FORM OF WARRANT


 


FREESEAS INC.


 


Warrant
To Purchase Common Stock


 


Warrant No.: _________


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


 


FreeSeas Inc., a Marshall
Islands corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [HOLDERS], the registered holder hereof or its permitted assigns
(the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or
after the Issuance Date but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), [___________] (subject
to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant
Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 17. This Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued pursuant
to that certain Placement Agent Agreement, dated as of [ ], 2014, by and between the Company and Dawson James Securities, Inc.,
pursuant to which the investor(s) in connection therewith (the “Buyer” or “Buyers”
as applicable) are third-party beneficiaries (the “Placement Agent 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 on any day on or after the Issuance Date but prior to the Expiration Date, in
whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one
(1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount
equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this
Warrant was so exercised (in respect of such specific exercise, the “Aggregate Exercise Price”) in cash or via
wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise
was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original
of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than
all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant certificate and issuance of
a new Warrant certificate evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an
Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this
Warrant certificate after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st)
Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit C,
to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd)
Trading Day following the date on which the Company has received such Exercise Notice, the Company shall (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program
(which the Company shall cause the Transfer Agent to do at Holder’s request), upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the Holder or, at the Holder’s
instruction pursuant to the Exercise Notice, the Holder’s agent or designee, in each case, sent by reputable overnight courier
to the address as specified in the applicable Exercise Notice, a certificate, registered in the Company’s share register
in the name of the Holder or its designee (as indicated in the applicable Exercise Notice), for the number of shares of Common
Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed
for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery
of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than
the number of Warrant Shares being acquired upon an exercise, then, at the request of the Holder and upon surrender hereof by the
Holder at the principal office of the Company, the Company shall as soon as practicable and in no event later than three (3) Business
Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 8(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. The Company shall pay any and all taxes and fees which may be payable with respect to
the issuance and delivery of Warrant Shares upon exercise of this Warrant.


 




    	 



    	 



    

 


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


 


(c)          Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue to the Holder within
the later of (i) three (3) Trading Days after the Company’s receipt of the applicable Exercise Notice or Exchange Notice,
as applicable, and (ii) two (2) Trading Days after the Company’s receipt of the Aggregate Exercise Price or valid notice
of a Cashless Exercise, as applicable (such later date, the “Share Delivery Deadline”), a certificate for the
number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s
share register or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the
Holder is entitled upon the Holder’s exercise of this Warrant (as the case may be), and if on or after such Share Delivery
Deadline the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable
upon such exercise or exchange that the Holder so anticipated receiving from the Company, then, in addition to all other remedies
available to the Holder, the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation,
by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s
obligation to so issue and deliver such certificate or credit the Holder’s balance account with DTC for the number of shares
of Common Stock to which the Holder is entitled upon the Holder’s exercise or exchange hereunder (as the case may be) (and
to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder
a certificate or certificates representing such shares of Common Stock or credit the Holder’s balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise or exchange hereunder (as
the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during
the period commencing on the date of the Share Delivery Deadline and ending on the date of such issuance and payment under this
clause (ii).


 


(d)          Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the time of an exercise
hereof any Equity Conditions Failure shall then exist, then the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment
of the Aggregate Exercise Price, elect instead to make a cashless exercise (each a “Cashless Exercise”)
under this paragraph (d). A Cashless Exercise under this paragraph (d) may be made, at the election of the Holder from time to
time and irrespective of any other election to make a Cashless Exercise, so that upon such exercise Holder shall receive the “Net
Number” of shares of Common Stock determined according to the following formula:


 


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


 


For purposes
of the foregoing formula:


 




    	 



    	 



    

 


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


 


B= 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.


 


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


 


Notwithstanding anything to the contrary
contained herein, exercise of this Warrant on a cashless basis may also be made from time to time at the election of the Holder
(and irrespective of any election to make a Cashless Exercise under this paragraph (d)), pursuant to the exchange provisions of
Section 5 of this Warrant.


 


(e)          Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof (including, without limitation, the Net Number), the Company shall promptly issue to
the Holder the number of Warrant Shares that are not disputed, provided that following such issuance to Holder such dispute shall
be resolved in accordance with Section 14.


 


(f)          Limitations
on Beneficial Ownership Exercise. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not
be exercisable or exchangeable by the Holder hereof to the extent (but only to the extent) that the Holder or any of its Affiliates
would beneficially own in excess of 9.9% (the “Maximum Percentage”) of the Common Stock. To the extent
the above limitation applies, the determination of whether this Warrant shall be exercisable or exchangeable (vis-à-vis
other convertible, exercisable or exchangeable securities owned by the Holder or any of its Affiliates) and of which such securities
shall be exercisable or exchangeable (as among all such securities owned by the Holder) shall, subject to such Maximum Percentage
limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case
may be). No prior inability to exercise or exchange 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 or exchangeability. For
the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with
respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act (as defined
in the Placement Agent Agreement) and the rules and regulations promulgated thereunder. The provisions of this paragraph shall
be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein
contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation.
The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The holders of Common Stock shall
be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of holders of a
majority of its Common Stock. For any reason at any time, upon the written or oral request of the Holder, the Company shall within
one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding, including
by virtue of any prior conversion or exercise or exchange of convertible or exercisable or exchangeable securities into Common
Stock, including, without limitation, pursuant to this Warrant or securities issued pursuant to the Placement Agent Agreement.


 




    	 



    	 



    

 


(g)          Insufficient
Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard
to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise
or exchange of this Warrant). If, notwithstanding the foregoing, and not in limitation thereof, at any time while any of the SPA
Warrants remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to
satisfy its obligation to reserve for issuance upon exercise or exchange of the SPA Warrants at least a number of shares of Common
Stock equal to the number of shares of Common Stock as shall from time to time be necessary to effect the exercise or exchange
of all of the SPA Warrants then outstanding (the “Required Reserve Amount”) (an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the SPA Warrants then outstanding.
Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share Failure, the Company shall
hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable efforts to solicit
its stockholders’ approval of such increase in authorized shares of Common Stock.


 


(h)          Activity
Restrictions


 


(i)          For
so long as Holder or any of its Affiliates holds any Warrants or any Warrant Shares, neither Holder nor any Affiliate will:  (i)
vote any shares of Common Stock beneficially owned by it, solicit any proxies, or seek to advise or influence any Person with respect
to any voting securities of the Company; (ii) engage or participate in any actions, plans or proposals which relate to or would
result in (a) acquiring additional securities of the Company, alone or together with any other Person, which would result in Buyer
or its Affiliates beneficially owning (within the meaning of Section 13(d) under the 1934 Act) more than 9.9% of the Common Stock,
(b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Company or any of its Subsidiaries,
(c) a sale or transfer of a material amount of assets of the Company or any of its Subsidiaries, (d) any change in the present
board of directors or management of the Company, including any plans or proposals to change the number or term of directors or
to fill any existing vacancies on the board, (e) any material change in the present capitalization or dividend policy of the Company,
(f) any other material change in the Company’s business or corporate structure, including but not limited to, if the Company
is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a
vote is required by Section 13 of the Investment Company Act of 1940, (g) changes in the Company’s charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of control of the Company by any Person, (h) causing a
class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Company
becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act, or (j) any action, intention, plan
or arrangement similar to any of those enumerated above; or (iii) request the Company or its directors, officers, employees, agents
or representatives to amend or waive any provision of this paragraph. The restrictions contained in this Section 1(h)(i) shall
not limit Holder’s rights to enforce its rights or exercise its rights as to the Securities or under this Warrant or the
Transaction Documents.


 


(ii)         Provided
that no Equity Condition Failure shall have occurred, if the trading price on the Principal Market at the time of an exercise of
this Warrant is greater than the then applicable Exercise Price then in effect, then in respect of such particular exercise Holder
may only exercise this Warrant for a cash exercise price (and not by means of a Cashless Exercise under Section 1(d) above or on
a cashless basis under Section 5 below).


 


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


 




    	 



    	 



    

 


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


 


(b)          [Intentionally
Omitted].


 


(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). In addition, and notwithstanding anything to the contrary contained herein, upon an Exchange as set forth in
Section 5 hereof, the number of Warrant Shares for which this Warrant is exercisable immediately following such Exchange shall
be equal to (i) the number of Warrant Shares for which this Warrant was exercisable immediately prior to such Exchange less (ii)
the number of Warrant Shares under the portion of the Warrant exchanged in Exchange (e.g., if this Warrant is exercisable (without
regard to limitations hereunder) for 100 shares immediately prior to an Exchange and 30% of the Warrant is submitted for Exchange
(i.e., the Warrant to acquire 30 Warrant Shares is submitted for Exchange), then this Warrant will be exercisable for 70 Warrant
Shares immediately following the completion of such Exchange), and the number of such Warrant Shares issuable hereunder shall automatically
be adjusted, as necessary, to enable to the Company to comply with its obligations to issue the full Exchange Number under Section
5 hereof upon any Exchange hereunder.


 


(d)          Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest 1/10000th of cent and the nearest
1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an
issue or sale of Common Stock.


 


(e)          Other
Events. In the event that the Company (or any Subsidiary (as defined in the Placement Agent 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 specifically 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(e) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting
its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good
faith, upon 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.


 




    	 



    	 



    

 


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


 


4.          PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.


 


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


 


(b)          Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents related to this Warrant
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 confirming the obligations of the
Successor Entity as set forth in this paragraph (b) and (c) and elsewhere in this Warrant and an obligation 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). Notwithstanding the foregoing, at the election of the Holder upon exercise of this Warrant following
a Fundamental Transaction, the Successor Entity shall deliver to the Holder, 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 common
stock (or its equivalent) of the Successor Entity (including its Parent Entity), or other securities, cash, assets or other property,
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).


 




    	 



    	 



    

 


(c)          [Intentionally
Omitted].


 


(d)          Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and shall be applied
as if this Warrant (and any such subsequent warrants issued hereunder) 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)).


 


5.          EXCHANGE
RIGHTS. In addition to the rights of the Holder under Section 1 hereof, this Warrant shall be exchangeable by the Holder on
a cashless basis as further set forth below (and subject to the limitations set forth in Section 1(h)(ii) hereof).


 


(a)          Exchange
Right. The Holder shall be entitled at any time and from time to time from and after the ninety (90) day anniversary of the
Issuance Date and prior to the Expiration Date, by written notice to the Company in the form of Exhibit B attached
hereto (an “Exchange Notice”) to exchange (an “Exchange”) all or any portion
of this Warrant for cash or, if elected by the Company in compliance with the terms hereof, fully paid and non-assessable shares
of Common Stock, all as further set forth in this Section 5. If the Company does not elect to honor such Exchange in shares of
Common Stock (or is not permitted to elect to honor such Exchange in shares of Common Stock due to Section 5(d)(iii)), then the
Company shall pay to the holder, within ten (10) Business Days after receipt of the applicable Exchange Notice, the Exchange Amount
(as defined below) in cash in respect of such Exchange.


 


(b)          Exchange
Number. If the Company is permitted to honor an Exchange by issuing shares of Common Stock in respect thereof, then the number
of shares of Common Stock issuable in respect of such Exchange shall be determined by dividing (x) the Exchange Amount (as defined
below) in respect of such Exchange by (y) the Exchange Price (as defined below) in respect of such Exchange (such number of shares
of Common Stock so issuable being the “Exchange Number”).


 


(c)          Definitions.


 


(i)          “Exchange
Amount” means the Black-Scholes Exchange Value of the portion of the Warrant being exchanged pursuant to Section 5(a),
determined as of the applicable Exchange Date (as defined below).


 


(ii)         “Exchange
Price” means the Closing Bid Price as of one (1) Trading Day prior to the Exchange Date.


 


(d)          Mechanics
of Exchange.


 


(i)          Optional
Exchange. To exchange any Exchange Amount on any date (an “Exchange Date”), the Holder shall transmit by
facsimile (or otherwise deliver), for receipt on such date, a copy of an executed Exchange Notice. The Holder shall not be required
to deliver the original of this Warrant in order to effect an exchange hereunder. Execution and delivery of an Exchange Notice
with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant
and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of
an Exchange Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this
Warrant after delivery of the Warrant Shares in accordance with the terms hereof.


 


(ii)         Exchange
for Shares of Common Stock. If the Company is permitted to elect, and has elected, to pay the Exchange Amount in shares of
Common Stock in respect of a specific Exchange Notice, which election shall be made on or before the first (1st) Trading
Day following the date on which the Company has received such Exchange Notice, the Company shall transmit by facsimile an acknowledgment
of confirmation of receipt of such Exchange Notice, in the form attached hereto as Exhibit C, to the Holder
and the Transfer Agent and stating that such Exchange Notice shall be honored in shares of Common Stock. In such event, then on
or before the third (3rd) Trading Day following the date on which the Company has received such Exchange Notice, the
Exchange Number of shares of Common Stock shall be issued to Holder, or at Holder’s instruction, as if such shares of Common
Stock were issuable upon an exercise under Section 1 hereof.


 




    	 



    	 



    

 


(iii)        Equity
Condition Failure. Notwithstanding the above, if at the time on an Exchange Date, an Equity Conditions Failure with respect
to clauses (v) or (vi) of the definition of Equity Conditions has occurred and is still then continuing, then the Company shall
not be permitted to elect to honor such Exchange in shares of Common Stock and shall instead honor such Exchange in cash.


 


(iv)        Disputes.
Dispute as to the determination of the Exchange Amount, the Exchange Price or the arithmetic calculation of the number of Warrant
Shares to be issued pursuant to the terms hereof, and shares subject to such dispute, shall be handled in the same manner as for
disputes under Section 1(e) hereof.


 


6.          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined
in the Placement Agent Agreement), Bylaws (as defined in the Placement Agent Agreement) or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry
out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting
the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon
the exercise of this Warrant, and (iii) shall, so long as any of the 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, the maximum 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).


 


7.          WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as
the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company. Notwithstanding this Section 7, the Company shall provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.


 


8.          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 8(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
8(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.


 


(b)          Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 8(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 8(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional
shares of Common Stock shall be given.


 


(d)          Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 8(a)
or Section 8(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.


 


9.          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 Placement Agent Agreement. Unless the same shall be made available to the public through a filing with
the SEC through EDGAR and are available to the public through the EDGAR system, 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) as soon
as practicable 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, indebtedness,
or other property pro rata 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 (to the extent it constitutes, or contains,
material, non-public information regarding the Company or any of its Subsidiaries) 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 (whether under this Section 9 or otherwise) 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 Placement Agent Agreement) pursuant to a Current Report on Form 6-K. It is expressly
understood and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not
be disputed or challenged by the Company.


 


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


 


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


 




    	 



    	 



    

 


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


 


13.         CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have
the meanings ascribed to such terms on the Closing Date (as defined in the Placement Agent Agreement) in such other Transaction
Documents unless otherwise consented to in writing by the Holder.


 


14.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Exchange Amount, the Exchange Price,
the Closing Sale Price, the Closing Bid Price, the Bid Price or fair market value or the arithmetic calculation of the Warrant
Shares (as the case may be), the Company or the Holder (as the case may be) shall submit the disputed determinations or arithmetic
calculations (as the case may be) via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving
rise to such dispute to the Company or the Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time
after the Holder or the Company (as the case may be) learned of the circumstances giving rise to such dispute. If the Holder and
the Company are unable to agree upon such determination or calculation (as the case may be) of the Exercise Price, the Exchange
Amount, the Exchange Price, the Closing Sale Price, the Closing Bid Price, the Bid Price or fair market value or the number of
Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination or arithmetic calculation being
submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit via facsimile
(a) the disputed arithmetic calculation of the Warrant Shares, the disputed determination of the Exercise Price, the Exchange Amount,
the Exchange Price, the Closing Sale Price, the Closing Bid Price, the Bid Price or fair market value (as the case may be) to an
independent, reputable investment bank selected with the agreement of the Company and the Holder or (b) if acceptable to the Holder,
the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall
cause at its expense the investment bank or the accountant (as the case may be) to perform the determinations or calculations (as
the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives
such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s determination
or calculation (as the case may be) shall be binding upon all parties absent demonstrable error.


 




    	 



    	 



    

 


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


 


16.         TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company. In order to validly exercise
this Warrant, any Holder other than the original Holder of this Warrant must, concurrently with or prior to the delivery of an
Exercise Notice to the Company, provide the Company with definitive documentation conclusively evidencing, in the Company’s
reasonable discretion, that the Person delivering such Exercise Notice is the actual owner of this Warrant possessing the right
to cause the exercise hereof.


 


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


 


(a)          “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 all of the market makers for such security as reported in the “pink sheets” by OTC
Markets Group Inc. (formerly Pink Sheets LLC) (the “Pink Sheets”) 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 14. All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction during such period.


 


(b)          “Black
Scholes Exchange Value” means the value of an option for the number of shares equal to the portion of the Warrant being
exchanged at the applicable Exchange Date as set forth in the applicable Exchange Notice as such value is determined calculated
using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying
price per share equal to the Closing Sale Price of the Common Stock as of the Issuance Date (adjusted upward to the same extent
that the Exercise Price hereunder has been adjusted upward pursuant to Section 2(a) hereof), (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of the Warrant as of such Exchange Date, (iii) a strike price
equal to the Exercise Price in effect at the time of the applicable Exchange, (iv) an expected volatility equal to 135% and (v)
a deemed remaining term of the Warrant of five (5) years (regardless of the actual remaining term of the Warrant).


 


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


 




    	 



    	 



    

 


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


 


(e)          “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and the 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 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 all of the market makers for such
security as reported in the Pink Sheets. 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 shall be resolved in accordance with
the procedures in Section 14. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.


 


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


 


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


 


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


 


(i)          “Equity
Conditions” means: (i) the Company shall have complied in all respects with all applicable securities laws and regulations
and all rules and regulations of the Eligible Markets in respect of the offer, sale and issuance of the Securities under the Transaction
Documents, (ii) the Common Stock (including all shares of Common Stock to be received by Holder) shall be listed or designated
for quotation (as applicable) on an Eligible Market and no Trading Market Event (or event which with notice or passage of time
would be a Trading Market Event) has occurred, (iii) the Company shall be in compliance in all material respects with all of its
obligations under all of the Transaction Documents, (iv) each of the Registration Statement and the Prospectus contained therein
(each as defined in the Placement Agent Agreement) shall continue to be effective and fully available for use with respect to issuance
of all of the Securities, including, without limitation, any issuance of Warrant Shares pursuant to a cash exercise hereof, including
without limitation a Mandatory Exercise under Section 18, (v) all Common Shares and Warrant Shares (including any Warrant Shares
to be received upon exercise or exchange of this Warrant and including any Warrant Shares to be issued in a cash exercise) shall
be then (or upon such issuance (as the case may be)) freely tradeable by Holder without restriction of any kind or nature (and
the Company shall have no knowledge of any fact which would reasonably be expected to negate the foregoing in the foreseeable future),
(vi) no limitation shall be applicable with respect to the issuance of any Warrant Shares hereunder (other than under Section 1(f)(i)),
and (vii) the Company is fully reporting under the 1934 and Rule 144 and has been such on a timely basis for the 15 months immediately
preceding the date of determination. For purposes hereof a “Trading Market Event” shall mean if
the Company or the Common Stock or any shares of Common Stock issued or issuable hereunder or under any other Transaction Document
shall cease or fail to be listed for trading or quoted on an Eligible Market.


 


(j)          “Equity
Conditions Failure” means that on any applicable date of determination, any of the Equity Conditions have not been satisfied
then.


 




    	 



    	 



    

 


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


 


(l)          “Fundamental
Transaction” means that (i) the Company shall, directly or indirectly, in one or more related transactions, (1) consolidate
or merge with or into (whether or not the Company is the surviving corporation) any other Person unless the stockholders of the
Company immediately prior to such consolidation or merger continue to hold more than 50% of the outstanding shares of Voting Stock
after such consolidation or merger, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially
all of its properties or assets to any other Person, or (3) consummate a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other Person whereby
such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of
Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated with the
other Persons making or party to, such stock or share purchase agreement or other business combination), or (ii) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 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.


 


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


 


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


 


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


 


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


 


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


 


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


 


(s)          “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).


 




    	 



    	 



    

 


18.         MANDATORY
EXERCISE. If at any time after the ninety (90) day anniversary of the Issuance Date, for twenty (20) consecutive Trading Days
the Closing Bid Price of the Common Stock for each Trading Day during such period is at a price greater than or equal to 20% above
the Exercise Price as in effect at the end of such Trading Day, and the average daily dollar volume during such twenty (20) consecutive
Trading Days is equal to or exceeds $350,000 (such period being the “Trigger Period”), then (provided no Equity
Conditions Failure shall have occurred or be continuing at any time during such period), the Company shall have the right to require
the Holder to exercise for cash all, but not less than all, of this Warrant for all of the then-remaining Warrant Shares as further
set forth below. The Company may exercise its right to require exercise under this Section 18 (the “Mandatory Exercise
Right”) on one occasion (or, if a Mandatory Exercise Notice becomes null and void pursuant to this Section 18, or if
the Holder delivers to the Company a Blocker Notice (as defined below)), such number of additional occasions as necessary to permit
a Mandatory Exercise with respect to the entire amount of Warrant Shares issuable hereunder). The Company shall exercise its Mandatory
Exercise Right (to the extent permitted hereby) by delivering, within ten (10) Trading Days following the end of the Trigger Period,
a written notice thereof by facsimile and overnight courier to the Holder (the “Mandatory Exercise Notice” and
the date such notice by facsimile is deemed to be delivered in accordance with Section 9(f) of the Placement Agent Agreement is
referred to as the “Mandatory Exercise Notice Date”). The Mandatory Exercise Notice shall be irrevocable. The
Mandatory Exercise Notice shall (1) state the Trading Day selected for the Mandatory Exercise in accordance with this Section 18,
which Trading Day shall be at least five (5) Trading Days but not more than fifteen (15) Trading Days following the Mandatory Exercise
Notice Date (the “Mandatory Exercise Date”), (2) state the number of shares of Common Stock to be issued to
the Holder on the Mandatory Exercise Date and (3) contain a certification from the Chief Executive Officer of the Company
that there has been no Equity Conditions Failure as of the Mandatory Exercise Notice Date. Any portion of this Warrant exercised
by the Holder after the Mandatory Exercise Notice Date shall reduce the number of Warrant Shares for which this Warrant is required
to be exercised on the Mandatory Exercise Date. If the Company has elected a Mandatory Exercise, the mechanics of exercise set
forth in Section 1 shall apply, to the extent applicable, as if the Company had received from the Holder on the Mandatory Exercise
Date an Exercise Notice with respect to all of the then-remaining Warrant Shares (or the Permitted Exercise Amount (as defined
below) of Warrant Shares, as applicable). Notwithstanding anything contained in this Section 18 to the contrary (but subject to
the last sentence of this Section 18), if (I) the Closing Bid Price of the Common Stock on any Trading Day during the period commencing
on the Mandatory Exercise Notice Date and ending on the Trading Day immediately preceding the Mandatory Exercise Date is less than
the Exercise Price then in effect at the end of trading on such day; (II) the daily dollar trading volume (as reported on Bloomberg)
of the Common Stock on the applicable Eligible Market on any Trading Day during the period commencing on the Mandatory Exercise
Notice Date and ending on the Trading Day immediately preceding the Mandatory Exercise Date is less than $350,000; or (III) an
Equity Conditions Failure occurs on any day since the occurrence of the Trigger Period and prior to the Mandatory Exercise Date,
then the Mandatory Exercise Notice delivered to the Holder shall be null and void ab initio and the Mandatory Exercise shall not
occur and the Mandatory Exercise Right shall not be available to the Company unless and until the conditions precedent to such
Mandatory Exercise Right are again satisfied. If the Company elects to cause a mandatory exercise of this Warrant pursuant to this
Section 18, then it must simultaneously take the same action with respect to all of the other SPA Warrants, if any, held by any
person other than Holder. Notwithstanding anything contained in this Section 18 to the contrary, an effort by the Company to exercise
its right under this Section 18 shall be stayed to the extent the Holder delivers a written notice to the Company stating that
such exercise would result in a violation of Section 1(f) (a “Blocker Notice”), which Blocker Notice may be
delivered at any time prior to the Mandatory Exercise Date, in which case the Company shall have the right to require the Holder
to exercise this Warrant for such number of Warrant Shares that may be exercise hereunder without violating Section 1(f) (the “Permitted
Exercise Amount”) and from time to time thereafter the Holder shall exercise this Warrant (so long as no Equity Conditions
Failure has occurred from and after the Mandatory Exercise Notice Date) in such amounts and from time to time until fully exercised,
subject to ongoing compliance with Section 1(f) hereof and subject to Holder’s rights hereunder and the other terms and conditions
hereof following the Mandatory Exercise Date.


 


[signature page follows]


 




    	 



    	 



    

 


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.


 


	 	FREESEAS INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 




    	 



    	 



    

 


EXHIBIT A


 


EXERCISE NOTICE


 


TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS


WARRANT TO PURCHASE COMMON STOCK


 


FREESEAS INC.


 


The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
FreeSeas Inc., a Marshall Islands corporation (the “Company”), evidenced by Warrant to Purchase Common Stock
No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.


 


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


 


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


 


	 	____________	a “Cashless Exercise” with respect to _______________ Warrant Shares.


 


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


 


2.          Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares,
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 and Net Number of shares of Common Stock. The Company shall deliver to Holder, or its designee or agent as
specified below, __________ shares of Common Stock in respect of the exercise contemplated hereby. Delivery shall be made to Holder,
or for its benefit, to the following address:


 


	 
	 
	 
	 


 


Date: _______________ __, ______


 


	 
	  Name of Registered Holder


 


	By:	 
	 	Name:
	 	Title:


 


	 	Account Number:	 
	 	  (if electronic book entry transfer)


 


	 	Transaction Code Number:	 
	 	  (if electronic book entry transfer)


 




    	 



    	 



    

 


EXHIBIT B


 


EXCHANGE NOTICE


 


TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXCHANGE THIS


WARRANT TO PURCHASE COMMON STOCK


 


FREESEAS INC.


 


The undersigned holder
hereby exercises the right to exchange the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of FreeSeas,
Inc., a Marshall Islands corporation (the “Company”) as described. Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.


 


Date of Exchange:____________


 


		1.	The
total number of shares with respect to which this Warrant is being exchanged: _________________


 


		2.	Black
Scholes Exchange Value (as defined in Section 17) for an option to purchase _________________________ [SAME # AS FROM 1 ABOVE]
shares of Common Stock: $ ______________.


 


Resulting Exchange Amount: $______________
[insert from item 2 above]


 


		3.	Exchange
Price: Closing Bid Price of the Common Stock as of two (2) Trading Days prior to the date of Exchange (as such Closing Bid
Price is defined in Section 17 herein):$______________.


 


Resulting Exchange Number [Exchange
Amount/Exchange Price as set forth in 3 above] (if issuer is permitted to elect to issue shares of Common Stock):_____________
shares of Common Stock


 


Account for Wire Transfer:__________________________________________________


 


Account for Share issuance (if Company
is permitted to elect and so elects):___________


 


	 	 


 


Date: _______________ __, ______


 


	 
	  Name of Registered Holder


 


	By:	 
	 	Name:
	 	Title:


 




    	 



    	 



    

 


EXHIBIT C


 


ACKNOWLEDGMENT


 


The Company hereby
acknowledges this [Exercise Notice][Exchange Notice] and hereby directs ______________ to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated _________, 20__, from the Company and acknowledged and
agreed to by _______________.


 


	 	FREESEAS INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title: