Exhibit 10.3


 





[FORM OF WARRANT]


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


The
wet seal, INC.


Warrant
To Purchase Common Stock


Warrant No.: 


Number of Shares of Common Stock: _____________


Date of Issuance: March [___], 2014 (“Issuance Date”)


The Wet Seal, Inc.,
a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, HUDSON BAY MASTER FUND LTD.,
the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set
forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or
after [_______]1 (the “Initial Exercisability
Date”), but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), ______________ (_____________)2
fully paid nonassessable shares of Common Stock, subject to adjustment as provided herein (the “Warrant
Shares”). Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including
any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”),
shall have the meanings set forth in Section 16. This Warrant is one of the Warrants to purchase Common Stock (the “SPA
Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of March 20, 2014 (the
“Subscription Date”), by and among the Company and the investors (the “Buyers”) referred
to therein (the “Securities Purchase Agreement”). Capitalized terms used herein and not otherwise defined shall
have the definitions ascribed to such terms in the Securities Purchase Agreement.  


 








1
Insert the date six months and one day after the Issuance Date.


2
Insert 60% of the number of shares of Common Stock issuable upon conversion of the SPA Securities purchased by the
Holder pursuant to the Securities Purchase Agreement.








    	  



    	 



    



1.             EXERCISE OF WARRANT.


(a)   
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations
set forth in Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability
Date, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder's election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal
to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by wire transfer of immediately available funds or (B) if the provisions of Section 1(d) are
applicable, by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section
1(d)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and
delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation
of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares.
On or before the first (1st) Trading Day following the date on which the Company has received the Exercise Notice, the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's
transfer agent (the “Transfer Agent”). On or before the third (3rd) Trading Day following the date on which
the Company has received the Exercise Notice, so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless
Exercise) on or prior to the second (2nd) Trading Day following the date on which the Company has received the Exercise Notice
(the “Share Delivery Date”) (provided that if the Aggregate Exercise Price has not been delivered by such date,
the Share Delivery Date shall be one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered),
the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the Holder's or its designee's balance account with 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 dispatch by
overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company's share register
in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise.
The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the
issuance of Warrant Shares via DTC, if any. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective
of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as 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 the Company shall as soon as practicable and in no event later than three (3) Trading
Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to
purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant
Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this
Warrant, but rather the




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number of Warrant Shares to be issued
shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company's obligations to issue and deliver Warrant Shares
in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination. 
Notwithstanding anything to the contrary contained in this Warrant or the Registration Rights Agreement, the Company shall
cause the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) for delivery via DTC to the
transferee in connection with any sale of Registrable Securities (as defined in the Registration Rights Agreement) with respect
to which the Holder has entered into a contract for sale, and delivered a copy of the prospectus included as part of the particular
Registration Statement (as defined in the Registration Rights Agreement) to the extent applicable, after the effective date of
such Registration Statement and prior to the Holder’s receipt of the notice of a Grace Period (as defined in the Registration
Rights Agreement) and for which the Holder has not yet settled.


(b)  
Exercise Price. For purposes of this Warrant, “Exercise Price” means $2.12, 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 on or prior to the Share Delivery Date (a “Delivery Failure”) either (I) if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program, 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 if the Transfer Agent
is participating in the DTC Fast Automated Securities Transfer Program, 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 or (II) if the Registration
Statement (as defined in the Registration Rights Agreement) covering the resale of the Warrant Shares that are the subject of the
Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant
Shares and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement
(x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such aggregate
number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account
with DTC through its Deposit / Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is
hereinafter referred as a “Notice Failure” and together with the event described in clause (I) above, an “Exercise
Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares
of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the
Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Trading
Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's
total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock
so purchased (the “Buy-In Price”), at which point the Company's obligation to deliver such certificate (and
to issue such shares of Common Stock) or credit such Holder's balance account with DTC for such shares of Common Stock shall terminate,
or (ii) promptly




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honor its obligation to deliver to the
Holder a certificate or certificates representing such shares of Common Stock or credit such Holder's balance account with DTC,
as applicable, and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of shares of Common Stock, times (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the
period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this
clause (ii). Nothing shall limit the Holder's right to pursue any other remedies available to it hereunder, at law or in equity,
including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure
to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon
the exercise of this Warrant as required pursuant to the terms hereof.


(d)  
Cashless Exercise.  Notwithstanding anything contained herein to the contrary (other than the limitations
set forth in Section 1(f)), if the Registration Statement (as defined in the Registration Rights Agreement) covering the resale
of the Unavailable Warrant Shares is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made
to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net
Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):


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


D


For purposes
of the foregoing formula:


	A		=	 the total number of shares with respect to which this Warrant is then being exercised.
	 	 	 	 
	B	 	=	the arithmetic average of the Closing Sale Prices of the Common Stock for the five
(5) consecutive Trading Days ending on the date immediately preceding the date of the Exercise Notice.
	 	 	 	 
	C	 	=	the Exercise Price then in effect for the applicable Warrant Shares at the time
of such exercise.
	 	 	 	 
	D	 	=	as applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant
to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof
on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS
promulgated under the federal securities laws) on such Trading Day, (ii) the Bid Price of the Common Stock as of the time of the
Holder’s execution of the applicable Exercise Notice if such Exercise
Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter
pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice
if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section
1(a) hereof after the close of “regular trading hours” on such Trading Day.






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


(e)   
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of
the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 11.


(f)   
Beneficial Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect
the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant
to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent
that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially
own in excess of 4.99% (the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately
after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially
owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and
all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable
upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including,
without limitation, any convertible notes or convertible preferred stock or warrants, including the other SPA Warrants) beneficially
owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”). For purposes of this Warrant,
in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without
exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in the most
recent of (x) the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or
other public filing with the Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more
recent public announcement by the Company or (3) any




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other written notice by the Company
or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share
Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding
shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of
the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder's
beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the
Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such
purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return
to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral
request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the
Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that
the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution
Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares
of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder's and the
other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer
the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the
Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice
to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after
delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such
notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after
such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution
Parties and not to any other holder of SPA Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the
shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to
be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act.
No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions
of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to
correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership
limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.




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(g)  
 Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have
a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon
exercise of this Warrant at least a number of shares of Common Stock equal to 100% of the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise of all of this Warrant then outstanding (the “Required Reserve Amount”
and the failure to have such sufficient number of authorized and unreserved shares of Common Stock, an “Authorized Share
Failure”), then the Company shall immediately take all action necessary to increase the Company's authorized shares of
Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding.
Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall
hold a meeting of its shareholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each shareholder with a proxy statement and shall use its reasonable best efforts
to solicit its shareholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors
to recommend to the shareholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized
Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common
Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining
such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that upon any exercise
of this Warrant, the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise (such unavailable
number of shares of Common Stock, the “Authorization Failure Shares”), then unless the Holder elects to void
such attempted exercise, the Holder may require, within three (3) Trading Days of the applicable exercise, in lieu of delivering
such Authorization Failure Shares to the Holder, the Company to pay cash in exchange for the cancellation of such portion of this
Warrant exercisable into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization
Failure Shares and (y) the greatest Closing Sale Price of the shares of Common Stock on any Trading Day during the period commencing
on the date the Holder delivers the applicable Exercise Notice with respect to such Authorization Failure Shares to the Company
and ending on the date of such issuance and payment under this Section 1(g) and (ii) to the extent the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization
Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith


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


(a)     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 Subscription Date, (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




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


(i)     Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(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




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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 at any time 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 issuance
or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is
to be made pursuant to other provisions of this Section  2(b), except as contemplated below, no further adjustment of the
Exercise Price shall be made by reason of such issue or sale.


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




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(iv)   Calculation of Consideration
Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance or sale
or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary Security”,
and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”), together comprising
one integrated transaction, the aggregate consideration per share of Common Stock with respect to such Primary Security shall be
deemed to be equal to the difference of (x) the lowest price per share for which one share of Common Stock was issued (or was deemed
to be issued pursuant to Section 2(b)(i) or 2(b)(ii) above, as applicable) in such integrated transaction (or one or more transactions
if such issuances or sales or deemed issuances or sales of securities of the Company either (A) have at least one investor or purchaser
in common, (B) are consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing)
solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Option Value
of each such Option, if any, (II) the fair market value (as determined by the Holder) or the Option Value, as applicable, of such
Adjustment Right, if any, and (III) the fair market value (as determined by the Holder) of such Convertible Security, if any, in
each case, as determined on a per share basis in accordance with this Section 2(b)(iv). If any 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
(for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose
of the calculation of the Option Value) 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 (for the purpose of determining the consideration paid for such Common Stock, Option
or Convertible Security, but not for the purpose of the calculation of the Option Value) will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the
Company for such securities will be the arithmetic average of the Weighted Average Prices of such security for each of the five
(5) Trading 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 (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible
Security, but not for the purpose of the calculation of the Option Value) will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to such 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 the Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final and




    	- 10 -



    	 



    


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.


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


(c)     Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this
Section 2, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be
the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).


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




    	- 11 -



    	 



    


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


(f)      Other Events. In the event that the Company (or any Subsidiary (as defined in the Securities Purchase Agreement))
shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect
the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly
provided for by such provisions (including, without limitation, the granting of 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(f) 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 of nationally recognized standing to
make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses shall be borne by
the Company.


(g)     Calculations. All calculations under this Section 2 shall be made by rounding to the nearest 1/100th
of cent or the nearest 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 issuance
or sale of Common Stock.


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




    	- 12 -



    	 



    


(i)       Exercise Floor Price. Notwithstanding the foregoing provisions of this Section 2, no adjustment pursuant to Section
2 shall cause the Exercise Price to be less than $1.76 (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction) (the “Exercise Floor Price”). For the avoidance of doubt, if a Dilutive Issuance would
cause the Exercise Price to be lower than the Exercise Floor Price but for the immediately preceding sentence, then the Exercise
Price shall be equal to the Exercise Floor Price.


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


4.           
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.


(a)     Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, that to the extent that the Holder's right to participate in any such Purchase Right would result
in the Holder and the other Attribution Parties exceeding the Maximum




    	- 13 -



    	 



    


Percentage, then the Holder shall not
be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares
of Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the
Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such
right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly
in abeyance) to the same extent as if there had been no such limitation).


(b)     Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the
Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents
in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the
Holder and approved by the Holder prior to such Fundamental Transaction, including agreements, if so requested by the Holder, 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) except to the extent of a Change of Control
in which the Company (or the Successor Entity), as applicable, complies with Section 4(c) below in all respects, 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 (a “Public Company”). If the Successor Entity (or its Parent Entity) is a Public Company
and the Company (or the Successor Entity), as applicable, complies with Section 4(c) below in all respects, 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




    	- 14 -



    	 



    


Fundamental Transaction (without regard
to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding
the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice
to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In
addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant
to which holders of 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 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 the Warrant prior to such Fundamental Transaction, such shares of Common 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 a form and substance reasonably satisfactory to the Holder.


(c)   
Black-Scholes Redemption Right. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the
request of the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Change of Control
(as defined in the SPA Securities), (y) the consummation of any Change of Control and (z) the Holder first becoming aware of any
Change of Control through the date that is ninety (90) days after the public disclosure of the consummation of such Change of Control
by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may
be) shall purchase this Warrant from the Holder on the later of (x) the fifth (5th) Trading Day after the date of such
request and (y) the date of consummation of such Change of Control, as applicable, by paying to the Holder cash in an amount equal
to the Black Scholes Value. For the avoidance of doubt, if a potential Change of Control is not consummated, the Holder shall have
no right to be redeemed pursuant to this Section 4(c) in connection therewith.


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


(a)               
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




    	- 15 -



    	 



    


performance of any of the terms of this
Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required
to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase
the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect,
(ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA
Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of the SPA Warrants, 100% of the number of shares of Common Stock
as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations
on exercise).


5.     
     WARRANT HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, the Holder, solely
in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder
of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder,
solely in such Person's capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right
to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of
this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted
by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies
of the same notices and other information given to the shareholders of the Company generally, contemporaneously with the giving
thereof to the shareholders.


6.     
      REISSUANCE OF WARRANTS.


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


(b)  
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this
Warrant, the Company shall execute and deliver to the Holder a new Warrant




    	- 16 -



    	 



    


(in accordance with Section 7(d)) representing
the right to purchase the Warrant Shares then underlying this Warrant.


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


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


7.          
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice
shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i)
immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and
certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company closes
its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect
to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other
property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities
Purchase Agreement) pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of execution
specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.


8.          
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived
and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if
the




    	- 17 -



    	 



    


Company has obtained the written consent
of the Holder. The Holder shall be entitled, at its option, to the benefit of any amendment of (a) any other similar warrant issued
under the Securities Purchase Agreement or (b) any other similar warrant. No consideration shall be offered or paid to the Holder
to amend or consent to a waiver or modification of any provision of this Warrant unless the same consideration is also offered
to all of the holders of the other SPA Warrants. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.


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


10.        
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers
and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference
and shall not form part of, or affect the interpretation of, this Warrant.


11. 
       DISPUTE RESOLUTION.


(a)     Submission to Dispute Resolution.


(i)     In the case of a dispute relating to the Exercise Price, the Closing Sale Price, Option Value, Black Scholes Value or fair
market value or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including,




    	- 18 -



    	 



    


without limitation, a dispute
relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute
to the other party via facsimile (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances
giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such
dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing
Sale Price, such Option Value, Black Scholes Value or such fair market value or such arithmetic calculation of the number of Warrant
Shares (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company
or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, subject
to the Consent of the Company, not to be unreasonably withheld, select an independent, reputable investment bank to resolve such
dispute.


(ii)     The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 11 and (B) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required
Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver
all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the
Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation
or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based
solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).
Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither
the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).


(iii)     The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and
the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The
fees and expenses of such investment bank shall be split 50/50 by the Company and the Holder (or, to the extent any other holders
of SPA Warrants submitted such dispute to dispute resolution, such 50% shall be allocated and paid pro rata by the Holder and
such applicable other holders of SPA Warrants based upon the number of shares of Common Stock then issuable upon exercise of the
Warrant of the Holder and the SPA Warrants of the such other Holders), and such investment bank’s resolution of such dispute
shall be final and binding upon all parties absent manifest error.




    	- 19 -



    	 



    


(b)     Miscellaneous.
The Company and the Holder each expressly acknowledge and agree that (i) this Section 11 constitutes an agreement to arbitrate
between the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil
Practice Law and Rules (“CPLR”) and that either the Company or the Holder is authorized to apply for an order
to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 11, (ii) a dispute relating
to the Exercise Price includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale
of Common Stock occurred under Section 2(b), (B) the consideration per share at which an issuance or deemed issuance of Common
Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed
issuance or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like constitutes and Option or
Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Warrant and each other applicable Transaction
Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment
bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment
bank determines are required to be made by such investment bank in connection with its resolution of such dispute (including,
without limitation, determining (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section
2(b), (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance
or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded Securities,
(D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security and (E) whether a Dilutive
Issuance occurred) and in resolving such dispute such investment bank shall apply such findings, determinations and the like to
the terms of this Warrant and any other applicable Transaction Documents, (iv) either the Holder or the Company, in its sole discretion,
shall have the right to submit any dispute described in this Section 11 to any state or federal court sitting in The City of New
York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 11 and (v) nothing in this Section 11
shall limit the Holder or the Company from obtaining any injunctive relief or other equitable remedies (including, without limitation,
with respect to any matters described in this Section 11).


12.        
REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue
actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants
to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required. The Company




    	- 20 -



    	 



    


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.


13. 
       TRANSFER.This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned
without the consent of the Company, except as may otherwise be required by Section 2(f) of the Securities Purchase Agreement.


14. 
       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).


15.        
 DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries (as defined in the Securities Purchase Agreement), the Company shall within one (1)
Business Day after any such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form
8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic information relating to the
Company or its Subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in
the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute
material, nonpublic information relating to the Company or its Subsidiaries.


16. 
       CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:


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


(b)  
“Adjustment Right” means any right granted with respect to any securities issued in connection with,
or with respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other
than rights of the type




    	- 21 -



    	 



    


described in Section 3 and 4 hereof)
that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities
(including, without limitation, any cash settlement rights, cash adjustment or other similar rights).


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


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


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


(f)   
“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 OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets 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 11. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.




    	- 22 -



    	 



    


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


(h)  
“Bloomberg” means Bloomberg Financial Markets.


(i)    
“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.


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




    	- 23 -



    	 



    


shall be resolved pursuant to Section
11. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification
or other similar transaction during the applicable calculation period.


(k)  
“Common Stock” means (i) the Company's shares of Class A Common Stock, par value $0.10 per share,
and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification
of such Common Stock.


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


(m)
“Eligible Market” means the Principal Market, the NYSE MKT LLC, The NASDAQ Global Market, The NASDAQ
Global Select Market, The NASDAQ Capital Market or The New York Stock Exchange, Inc.


(n)  
“Excluded Securities” means any Common Stock issued or issuable: (i) in connection with any Approved
Stock Plan, (ii) pursuant to the terms of the SPA Securities (including, without limitation, pursuant to a Company Conversion (as
defined in the SPA Securities) or upon exercise of the SPA Warrants; provided, that the terms of such SPA Securities or
SPA Warrants are not amended, modified or changed on or after the Subscription Date and (iii) upon exercise of any Options or Convertible
Securities which are outstanding on the day immediately preceding the Subscription Date; provided, that the terms of such
Options or Convertible Securities are not amended, modified or changed on or after the Subscription Date.


(o)  
“Expiration Date” means the date sixty (60) months after the Initial Exercisability Date or, if such
date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next day that is not a Holiday.


(p)  
“Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly,
in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries
is the surviving corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all
or substantially all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase,
tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting 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 (5) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize
or reclassify the Common




    	- 24 -



    	 



    


Stock (which shall not include a reverse
stock split), or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d)
and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented
by issued and outstanding Voting Stock of the Company.


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


(r)    
“Holder Pro Rata Amount” means a fraction (i) the numerator of which is the aggregate principal amount
of the SPA Securities issued to the initial Holder of this Warrant on the Closing Date and (ii) the denominator of which is the
aggregate principal amount of all SPA Securities issued to the Buyers pursuant to the Securities Purchase Agreement on the Closing
Date. In the event the initial Holder of this Warrant (or any subsequent transferee) shall sell or otherwise transfer or assign
any portion of its Warrant or SPA Securities, the transferee thereof shall be allocated a pro rata portion of such Holder Pro Rata
Amount.


(s)   
“Lead Investor” means Hudson Bay Master Fund Ltd.


(t)    
“Option Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as
the case may be) determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable of such
Option, Convertible Security or Adjustment Right (as the case may be), if the issuance of such of such Option, Convertible Security
or Adjustment Right (as the case may be) is publicly announced or (B) the Trading Day immediately following the issuance of the
applicable Option if the issuance of such Option is not publicly announced, for pricing purposes calculated using the Black Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) the underlying price per share used
in such calculation shall be the highest Weighted Average Price of the Common Stock during the period beginning on the Trading
Day prior to the execution of definitive documentation relating to the issuance of of such Option or Convertible Security (as the
case may be) and ending on (A) the Trading Day immediately following the public announcement of such issuance, if the issuance
of such Option, Convertible Security or Adjustment Right (as the case may be) is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Option if the issuance of such Option, Convertible Security or Adjustment Right (as the
case may be) is not publicly announced, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal
to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance
of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected
volatility equal to the greater of 100% and the 30 day volatility obtained from the HVT function on Bloomberg (determined utilizing
a 365 day annualization factor) as of (A) the Trading Day immediately following the public announcement of the applicable Option
if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable
of such Option, Convertible Security or Adjustment Right (as the case may be) if the issuance of such of such Option, Convertible
Security or Adjustment Right (as the case may be) is not publicly announced.




    	- 25 -



    	 



    


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


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


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


(x)  
“Principal Market” means the NASDAQ Global Select Market.


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


(z)   
“SPA Securities” means the Notes issued pursuant to the Securities Purchase Agreement.


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


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


(cc)   “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).


(dd)  “Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price
for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the
Principal Market




    	- 26 -



    	 



    


publicly announces is the official open
of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the official
close of trading), as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply,
the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such
security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the
official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces is the
official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security
by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC
Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved pursuant to Section 11 with the term “Weighted Average Price” being substituted for the term “Exercise
Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification
or other similar transaction during the applicable calculation period.


[Signature Page Follows]


 


 




    	- 27 -



    	 



    


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


 


	 	 	THE WET SEAL, INC.
	 	 	 	 
	 	 	By:	 
	 	 	Name:	
	 	 	Title:	




 


 







    	  



    	 



    


EXHIBIT A


 


EXERCISE NOTICE


TO BE EXECUTED BY THE REGISTERED HOLDER TO
EXERCISE THIS


WARRANT TO PURCHASE COMMON STOCK


 


THE
WET SEAL, inc. 


 


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


 


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


 


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


 


____________a
“Cashless Exercise” with respect to _______________ Warrant Shares.


 


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


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


 


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


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


	Issue to:	
	 	 
	 	 


 


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




	DTC Participant:	



 



    	  



    	 



    


 


	DTC Number:	
	Account Number:	
		
	 	 	 


 


Date: _______________ __, ______


 


_________________________________


     Name of Registered Holder


 


 


	By:		_______________________
	 	 	Name:
	 	 	Title:









 




    	  



    	 



    


ACKNOWLEDGMENT


 


 


The Company hereby acknowledges
this Exercise Notice and hereby directs American Stock Transfer & Trust Company, LLC. to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated March [__], 2014 from the Company and acknowledged
and agreed to by American Stock Transfer & Trust Company, LLC.


 


 


	 	 	THE WET SEAL, INC.
	 	 	 	 
	 	 	By:	 
	 	 	Name:	
	 	 	Title: