHIBIT
B


 


ACKNOWLEDGMENT


 


The
Company hereby acknowledges this Exercise Notice and hereby directs _________________ to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated _______, 20 ___, from the Company and acknowledged
and agreed to by_______________.


 


	 	TOUGHBUILT
    INDUSTRIES, INC.
	 	 	 
	 	By:	                        
	 	Name:	 
	 	Title: