Document:

Exhibit
4.7

 

TOUGHBUILT
INDUSTRIES, INC.

2016
EQUITY INCENTIVE PLAN

 

1.       PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, and any Parents and Subsidiaries that exist now or in the future, by
offering them an opportunity to participate in the Company’s future performance through the grant of Awards. Capitalized
terms not defined elsewhere in the text are defined in Section 27.

 

2.
       SHARES SUBJECT TO THE PLAN.

 

2.1       Number
of Shares Available. Subject to Sections 2.6 and 21 and any other applicable provisions hereof, the total number of Shares
reserved and available for grant and issuance pursuant to this Plan as of the date of adoption of the Plan by the Board is 12,000,000
shares.

 

2.2       Lapsed,
Returned Awards. Shares subject to Awards, and Shares issued under the Plan under any Award, will again be available for grant
and issuance in connection with subsequent Awards under this Plan to the extent such Shares: (a) are subject to issuance upon
exercise of an Option or SAR granted under this Plan but which cease to be subject to the Option or SAR for any reason other than
exercise of the Option or SAR; (b) are subject to Awards granted under this Plan that are forfeited or are repurchased by the
Company at the original issue price; (c) are subject to Awards granted under this Plan that otherwise terminate without such Shares
being issued; or (d) are surrendered pursuant to an Exchange Program. To the extent an Award under the Plan is paid out in cash
rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan.
Shares used or withheld to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award
will become available for future grant or sale under the Plan. For the avoidance of doubt, Shares that otherwise become available
for grant and issuance because of the provisions of this Section 2.2 shall not include Shares subject to Awards that initially
became available because of the substitution clause in Section 21.2 hereof.

 

2.3       Minimum
Share Reserve. At all times the Company shall reserve and keep available a sufficient number of Shares as shall be required
to satisfy the requirements of all outstanding Awards granted under this Plan.

 

2.4       Automatic
Share Reserve Increase. The number of Shares available for grant and issuance under the Plan shall be increased on January
1, of each of the ten (10) calendar years during the term of the Plan, by the lesser of (i) two and one half percent (2.5%) of
the number of Shares issued and outstanding on each December 31 immediately prior to the date of increase or (ii) such number
of Shares determined by the Board.

 

2.5       Limitations.
No more than 3,000,000 Shares shall be issued pursuant to the exercise of ISO’s.

 

2.6       Adjustment
of Shares. If the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock
split, subdivision, combination, reclassification or similar change in the capital structure of the Company, without consideration,
then (a) the number of Shares reserved for issuance and future grant under the Plan set forth in Section 2.1, (b) the Exercise
Prices of and number of Shares subject to outstanding Options and SARs, (c) the number of Shares subject to other outstanding
Awards, (d) the maximum number of shares that may be issued as ISO’s set forth in Section 2.5, (e) the maximum number of
Shares that may be issued to an individual or to a new Employee in any one calendar year set forth in Section 3 and (f) the number
of Shares that are granted as Awards to Non-Employee Directors as set forth in Section 12, shall be proportionately adjusted,
subject to any required action by the Board or the stockholders of the Company and in compliance with applicable securities laws;
provided that fractions of a Share will not be issued.

 

3.       ELIGIBILITY.
ISO’s may be granted only to Employees. All other Awards may be granted to Employees, Consultants, Directors and Non-Employee
Directors of the Company or any Parent or Subsidiary of the Company; provided such Consultants, Directors and Non-Employee Directors
render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. No Employee
will be eligible to receive more than 250,000 Shares in any calendar year under this Plan pursuant to the grant of Awards.

 

    	 

     

    

 

4.
       ADMINISTRATION.

 

4.1       Committee
Composition; Authority. This Plan will be administered by the Committee or by the Board acting as the Committee. Subject to
the general purposes, terms and conditions of this Plan, and to the direction of the Board, the Committee will have full power
to implement and carry out this Plan, except, however, the Board shall establish the terms for the grant of an Award to Non-Employee
Directors. The Committee will have the authority to:

 

(a)       construe
and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;

 

(b)
       prescribe, amend and rescind rules and regulations relating to this Plan or any Award;

 

(c)
       select persons to receive Awards;

 

(d)       determine
the form and terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or times when Awards may vest and be exercised (which
may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the Committee will determine;

 

(e)       
determine the number of Shares or other consideration subject to Awards;

 

(f)       determine
the Fair Market Value in good faith and interpret the applicable provisions of this Plan and the definition of Fair Market Value
in connection with circumstances that impact the Fair Market Value, if necessary;

 

(g)       determine
whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the Company or any Parent or Subsidiary of the Company;

 

(h)       
grant waivers of Plan or Award conditions;

 

(i)
       determine the vesting, exercisability and payment of Awards;

 

(j)
       correct any defect, supply any omission or reconcile any inconsistency in this Plan,
any Award or any Award Agreement;

 

(k)
       determine whether an Award has been earned;

 

(l)
       determine the terms and conditions of any, and to institute any Exchange Program;

 

(m)
       reduce or waive any criteria with respect to Performance Factors;

 

(n)       adjust
Performance Factors to take into account changes in law and accounting or tax rules as the Committee deems necessary or appropriate
to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships provided that
such adjustments are consistent with the regulations promulgated under Section 162(m) of the Code with respect to persons whose
compensation is subject to Section 162(m) of the Code;

 

(o)       adopt
rules and/or procedures (including the adoption of any subplan under this Plan) relating to the operation and administration of
the Plan to accommodate requirements of local law and procedures outside of the United States;

 

(p)
       make all other determinations necessary or advisable for the administration of this
Plan; and

 

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(q)
       delegate any of the foregoing to a subcommittee consisting of one or more executive
officers pursuant to a specific delegation.

 

4.2       Committee
Interpretation and Discretion. Any determination made by the Committee with respect to any Award shall be made in its sole
discretion at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later
time, and such determination shall be final and binding on the Company and all persons having an interest in any Award under the
Plan. Any dispute regarding the interpretation of the Plan or any Award Agreement shall be submitted by the Participant or Company
to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on the Company and the
Participant. The Committee may delegate to one or more executive officers the authority to review and resolve disputes with respect
to Awards held by Participants who are not Insiders, and such resolution shall be final and binding on the Company and the Participant.

 

4.3       Section
162(m) of the Code and Section 16 of the Exchange Act. When necessary or desirable for an Award to qualify as “performance-based
compensation” under Section 162(m) of the Code the Committee shall include at least two persons who are “outside directors”
(as defined under Section 162(m) of the Code) and at least two (or a majority if more than two then serve on the Committee) such
“outside directors” shall approve the grant of such Award and timely determine (as applicable) the Performance Period
and any Performance Factors upon which vesting or settlement of any portion of such Award is to be subject. When required by Section
162(m) of the Code, prior to settlement of any such Award at least two (or a majority if more than two then serve on the Committee)
such “outside directors” then serving on the Committee shall determine and certify in writing the extent to which
such Performance Factors have been timely achieved and the extent to which the Shares subject to such Award have thereby been
earned. Awards granted to Participants who are subject to Section 16 of the Exchange Act must be approved by two or more “non-employee
directors” (as defined in the regulations promulgated under Section 16 of the Exchange Act). With respect to Participants
whose compensation is subject to Section 162(m) of the Code, and provided that such adjustments are consistent with the regulations
promulgated under Section 162(m) of the Code, the Committee may adjust the performance goals to account for changes in law and
accounting and to make such adjustments as the Committee deems necessary or appropriate to reflect the impact of extraordinary
or unusual items, events or circumstances to avoid windfalls or hardships, including without limitation (i) restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring charges, (ii) an event either not directly related to the
operations of the Company or not within the reasonable control of the Company’s management, or (iii) a change in accounting
standards required by generally accepted accounting principles.

 

4.4       Documentation.
The Award Agreement for a given Award, the Plan and any other documents may be delivered to, and accepted by, a Participant or
any other person in any manner (including electronic distribution or posting) that meets applicable legal requirements.

 

5.       OPTIONS.
The Committee may grant Options to Participants and will determine whether such Options will be Incentive Stock Options within
the meaning of the Code (“ISO’s”) or Nonqualified Stock Options (“NQSO’s”),
the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may vest and
be exercised, and all other terms and conditions of the Option, subject to the following:

 

5.1       Option
Grant. Each Option granted under this Plan will identify the Option as an ISO or an NQSO. An Option may be, but need not be,
awarded upon satisfaction of such Performance Factors during any Performance Period as are set out in advance in the Participant’s
individual Award Agreement. If the Option is being earned upon the satisfaction of Performance Factors, then the Committee will:
(x) determine the nature, length and starting date of any Performance Period for each Option; and (y) select from among the Performance
Factors to be used to measure the performance, if any. Performance Periods may overlap and Participants may participate simultaneously
with respect to Options that are subject to different performance goals and other criteria.

 

5.2       Date
of Grant. The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option,
or a specified future date. The Award Agreement and a copy of this Plan will be delivered to the Participant within a reasonable
time after the granting of the Option.

 

5.3       Exercise
Period. Options may be vested and exercisable within the times or upon the conditions as set forth in the Award Agreement
governing such Option; provided, however, that no Option will be exercisable after the expiration of ten (10) years from the date
the Option is granted; and provided further that no ISO granted to a person who, at the time the ISO is granted, directly or by
attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any
Parent or Subsidiary of the Company (“Ten Percent Stockholder”) will be exercisable after the expiration of
five (5) years from the date the ISO is granted. The Committee also may provide for Options to become exercisable at one time
or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines.

 

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5.4       Exercise
Price. The Exercise Price of an Option will be determined by the Committee when the Option is granted; provided that: (i)
the Exercise Price of an Option will be not less than one hundred percent (100%) of the Fair Market Value of the Shares on the
date of grant and (ii) the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than one hundred ten
percent (110%) of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance
with Section 11 and the Award Agreement and in accordance with any procedures established by the Company.

 

5.5       Method
of Exercise. Any Option granted hereunder will be vested and exercisable according to the terms of the Plan and at such times
and under such conditions as determined by the Committee and set forth in the Award Agreement. An Option may not be exercised
for a fraction of a Share. An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form
as the Committee may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the
Shares with respect to which the Option is exercised (together with applicable withholding taxes). Full payment may consist of
any consideration and method of payment authorized by the Committee and permitted by the Award Agreement and the Plan. Shares
issued upon exercise of an Option will be issued in the name of the Participant. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a stockholder will exist with respect to the Shares, notwithstanding the exercise of
the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will
be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided
in Section 2.6 of the Plan. Exercising an Option in any manner will decrease the number of Shares thereafter available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

 

5.6
       Termination. The exercise of an Option will be subject to the following (except
as may be otherwise provided in an Award Agreement):

 

(a)       If
the Participant is Terminated for any reason except for Cause or the Participant’s death or Disability, then the Participant
may exercise such Participant’s Options only to the extent that such Options would have been exercisable by the Participant
on the Termination Date no later than ninety (90) days after the Termination Date (or such shorter time period or longer time
period not exceeding five (5) years as may be determined by the Committee, with any exercise beyond three (3) months after the
Termination Date deemed to be the exercise of an NQSO), but in any event no later than the expiration date of the Options.

 

(b)       If
the Participant is Terminated because of the Participant’s death (or the Participant dies within ninety (90) days after
a Termination other than for Cause or because of the Participant’s Disability), then the Participant’s Options may
be exercised only to the extent that such Options would have been exercisable by the Participant on the Termination Date and must
be exercised by the Participant’s legal representative, or authorized assignee, no later than twelve (12) months after the
Termination Date (or such shorter time period not less than six (6) months or longer time period not exceeding five (5) years
as may be determined by the Committee), but in any event no later than the expiration date of the Options.

 

(c)       If
the Participant is Terminated because of the Participant’s Disability, then the Participant’s Options may be exercised
only to the extent that such Options would have been exercisable by the Participant on the Termination Date and must be exercised
by the Participant (or the Participant’s legal representative or authorized assignee) no later than six (6) months after
the Termination Date (with any exercise beyond (a) three (3) months after the Termination Date when the Termination is for a Disability
that is not a “permanent and total disability” as defined in Section 22(e)(3) of the Code, or (b) twelve (12) months
after the Termination Date when the Termination is for a Disability that is a “permanent and total disability” as
defined in Section 22(e)(3) of the Code, deemed to be exercise of an NQSO), but in any event no later than the expiration date
of the Options.

 

(d)       If
the Participant is terminated for Cause, then Participant’s Options shall expire on such Participant’s Termination
Date, or at such later time and on such conditions as are determined by the Committee, but in any no event later than the expiration
date of the Options. Unless otherwise provided in the Award Agreement, Cause will have the meaning set forth in the Plan.

 

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5.7       Limitations
on Exercise. The Committee may specify a minimum number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent any Participant from exercising the Option for the full number of Shares for which it
is then exercisable.

 

5.8       Limitations
on ISO’s. With respect to Awards granted as ISO’s, to the extent that the aggregate Fair Market Value of the Shares
with respect to which such ISO’s are exercisable for the first time by the Participant during any calendar year (under all
plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated
as NQSO’s. For purposes of this Section 5.8, ISO’s will be taken into account in the order in which they were granted.
The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted. In the
event that the Code or the regulations promulgated thereunder are amended after the Effective Date to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISO’s, such different limit will be automatically incorporated
herein and will apply to any Options granted after the effective date of such amendment.

 

5.9       Modification,
Extension or Renewal. The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options
in substitution therefor, provided that any such action may not, without the written consent of a Participant, impair any of such
Participant’s rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed or otherwise
altered will be treated in accordance with Section 424(h) of the Code. Subject to Section 18 of this Plan, by written notice to
affected Participants, the Committee may reduce the Exercise Price of outstanding Options without the consent of such Participants;
provided, however, that the Exercise Price may not be reduced below the Fair Market Value on the date the action is taken to reduce
the Exercise Price.

 

5.10       No
Disqualification. Notwithstanding any other provision in this Plan, no term of this Plan relating to ISO’s will be interpreted,
amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under
Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code.

 

6.
       RESTRICTED STOCK AWARDS.

 

6.1       Awards
of Restricted Stock. A Restricted Stock Award is an offer by the Company to sell to a Participant Shares that are subject
to restrictions (“Restricted Stock”). The Committee will determine to whom an offer will be made, the number
of Shares the Participant may purchase, the Purchase Price, the restrictions under which the Shares will be subject and all other
terms and conditions of the Restricted Stock Award, subject to the Plan.

 

6.2       Restricted
Stock Purchase Agreement. All purchases under a Restricted Stock Award will be evidenced by an Award Agreement. Except as
may otherwise be provided in an Award Agreement, a Participant accepts a Restricted Stock Award by signing and delivering to the
Company an Award Agreement with full payment of the Purchase Price, within thirty (30) days from the date the Award Agreement
was delivered to the Participant. If the Participant does not accept such Award within thirty (30) days, then the offer of such
Restricted Stock Award will terminate, unless the Committee determines otherwise.

 

6.3       Purchase
Price. The Purchase Price for a Restricted Stock Award will be determined by the Committee and may be less than Fair Market
Value on the date the Restricted Stock Award is granted. Payment of the Purchase Price must be made in accordance with Section
11 of the Plan, and the Award Agreement and in accordance with any procedures established by the Company.

 

6.4       Terms
of Restricted Stock Awards. Restricted Stock Awards will be subject to such restrictions as the Committee may impose or are
required by law. These restrictions may be based on completion of a specified number of years of service with the Company or upon
completion of Performance Factors, if any, during any Performance Period as set out in advance in the Participant’s Award
Agreement. Prior to the grant of a Restricted Stock Award, the Committee shall: (a) determine the nature, length and starting
date of any Performance Period for the Restricted Stock Award; (b) select from among the Performance Factors to be used to measure
performance goals, if any; and (c) determine the number of Shares that may be awarded to the Participant. Performance Periods
may overlap and a Participant may participate simultaneously with respect to Restricted Stock Awards that are subject to different
Performance Periods and having different performance goals and other criteria.

 

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6.5       Termination
of Participant. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s
Termination Date (unless determined otherwise by the Committee).

 

7.
       STOCK BONUS AWARDS.

 

7.1       Awards
of Stock Bonuses. A Stock Bonus Award is an award to an eligible person of Shares for services to be rendered or for past
services already rendered to the Company or any Parent or Subsidiary. All Stock Bonus Awards shall be made pursuant to an Award
Agreement. No payment from the Participant will be required for Shares awarded pursuant to a Stock Bonus Award.

 

7.2       Terms
of Stock Bonus Awards. The Committee will determine the number of Shares to be awarded to the Participant under a Stock Bonus
Award and any restrictions thereon. These restrictions may be based upon completion of a specified number of years of service
with the Company or upon satisfaction of performance goals based on Performance Factors during any Performance Period as set out
in advance in the Participant’s Stock Bonus Agreement. Prior to the grant of any Stock Bonus Award the Committee shall:
(a) determine the nature, length and starting date of any Performance Period for the Stock Bonus Award; (b) select from among
the Performance Factors to be used to measure performance goals; and (c) determine the number of Shares that may be awarded to
the Participant. Performance Periods may overlap and a Participant may participate simultaneously with respect to Stock Bonus
Awards that are subject to different Performance Periods and different performance goals and other criteria.

 

7.3       Form
of Payment to Participant. Payment may be made in the form of cash, whole Shares, or a combination thereof, based on the Fair
Market Value of the Shares earned under a Stock Bonus Award on the date of payment, as determined in the sole discretion of the
Committee.

 

7.4       Termination
of Participation. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s
Termination Date (unless determined otherwise by the Committee).

 

8.
       STOCK APPRECIATION RIGHTS.

 

8.1       Awards
of SARs. A Stock Appreciation Right (“SAR”) is an award to a Participant that may be settled in cash, or
Shares (which may consist of Restricted Stock), having a value equal to (a) the difference between the Fair Market Value on the
date of exercise over the Exercise Price multiplied by (b) the number of Shares with respect to which the SAR is being settled
(subject to any maximum number of Shares that may be issuable as specified in an Award Agreement). All SARs shall be made pursuant
to an Award Agreement.

 

8.2       Terms
of SARs. The Committee will determine the terms of each SAR including, without limitation: (a) the number of Shares subject
to the SAR; (b) the Exercise Price and the time or times during which the SAR may be settled; (c) the consideration to be distributed
on settlement of the SAR; and (d) the effect of the Participant’s Termination on each SAR. The Exercise Price of the SAR
will be determined by the Committee when the SAR is granted, and may not be less than Fair Market Value. A SAR may be awarded
upon satisfaction of Performance Factors, if any, during any Performance Period as are set out in advance in the Participant’s
individual Award Agreement. If the SAR is being earned upon the satisfaction of Performance Factors, then the Committee will:
(x) determine the nature, length and starting date of any Performance Period for each SAR; and (y) select from among the Performance
Factors to be used to measure the performance, if any. Performance Periods may overlap and Participants may participate simultaneously
with respect to SARs that are subject to different Performance Factors and other criteria.

 

8.3       Exercise
Period and Expiration Date. A SAR will be exercisable within the times or upon the occurrence of events determined by the
Committee and set forth in the Award Agreement governing such SAR. The SAR Agreement shall set forth the expiration date; provided
that no SAR will be exercisable after the expiration of ten (10) years from the date the SAR is granted. The Committee may also
provide for SARs to become exercisable at one time or from time to time, periodically or otherwise (including, without limitation,
upon the attainment during a Performance Period of performance goals based on Performance Factors), in such number of Shares or
percentage of the Shares subject to the SAR as the Committee determines. Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such Participant’s Termination Date (unless determined otherwise by the Committee). Notwithstanding
the foregoing, the rules of Section 5.6 also will apply to SARs.

 

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8.4       Form
of Settlement. Upon exercise of a SAR, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying (i) the difference between the Fair Market Value of a Share on the date of exercise over the Exercise Price; times
(ii) the number of Shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment from the
Company for the SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof. The portion of a SAR
being settled may be paid currently or on a deferred basis with such interest or dividend equivalent, if any, as the Committee
determines, provided that the terms of the SAR and any deferral satisfy the requirements of Section 409A of the Code.

 

8.5       Termination
of Participation. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s
Termination Date (unless determined otherwise by the Committee).

 

9.
       RESTRICTED STOCK UNITS.

 

9.1       Awards
of Restricted Stock Units. A Restricted Stock Unit (“RSU”) is an award to a Participant covering a number
of Shares that may be settled in cash, or by issuance of those Shares (which may consist of Restricted Stock). All RSU’s
shall be made pursuant to an Award Agreement.

 

9.2       Terms
of RSU’s. The Committee will determine the terms of an RSU including, without limitation: (a) the number of Shares subject
to the RSU; (b) the time or times during which the RSU may be settled; (c) the consideration to be distributed on settlement;
and (d) the effect of the Participant’s Termination on each RSU. An RSU may be awarded upon satisfaction of such performance
goals based on Performance Factors during any Performance Period as are set out in advance in the Participant’s Award Agreement.
If the RSU is being earned upon satisfaction of Performance Factors, then the Committee will: (x) determine the nature, length
and starting date of any Performance Period for the RSU; (y) select from among the Performance Factors to be used to measure the
performance, if any; and (z) determine the number of Shares deemed subject to the RSU. Performance Periods may overlap and participants
may participate simultaneously with respect to RSU’s that are subject to different Performance Periods and different performance
goals and other criteria.

 

9.3       Form
and Timing of Settlement. Payment of earned RSU’s shall be made as soon as practicable after the date(s) determined
by the Committee and set forth in the Award Agreement. The Committee, in its sole discretion, may settle earned RSU’s in
cash, Shares, or a combination of both. The Committee may also permit a Participant to defer payment under a RSU to a date or
dates after the RSU is earned provided that the terms of the RSU and any deferral satisfy the requirements of Section 409A of
the Code.

 

9.4       Termination
of Participant. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s
Termination Date (unless determined otherwise by the Committee).

 

10.       
PERFORMANCE AWARDS.

 

10.1       Performance
Awards. A Performance Award is an award to a Participant of a cash bonus or a Performance Share bonus. Grants of Performance
Awards shall be made pursuant to an Award Agreement.

 

10.2       Terms
of Performance Awards. The Committee will determine, and each Award Agreement shall set forth, the terms of each award of
Performance Award including, without limitation: (a) the amount of any cash bonus; (b) the number of Shares deemed subject to
a Performance Share bonus; (c) the Performance Factors and Performance Period that shall determine the time and extent to which
each Performance Award shall be settled; (d) the consideration to be distributed on settlement; and (e) the effect of the Participant’s
Termination on each Performance Award. In establishing Performance Factors and the Performance Period the Committee will: (x)
determine the nature, length and starting date of any Performance Period; and (y) select from among the Performance Factors to
be used. Prior to settlement the Committee shall determine the extent to which Performance Awards have been earned. Performance
Periods may overlap and Participants may participate simultaneously with respect to Performance Awards that are subject to different
Performance Periods and different performance goals and other criteria. No Participant will be eligible to receive more than $100,000
in Performance Awards in any calendar year under this Plan.

 

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10.3       Value,
Earning and Timing of Performance Shares. Any Performance Share bonus will have an initial value equal to the Fair Market
Value of a Share on the date of grant. After the applicable Performance Period has ended, the holder of a Performance Share bonus
will be entitled to receive a payout of the number of Shares earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the corresponding Performance Factors or other vesting provisions have been achieved. The
Committee, in its sole discretion, may pay an earned Performance Share bonus in the form of cash, in Shares (which have an aggregate
Fair Market Value equal to the value of the earned Performance Shares at the close of the applicable Performance Period) or in
a combination thereof. Performance Share bonuses may also be settled in Restricted Stock.

 

10.4       Termination
of Participant. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s
Termination Date (unless determined otherwise by the Committee).

 

11.       
PAYMENT FOR SHARE PURCHASES.

 

Payment
from a Participant for Shares purchased pursuant to this Plan may be made in cash or by check or, where expressly approved for
the Participant by the Committee and where permitted by law (and to the extent not otherwise set forth in the applicable Award
Agreement):

 

(a)       by
cancellation of indebtedness of the Company to the Participant;

 

(b)       by
surrender of shares of the Company held by the Participant that have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Award will be exercised or settled;

 

(c)       by
waiver of compensation due or accrued to the Participant for services rendered or to be rendered to the Company or a Parent or
Subsidiary of the Company;

 

(d)       by
consideration received by the Company pursuant to a broker-assisted or other form of cashless exercise program implemented by
the Company in connection with the Plan;

 

(e)
       by any combination of the foregoing; or

 

(f)
       by any other method of payment as is permitted by applicable law.

 

12.       
GRANTS TO NON-EMPLOYEE DIRECTORS.

 

12.1       Types
of Awards. Non-Employee Directors are eligible to receive any type of Award offered under this Plan except ISO’s. Awards
pursuant to this Section 12 may be automatically made pursuant to policy adopted by the Board, or made from time to time as determined
in the discretion of the Board.

 

12.2       Eligibility.
Awards pursuant to this Section 12 shall be granted only to Non-Employee Directors. A Non-Employee Director who is elected or
re-elected as a member of the Board will be eligible to receive an Award under this Section 12.

 

12.3       Vesting,
Exercisability and Settlement. Except as set forth in Section 21, Awards shall vest, become exercisable and be settled as
determined by the Board. With respect to Options and SARs, the exercise price granted to Non-Employee Directors shall not be less
than the Fair Market Value of the Shares at the time that such Option or SAR is granted.

 

12.4       Election
to receive Awards in Lieu of Cash. A Non-Employee Director may elect to receive his or her annual retainer payments and/or
meeting fees from the Company in the form of cash or Awards or a combination thereof, as determined by the Committee. Such Awards
shall be issued under the Plan. An election under this Section 12.4 shall be filed with the Company on the form prescribed by
the Company.

 

13.
       WITHHOLDING TAXES.

 

13.1       Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company, or to the Parent or Subsidiary employing the Participant, an amount sufficient to satisfy
applicable U.S. federal, state, local and international withholding tax requirements or any other tax liability legally due from
the Participant prior to the delivery of Shares pursuant to exercise or settlement of any Award. Whenever payments in satisfaction
of Awards granted under this Plan are to be made in cash, such payment will be net of an amount sufficient to satisfy applicable
U.S. federal, state, local and international withholding tax requirements or any other tax liability legally due from the Participant.
The Fair Market Value of the Shares will be determined as of the date that the taxes are required to be withheld and such Shares
will be valued based on the value of the actual trade or, if there is none, the Fair Market Value of the Shares as of the previous
trading day.

 

    	8

     

    

 

13.2       Stock
Withholding. The Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time and
to limitations of local law, may require or permit a Participant to satisfy such tax withholding obligation or any other tax liability
legally due from the Participant, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company
withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the minimum statutory amount required to be
withheld, or (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum amount required
to be withheld.

 

14.
       TRANSFERABILITY.

 

14.1       Transfer
Generally. Unless determined otherwise by the Committee or pursuant to Section 14.2, an Award may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution. If the Committee
makes an Award transferable, including, without limitation, by instrument to an inter vivos or testamentary trust in which the
Awards are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift to a Permitted Transferee, such Award
will contain such additional terms and conditions as the Committee deems appropriate. All Awards shall be exercisable: (i) during
the Participant’s lifetime only by (A) the Participant, or (B) the Participant’s guardian or legal representative;
(ii) after the Participant’s death, by the legal representative of the Participant’s heirs or legatees; and (iii)
in the case of all awards except ISO’s, by a Permitted Transferee.

 

14.2       Award
Transfer Program. Notwithstanding any contrary provision of the Plan, the Committee shall have all discretion and authority
to determine and implement the terms and conditions of any Award Transfer Program instituted pursuant to this Section 14.2 and
shall have the authority to amend the terms of any Award participating, or otherwise eligible to participate in, the Award Transfer
Program, including (but not limited to) the authority to (i) amend (including to extend) the expiration date, post-termination
exercise period and/or forfeiture conditions of any such Award,

(ii)
amend or remove any provisions of the Award relating to the Award holder’s continued service to the Company, (iii) amend
the permissible payment methods with respect to the exercise or purchase of any such Award, (iv) amend the adjustments to be implemented
in the event of changes in the capitalization and other similar events with respect to such Award, and (v) make such other changes
to the terms of such Award as the Committee deems necessary or appropriate in its sole discretion.

 

15.
       PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.

 

15.1       Voting
and Dividends. No Participant will have any of the rights of a stockholder with respect to any Shares until the Shares are
issued to the Participant, except for any dividend equivalent rights permitted by an applicable Award Agreement. After Shares
are issued to the Participant, the Participant will be a stockholder and have all the rights of a stockholder with respect to
such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares;
provided, that if such Shares are Restricted Stock, then any new, additional or different securities the Participant may become
entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate
or capital structure of the Company will be subject to the same restrictions as the Restricted Stock; provided, further, that
the Participant will have no right to retain such stock dividends or stock distributions with respect to Shares that are repurchased
at the Participant’s Purchase Price or Exercise Price, as the case may be, pursuant to Section 15.2.

 

15.2       Restrictions
on Shares. At the discretion of the Committee, the Company may reserve to itself and/or its assignee(s) a right to repurchase
(a “Right of Repurchase”) a portion of any or all Unvested Shares held by a Participant following such Participant’s
Termination at any time within ninety (90) days after the later of the Participant’s Termination Date and the date the Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase money indebtedness, at the Participant’s Purchase
Price or Exercise Price, as the case may be.

 

    	9

     

    

 

16.       CERTIFICATES.
All Shares or other securities whether or not certificated, delivered under this Plan will be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable U.S.
federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or
automated quotation system upon which the Shares may be listed or quoted and any non-U.S. exchange controls or securities law
restrictions to which the Shares are subject.

 

17.       ESCROW;
PLEDGE OF SHARES. To enforce any restrictions on a Participant’s Shares, the Committee may require the Participant to
deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee,
appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates.
Any Participant who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under
this Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure
the payment of the Participant’s obligation to the Company under the promissory note; provided, however, that the Committee
may require or accept other or additional forms of collateral to secure the payment of such obligation and, in any event, the
Company will have full recourse against the Participant under the promissory note notwithstanding any pledge of the Participant’s
Shares or other collateral. In connection with any pledge of the Shares, the Participant will be required to execute and deliver
a written pledge agreement in such form as the Committee will from time to time approve. The Shares purchased with the promissory
note may be released from the pledge on a pro rata basis as the promissory note is paid.

 

18.       REPRICING;
EXCHANGE AND BUYOUT OF AWARDS. Without prior stockholder approval the Committee may (i) reprice Options or SARS (and where
such repricing is a reduction in the Exercise Price of outstanding Options or SARS, the consent of the affected Participants is
not required provided written notice is provided to them, notwithstanding any adverse tax consequences to them arising from the
repricing), and (ii) with the consent of the respective Participants (unless not required pursuant to Section 5.9 of the Plan),
pay cash or issue new Awards in exchange for the surrender and cancellation of any, or all, outstanding Awards.

 

19.       SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be effective unless such Award is in compliance with all applicable
U.S. and foreign federal and state securities laws, rules and regulations of any governmental body, and the requirements of any
stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the
date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan,
the Company will have no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals
from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or
other qualification of such Shares under any state or federal or foreign law or ruling of any governmental body that the Company
determines to be necessary or advisable. The Company will be under no obligation to register the Shares with the SEC or to effect
compliance with the registration, qualification or listing requirements of any foreign or state securities laws, stock exchange
or automated quotation system, and the Company will have no liability for any inability or failure to do so.

 

20.       NO
OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent or Subsidiary
of the Company or limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate Participant’s
employment or other relationship at any time.

 

21.
       CORPORATE TRANSACTIONS.

 

21.1       Assumption
or Replacement of Awards by Successor. In the event of a Corporate Transaction any or all outstanding Awards may be assumed
or replaced by the successor corporation, which assumption or replacement shall be binding on all Participants. In the alternative,
the successor corporation may substitute equivalent Awards or provide substantially similar consideration to Participants as was
provided to stockholders (after taking into account the existing provisions of the Awards). The successor corporation may also
issue, in place of outstanding Shares of the Company held by the Participant, substantially similar shares or other property subject
to repurchase restrictions no less favorable to the Participant. In the event such successor or acquiring corporation (if any)
refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, then notwithstanding
any other provision in this Plan to the contrary, such Awards shall have their vesting accelerate as to all shares subject to
such Award (and any applicable right of repurchase fully lapse) immediately prior to the Corporate Transaction unless otherwise
determined by the Board and then such Awards will terminate. In addition, in the event such successor or acquiring corporation
(if any) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, the
Committee will notify the Participant in writing or electronically that such Award will be exercisable for a period of time determined
by the Committee in its sole discretion, and such Award will terminate upon the expiration of such period. Awards need not be
treated similarly in a Corporate Transaction.

 

    	10

     

    

 

21.2       Assumption
of Awards by the Company. The Company, from time to time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or otherwise, by either; (a) granting an Award under
this Plan in substitution of such other company’s award; or (b) assuming such award as if it had been granted under this
Plan if the terms of such assumed award could be applied to an Award granted under this Plan. Such substitution or assumption
will be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this
Plan if the other company had applied the rules of this Plan to such grant. In the event the Company assumes an award granted
by another company, the terms and conditions of such award will remain unchanged (except that the Purchase Price or the Exercise
Price, as the case may be, and the number and nature of Shares issuable upon exercise or settlement of any such Award will be
adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects to grant a new Option in substitution
rather than assuming an existing option, such new Option may be granted with a similarly adjusted Exercise Price.

 

21.3       Non-Employee
Directors’ Awards. Notwithstanding any provision to the contrary herein, in the event of a Corporate Transaction, the
vesting of all Awards granted to Non-Employee Directors shall accelerate and such Awards shall become exercisable (as applicable)
in full prior to the consummation of such event at such times and on such conditions as the Committee determines.

 

22.       ADOPTION
AND STOCKHOLDER APPROVAL. This Plan shall be submitted for the approval of the Company’s stockholders, consistent with
applicable laws, within twelve (12) months before or after the date this Plan is adopted by the Board.

 

23.       TERM
OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein, this Plan will become effective on the Effective Date
and will terminate ten (10) years from the date this Plan is adopted by the Board. This Plan and all Awards granted hereunder
shall be governed by and construed in accordance with the laws of the State of Nevada.

 

24.       AMENDMENT
OR TERMINATION OF PLAN. The Board may at any time terminate or amend this Plan in any respect, including, without limitation,
amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan; provided, however, that the Board
will not, without the approval of the stockholders of the Company, amend this Plan in any manner that requires such stockholder
approval; provided further, that a Participant’s Award shall be governed by the version of this Plan then in effect at the
time such Award was granted.

 

25.       NON-EXCLUSIVITY
OF THE PLAN. Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of the Company
for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt
such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock awards
and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific
cases.

 

26.       INSIDER
TRADING POLICY. Each Participant who receives an Award shall comply with any policy adopted by the Company from time to time
covering transactions in the Company’s securities by Employees, officers and/or directors of the Company.

 

27.
       DEFINITIONS. As used in this Plan, and except as elsewhere defined herein, the following
terms will have the following meanings:

 

“Award”
means any award under the Plan, including any Option, Restricted Stock, Stock Bonus, Stock Appreciation Right, Restricted Stock
Unit or award of Performance Shares.

 

“Award
Agreement” means, with respect to each Award, the written or electronic agreement between the Company and the Participant
setting forth the terms and conditions of the Award, which shall be in substantially a form (which need not be the same for each
Participant) that the Committee has from time to time approved, and will comply with and be subject to the terms and conditions
of this Plan.

 

    	11

     

    

 

“Award
Transfer Program” means any program instituted by the Committee which would permit Participants the opportunity to transfer
any outstanding Awards to a financial institution or other person or entity approved by the Committee.

 

“Board”
means the Board of Directors of the Company.

 

“Cause”
means (i) Participant’s willful failure substantially to perform his or her duties and responsibilities to the Company or
deliberate violation of a Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or
any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized
use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the
Participant owes an obligation of non disclosure as a result of his or her relationship with the Company; or (iv) Participant’s
willful breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as
to whether a Participant is being terminated for Cause shall be made in good faith by the Company and shall be final and binding
on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s
employment or consulting relationship at any time as provided in Section 20 above, and the term “Company” will be
interpreted to include any Subsidiary or Parent, as appropriate.

 

“Code”
means the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

 

“Committee”
means the Compensation Committee of the Board or those persons to whom administration of the Plan, or part of the Plan, has been
delegated as permitted by law.

 

“Common
Stock” means the Common Stock of the Company.

 

“Company”
means ToughBuilt Industries, Inc., or any successor corporation.

 

“Consultant”
means any person, including an advisor or independent contractor, engaged by the Company or a Parent or Subsidiary to render services
to such entity.

 

“Corporate
Transaction” means the occurrence of any of the following events: (i) any “person” (as such term is used
in Sections 13(d) and 14 (d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting
power represented by the Company’s then-outstanding voting securities; (ii) the consummation of the sale or disposition
by the Company of all or substantially all of the Company’s assets; (iii) the consummation of a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented
by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation
or (iv) any other transaction which qualifies as a “corporate transaction” under Section 424(a) of the Code wherein
the stockholders of the Company give up all of their equity interest in the Company (except for the acquisition, sale or transfer
of all or substantially all of the outstanding shares of the Company).

 

“Director”
means a member of the Board.

 

“Disability”
means in the case of incentive stock options, total and permanent disability as defined in Section 22(e)(3) of the Code and in
the case of other Awards, that the Participant is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months.

 

“Effective
Date” means the day immediately prior to the date of the underwritten initial public offering of the Company’s
Common Stock pursuant to a registration statement that is declared effective by the SEC.

 

    	12

     

    

 

“Employee”
means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment”
by the Company.

 

“Exchange
Act” means the United States Securities Exchange Act of 1934, as amended.

 

“Exchange
Program” means a program pursuant to which outstanding Awards are surrendered, cancelled or exchanged for cash, the
same type of Award or a different Award (or combination thereof).

 

“Exercise
Price” means, with respect to an Option, the price at which a holder may purchase the Shares issuable upon exercise
of an Option and with respect to a SAR, the price at which the SAR is granted to the holder thereof.

 

“Fair
Market Value” means, as of any date, the value of a share of the Company’s Common Stock determined as follows:

 

(a)       if
such Common Stock is publicly traded and is then listed on a national securities exchange, the closing price on the date of determination
on the principal national securities exchange on which the Common Stock is listed or admitted to trading as officially quoted
in the composite tape of transactions on such exchange or such other source as the Committee deems reliable for the applicable
date;

 

(b)       if
such Common Stock is publicly traded but is neither listed nor admitted to trading on a national securities exchange, the average
of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal or such other source as
the Committee deems reliable;

 

(c)       in
the case of an Option or SAR grant made on the Effective Date, the price per share at which shares of the Company’s Common
Stock are initially offered for sale to the public by the Company’s underwriters in the initial public offering of the Company’s
Common Stock pursuant to a registration statement filed with the SEC under the Securities Act; or

 

(d)
       if none of the foregoing is applicable, by the Board or the Committee in good faith.

 

“Insider”
means an officer or director of the Company or any other person whose transactions in the Company’s Common Stock are subject
to Section 16 of the Exchange Act.

 

“Non-Employee
Director” means a Director who is not an Employee of the Company or any arent or Subsidiary.

 

“Option”
means an award of an option to purchase Shares pursuant to Section 5.

 

“Parent”
means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations
other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

 

“Participant”
means a person who holds an Award under this Plan.

 

“Performance
Award” means cash or stock granted pursuant to Section 10 or Section 12 of the Plan.

 

“Performance
Factors” means any of the factors selected by the Committee and specified in an Award Agreement, from among the following
objective measures, either individually, alternatively or in any combination, applied to the Company as a whole or any business
unit or Subsidiary, either individually, alternatively, or in any combination, on a GAAP or non-GAAP basis, and measured, to the
extent applicable on an absolute basis or relative to a pre-established target, to determine whether the performance goals established
by the Committee with respect to applicable Awards have been satisfied:

 

    	13

     

    

 

	 	●	Profit
    Before Tax;
	 	 	 
	 	●	Billings;
	 	 	 
	 	●	Revenue;
	 	 	 
	 	●	(Net
    revenue;
	 	 	 
	 	●	Earnings
    (which may include earnings before interest and taxes, earnings before taxes, and net earnings);
	 	 	 
	 	●	Operating
    income;
	 	 	 
	 	●	Operating
    margin;
	 	 	 
	 	●	Operating
    profit;
	 	 	 
	 	●	Controllable
    operating profit, or net operating profit;
	 	 	 
	 	●	Net
    Profit;
	 	 	 
	 	●	Gross
    margin;
	 	 	 
	 	●	Operating
    expenses or operating expenses as a percentage of revenue;
	 	 	 
	 	●	Net
    income;
	 	 	 
	 	●	Earnings
    per share;
	 	 	 
	 	●	Total
    stockholder return;
	 	 	 
	 	●	Market
    share;
	 	 	 
	 	●	Return
    on assets or net assets;
	 	 	 
	 	●	The
    Company’s stock price;
	 	 	 
	 	●	Growth
    in stockholder value relative to a pre-determined index;
	 	 	 
	 	●	Return
    on equity;
	 	 	 
	 	●	Return
    on invested capital;
	 	 	 
	 	●	Cash
    Flow (including free cash flow or operating cash flows)
	 	 	 
	 	●	Cash
    conversion cycle;
	 	 	 
	 	●	Economic
    value added;
	 	 	 
	 	●	Individual
    confidential business objectives;
	 	 	 
	 	●	Contract
    awards or backlog;
	 	 	 
	 	●	Overhead
    or other expense reduction;
	 	 	 
	 	●	Credit
    rating;
	 	 	 
	 	●	Strategic
    plan development and implementation;
	 	 	 
	 	●	Succession
    plan development and implementation;

 

    	14

     

    

 

		●	Customer
    indicators;
	 	 	 
	 	●	New
    product invention or innovation;
	 	 	 
	 	●	Attainment
    of research and development milestones;
	 	 	 
	 	●	Attainment
    of objective operating goals and employee metrics; and
	 	 	 
	 	●	Any
    other metric that is capable of measurement as determined by the Committee.

 

The
Committee may, in recognition of unusual or non-recurring items such as acquisition-related activities or changes in applicable
accounting rules, provide for one or more equitable adjustments (based on objective standards) to the Performance Factors to preserve
the Committee’s original intent regarding the Performance Factors at the time of the initial award grant. It is within the
sole discretion of the Committee to make or not make any such equitable adjustments.

 

“Performance
Period” means the period of service determined by the Committee, during which years of service or performance is to
be measured for the Award.

 

“Performance
Share” means a performance share bonus granted as a Performance Award.

 

“Permitted
Transferee” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships) of the Employee, any person sharing the Employee’s household (other than a tenant or employee), a trust in
which these persons (or the Employee) have more than 50% of the beneficial interest, a foundation in which these persons (or the
Employee) control the management of assets, and any other entity in which these persons (or the Employee) own more than 50% of
the voting interests.

 

“Plan”
means this ToughBuilt Industries, Inc. 2016 Equity Incentive Plan.

 

“Purchase
Price” means the price to be paid for Shares acquired under the Plan, other than Shares acquired upon exercise of an
Option or SAR.

 

“Restricted
Stock Award” means an award of Shares pursuant to Section 6 or Section 12 of the Plan, or issued pursuant to the early
exercise of an Option.

 

“Restricted
Stock Unit” means an Award granted pursuant to Section 9 or Section 12 of the Plan.

 

“SEC”
means the United States Securities and Exchange Commission.

 

“Securities
Act” means the United States Securities Act of 1933, as amended.

 

“Shares”
means shares of the Company’s Common Stock and the common stock of any successor security.

 

“Stock
Appreciation Right” means an Award granted pursuant to Section 8 or Section 12 of the Plan.

 

“Stock
Bonus” means an Award granted pursuant to Section 7 or Section 12 of the Plan.

 

“Subsidiary”
means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.

 

    	15

     

    

 

“Termination”
or “Terminated” means, for purposes of this Plan with respect to a Participant, that the Participant has for
any reason ceased to provide services as an employee, officer, director, consultant, independent contractor or advisor to the
Company or a Parent or Subsidiary of the Company. An employee will not be deemed to have ceased to provide services in the case
of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee; provided, that such leave
is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute
or unless provided otherwise pursuant to formal policy adopted from time to time by the Company and issued and promulgated to
employees in writing. In the case of any employee on an approved leave of absence, the Committee may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the Company or a Parent or Subsidiary of the Company as it
may deem appropriate, except that in no event may an Award be exercised after the expiration of the term set forth in the applicable
Award Agreement. In the event of military leave, if required by applicable laws, vesting shall continue for the longest period
that vesting continues under any other statutory or Company approved leave of absence and, upon a Participant’s returning
from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services
Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Awards to the same extent as
would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as
he or she was providing services immediately prior to such leave. An employee shall have terminated employment as of the date
he or she ceases to be employed (regardless of whether the termination is in breach of local laws or is later found to be invalid)
and employment shall not be extended by any notice period or garden leave mandated by local law. The Committee will have sole
discretion to determine whether a Participant has ceased to provide services for purposes of the Plan and the effective date on
which the Participant ceased to provide services (the “Termination Date”).

 

“Unvested
Shares” means Shares that have not yet vested or are subject to a right of repurchase in favor of the Company (or any
successor thereto).

 

    	16Form
of Representative’s Warrant

 

THE
REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE
WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN,
PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF 180 DAYS FOLLOWING THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT
(DEFINED BELOW) TO ANYONE OTHER THAN (I) JOSEPH GUNNAR & CO., LLC OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH
THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF JOSEPH GUNNAR & CO., LLC OR ANY SUCH UNDERWRITER OR SELECTED DEALER.

 

THIS
PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [●], 2019. VOID AFTER 5:00 P.M., EASTERN TIME, [●], 2023.

 

PURCHASE
WARRANT

 

For
the Purchase of [●] Shares of Common Stock

 

of

 

TOUGHBUILT
INDUSTRIES, INC.

 

1.
Purchase Warrant.

 

THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of Joseph Gunnar & Co.,
LLC or its assigns (“Holder”), as registered owner of this Purchase Warrant, to ToughBuilt Industries, Inc.,
a Nevada corporation (the “Company”), Holder is entitled, at any time or from time to time from [●],
2019 (the one-year anniversary of the effective date of the Offering, the “Commencement Date”), and at or before
5:00 p.m., Eastern time, [●], 2023 (the five-year anniversary of the effective date of the Offering, the “Expiration
Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to [●] shares of common
stock of the Company, par value $0.0001 per share (the “Shares”), subject to adjustment as provided in Section
6 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase
Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period
ending on the Expiration Date, the Company agrees not to take any action that would terminate the Purchase Warrant. This Purchase
Warrant is initially exercisable at $[●] per Share (125% of the price of the Shares sold in the Offering); provided,
however, that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this
Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be
adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted
exercise price, depending on the context.

 

    	 	 	 

    	 

    

 

2.
Exercise.

 

2.1
Exercise Form.

 

In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and
completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being
purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified
check or official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern
time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented
hereby shall cease and expire.

 

2.2
Cashless Exercise.

 

If at any time after the Commencement Date there is no effective registration statement registering,
or no current prospectus available for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant
by payment of cash or check payable to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive
the number of Shares equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this
Purchase Warrant to the Company, together with the exercise form attached hereto, in which event the Company shall issue to Holder,
Shares in accordance with the following formula:

 

	X	=	Y(A-B)

            A

	Where,X	=	The
    number of Shares to be issued to Holder;
	Y	=	The
    number of Shares for which the Purchase Warrant is being exercised;
	A	=	The
                                         fair market value of one Share; and

        

	B	=	The
    Exercise Price.

 

For
purposes of this Section 2.2, the fair market value of a Share is defined as follows:

 

(i)
if the Company’s common stock is traded on a securities exchange, the value shall be deemed to be the closing price on such
exchange on the trading date immediately prior to the date on which the exercise form in connection with the exercise of the Purchase
Warrant is submitted to the Company; or

 

(ii)
if the Company’s common stock is traded over-the-counter, the value shall be deemed to be the closing bid price on the trading
date immediately prior to the date on which the exercise form in connection with the exercise of the Purchase Warrant is submitted
to the Company; if there is no public market, the value shall be the fair market value thereof, as determined in good faith by
the Company’s Board of Directors.

 

2.3
Legend.

 

Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless
such securities have been registered under the Securities Act of 1933, as amended (the “Act”):

 

    	 	2	 

    	 

    

 

“The
securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”),
or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act, or pursuant to an exemption from registration under the
Act and applicable state law which, in the opinion of counsel to the Company, is available.”

 

3.
Transfer.

 

3.1
General Restrictions.

 

The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that
such Holder will not: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant for a period of 180 days following
the effective date of the registration statement on Form S-1 (Registration No. 333-[●]) of the Company (the “Registration
Statement”) to anyone other than: (i) Joseph Gunnar & Co., LLC (“JGUN”) or an underwriter or
a selected dealer participating in the Offering, or (ii) a bona fide officer or partner of JGUN or of any such underwriter or
selected dealer, in each case in accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause this Purchase Warrant or the securities
issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result in the
effective economic disposition of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(g)(2).
On and after that date that is 180 days after the effective date of the Registration Statement, transfers to others may be made
subject to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder
must deliver to the Company the assignment form attached hereto duly executed and completed, together with the Purchase Warrant
and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five (5) Business Days transfer
this Purchase Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of
like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable
hereunder or such portion of such number as shall be contemplated by any such assignment.

 

3.2
Restrictions Imposed by the Act.

 

The securities evidenced by this Purchase Warrant shall not be transferred unless and
until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an
exemption from registration under the Act and applicable state securities laws, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement or a post-effective amendment to the Registration Statement
relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities
and Exchange Commission (the “Commission”) and compliance with applicable state securities law has been established.

 

    	 	3	 

    	 

    

 

4.
Registration Rights.

 

The Holder shall only be entitled to the rights set forth in this Section 4 at such time as
the Registration Statement is not effective or the prospectus included in the Registration Statement covering the Registrable
Securities (as defined below) is not available for use by the Holders thereof.

 

4.1
Demand Registration.

 

4.1.1
Grant of Right.

 

The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51%
of the Purchase Warrants and/or the underlying Shares (“Majority Holders”), agrees to register, on one occasion,
all or any portion of the Shares underlying the Purchase Warrants (collectively, the “Registrable Securities”).
On such occasion, the Company will file a registration statement with the Commission covering the Registrable Securities within
sixty (60) days after receipt of a Demand Notice and use its commercially reasonable efforts to have the registration statement
declared effective promptly thereafter, subject to compliance with review by the Commission; provided, however,
that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect
to which the Holder is entitled to piggyback registration rights pursuant to Section 4.2 hereof and either: (i) the Holder
has elected to participate in the offering covered by such registration statement or (ii) if such registration statement relates
to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement has
been withdrawn or until thirty (30) days after such offering is consummated. The demand for registration may be made at any time
during a period of four (4) years beginning one year after the effective date of the Registration Statement. The Company covenants
and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the
Purchase Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.

 

4.1.2
Terms.

 

The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant
to Section 4.1.1, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the Registrable Securities. The Company agrees to use
its commercially reasonable efforts to cause the filing required herein to become effective promptly and to qualify or register
the Registrable Securities in such States as are reasonably requested by the Holder(s); provided, however, that
in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause:
(i) the Company to be obligated to register or license to do business in such State or submit to general service of process in
such State, or (ii) the principal shareholders of the Company to be obligated to escrow their shares of capital stock of the Company.
The Company shall cause any registration statement filed pursuant to the demand right granted under Section 4.1.1 to remain
effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable Securities
covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only
use the prospectuses provided by the Company to sell the shares covered by such registration statement, and will immediately cease
to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due
to a material misstatement or omission. Notwithstanding the provisions of this Section 4.1.2, the Holder shall be entitled
to a demand registration under this Section 4.1.2 on only one (1) occasion and such demand registration right shall terminate
on the fifth anniversary of the effective date of the Registration Statement in accordance with FINRA Rule 5110(f)(2)(G)(iv).

 

    	 	4	 

    	 

    

 

4.2
“Piggy-Back” Registration.

 

4.2.1
Grant of Right.

 

In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall
have the right, for a period of six (6) years commencing one year after the effective date of the Registration Statement, to include
the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with
a transaction contemplated by Rule 145 promulgated under the Act or pursuant to Form S-8 or any equivalent form); provided,
however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the
managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares of common stock
which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such
Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion
hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the
Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included
by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company
has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration
Statement or are not entitled to pro rata inclusion with the Registrable Securities.

 

4.2.2
Terms.

 

The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section
4.2.1 hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected
by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration,
the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice
prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for
each registration statement filed by the Company until such time as all of the Registrable Securities have been sold by the Holder.
The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written
notice, within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except
as otherwise provided in this Purchase Warrant, there shall be no limit on the number of times the Holder may request registration
under this Section 4.2.2; provided, however, that such registration rights shall terminate on the seventh anniversary of
the effective date of the Registration Statement.

 

    	 	5	 

    	 

    

 

4.3
General Terms.

 

4.3.1
Indemnification.

 

The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration
statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage,
expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or
otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant
to which the Company has agreed to indemnify the Underwriters contained in Section 5 of the Underwriting Agreement between the
Underwriters and the Company, dated as of [●], 2018. The Holder(s) of the Registrable Securities to be sold pursuant to
such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against
all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange
Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing,
for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained
in Section 5 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.

 

4.3.2
Exercise of Purchase Warrants.

 

Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s)
to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

 

4.3.3
Documents Delivered to Holders.

 

The Company shall furnish to each Holder participating in any of the foregoing offerings
and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an
opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes
an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and
(ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes
an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent
registered public accounting firm which has issued a report on the Company’s financial statements included in such registration
statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus
included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters
in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering
requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence
between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission
or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records
and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times as any such Holder shall reasonably request.

 

    	 	6	 

    	 

    

 

4.3.4
Underwriting Agreement.

 

The Company shall enter into an underwriting agreement with the managing underwriter(s), if any,
selected by any Holders whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter
shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the
Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company
and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall
be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option,
require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters
shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties
to or agreements with the Company or the underwriters except as they may relate to such Holders, their Shares and their intended
methods of distribution.

 

4.3.5
Documents to be Delivered by Holder(s).

 

Each of the Holder(s) participating in any of the foregoing offerings shall furnish
to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling
security holders.

 

4.3.6
Damages.

 

Should the registration or the effectiveness thereof required by Section 4.1 and Section 4.2 hereof
be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any
other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including
injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity
of proving actual damages and without the necessity of posting bond or other security.

 

    	 	7	 

    	 

    

 

5.
New Purchase Warrants to be Issued.

 

5.1
Partial Exercise or Transfer.

 

Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised
or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase
Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise
Price and/or transfer tax if exercised pursuant to Section 2.1 hereof, the Company shall cause to be delivered to the Holder
without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of
the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or
assigned.

 

5.2
Lost Certificate.

 

Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation
of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and
deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such
loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

 

6.
Adjustments.

 

6.1
Adjustments to Exercise Price and Number of Securities.

 

The Exercise Price and the number of Shares underlying the Purchase
Warrant shall be subject to adjustment from time to time as hereinafter set forth:

 

6.1.1
Share Dividends; Split Ups.

 

If, after the date hereof, and subject to the provisions of Section 6.3 below, the number
of outstanding Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then,
on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in
outstanding shares, and the Exercise Price shall be proportionately decreased.

 

6.1.2
Aggregation of Shares.

 

If, after the date hereof, and subject to the provisions of Section 6.3 below, the number
of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then,
on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in
outstanding shares, and the Exercise Price shall be proportionately increased.

 

    	 	8	 

    	 

    

 

6.1.3
Replacement of Securities upon Reorganization, etc.

 

In case of any reclassification or reorganization of the outstanding
Shares other than a change covered by Section 6.1.1 or Section 6.1.2 hereof or that solely affects the par value
of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another
corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation
and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance
to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with
which the Company is dissolved, the Holder of this Purchase Warrant shall have the right to receive upon the exercise hereof (until
the Expiration Date), for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount
of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share
reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the
number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any
reclassification also results in a change in Shares covered by Section 6.1.1 or Section 6.1.2, then such adjustment
shall be made pursuant to Section 6.1.1, Section 6.1.2 and this Section 6.1.3. The provisions of this Section
6.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations,
sales or other transfers.

 

6.1.4
Changes in Form of Purchase Warrant.

 

This form of Purchase Warrant need not be changed because of any change pursuant to
this Section 6.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number
of Shares as are stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of
the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an
adjustment occurring after the Commencement Date or the computation thereof.

 

6.2
Substitute Purchase Warrant.

 

In case of any consolidation of the Company with, or share reconstruction or amalgamation
of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does
not result in any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share
reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder
of each Purchase Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of
such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities
and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of
the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction
or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to
the adjustments provided for in this Section 6. The above provision of this Section 6 shall similarly apply to successive
consolidations or share reconstructions or amalgamations.

 

    	 	9	 

    	 

    

 

6.3
Elimination of Fractional Interests.

 

The Company shall not be required to issue certificates representing fractions of
Shares upon the exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional
interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or
down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.

 

7.
Reservation and Listing.

 

The Company shall at all times reserve and keep available out of its authorized Shares, solely
for the purpose of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights
as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants
and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon
such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder.
The Company further covenants and agrees that upon exercise of the Purchase Warrants and payment of the exercise price therefor,
all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and
not subject to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall
use its commercially reasonable efforts to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject
to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor
trading market) on which the Shares issued to the public in the Offering may then be listed and/or quoted.

 

8.
Certain Notice Requirements.

 

8.1
Holder’s Right to Receive Notice.

 

Nothing herein shall be construed as conferring upon the Holders the right to vote
or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever
as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise,
any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written
notice of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books
(the “Notice Date”) for the determination of the shareholders entitled to such dividend, distribution, conversion
or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or
sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding
the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at
the same time and in the same manner that such notice is given to the shareholders.

 

    	 	10	 

    	 

    

 

8.2
Events Requiring Notice.

 

The Company shall be required to give the notice described in this Section 8 upon one or
more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling
them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company,
(ii) the Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor,
or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction
or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.

 

8.3
Notice of Change in Exercise Price.

 

The Company shall, promptly after an event requiring a change in the Exercise Price
pursuant to Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”).
The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being
true and accurate by the Company’s Chief Financial Officer.

 

8.4
Transmittal of Notices.

 

All notices, requests, consents and other communications under this Purchase Warrant shall be in
writing and shall be deemed to have been duly made (1) when hand delivered, (2) when mailed by express mail, electronic mail or
private courier service or (3) when the event requiring notice is disclosed in all material respects and filed in a current report
on Form 8-K or in a definitive proxy statement on Schedule 14A prior to the Notice Date: (i) if to the registered Holder of the
Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to the following
address or to such other address as the Company may designate by notice to the Holders:

 

If
to the Holder:

 

Joseph
Gunnar & Co., LLC

30
Broad Street, 11th Floor

New
York, New York 10004

Attn:
Stephan A. Stein, President

Fax
No.: 212-440-9668

Email: sstein@jgunnar.com

 

    	 	11	 

    	 

    

 

With
a copy (which shall not constitute notice) to:

 

Greenberg
Traurig, LLP

MetLife
Building

200
Park Avenue

New
York, New York 10166

Attn:
Alan I. Annex, Esq.

Fax
No.: 212-801-6400

e-mail:
annexa@gtlaw.com

 

If
to the Company:

 

ToughBuilt
Industries, Inc.

25371
Commercentre Drive

Lake
Forest, California 92630

Attn:
Michael Panosian, Chief Executive Officer

e-mail:
michael@toughbuilt.com

 

with
a copy (which shall not constitute notice) to:

 

Wexler
Burkhart Hirschberg & Unger, LLP

277
Oak Street Concourse 2

Garden
City, New York 11530

Attn:
Jolie Kahn

Fax
No.: 516-222-8803

e-mail:
jkahn@wbhulaw.com

 

9.
Miscellaneous.

 

9.1
Amendments.

 

The Company and JGUN may from time to time supplement or amend this Purchase Warrant without the approval of
any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective
or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder
that the Company and JGUN may deem necessary or desirable and that the Company and JGUN deem shall not adversely affect the interest
of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against
whom enforcement of the modification or amendment is sought.

 

9.2
Headings.

 

The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way
limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant.

 

    	 	12	 

    	 

    

 

9.3
Entire Agreement.

 

This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or
in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter
hereof.

 

9.4
Binding Effect.

 

This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the
Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant
or any provisions herein contained.

 

9.5
Governing Law; Submission to Jurisdiction.

 

This Purchase Warrant shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees
that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought
and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District
of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served
upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing
party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees
and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby
irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this agreement or the transactions contemplated hereby.

 

9.6
Waiver, etc.

 

The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant
shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase
Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this
Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant
shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement
of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to
be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

 

    	 	13	 

    	 

    

 

9.7
Execution in Counterparts.

 

This Purchase Warrant may be executed in one or more counterparts, and by the different parties
hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute
one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto
and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic
transmission.

 

9.8
Exchange Agreement.

 

As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees
that, at any time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and JGUN enter into an agreement
(“Exchange Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged
for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.

 

[Remainder
of page intentionally left blank.]

 

    	 	14	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the __th day
of _____________, 2018.

 

	TOUGHBUILT
                                         INDUSTRIES, INC.

	 
	 	 	 
	By:
    	 	 
	Name:	                            	 
	Title:	 	 

 

    	 	15	 

    	 

    

 

Form
to be used to exercise Purchase Warrant:

 

Date:
_________, 20___

 

The
undersigned hereby elects irrevocably to exercise the Purchase Warrant for ______ Shares of ToughBuilt Industries, Inc., a Nevada
corporation (the “Company”) and hereby makes payment of $____ (at the rate of $____ per Share) in payment of
the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with
the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase
Warrant has not been exercised.

 

or

 

The
undersigned hereby elects irrevocably to convert its right to purchase ___ Shares under the Purchase Warrant for ______ Shares,
as determined in accordance with the following formula:

 

	X
	=	Y(A-B)

           A

	Where,X	=	The
    number of Shares to be issued to Holder;
	Y	=	The
    number of Shares for which the Purchase Warrant is being exercised;
	A	=	The
    fair market value of one Share which is equal to $_____; and
	B	=	The
    Exercise Price which is equal to $______ per share

 

The
undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement
with respect to the calculation shall be resolved by the Company in its sole discretion.

 

Please
issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable,
a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.

 

Signature

 

Signature
Guaranteed

 

    	 	16	 

    	 

    

 

INSTRUCTIONS
FOR REGISTRATION OF SECURITIES

 

Name:

(Print
in Block Letters)

Address:

 

NOTICE:
The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by
a firm having membership on a registered national securities exchange.

 

    	 	17	 

    	 

    

 

Form
to be used to assign Purchase Warrant:

ASSIGNMENT

 

(To
be executed by the registered Holder to effect a transfer of the within Purchase Warrant):

 

FOR
VALUE RECEIVED, __________________ does hereby sell, assign and transfer unto ______________ the right to purchase shares of ToughBuilt
Industries, Inc., a Nevada corporation (the “Company”), evidenced by the Purchase Warrant and does hereby
authorize the Company to transfer such right on the books of the Company.

 

Dated:
__________, 20__

 

Signature

 

Signature
Guaranteed

 

NOTICE:
The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration
or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or
by a firm having membership on a registered national securities exchange.

 

    	 	18

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