Document:

Exhibit 10.41

 

WARRANT AGENCY AGREEMENT

 

WARRANT AGENCY AGREEMENT, dated as of November
[●], 2018 (“Agreement”), among Sonoma Pharmaceuticals, Inc., a Delaware corporation (the “Company”)
and Computershare, Inc., a Delaware corporation, and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally
chartered trust company (collectively, the “Warrant Agent”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to a registered offering
by the Company of units, each unit consisting of one share of common stock, par value $0.0001 per share (the “Common Stock”),
and 3,650,000 warrants to purchase shares of Common Stock (the “Warrants”) pursuant to an effective registration
statement on Form S-1 (File No. 333-227806) (the “Registration Statement”), the Company wishes to issue Warrants
in book entry form entitling the respective holders of the Warrants (the “Holders”, which term shall include
a Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in “street
name”, a Participant (as defined below) or a designee appointed by such Participant), to purchase an aggregate of up to 3,650,000
shares of Common Stock upon the terms and subject to the conditions hereinafter set forth (the “Offering”);

 

WHEREAS, the shares of Common Stock and
Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately, but will be
purchased together in the Offering; and

 

WHEREAS, the Company wishes the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration,
transfer, exchange, exercise and replacement of the Warrants.

 

NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the parties hereby agree as follows:

Section 1.               
Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

 

(a)               
“Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”).

 

(b)               
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which The Nasdaq Stock Market is authorized or required by law or other governmental
action to close.

 

(c)               
“Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided,
however, that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business
Day.

 

(d)               
“Person” means an individual, corporation, association, partnership, limited liability company,
joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other
entity.

 

(e)               
“Warrant Certificate” means a certificate in substantially the form attached as Exhibit 1
hereto, representing such number of Warrant Shares as is indicated therein, provided that any reference to the delivery of a Warrant
Certificate in this Agreement shall include delivery of notice from the Depositary or a Participant (each as defined below) of
the transfer or exercise of Warrant in the form of a Global Warrant (as defined below).

 

(f)                
“Warrant Shares” means the shares of Common Stock underlying the Warrants and issuable upon exercise
of the Warrants.

 

All other capitalized terms used but not
otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.

 

 

 

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Section 2.               
Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance
with the express terms and conditions hereof (and no implied terms and conditions), and the Warrant Agent hereby accepts such appointment.

 

Section 3.               
Global Warrants.

 

(a)               
The Warrants shall be issuable in book entry form (the “Global Warrants”). All of the Warrants
shall initially be represented by one or more Global Warrants, substantially in the form of the Warrant Certificate, deposited
with the Warrant Agent and registered in the name of Cede & Co., a nominee of The Depository Trust Company (the “Depositary”),
or as otherwise directed by the Depositary. Ownership of beneficial interests in the Warrants shall be shown on, and the transfer
of such ownership shall be effected through, records maintained by (i) the Depositary or its nominee for each Global Warrant or
(ii) institutions that have accounts with the Depositary (such institution, with respect to a Warrant in its account, a “Participant”).
The terms of this Warrant Agreement are to be read in conjunction with the applicable terms of the Warrant Certificate. If there
is a conflict between the express terms of this Warrant Agreement and the Warrant Certificate, the terms of the Warrant Certificate
shall govern and be controlling; provided, however, that all provisions with respect to the rights, duties, protections and liability
of the Warrant Agent only shall be determined and interpreted solely by the provisions of this Warrant Agreement and no provision
of this Warrant Agreement shall affect or limit the obligations of the Company under this Warrant.

 

(b)               
If the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company
may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible
for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions
to the Depositary to deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant
Agent to deliver to each Holder a Warrant Certificate. The Company shall use its best efforts to enable the Warrants to be “DTC
eligible” so that interests in the Warrants may be held in book-entry through the Depositary for the term of the Warrant.

 

(c)               
A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to
a Warrant Certificate Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange
of some or all of such Holder’s Global Warrants for a Warrant Certificate evidencing the same number of Warrants, which request
shall be in the form attached hereto as Annex A (a “Warrant Certificate Request Notice” and the date
of delivery of such Warrant Certificate Request Notice by the Holder, the “Warrant Certificate Request Notice Date”
and the deemed surrender upon delivery by the Holder of a number of Global Warrants for the same number of Warrants evidenced by
a Warrant Certificate, a “Warrant Exchange”), the Warrant Agent shall promptly effect the Warrant Exchange and
shall promptly issue and deliver , at the expense of the Company, to the Holder a Warrant Certificate for such number of Warrants
in the name set forth in the Warrant Certificate Request Notice. Such Warrant Certificate shall be dated the original issue date
of the Warrants, shall be manually executed by an authorized signatory of the Company, shall be in the form attached hereto as
Exhibit 1, and shall be reasonably acceptable in all respects to such Holder. In connection with a Warrant Exchange, the
Company agrees to deliver, or to direct the Warrant Agent to deliver, the Warrant Certificate to the Holder within three (3) Business
Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant Certificate Request Notice
(“Warrant Certificate Delivery Date”). If the Company fails for any reason to deliver to the Holder the Warrant
Certificate subject to the Warrant Certificate Request Notice by the Warrant Certificate Delivery Date, the Company shall pay to
the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Warrant Certificate
(based on the VWAP (as defined in the Warrants) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business
Day for each Business Day after such Warrant Certificate Delivery Date until such Warrant Certificate is delivered or, prior to
delivery of such Warrant Certificate, the Holder rescinds such Warrant Exchange. In no event shall the Warrant Agent be liable
for the Company’s failure to deliver the Warrant Certificate by the Warrant Certificate Delivery Date. The Company covenants
and agrees that, upon the date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder
of the Warrant Certificate and, notwithstanding anything to the contrary set forth herein, the Warrant Certificate shall be deemed
for all purposes to contain all of the terms and conditions of the Warrants evidenced by such Warrant Certificate and the terms
of this Agreement, other than Sections 3(c) and 9 herein, shall not apply to the Warrants evidenced by the Warrant Certificate.
For purposes of this Section 3(c) only, the term “Holder” shall be deemed to be the beneficial owner of record
of the Warrant.

 

Section 4.               
Form of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Common Stock
(“Exercise Notice”) and the form of assignment to be printed on the reverse thereof, shall be in the form of Exhibit
1 hereto.

 

 

 

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Section 5.               
Countersignature and Registration.

 

(a)               
The Warrant Certificates shall be executed on behalf of the Company by its Chief Executive Officer, Chief Financial
Officer or other authorized officer, either manually or by facsimile signature. The Warrant Certificates shall be countersigned
by the Warrant Agent either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer of the
Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless,
may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed
such Warrant Certificate had not ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of
the Company to sign such Warrant Certificate, although at the date of the execution of this Warrant Agreement any such person was
not such an officer.

 

(b)               
The Warrant Agent will keep or cause to be kept, at one of its offices, or at the office of one of its agents, books
for registration and transfer of the actually issued Warrant Certificates issued hereunder. Such books shall show the names and
addresses of the respective Holders of the Warrant Certificates, the number of warrants evidenced on the face of each of such Warrant
Certificate and the date of each of such Warrant Certificate. The Warrant Agent will create a special account for the issuance
of Warrant Certificates. For purposes of clarity, the Warrant Agent shall not be required to keep a book for registration and transfer
of book-entry form warrants represented by the Global Warrant.

 

Section 6.               
Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates.

 

(a)               
With respect to the Global Warrant, subject to the provisions of the Warrant Certificate and the last sentence of
this first paragraph of Section 6 and subject to applicable law, rules or regulations, at any time after the closing date of the
Offering, and at or prior to the Close of Business on the Termination Date, any Warrant Certificate or Warrant Certificates or
Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant
Certificates or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock as
the Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled such Holder to purchase.
Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant shall make such request
in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates, together with the
required form of assignment and certificate duly executed and properly completed and such other documentation as the Warrant Agent
may reasonably request (which in case of a Warrant in book entry or electronic form held through the Depositary shall not include
any ink-original documents and shall not include any medallion guarantee or other type of guarantee or notarization), to be transferred,
split up, combined or exchanged at the office of the Warrant Agent designated for such purpose, provided that no such surrender
is applicable to the Holder of a Global Warrant. Any requested transfer of Warrants, whether in book-entry form or certificate
form, shall be accompanied by evidence of authority of the party making such request that may be reasonably required by the Warrant
Agent. Thereupon the Warrant Agent shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver
to the Person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested. The Company
may require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Warrant Certificates. The Warrant Agent shall not have any duty or obligation
to take any action under any section of this Agreement that requires the payment of taxes and/or charges unless and until it is
satisfied that all such payments have been made.

 

(b)               
Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation
of a Warrant Certificate, which evidence shall include an affidavit of loss, or in the case of mutilated certificates, the certificate
or portion thereof remaining, and, in case of loss, theft or destruction, of indemnity or security acceptable to the Company and
the Warrant Agent and satisfaction of any other reasonable requirements established by Section 8-405 of the Uniform Commercial
Code as in effect in the State of Delaware, and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental
thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Company will make
and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of the Warrant Certificate
so lost, stolen, destroyed or mutilated. Notwithstanding anything herein to the contrary, in connection with a Warrant in book
entry or electronic form held through the Depositary, no posting of a bond shall be required under this Section 6(b).

 

 

 

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Section 7.               
Exercise of Warrants; Exercise Price; Termination Date.

 

(a)               
The Warrants shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable
and shall terminate and become void, and all rights thereunder and under this Agreement shall cease, at the Close of Business on
the Termination Date. Subject to the foregoing and to Section 7(b) below, the Holder of a Warrant may exercise the Warrant in whole
or in part upon surrender of the Warrant Certificate, if required, with the properly completed and duly executed Exercise Notice
and payment of the Exercise Price (unless exercised via a cashless exercise), which may be made, at the option of the Holder, by
wire transfer or by certified or official bank check in United States dollars, to the Warrant Agent at the office of the Warrant
Agent designated for such purposes. In the case of the Holder of a Global Warrant, the Holder shall deliver the executed Exercise
Notice (which shall not require any ink-original documents and shall not require any medallion guarantee or other type of guarantee
or notarization of a Notice Exercise) and the payment of the Exercise Price as described herein. Notwithstanding any other provision
in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry
form through the Depositary (or another established clearing corporation performing similar functions), shall effect exercises
by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction form for exercise,
complying with the procedures to effect exercise that are required by the Depositary (or such other clearing corporation, as applicable).
Notwithstanding anything herein to the contrary, the Company acknowledges and agrees that upon delivery of an Exercise Notice or
upon a Holder instructing its Participant to exercise, such Holder shall be deemed for all corporate purposes to have become the
holder of record of the Warrant Shares with respect to such exercise, irrespective of the date of delivery of the Warrant Shares,
provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Warrant
Agent within the earlier of (i) by 12:00 p.m. Eastern Time on the second Trading Day (as defined in the Warrant Certificate) and
(ii) the number of Trading Days comprising the Standard Settlement Period (as defined in the Warrant Certificate), following delivery
of the Exercise Notice.

 

(b)               
Upon the Warrant Agent’s receipt of a Warrant Certificate prior to the Close of Business on the Termination
Date set forth in such Warrant Certificate, with the executed Exercise Notice, accompanied by payment of the Exercise Price for
the shares to be purchased (other than in the case of a cashless exercise) and an amount equal to any applicable tax, governmental
charge or expense reimbursement referred to in Section 6 (or, in the case of the Holder of a Global Warrant, the delivery of the
executed Exercise Notice (which shall not require any ink-original documents and shall not require any medallion guarantee or other
type of guarantee or notarization of a Notice Exercise) and the payment of the Exercise Price (other than in the case of a cashless
exercise) and any other applicable amounts as set forth herein), the Company shall cause the Warrant Agent to, and the Warrant
Agent shall, cause the Warrant Shares underlying such Warrant Certificate or Global Warrant to be delivered to or upon the order
of the Holder of such Warrant Certificate or Global Warrant, registered in such name or names as may be designated by such Holder,
no later than the Warrant Share Delivery Date (as such term is defined in the Warrant Certificate). If the Company is then a participant
in the DWAC system of the Depositary and either (A) there is an effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or (B) the Warrant is being exercised via cashless exercise, then the
certificates for Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of the Holder’s
broker with the Depositary through its DWAC system. For the avoidance of doubt, if the Company becomes obligated to pay any amounts
to any Holders pursuant to Section 2(d)(i) or 2(d)(iv) of the Warrant Certificate, such obligation shall be solely that of the
Company and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, except in the case
of a cashless exercise, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the aggregate Exercise
Price of the Warrant Shares to be purchased upon exercise of such Holder’s Warrant as set forth in Section 7(a) hereof by
the Warrant Share Delivery Date, the Company will not obligated to cause the Warrant Agent to deliver certificates representing
any such Warrant Shares (via DWAC or otherwise) until following receipt of such payment, and the applicable Warrant Share Delivery
Date shall be deemed extended by one day for each day (or part thereof) until such payment is delivered to the Warrant Agent. Upon
receipt of an Exercise Notice for a cashless exercise, the Warrant Agent shall deliver a copy of the Exercise Notice to the Company
and request from the Company and the Company shall promptly calculate and transmit to the Warrant Agent in writing the number of
Warrant Shares issuable in connection with such cashless exercise. The Warrant Agent shall have no obligation under this Agreement
to calculate, the number of Warrant Shares issuable in connection with a cashless exercise nor shall the Warrant agent have any
duty or obligation to investigate or confirm whether the Company’s determination of the number of Warrant Shares issuable
upon such exercise, pursuant to this Section 7, is accurate or correct.

 

(c)               
In case the Holder of any Warrant Certificate shall exercise fewer than all Warrants evidenced thereby, upon the
request of the Holder, a new Warrant Certificate evidencing the number of Warrants equivalent to the number of Warrants remaining
unexercised may be executed and delivered by the Company and, upon written instruction, countersigned by the Warrant Agent and
delivered to the Holder of such Warrant Certificate or to his duly authorized assigns in accordance with Section 2(d)(ii) of the
Warrant Certificate, subject to the provisions of Section 6 hereof.

 

 

 

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(d)               
Cost Basis Information.

 

(1)              
In the event of a cash exercise of the Warrants, the Company hereby instructs the Warrant Agent to record cost basis for
newly issued Warrant Shares to be equal to the Exercise Price.

 

(2)              
In the event of a cashless exercise, the Company shall provide cost basis for Warrant Shares issued pursuant to a cashless
exercise at the time the Company confirms the number of Warrant Shares issuable in connection with the cashless exercise to the
Warrant Agent pursuant to Section 7(b) hereof.

 

Section 8.               
Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant
Agent for cancellation or in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates
shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver
to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.

 

Section 9.               
Certain Representations; Reservation and Availability of Shares of Common Stock or Cash.

 

(a)               
This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution
and delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against
the Company in accordance with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming
due authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration
Statement, constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their
terms and entitled to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(b)               
The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued
shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the
number of shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.

 

(c)               
The Warrant Agent will create a reserve account, into which shall be reserved such number of shares of Common Stock
that are issuable upon the exercise of the Warrants in full, and from such reserve account shall the Common Stock be issued upon
the exercise of Warrants.

 

(d)               
The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates
evidencing Common Stock upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental
charge which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance
or delivery of certificates for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Warrants
surrendered for exercise or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until
any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the Holder of such
Warrant Certificate at the time of surrender) or until it has been established to the Company’s and the Warrant Agent’s
reasonable satisfaction that no such tax or governmental charge is due.

 

Section 10.           
Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued (or to whose broker’s
account is credited shares of Common Stock through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed
to have become the holder of record for the Common Stock represented thereby on, and such certificate shall be dated the date on
which submission of the Exercise Notice was made, provided that the Warrant Certificate evidencing such Warrant was duly surrendered
(but only if required herein) and payment of the Exercise Price (and any applicable transfer taxes) was received on or prior to
the time set forth in Section 7; provided, however, that if the date of submission of the Exercise Notice is a date upon which
the Common Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding day on which the Common Stock transfer books of the Company
are open.

 

 

 

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Section 11.           
Adjustment of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price,
the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time
as provided in Section 3 of the Warrant Certificate. In the event that at any time, as a result of an adjustment made pursuant
to Section 3 of the Warrant Certificate, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the shares contained in Section 3 of the Warrant Certificate, and the provisions of Sections
7, 9 and 14 of this Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares. All
Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant Certificate
shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from time
to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.

 

Section 12.           
Certification of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the
number of shares of Common Stock issuable upon the exercise of each Warrant is adjusted as provided in Section 11, the Company
shall promptly inform the Warrant Agent and each transfer agent of the Common Stock in writing of the Exercise Price of each Warrant
as so adjusted, and a brief statement of the facts accounting for such adjustment. The Warrant Agent shall be fully protected in
relying on such certificate and on any adjustment or statement contained therein and shall have no duty or liability with respect
to, and shall not be deemed to have knowledge of any such adjustment or any such event unless and until it shall have received
such certificate.

 

Section 13.           
Bank Accounts. All funds received by Warrant Agent under this Agreement that are to be distributed or applied by
Warrant Agent in the performance of services to be provided hereunder (the “Funds”) shall be held by Computershare
Inc. as agent for the Company and deposited in one or more bank accounts to be maintained by Computershare Inc. in its name as
agent for the Company. Until paid pursuant to the terms of this Agreement, Computershare Inc. will hold the Funds through such
accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment
grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating)
(each as reported by Bloomberg Finance L.P.). Computershare Inc. shall have no responsibility or liability for any diminution of
the Funds that may result from any deposit made by Computershare Inc. in accordance with this paragraph, including any losses resulting
from a default by any bank, financial institution or other third party. Computershare Inc. may from time to time receive interest,
dividends or other earnings in connection with such deposits. Computershare Inc. shall not be obligated to pay such interest, dividends
or earnings to the Company, any holder or any other party.

 

Section 14.           
Fractional Shares of Common Stock.

 

(a)               
The Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants.
Whenever any fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall
reflect a rounding up of such fraction to the nearest whole Warrant.

 

(b)               
The Company shall not issue fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates
which evidence fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required
to be issued or distributed, the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(e)(v)
of the Warrant Certificate.

 

Section 15.           
Conditions of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon
the express terms and conditions hereof, including the following to all of which the Company agrees and to all of which the rights
hereunder of the Holders from time to time of the Warrants shall be subject:

 

(a)               
Compensation. The Company agrees to pay the Warrant Agent reasonable compensation for its services as such
Warrant Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for
all expenditures that the Warrant Agent may reasonably incur (including, without limitation, reasonable fees and expenses of counsel)
in connection with the preparation, delivery, negotiation, amendment, administration and the execution of this Agreement and the
exercise and performance of its duties hereunder. The Company shall provide an initial funding of $1,000 for the purpose of issuing
cash in lieu of fractional shares. From time to time thereafter, the Warrant Agent may request additional funding to cover fractional
payments in writing. The Warrant Agent shall have no obligation to make such fractional payments unless the Company shall have
provided the necessary funds to pay in full all amounts due and payable with respect thereto.

 

 

 

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(b)               
Indemnification. The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless against
any costs, expenses (including reasonable fees of its legal counsel), losses or damages, which may be paid, incurred or suffered
by or to which it may become subject, arising from or out of, directly or indirectly, any claims or liability resulting from its
actions or omissions as Warrant Agent pursuant hereto; provided, that such covenant and agreement does not extend to, and the Warrant
Agent shall not be indemnified with respect to, such costs, expenses, losses and damages incurred or suffered by the Warrant Agent
as a result of, or arising out of, its gross negligence, bad faith, or willful misconduct (each as determined in a final non-appealable
judgment by a court of competent jurisdiction). The costs and expenses incurred by the Warrant Agent in enforcing this right of
indemnification shall be paid by the Company.

 

(c)               
Agent for the Company. In acting under this Warrant Agreement and in connection with the Warrant Certificates,
the Warrant Agent is acting solely as agent of the Company and does not assume any obligations or relationship of agency or trust
for or with any of the Holders of Warrant Certificates or beneficial owners of Warrants.

 

(d)               
Counsel. The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the
Company, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in the absence of bad faith and in accordance with the advice of such counsel.

 

(e)               
Documents. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action
taken or omitted by it in reliance upon the Global Warrant, any Warrant Certificate, notice, direction, consent, certificate, affidavit,
statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper
parties.

 

(f)                
Certain Transactions. The Warrant Agent, and its officers, directors, Affiliates and employees, may become
the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant
Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of Holders of Warrant
Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant
Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under any indenture to which the Company is a party.

 

(g)               
No Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent shall have no liability
for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.

 

(h)               
No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are expressly
set forth herein and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the
Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in
any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant
Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or responsibility in case of any default
by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case
of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including, without limiting
the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law.

 

(i)                
Instructions; Certifications. From time to time, the Company may provide the Warrant Agent with instructions
or certifications concerning or related to the services performed by the Warrant Agent hereunder. In addition, at any time the
Warrant Agent may apply to any officer of the Company for instruction, and may consult with legal counsel for the Warrant Agent
or the Company with respect to any matter arising in connection with the services to be performed by the Warrant Agent under this
Agreement. The Warrant Agent and its employees, agents and subcontractors shall not be liable and shall be indemnified by the Company
for any action taken or omitted by Warrant Agent, its employees, agents and subcontractors in reliance upon any Company instructions,
certifications or upon the advice or opinion of such counsel. The Warrant Agent shall not be held to have notice of any change
of authority of any person, until receipt of written notice thereof from the Company.

 

 

 

    	 	7	 

     

    

 

(j)                
The Warrant Agent shall not have any duty or responsibility in the case of the receipt of any written demand from
any holder of Warrants with respect to any action or default by the Company, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand
upon the Company.

 

(k)               
The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith or willful misconduct (each as determined by a final non-appleable judgment
of a court of competent jurisdiction) in the selection and continued employment thereof.

 

(l)                
The Warrant Agent shall not be obligated to expend or risk its own funds or to take any action that it believes would
expose or subject it to expense or liability or to a risk of incurring expense or liability, unless it has been furnished with
assurances of repayment or indemnity satisfactory to it.

 

(m)             
The Warrant Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations
relating to any registration statement filed with the Commission or this Agreement, including without limitation obligations under
applicable regulation or law.

 

(n)               
The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any
Warrants authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application
by the Company of the proceeds of the issue and sale, or exercise, of the Warrants.

 

(o)               
The Warrant Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty
of signature by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents
Medallion Program or other comparable “signature guarantee program” or insurance program in addition to, or in substitution
for, the foregoing; or (b) any law, act, regulation or any interpretation of the same even though such law, act, or regulation
may thereafter have been altered, changed, amended or repealed.

 

(p)               
In the event the Warrant Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction,
direction, request or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent, may, in
its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to Company,
the holder of any Warrant or any other person or entity for refraining from taking such action, unless the Warrant Agent receives
written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Warrant Agent.

 

(q)               
Delivery of Exercise Price. The Warrant Agent shall forward funds received for warrant exercises under this
Agreement in a given month by the 5th Business Day of the following month by wire transfer to an account designated by the Company.

 

(r)                
Opinion of Counsel. The Company shall provide an opinion of counsel prior to the effective date of this Agreement
to set up a reserve of Warrants and related Common Stock. The opinion shall state that all Warrants or Common Stock, as applicable,
are: (1) registered under the Securities Act or are exempt from such registration, and all appropriate state securities law filings
have been made with respect to the warrants or shares; and (2) validly issued, fully paid and non-assessable.

 

(s)                
Confidentiality. The Warrant Agent and the Company agree that all books, records, information and data pertaining
to the business of the other party, including inter alia, personal, non-public Warrant holder information, which are exchanged
or received pursuant to the negotiation or the carrying out of this Agreement including the compensation for services performed
hereunder shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law,
including, without limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and criminal
actions).

 

(t)                
Consequential Damages. Neither party to this Agreement shall be liable to the other party for any consequential,
indirect, punitive, special or incidental damages under any provisions of this Agreement or for any consequential, indirect, punitive,
special or incidental damages arising out of any act or failure to act hereunder even if that party has been advised of or has
foreseen the possibility of such damages.

 

 

 

    	 	8	 

     

    

 

(u)               
Limitation of Liability. Notwithstanding anything contained herein to the contrary, the Warrant Agent’s
aggregate liability during any term of this Agreement with respect to, arising from, or arising in connection with this Agreement,
or from all services provided or omitted to be provided under this Agreement, whether in contract, or in tort, or otherwise, is
limited to, and shall not exceed, the amounts paid hereunder by the Company to the Warrant Agent as fees and charges, but not including
reimbursable expenses, during the twelve (12) months immediately preceding the event for which recovery from the Warrant Agent
is being sought.

 

The rights and obligations of the parties
set forth in this Section 15 shall survive the expiration of the Warrants, the termination of this Agreement and the resignation,
replacement or removal of the Warrant Agent.

 

Section 16.           
Purchase or Consolidation or Change of Name of Warrant Agent.

 

(a)               
Any Person into which the Warrant Agent or any successor Warrant Agent may be merged or with which it may be consolidated,
or any Person resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent shall be party,
or any Person succeeding to the shareholder services business of the Warrant Agent or any successor Warrant Agent, shall be the
successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part
of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Warrant Agent under the
provisions of Section 18. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement
any of the Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the
countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case at that time
any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates
either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant
Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

(b)               
In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates
shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver
Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned,
the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases
such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

Section 17.           
Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the
following express terms and conditions, by all of which the Company, by its acceptance hereof, shall be bound:

 

(a)               
Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chief Executive Officer, Chief Financial Officer or Vice President of the Company; and
such certificate shall be full authorization and protection to the Warrant Agent, and the Warrant Agent shall incur no liability
for or in respect of for any action taken, suffered or omitted to be taken by it under the provisions of this Agreement in reliance
upon such certificate.

 

(b)               
Subject to the limitation set forth in Section 15, the Warrant Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (each as determined by a final, non-appealable judgment of a court of competent jurisdiction).

 

(c)               
The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in
this Agreement or in the Warrant Certificates (except its countersignature thereof) by the Company or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

 

 

    	 	9	 

     

    

 

(d)               
The Warrant Agent shall not have any liability or be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity
or execution of any Warrant Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for
the adjustment of the Exercise Price or the making of any change in the number of shares of Common Stock required under the provisions
of Section 11 or responsible for the manner, method or amount of any such change or adjustment or the ascertaining of the existence
of facts that would require any such adjustment or change (except with respect to the exercise of Warrants evidenced by Warrant
Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Warrant Certificate or as to whether any shares of Common Stock will, when issued, be duly authorized, validly
issued, fully paid and nonassessable.

 

(e)               
Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other
party hereto for the carrying out or performing by any party of the provisions of this Agreement.

 

(f)                
The Warrant Agent shall not be obligated to expend or risk its own funds or to take any action that it believes would
expose or subject it to expense or liability or to a risk of incurring expense or liability, unless it has been furnished with
assurances of repayment or indemnity satisfactory to it.

This Section 17 shall survive the expiration
of the Warrants, the termination of this Agreement and the resignation, replacement or removal of the Warrant Agent.

 

Section 18.           
Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon
30 days’ notice in writing sent to the Company and, in the event that the Warrant Agent or one of its Affiliates is not also
the transfer agent for the Company, to each transfer agent of the Common Stock. In the event the transfer agency relationship in
effect between the Company and the Warrant Agent terminates, the Warrant Agent will be deemed to have resigned automatically and
be discharged from its duties under this Agreement as of the effective date of such termination, and the Company shall be responsible
for sending any required notice thereunder. The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’
notice in writing, sent to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent of the
Common Stock, and to the Holders of the Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Warrant Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit
his Warrant Certificate for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent, provided that, for purposes of this Agreement, the Company shall be deemed
to be the Warrant Agent until a new warrant agent is appointed. Any successor Warrant Agent, whether appointed by the Company or
by such a court, shall be a Person (other than a natural person) organized and doing business under the laws of the United States
or of a state thereof, in good standing, which is authorized under such laws to exercise shareholder services powers and is subject
to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined
capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor
Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute
and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any
notice provided for in this Section 18, or any defect therein, shall not affect the legality or validity of the resignation or
removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.

 

Section 19.           
Issuance of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants
to the contrary, the Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of
shares of stock or other securities or property purchasable under the several Warrant Certificates made in accordance with the
provisions of this Agreement.

 

 

 

    	 	10	 

     

    

 

Section 20.           
Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder
of any Warrant Certificate to or on the Company, (ii) by the Company or by the Holder of any Warrant Certificate to or on the Warrant
Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given when in writing
(a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express
or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth
Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested),
and (d) the date of transmission, if such notice or communication is delivered via facsimile or email attachment at or prior to
5:30 p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m. (New York
City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

 

(a)               
If to the Company, to:

 

Sonoma Pharmaceuticals, Inc.

1129 N. McDowell Blvd.

Petaluma, CA 94954

Attention: CEO

 

(b)               
If to the Warrant Agent, to:

 

[Computershare Inc.

Attention: General Counsel

462 South 4th Street, Suite 1600

Louisville, KY 40202

 

For any notice delivered by email to be
deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next Business
Day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.

 

(c)               
If to the Holder of any Warrant Certificate, to the address of such Holder as shown on the registry books of the
Company. Any notice required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf
of the Company. Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to
a Holder of any Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures
of the Depositary or its designee.

 

Section 21.           
Supplements and Amendments.

 

(a)               
The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of
any Holders of Global Warrants in order to (i) add to the covenants and agreements of the Company for the benefit of the Holders
of the Global Warrants, (ii) to surrender any rights or power reserved to or conferred upon the Company in this Agreement, (iii)
cure any ambiguity, or (iv) correct or supplement any provision herein which may be defective or inconsistent with any other provision
herein, provided that such addition, correction or surrender shall not adversely affect the interests of the Holders of the Warrants
in any material respect.

 

 

 

    	 	11	 

     

    

 

(b)               
In addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive
not less than a majority of the shares of Common Stock issuable thereunder, the Company and the Warrant Agent may modify this Agreement
for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the Holders of the Global Warrants; provided, however, that no modification
of the terms (including but not limited to the adjustments described in Section 11 herein or Section 3 of the Warrant) upon which
the Warrants are exercisable or the rights of the holders of Warrants to receive liquidated damages or other payments in cash from
the Company, including, without limitation, pursuant to Section 3(e) of the Warrant, or reducing the percentage required for consent
to modification of this Agreement or requiring a holder of Warrants in book entry or electronic form held through the Depositary
to deliver any ink-original Exercise Notice or any medallion guarantee (or other type of guarantee or notarization) of an Exercise
Notice, may be made without the consent of the Holder of each outstanding Warrant affected thereby, provided, further, that no
amendment hereunder shall affect any terms of any Warrant Certificate issued in a Warrant Exchange. As a condition precedent to
the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly
authorized officer of the Company that states that the proposed amendment complies with the terms of this Section 21. No supplement
or amendment to this Agreement shall be effective unless executed by the Warrant Agent. The Warrant Agent may, but shall not be
obligated to, execute any amendment or supplement or waiver that affects the Warrant Agent’s own rights, duties or immunities
under this Agreement.

 

Section 22.           
Successors. All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent
shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

Section 23.           
Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company,
the Holders of Warrant Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.

 

Section 24.           
Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be governed by, and construed in
accordance with, the laws of the State of Delaware without giving effect to the conflicts of law principles thereof.

 

Section 25.           
Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
A signature to this Agreement transmitted electronically shall have the same authority, effect and enforceability as an original
signature.

 

Section 26.           
Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.

 

Section 27.           
Information. The Company agrees to promptly provide to the Holders of the Warrants any information it provides to
the holders of the Common Stock, except to the extent any such information is publicly available on the EDGAR system (or any successor
thereof) of the Securities and Exchange Commission.

 

Section 28.           
USA PATRIOT Act Notice. The Warrant Agent hereby notifies the Company that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it must obtain, verify
and record certain information that identifies the Company, which information includes the name and address of the Company and
other information that will allow the Warrant Agent to identify the Company in accordance with the Patriot Act.

 

Section 29.           
Force Majeure. Notwithstanding anything to the contrary contained herein, the Warrant Agent will not be liable for
any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of
God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss
of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war,
or civil unrest; provided, however, that this provision shall not affect or limit in any way the obligations of the Company under
the Global Warrants or the Warrant Certificates.

 

Section 30.           
Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Agreement; provided, however, that if such prohibited and invalid provision shall
adversely affect the rights, immunities, liabilities, duties or obligations of the Warrant Agent, the Warrant Agent shall be entitled
to resign immediately upon written notice to the Company.

 

(Signature page follows)

 

 

 

    	 	12	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the day and year first above written.

 

	 	
        SONOMA PHARMACEUTICALS, INC.

        

        

	 	 
	 	 
	 	 
	 	By: /s/ Jim Schutz                    
	 	Name:      Jim Schutz
	 	Title:        Chief Executive Officer
	 	 
	 	 
	 	COMPUTERSHARE, INC.

	 	as Warrant Agent
	 	 
	 	 
	 	By:                                     
	 	Name:
	 	Title:
	 	 
	 	 
	 	COMPUTERSHARE TRUST
        COMPANY, N.A.
	 	As Warrant Agent
	 	 
	 	 
	 	By: ______________________________
	 	Name:
	 	Title:
	 	 

 

 

 

    	 	13	 

     

    

 

Annex A: Form of Warrant Certificate
Request Notice

 

WARRANT CERTIFICATE REQUEST NOTICE

 

To: Computershare, Inc. and Computershare
Trust Company, N.A., collectively as Warrant Agent for Sonoma Pharmaceuticals, Inc. (the “Company”)

 

The undersigned Holder of Common Stock Purchase
Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive a Warrant
Certificate evidencing the Warrants held by the Holder as specified below:

 

1.       Name
of Holder of Warrants in form of Global Warrants: _____________________________

 

2.       Name
of Holder in Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants): ________________________________

 

3.       Number
of Warrants in name of Holder in form of Global Warrants: ___________________

 

4.       Number
of Warrants for which Warrant Certificate shall be issued: __________________

 

5.       Number
of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate, if any: ___________

 

6.       Warrant
Certificate shall be delivered to the following address:

______________________________

______________________________

______________________________

______________________________

 

The undersigned hereby acknowledges and
agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have
surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced
by the Warrant Certificate.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: __________________________________________________

 

Signature of Authorized Signatory of Investing
Entity: ___________________________

 

Name of Authorized Signatory: ______________________________________________

 

Title of Authorized Signatory: _______________________________________________

 

Date: ___________________________________________________________________

 

 

 

 

    	 	14	 

     

    

 

Exhibit 1: Form of Warrant Certificate

 

 

 

 

 

 

 

 

 

 

    	 	15Exhibit

Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”), is entered into as of November 13, 2018 (the “Effective Date”), by and between LGI Homes, Inc., a Delaware corporation (the “Company”) and Eric Lipar, an individual (the “Executive”).
WHEREAS, the Company desires to employ the Executive on the terms, conditions and for the consideration hereinafter set forth, and the Executive is willing to serve as an employee of the Company on such terms and conditions and for such consideration.
NOW THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, the Company and the Executive hereby agree as follows:
1.Employment and Duties.
(a)General.  The Executive shall serve as Chief Executive Officer and Chairman of the Board of Directors of the Company, reporting to the Company’s Board of Directors.  The Executive shall have such duties and responsibilities, commensurate with the Executive’s position, as may be reasonably assigned to the Executive from time to time by the Board of Directors.  The Executive’s principal place of employment shall be 1450 Lake Robbins Drive, Suite 430, The Woodlands, Texas 77380.
(b)Exclusive Services.  For so long as the Executive is employed by the Company, the Executive shall devote his full attention to his duties hereunder, shall faithfully serve the Company, shall in all respects conform to and comply with the lawful and good faith directions and instructions given to him by the Company and shall use his best efforts to promote and serve the interests of the Company.  Further, the Executive shall not, directly or indirectly, render services to any other person or organization without the consent of the Company or otherwise engage in activities that would interfere significantly with his faithful performance of his duties hereunder.  Notwithstanding the foregoing, the Executive may (i) serve on corporate boards, provided he receives prior permission from the Company’s Board of Directors; (ii) serve on corporate, civic, children sports organization or charitable boards or engage in charitable activities without remuneration therefor; and (iii) manage personal investments, provided that such activity does not contravene the first sentence of this Section 1(b) or any other provision of this Agreement.
2.Term of Employment.  The Executive’s employment shall be covered by the terms of this Agreement effective as of the Effective Date and shall continue for a period of three (3) years, unless terminated earlier pursuant to Section 4 of this Agreement; provided that, on such third (3rd) anniversary of the Effective Date and each anniversary thereafter (such date and each anniversary thereof, a “Renewal Date”), this Agreement shall be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one (1) year, unless either party provides written notice of its intention not to extend the term of this Agreement at least ninety (90) days prior to the applicable Renewal Date.  The period from the Effective Date until the termination of the Executive’s employment under this Agreement is referred to as the “Term”.
3.Compensation and Other Benefits.  Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Executive during the Term as compensation for services rendered hereunder:
(a)Base Salary.  The Company shall pay to the Executive an annual salary (the “Base Salary”) at the rate of $840,588, payable in substantially equal installments at such intervals as may be 

determined by the Company in accordance with the Company’s then current ordinary payroll practices as established from time to time.  The Base Salary shall be reviewed in good faith by the Compensation Committee of the Company’s Board of Directors (the “Board”), based upon the Executive’s performance, not less often than annually.  The Base Salary may be increased, but not decreased (other than an across-the-board salary reduction applicable to all similarly situated executives).
(b)Bonus.  For each fiscal year during the Term, the Executive shall be eligible to receive an incentive bonus, the amounts and targets to which shall be determined by the Compensation Committee.  It is intended that such bonus, if any, shall be paid to the Executive no later than ten (10) days following the date the Company receives its audited financial statements for the applicable fiscal year; however, in no event shall such bonus be paid to the Executive later than March 15th of the calendar year immediately following the calendar year in which the bonus is earned.
(c)Employee Benefits.  The Executive shall be entitled to participate in all employee benefit arrangements that the Company may offer to its executives of a like status from time to time, and as may be amended from time to time.  In addition, the Company shall provide the Executive with a $1,500.00 monthly car allowance, payable in accordance with the applicable policies and procedures of the Company as in effect from time to time.
(d)Expenses.  The Company shall reimburse the Executive for reasonable travel and other business-related expenses incurred by the Executive in the fulfillment of his duties hereunder upon presentation of written documentation thereof, in accordance with the applicable expense reimbursement policies and procedures of the Company as in effect from time to time.
4.Termination of Employment.
(a)Expiration of the Term, For Cause, Without Good Reason, Death or Disability.  If the Executive’s employment is terminated due to the Executive’s death or Disability, by the Company for Cause, by the Executive voluntarily without Good Reason or on account of either party’s failure to renew this Agreement in accordance with Section 2, then the Executive shall receive only the following from the Company: (i) any unpaid Base Salary accrued through the date of termination, (ii) a lump sum payment for any accrued but unused vacation pay, (iii) a lump sum payment for any previously unreimbursed business expenses incurred by the Executive on behalf of the Company during the term of his employment, and (iv) any earned but unpaid annual bonus with respect to any completed fiscal year immediately preceding the termination date, which shall be paid on the otherwise applicable payment date; provided that, if the Executive’s employment is terminated by the Company for Cause, then any such accrued but unpaid annual bonus shall be forfeited (collectively, such (i) through (iv) being the “Accrued Rights”).
(i)    For purposes of this Agreement the term “Cause” shall mean a termination of the Executive’s employment because of: (1) any act or omission that constitutes a material breach by the Executive of any of his obligations under this Agreement; (2) the Executive’s conviction of, or plea of nolo contendere to, (A) any felony or (B) another crime involving dishonesty or moral turpitude or which could reflect negatively upon the Company or otherwise impair or impede its operations; (3) the Executive’s engaging in any misconduct, negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Company or any of its subsidiaries or affiliates; (4) the Executive’s material breach of a written policy of the Company or the rules of any governmental or regulatory body applicable to the Company; (5) the Executive’s refusal to follow the directions of the Board; or (6) any other willful misconduct by the Executive which is materially injurious to the financial condition or business reputation of the Company or any of its subsidiaries or affiliates.  Notwithstanding anything in this Section 4(a)(i) to the contrary, no 

event or condition described in Sections 4(a)(ii)(1), (3), (4), (5) or (6) shall constitute Cause unless (x) within 90 days from the Board first acquiring actual knowledge of the existence of the Cause condition, the Board provides the Executive written notice of its intention to terminate his employment for Cause and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the Executive within 20 days of his receipt of such notice (or, in the event that such grounds cannot be corrected within such 20-day period, the Executive has not taken all reasonable steps within such 20-day period to correct such grounds as promptly as practicable thereafter); and (z) the Board terminates the Executive’s employment with the Company immediately following expiration of such 20-day period.  For purposes of this Section 4(a)(i), any attempt by the Executive to correct a stated Cause shall not be deemed an admission by the Executive that the Board’s assertion of Cause is valid.
(ii)    For purposes of this Agreement, the term “Disability” shall mean that the Executive: (x) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; (y) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company; or (z) is determined by the Social Security Administration to be disabled.
(iii)    For purposes of this Agreement, the term “Good Reason” shall mean to include: (1) a material diminution in the Executive’s Base Salary (other than an across-the-board salary reduction applicable to all similarly situated executives) or a failure by the Company to pay material compensation due and payable to the Executive in connection with his employment; (2) a material diminution in the nature or scope of the Executive’s authority, duties, responsibilities, or title from those applicable to him as of the Effective Date; (3) the Company requiring the Executive to be based at any office or location more than 50 miles from 1450 Lake Robbins Drive, The Woodlands, Texas 77380; or (4) a material breach by the Company of any term or provision of this Agreement.  Notwithstanding anything in this Section 4(a)(iii) to the contrary, no event or condition described in this Section shall constitute Good Reason unless, (x) within 90 days from the Executive first acquiring actual knowledge of the existence of the Good Reason condition described in this Section, the Executive provides the Board written notice of his intention to terminate his employment for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the Board within 20 days of the Board’s receipt of such notice (or, in the event that such grounds cannot be corrected within such 20-day period, the Board has not taken all reasonable steps within such 20-day period to correct such grounds as promptly as practicable thereafter); and (z) the Executive terminates his employment with the Company immediately following expiration of such 20-day period.  For purposes of this Section 4(a)(iii), any attempt by the Board to correct a stated Good Reason shall not be deemed an admission by the Board that the Executive’s assertion of Good Reason is valid.
(b)Termination of Employment Prior to a Change in Control.  Except as provided in Section 4(c) and subject to satisfaction of Section 4(e), if prior to a Change in Control the Executive’s employment is terminated by the Company without Cause (other than on account of the Executive’s death or disability) or is terminated by the Executive for Good Reason, then the Executive shall be entitled to receive (i) the Accrued Rights and (ii) a payment equal to two times (2x) his then current annual Base Salary.  The Executive shall have no further right to receive any other compensation or 

benefits after such termination or resignation of employment, except for the continuation of health benefits as provided under applicable law.  Except as otherwise required under Section 6(b), such amount shall be paid to the Executive in a lump sum no later than the forty-fifth (45th) day immediately following the Executive’s “separation from service” (as defined under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)), provided the Executive first executes a release of any and all claims against the Company (set forth in Section 4(e), below) and the revocation period specified therein has expired without the Executive revoking such release.  
(i)    For purposes of this Agreement the term “Change in Control” shall be as defined in the Company’s Amended and Restated 2013 Equity Incentive Plan, as amended from time to time, or any successor long-term equity incentive plan maintained by the Company.
(c)Termination of Employment after a Change in Control.  Subject to satisfaction of Section 4(e), if, within six (6) months immediately preceding a Change in Control or within twelve (12) months immediately following a Change in Control, the Executive’s employment is terminated by the Company without Cause (other than Cause or on account of the Executive’s death or disability) or is terminated by the Executive for Good Reason, then the Executive shall be entitled to receive the following benefits (collectively, the “Severance Benefits”): (i) the Accrued Rights; (ii) a payment equal to two times (2x) Base Salary; (iii) a payment equal to two times (2x) the dollar amount of the Executive’s full target bonus percentage as in effect for the twelve (12) month period immediately prior to such termination (for this purpose any performance targets shall be deemed immediately and fully satisfied); and (iv) $32,500 for the purpose of the Executive to fund health coverage continuation benefits.  Severance Benefits shall be paid to the Executive no later than the forty-fifth (45th) day immediately following the Executive’s “separation from service” (as defined under Section 409A of the Code), provided the Executive first executes a release of any and all claims against the Company (set forth in Section 4(e), below) and the revocation period specified therein has expired without the Executive revoking such release.  Notwithstanding the foregoing and for avoidance of doubt, if the Executive’s employment is terminated by the Company for Cause or by the Executive without Good Reason any time prior to or following a Change in Control, then the Executive shall be entitled to only any unpaid annual Base Salary through and including the date of termination and the Executive shall not be entitled to or receive any Severance Benefits.
(d)Resignation from Directorships and Officerships.  The termination of the Executive’s employment for any reason shall constitute the Executive’s immediate resignation from (i) any director, officer or employee position the Executive has with the Company, and (ii) all fiduciary positions (including as a trustee) the Executive holds with respect to any employee benefit plans or trusts established by the Company.  The Executive agrees that this Agreement shall serve as written notice of resignation in this circumstance.  
(e)Waiver and Release.  Notwithstanding any other provisions of this Agreement to the contrary, unless expressly waived in writing by the Board in its sole discretion, the Company shall not make or provide any Severance Benefits under this Section 4 (other than the Accrued Rights) unless the Executive timely executes and delivers to the Company a general release (which shall be provided by the Company not later than five (5) days from the date on which the Executive’s employment is terminated and be substantially in the form attached hereto as Exhibit A), whereby the Executive (or his estate or legally appointed personal representative) releases the Company (and affiliates of the Company and other designated persons) from all employment based or related claims of the Executive and all obligations of the Company to the Executive other than with respect to (x) the Company’s obligations to make and provide the Severance Benefits and (y) any vested benefits to which the Executive is entitled under the terms of any Company benefit or equity plan, and the Executive does not revoke such release within any applicable revocation period 

following the Executive’s delivery of the executed release to the Company.  If the requirements of this Section 4(e) are not satisfied by the Executive (or his estate or legally appointed personal representative), then no Severance Benefits (other than the Accrued Rights) shall be due to the Executive (or his estate) pursuant to this Agreement.  
(f)No Continued Benefits Following Termination.  Unless otherwise specifically provided in this Agreement or contemplated by another agreement between the Executive and the Company, or as otherwise required by law, all compensation, equity plans, and benefits payable to the Executive under this Agreement shall terminate on the date of termination of the Executive’s employment with the Company under the terms of this Agreement.
(g)Notice of Termination.  Any termination of employment by the Company or the Executive shall be communicated by a written “Notice of Termination” to the other party hereto given in accordance with Section 8(l) of this Agreement.  In the event of a termination by the Company for Cause, the Notice of Termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) specify the date of termination.  The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.
5.Section 280G Payments.  Notwithstanding anything in this Agreement to the contrary, if the Executive is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which the Executive has the right to receive from the Company or any other person, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by the Executive from the Company and/or such person(s) will be $1.00 less than three (3) times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better “net after-tax position” to the Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes).  The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order.  The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made at the Company’s expense by a legal, accounting or consulting firm expert in such matters that is selected for this purpose by the Company (the “280G Firm”) applying principles, assumptions and procedures consistent with Section 280G of the Code and taking into account the value of any reasonable compensation for services to be rendered by the Executive before or after the change in control, including any agreement not to render services to competitors pursuant to any non-competition provisions that may apply to the Executive to the extent permitted by Section 280G of the Code and the Company shall cooperate in the valuation of any such services, including any non-competition provisions.  In the event of any underpayment or overpayment under this Agreement, as determined by the 280G Firm, the amount of such underpayment or overpayment shall immediately be paid to the Executive or refunded to the Company, as the case may be, with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.  Nothing in this paragraph shall require 

the Company to be responsible for, or have any liability or obligation with respect to, the Executive’s excise tax liabilities under Section 4999 of the Code.
6.Section 409A of the Code.  This Agreement is intended to either avoid the application of, or comply with, Section 409A of the Code.  To that end this Agreement shall at all times be interpreted in a manner that is consistent with Section 409A.  Notwithstanding any other provision in this Agreement to the contrary, the Company shall have the right, in its sole discretion, to adopt such amendments to this Agreement or take such other actions (including amendments and actions with retroactive effect) as it determines is necessary or appropriate for this Agreement to comply with Section 409A.  Further:
(a)Any reimbursement of any costs and expenses by the Company to the Executive under this Agreement shall be made by the Company in no event later than the close of the Executive’s taxable year following the taxable year in which the cost or expense is incurred by the Executive.  The expenses incurred by the Executive in any calendar year that are eligible for reimbursement under this Agreement shall not affect the expenses incurred by the Executive in any other calendar year that are eligible for reimbursement hereunder and the Executive’s right to receive any reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit.
(b)Any payment following a separation from service that would be subject to Section 409A(a)(2)(A)(i) of the Code as a distribution following a separation from service of a “specified employee” (as defined under Section 409A(a)(2)(B)(i) of the Code) shall be made on the first to occur of (i) ten (10) days after the expiration of the six month period following such separation from service, (ii) death or (iii) such earlier date that complies with Section 409A.
(c)Each payment that the Executive may receive under this Agreement shall be treated as a “separate payment” for purposes of Section 409A of the Code.
7.Confidential Information, Trade Secrets and Restrictive Covenants.  The Company agrees to: (i) disclose, and to continue to disclose its confidential information and trade secrets to the Executive; (ii) provide initial and continued training, education and development to the Executive; and (iii) provide the Executive with confidential information and trade secrets about, and the opportunity to develop relationships with, the Company’s employees, customers and suppliers, and employees and agents of its customers and suppliers.  The prior agreement between the Executive and the Company (or its affiliates) governing confidentiality, non-competition and non-solicitation is hereby incorporated into this Agreement by reference and attached hereto as Exhibit B, and a default under or breach of such prior agreement shall constitute a material breach of this Agreement.   
8.Miscellaneous.
(a)Defense of Claims.  The Executive agrees that, during and following the Term, upon request from the Company, the Executive will cooperate with the Company in the defense of any claims or actions that may be made by or against the Company that affect the Executive’s prior areas of responsibility, except if the Executive’s reasonable interests are adverse to the Company in such claim or action.  The Company agrees to promptly reimburse the Executive for all of the Executive’s reasonable legal fees, travel and other direct expenses incurred, or to be reasonably incurred — and, if the Executive is no longer employed by the Company, to compensate the Executive (at a pro rata hourly rate calculated based on the Executive’s Base Salary at the time of the Executive’s termination of employment) for the Executive’s time — to comply with the Executive’s obligations under this Section 8(a).

(b)Non-Disparagement.  The Executive and the Company agree that at no time during the Executive’s employment by the Company or thereafter shall either the Executive or the Company make, or cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, the reputation, business or character of the other Party, or their affiliates or any of its respective directors, officers or employees.
(c)Source of Payments.  All payments provided under this Agreement, other than payments made pursuant to a plan or agreement which provides otherwise, shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets shall be made, to assure payment.  The Executive shall have no right, title or interest whatsoever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder.  To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.
(d)Arbitration.  Any dispute or controversy arising under or in connection with this Agreement or otherwise in connection with the Executive’s employment by the Company that cannot be mutually resolved by the parties to this Agreement and their respective advisors and representatives shall be settled exclusively by arbitration in Harris County, Houston, Texas in accordance with the rules of the American Arbitration Association before one arbitrator of exemplary qualifications and stature, who shall be selected jointly by an individual to be designated by the Company and an individual to be selected by the Executive, or if such two individuals cannot agree on the selection of the arbitrator, who shall be selected by the American Arbitration Association.
(e)Amendment, Waiver.  This Agreement may not be modified, amended or waived in any manner, except by an instrument in writing signed by both parties hereto.  The waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.
(f)Entire Agreement.  This Agreement and the agreements specifically incorporated herein are the entire agreement and understanding of the parties hereto with respect to the matters covered herein and supersedes all prior or contemporaneous negotiations, commitments, agreements and writings with respect to the subject matter hereof, all such other negotiations, commitments, agreements and writings shall have no further force or effect, and the parties to any such other negotiation, commitment, agreement or writing shall have no further rights or obligations thereunder.
(g)Governing Law/Venue.  This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to conflict of laws principles thereof.  Each party to this Agreement hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts in Houston, Texas, for the purposes of any proceeding arising out of or based upon this Agreement.
(h)No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
(i)Severability.  In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

(j)No Assignment.  Neither this Agreement nor any of the Executive’s rights and duties hereunder, shall be assignable or delegable by the Executive.  Any purported assignment or delegation by the Executive in violation of the foregoing shall be null and void ab initio and of no force and effect.  This Agreement may be assigned by the Company to a person or entity which is an affiliate or a successor in interest to substantially all of the business operations of the Company.  Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.
(k)Successors; Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
(l)Notices.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three (3) days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.
		
	If to the Company:
	LGI Homes, Inc.

1450 Lake Robbins Drive, Suite 430
The Woodlands, Texas 77380
      Att: Chair, Compensation Committee

		
	With a Copy to:
	Anthony Eppert

Hunton Andrews Kurth LLP
600 Travis Street, Suite 4200
Houston, Texas 77002

		
	If to Executive:
	Eric Lipar

[ADDRESS REDACTED]

(m)Prior Employment.  The Company has employed the Executive for the Executive’s general skills, management abilities and experience in the Company’s business or related industries.  The Executive acknowledges that he has been specifically instructed not to bring, disclose or use in any fashion any confidential information, trade secrets, proprietary information, data or technology, nor any confidential pricing information, belonging to any prior employer.  In no event is the Executive authorized to use or disclose any such information to the Company or any of its employees.
(n)Executive’s Representations.  The Executive hereby represents to the Company that (i) all confidential information, trade secrets or proprietary information, data or technology, belonging to any prior employer, including those that might have been contained on the Executive’s personal computer, cell phone or other electronic communications or storage device have been returned and/or deleted in accordance with any policy of or agreement with the Executive’s prior employer and (ii) the execution and delivery of this Agreement by the Executive and the Company and the performance by the Executive of his duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which the Executive is a party or otherwise bound.

(o)Assumption by Successor.  The failure of any successor entity to the Company to expressly assume in writing the terms of this Agreement shall be deemed a material breach of this Agreement.
(p)Withholding of Taxes.  The Company may withhold from any amounts or benefits payable under this Agreement all taxes it may be required to withhold pursuant to any applicable law or regulation.
(q)Counterparts.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
(r)Headings.  The section headings and captions in this Agreement are inserted only as a matter of convenience, and in no way define, limit or interpret the scope of this Agreement or of any particular section.
(s)Construction.  Whenever the context so requires herein, the masculine shall include the feminine and neuter, and the singular shall include the plural.  The words “includes” and “including” as used in this Agreement shall be deemed to be followed by the phrase “without limitation.”  The word “or” is not exclusive.
(t)Survival.  This Agreement shall terminate upon the termination of employment of the Executive; however, the following shall survive the termination of the Executive’s employment and/or the expiration or termination of this Agreement, regardless of the reasons for such expiration or termination: Section 4 (“Termination of Employment”) and the corresponding Exhibit A (“Waiver and Release”), Section 7 (“Confidential Information, Trade Secrets and Restrictive Covenants”), Section 8(a) (“Defense of Claims”), Section 8(b) (“Non-Disparagement”), Section 8(d) (“Arbitration”), Section 8(f) (“Entire Agreement”), Section 8(g) (“Governing Law/Venue”), Section 8(k) (“Successors/Binding Agreement”), Section 8(l) (“Notices”), and Section 8(n) (“Executive’s Representations”).
[SIGNATURES ON NEXT PAGE]

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective as of the Effective Date.
	
					
	EXECUTIVE:
	 
	 
	LGI HOMES, INC.:

	 
	 
	 
	 
	 

	/s/    Eric Lipar
	 
	By:
	/s/    Scott Garber

	Eric Lipar
	 
	 
	 

	 
	 
	 
	Its:
	General Counsel and Corporate Secretary

	 
	 
	 
	 
	 

	Date:
	November 13, 2018
	 
	Date:
	November 13, 2018

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

EXHIBIT A
WAIVER AND RELEASE
Pursuant to the terms of the Employment Agreement (the “Agreement”) dated as of [_________________], by and between LGI Homes, Inc., a Delaware corporation, and myself, and in exchange for the salary continuation and benefits payable under the Agreement (the “Severance Benefits”), I hereby waive all claims against and release (i) LGI Homes, Inc., its officers, employees, agents, insurers, predecessors, successors and assigns (collectively referred to as the “Company”), (ii) all of the affiliates of the Company and their directors, officers, employees, agents, insurers, predecessors, successors and assigns, and (iii) the Company and its affiliates’ employee benefit plans and the fiduciaries and agents of said plans (collectively referred to as the “Benefit Plans”) from any and all claims, demands, actions, liabilities and damages arising out of or relating in any way to my employment with or separation from employment with the Company and its affiliates other than amounts due pursuant to the Agreement and the rights and benefits I am entitled to under the Benefit Plans. (the Company, its affiliates and the Benefit Plans are sometimes hereinafter collectively referred to as the “Released Parties”.)
I understand that signing this Waiver and Release is an important legal act.  I acknowledge that I have been advised in writing to consult an attorney before signing this Waiver and Release.  I understand that, in order to be eligible for the Severance Benefits, I must sign (and return to the Company) this Waiver and Release before I will receive the Severance Benefits.  I acknowledge that I have been given at least 21 days to consider whether to accept the Severance Benefits and whether to execute this Waiver and Release.
In exchange for the payment to me of the Severance Benefits, (1) I agree not to sue the Released Parties in any local, state and/or federal court regarding or relating in any way to my employment with or separation from employment with the Company and its affiliates, and (2) I knowingly and voluntarily waive all claims and release the Released Parties from any and all claims, demands, actions, liabilities, and damages, whether known or unknown, arising out of or relating in any way to my employment with or separation from employment with the Company and its affiliates, except to the extent that my rights are vested under the terms of the Agreement or any employee benefit plans sponsored by the Company and its affiliates and except with respect to such rights or claims as may arise after the date this Waiver and Release is executed.  This Waiver and Release includes, but is not limited to, claims and causes of action under: Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act of 1967, as amended, including the Older Workers Benefit Protection Act of 1990; the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991; the Americans with Disabilities Act of 1990; the Workers Adjustment and Retraining Notification Act of 1988; the Pregnancy Discrimination Act of 1978; the Employee Retirement Income Security Act of 1974, as amended; the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; the Family and Medical Leave Act of 1993; the Fair Labor Standards Act; the Occupational Safety and Health Act; the Texas Labor Code et. seq.; claims in connection with workers’ compensation, retaliation or “whistle blower” statutes; and/or contract, tort, defamation, slander, wrongful termination or any other state or federal regulatory, statutory or common law.  Further, I expressly represent that no promise or agreement which is not expressed in this Waiver and Release has been made to me in executing this Waiver and Release, and that I am relying on my own judgment in executing this Waiver and Release, and that I am not relying on any statement or representation of the Company or its affiliates or any of their agents.  I agree that this Waiver and Release is valid, fair, adequate and reasonable, is with my full knowledge and consent, was not procured through fraud, duress or mistake and has not had the effect of misleading, misinforming or failing to inform me.

Notwithstanding the foregoing and anything in this Waiver and Release to the contrary, I do not release and expressly retain (a) all rights to payment or providing for post-employment benefits under the Agreement or qualified retirement plans or health plans sponsored by the Company, (b) all rights to indemnity, contribution, and a defense of directors and officers and other liability coverage that I may have under any statute, Company policy or by this or any other agreement; and (c) the right to any, unpaid reasonable business expenses and any accrued benefits payable under any Company welfare plan or tax-qualified plan.  Additionally, and notwithstanding the release of liability contained herein, nothing in this  Waiver and Release prevents me from filing any non-legal waivable claim (including a challenge to the validity of this Waiver and Release) with the Equal Employment Opportunity Commission (“EEOC”) or comparable state or local agency or participating in any investigation or proceeding conducted by the EEOC or comparable state or local agency; however, I understand and agree that I am waiving any and all rights to recover any monetary or personal relief or recovery as a result of such EEOC or comparable state or local agency proceeding or subsequent legal actions
I acknowledge that payment of the Severance Benefits is not an admission by any one or more of the Released Parties that they engaged in any wrongful or unlawful act or that they violated any federal or state law or regulation.  I acknowledge that neither the Company nor its affiliates have promised me continued employment or represented to me that I will be rehired in the future.  I acknowledge that my employer and I contemplate an unequivocal, complete and final dissolution of my employment relationship.  I acknowledge that this Waiver and Release does not create any right on my part to be rehired by the Company or its affiliates, and I hereby waive any right to future employment by the Company or its affiliates.
I understand that for a period of 7 calendar days following the date that I sign this Waiver and Release, I may revoke my acceptance of this Waiver and Release, provided that my written statement of revocation is received on or before that seventh day by [Name and/or Title], [address], facsimile number: [________], in which case the Waiver and Release will not become effective.  If I timely revoke my acceptance of this Waiver and Release, the Company shall have no obligation under this Waiver and Release nor the Agreement to provide the Severance Benefits to me.  I understand that failure to revoke my acceptance of the offer within 7 calendar days from the date I sign this Waiver and Release will result in this Waiver and Release being permanent and irrevocable.
Should any of the provisions set forth in this Waiver and Release be determined to be invalid by a court, agency or other tribunal of competent jurisdiction, it is agreed that such determination shall not affect the enforceability of other provisions of this Waiver and Release.  I acknowledge that this Waiver and Release sets forth the entire understanding and agreement between me and the Company and its affiliates concerning the subject matter of this Waiver and Release and supersede any prior or contemporaneous oral and/or written agreements or representations, if any, between me and the Company or its affiliates.
I acknowledge that I have read this Waiver and Release, have had an opportunity to ask questions and have it explained to me and that I understand that this Waiver and Release will have the effect of knowingly and voluntarily waiving any action I might pursue, including breach of contract, personal injury, retaliation, discrimination on the basis of race, age, sex, national origin, or disability and any other claims arising prior to the date of this Waiver and Release.  By execution of this document, I do not waive or release or otherwise relinquish any legal rights I may have which are attributable to or arise out of acts, omissions, or events of the Company or its affiliates which occur after the date of the execution of this Waiver and Release.

	
					
	EXECUTIVE:
	 
	 
	LGI HOMES, INC.:

	 
	 
	 
	 
	 

	 
	 
	By:
	 

	 
	 
	 
	 

	 
	 
	 
	Its:
	 

	 
	 
	 
	 
	 

	Date:
	 
	 
	Date:
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

EXHIBIT B
CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION

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