Document:

Exhibit 4.1

 

Execution Copy

 

NEITHER THIS DEBENTURE NOR THE SECURITIES
INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

SG
BLOCKS, INC.

 

SENIOR SECURED CONVERTIBLE DEBENTURE

 

	Original Issue Date: November 12, 2019	 	
Principal Amount $480,770
	 	 	Purchase Price: $375,000

 

FOR VALUE RECEIVED,
SG Blocks, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of RedDiamond Partners,
LLC or its registered assigns (the “Holder”) the amount set out above as the Principal Amount (as reduced pursuant
to the terms hereof, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration,
or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding
Principal at the applicable Interest Rate from the date of an Event of Default (as defined below) until the same becomes due and
payable, upon acceleration conversion or otherwise (in each case in accordance with the terms hereof). This Senior Secured Convertible
Debenture (including all debentures issued in exchange, transfer or replacement hereof, this “Debenture”) was
issued pursuant to the Securities Purchase Agreement dated November 12, 2019 (the “Securities Purchase Agreement”)
between the Company and the Holder. Certain capitalized terms used herein are defined in Section 16.

 

(1) GENERAL
TERMS

 

(a) Maturity
Date. The “Maturity Date” shall be March 1, 2020.

 

(b) Interest
Rate and Payment of Interest. Interest shall accrue on the outstanding Principal balance hereof from and after an Event of
Default at an annual rate equal to 24% (“Interest Rate”). Interest shall be calculated on the basis of a 365-day
year and the actual number of days elapsed, to the extent permitted by applicable law.

 

(c) Redemption.
The Company at its option shall have the right to redeem (“Optional Redemption”) a portion or all amounts outstanding
under this Debenture (i) prior to the Maturity Date provided that the Company shall pay an amount equal to the sum of the Principal
amount being redeemed and any accrued interest being redeemed and (ii) after the Maturity Date the Company shall pay an amount
equal to the product of (x) the sum of the Principal amount being redeemed and any accrued interest being redeemed and (y) 120%.
In order to make a redemption pursuant to this Section, the Company shall first provide written notice to the Holder of its intention
to make a redemption (the “Redemption Notice”) setting forth the amount of Principal and if applicable interest
it desires to redeem. After receipt of the Redemption Notice if the redemption is after the Maturity Date the Holder shall have
three (3) Business Days to elect to (x) convert all or any portion of this Debenture, subject to the limitations set forth herein
and (y) decline all or any portion of any cash payment of the Redemption Amount. On the fourth (4th) Business Day after
the Redemption Notice, the Company shall deliver to the Holder the Redemption Amount with respect to the Principal amount redeemed
and applicable interest, if any after giving effect to any conversions and/or cash payment declinations effected during the three
(3) Business Day period. Any amounts continuing to remain outstanding may thereafter be subject to additional Optional Redemptions
made in accordance with the provisions of this Section 1(c).

 

    

     

    

 

(d) Secured
Obligations. The obligations of the Company under this Debenture are secured by all of the assets of the Company and each of
its subsidiaries pursuant to the Security Agreement.

 

(2) EVENTS
OF DEFAULT.

 

(a) An
“Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether
it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court,
or any order, rule or regulation of any administrative or governmental body):

 

(i) The
Company's failure to pay to the Holder any amount of Principal within five (5) Business Days of the Maturity Date;

 

(ii) The
Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any subsidiary of the
Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company
or any subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating
to the Company or any subsidiary of the Company or there is commenced against the Company or any subsidiary of the Company any
such bankruptcy, insolvency or other proceeding which remains undismissed for a period of sixty-one (61) days; or the Company or
any subsidiary of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case
or proceeding is entered; or the Company or any subsidiary of the Company suffers any appointment of any custodian, private or
court appointed receiver or the like for it or any substantial part of its property which continues undischarged or unstayed for
a period of sixty-one (61) days; or the Company or any subsidiary of the Company makes a general assignment for the benefit of
creditors; or the Company or any subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall
be unable to pay, its debts generally as they become due; or the Company or any subsidiary of the Company shall call a meeting
of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or the Company or any subsidiary
of the Company shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other action is taken by the Company or any subsidiary of the Company for the purpose of effecting
any of the foregoing;

 

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(iii) The
Company or any subsidiary of the Company shall default in any of its obligations under any other debenture or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by
which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any subsidiary of the Company in an amount exceeding $200,000, whether such indebtedness now exists
or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable and
such default is not cured within five (5) Business Days;

 

(iv) The
Common Stock shall cease to be quoted or listed for trading on the Primary Market for a period of five (5) consecutive Trading
Days;

 

(v) The
Company or any subsidiary of the Company shall be a party to any Change of Control Transaction (as defined in Section 16) unless
in connection with such Change of Control Transaction this Debenture is retired;

 

(vi) The
Company shall fail to observe or perform any other material covenant, agreement or warranty contained in, or otherwise commit any
material breach or default of any provision of this Debenture (except as may be covered by Section 2(a)(i) through 2(a)(vii) hereof)
or any Transaction Document (as defined in Section 16) which is not cured within the time prescribed.

 

(vii) The Company
shall fail to maintain the Minimum Reserve (as defined in Section 3(d) below);

 

(viii) The
Security Agreement and related documents shall for any reason fail or cease to create a separate valid and perfected and first
priority Lien on the Collateral (as defined in the Security Agreement) in favor of Holder and such breach remains uncured for a
period of three (3) Business Days;

 

(xi) The
Company's (A) failure to cure a Conversion Failure by delivery of (I) the required number of shares of Common Stock or (II) the
Buy-In Price within five (5) Business Days after the applicable Conversion Failure or (B) notice, written or oral, to any holder
of the Debentures, including by way of public announcement, at any time, of its intention not to comply with a request for conversion
of any Debentures into shares of Common Stock that is tendered in accordance with the provisions of the Debentures, other than
pursuant to Section 4(c);

 

(b) During
the time that any portion of this Debenture is outstanding, if any Event of Default has occurred and is continuing, the full unpaid
Principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration
shall become at the Holder's election, immediately due and payable in cash. Furthermore, in addition to any other remedies, the
Holder shall have the right (but not the obligation) to convert this Debenture (subject to the beneficial ownership limitations
set out in Section 3(d)) at any time after (x) an Event of Default (provided that such Event of Default is continuing) or (y) the
Maturity Date at the Conversion Price. The Holder need not provide and the Company hereby waives any presentment, demand, protest
or other notice of any kind, (other than required notice of conversion) and the Holder may immediately enforce any and all of its
rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and
annulled by Holder at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of
Default or impair any right consequent thereon.

 

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(3) CONVERSION
OF DEBENTURE. This Debenture shall be convertible into shares of the Company's Common Stock, on the terms and conditions set
forth in this Section 3.

 

(a) Conversion
Right. Subject to the provisions of Section 3(c), at any time or times on or after an Event of Default or the Maturity Date,
the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully
paid and nonassessable shares of Common Stock in accordance with Section 3(b), at the Conversion Rate (as defined below). The number
of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to this Section 3(a) shall be determined by
dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”). The Company shall not
issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of
a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company
shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Common
Stock upon conversion of any Conversion Amount.

 

(i) “Conversion
Amount” means the product of (x) the portion of the Principal and accrued Interest to be converted with respect to which
this determination is being made and (y) 120%.

 

(ii) “Conversion
Price” means, as of any Conversion Date (as defined below) 67.5% of the lower of (x) the lowest daily VWAP during the
five (5) consecutive Trading Days immediately preceding the date of the Event of Default or Maturity Date, as applicable, or (y)
if the Debenture is not fully paid as of the Maturity Date, the lowest daily VWAP during the ten (10) consecutive Trading Days
immediately preceding the date of the applicable Conversion (as applicable, the “Conversion Price”). The Conversion
Price shall be adjusted from time to time pursuant to the other terms and conditions of this Debenture.

 

(b) Mechanics
of Conversion.

 

(i)  Conversion.
To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”), the Holder shall
(A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such date, a copy of
an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to
the Company and (B) if required by Section 3(b)(iii), surrender this Debenture to a nationally recognized overnight delivery service
for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Debenture
in the case of its loss, theft or destruction). On or before the third (3rd) Business Day following the date of receipt
of a Conversion Notice (the “Share Delivery Date”), the Company shall (X) if legends are not required to be
placed on certificates of Common Stock and provided that the Transfer Agent is participating in the Depository Trust Company's
(“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to
which the Holder shall be entitled to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent
Commission system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue
and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled which certificates shall not bear any restrictive
legends unless required pursuant to rules and regulations of the Commission. If this Debenture is physically surrendered for conversion
and the outstanding Principal of this Debenture is greater than the Principal portion of the Conversion Amount being converted,
then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt of this Debenture
and at its own expense, issue and deliver to the holder a new Debenture representing the outstanding Principal not converted. The
Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Debenture shall be treated
for all purposes as the record holder or holders of such shares of Common Stock upon the transmission of a Conversion Notice.

 

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(ii) Company's
Failure to Timely Convert. If within three (3) Trading Days after the Company's receipt of the facsimile copy of a Conversion
Notice the Company shall fail to issue and deliver a certificate to the Holder or credit the Holder's balance account with DTC
for the number of shares of Common Stock to which the Holder is entitled upon such holder's conversion of any Conversion Amount
(a “Conversion Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction
or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of Common Stock issuable upon such conversion that
the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Business
Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's
total purchase price (including brokerage commissions and other out of pocket expenses, if any) for the shares of Common Stock
so purchased (the “Buy-In Price”), at which point the Company's obligation to deliver such certificate
(and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate
or certificates representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the Conversion Date.

 

(iii) Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Debenture in
accordance with the terms hereof, the Holder shall not be required to physically surrender this Debenture to the Company
unless (A) the full Conversion Amount represented by this Debenture is being converted or (B) the Holder has provided the
Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this
Debenture upon physical surrender of this Debenture. The Holder and the Company shall maintain records showing the Principal
and Interest converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the
Holder and the Company, so as not to require physical surrender of this Debenture upon conversion.

 

(c) Limitations
on Conversions.

 

(i) Beneficial
Ownership. The Holder shall not have the right to convert any portion of this Debenture or otherwise receive shares of Common
Stock hereunder (including pursuant to Section (1)(c) or (3)(e)) to the extent that after giving effect to such conversion or receipt
of such shares, the Holder, together with any affiliate thereof, would beneficially own (as determined in accordance with Section
13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 4.99% of the number of shares of Common Stock outstanding
immediately after giving effect to such conversion or receipt of shares as payment of interest. Since the Holder will not be obligated
to report to the Company the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion
at issue would result in the issuance of shares of Common Stock in excess of 4.99% of the then outstanding shares of Common Stock
(the “Beneficial Ownership Limitation”) without regard to any other shares which may be beneficially owned by
the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation
contained in this Section applies, the determination of which portion of the Principal amount of this Debenture is convertible
shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a Principal amount
of this Debenture that, without regard to any other shares that the Holder or its affiliates may beneficially own, would result
in the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum Principal amount permitted to be converted on such Conversion Date in accordance with Section 3(a) and,
any Principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this Debenture.
Subject to the provisions of Section 3(c)(ii), upon sixty-one (61) days prior notice to the Company such Holder may change the
Beneficial Ownership Limitation to 9.99% of the number of shares of Common Stock. Other Holders shall be unaffected by any such
waiver.

 

(ii)
Primary Market Regulation. The Company shall not issue any shares of Common Stock upon conversion of this Debenture or otherwise
pursuant to the terms of this Debenture if the issuance of such shares of Common Stock (taken together with each issuance of such
shares upon the conversion of this Debenture pursuant to the terms of the Debenture) would exceed the aggregate number of shares
of Common Stock which the Company may issue upon conversion of the Debenture without breaching the Company’s obligations
under the rules or regulations of the Primary Market (the number of shares which may be issued without violating such rules and
regulations, including rules related to the aggregate of offerings under NASDAQ Listing Rule 5635(d), the “Exchange Cap”).
For the avoidance of doubt, the maximum number of shares of Common Stock that may be issued pursuant to this Section 3(c)(ii) is
1,200,957. In the event that the Holder shall sell or otherwise transfer the Debenture or a portion thereof, the transferee shall
be allocated a pro rata portion of the Exchange Cap with respect to such portion of the Debenture so transferred, and the restrictions
of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap so allocated to such transferee.

 

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(d) Other
Provisions.

 

(i) All
calculations under this Section 3 shall be rounded to the nearest $0.0001 or whole share.

 

(ii) The
Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock
solely for the purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein
provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less
than the maximum number of shares comprising the Exchange Cap (the “Minimum Reserve”); provided, however,
the Company shall not be in breach of the foregoing reserve requirement with respect to the issuance of shares of common stock
that result in the reserve not being maintained if the proceeds from such sale are used to repay the Debenture. The Company covenants
that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid,
nonassessable.

 

(iii) Nothing
herein shall limit a Holder's right to pursue actual damages or declare an Event of Default pursuant to Section 2 herein for the
Company’s failure to deliver certificates representing shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security.
The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.

 

(iv) The
Company shall make such filings, registrations or qualifications and take all other necessary action and will use its best efforts
to satisfy all conditions to be in compliance and satisfy the current public information requirement under Securities Act Rule
144(c).

 

(4) ADJUSTMENTS.

 

(a) Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon a conversion of this Debenture, at the Holder's option,
(i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder
would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon
the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of
this Debenture) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other
assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts
as the Holder would have been entitled to receive had this Debenture initially been issued with conversion rights for the form
of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the
Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Required
Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without
regard to any limitations on the conversion or redemption of this Debenture.

 

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(b) In
case of any (1) merger or consolidation of the Company or any subsidiary of the Company with or into another Person, or (2) sale
by the Company or any subsidiary of the Company of more than one-half of the assets of the Company in one or a series of related
transactions, a Holder shall have the right to (A) exercise any rights under Section 2(b), (B) convert the aggregate amount of
this Debenture then outstanding into the shares of stock and other securities, cash and property receivable upon or deemed to be
held by holders of Common Stock following such merger, consolidation or sale, and such Holder shall be entitled upon such event
or series of related events to receive such amount of securities, cash and property as the shares of Common Stock into which such
aggregate Principal amount of this Debenture could have been converted immediately prior to such merger, consolidation or sales
would have been entitled, or (C) in the case of a merger or consolidation, require the surviving entity to issue to the Holder
a convertible Debenture with a Principal amount equal to the aggregate Principal amount of this Debenture then held by such Holder,
plus all accrued and unpaid interest and other amounts owing thereon, which such newly issued convertible Debenture shall have
terms identical (including with respect to conversion) to the terms of this Debenture, and shall be entitled to all of the rights
and privileges of the Holder of this Debenture set forth herein and the agreements pursuant to which this Debentures were issued.
In the case of clause (C), the conversion price applicable for the newly issued shares of convertible preferred stock or convertible
Debentures shall be based upon the amount of securities, cash and property that each share of Common Stock would receive in such
transaction and the Conversion Price in effect immediately prior to the effectiveness or closing date for such transaction. The
terms of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder the right to receive
the securities, cash and property set forth in this Section upon any conversion or redemption following such event. This provision
shall similarly apply to successive such events.

 

(5) REISSUANCE
OF THIS DEBENTURE.

 

(a) Transfer.
If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Debenture (in accordance with Section 5(d)), registered in the name of the
registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued
and unpaid interest thereof) and, if less than the entire outstanding Principal is being transferred, a new Debenture (in accordance
with Section 5(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by
acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of Section 3(b)(iii) following conversion
or redemption of any portion of this Debenture, the outstanding Principal represented by this Debenture may be less than the Principal
stated on the face of this Debenture.

 

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(b) Lost,
Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Debenture,
the Company shall execute and deliver to the Holder a new Debenture (in accordance with Section 5(d)) representing the outstanding
Principal.

 

(c) Debenture
Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Debenture or Debentures (in accordance with Section 5(d)) representing in the aggregate the outstanding
Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal as is designated
by the Holder at the time of such surrender.

 

(d) Issuance
of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture, such
new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture,
the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section 5(a) or Section 5(c), the
Principal designated by the Holder which, when added to the Principal represented by the other new Debentures issued in connection
with such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance
of new Debentures), (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the
Issuance Date of this Debenture, (iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued
and unpaid Interest from the Issuance Date.

 

 

(6) NOTICES.
Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by email (provided
confirmation of transmission is electronically generated and kept on file by the sending party); or (iii) one (1) Trading Day after
deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same.
The addresses and email for such communications shall be:

 

	If to the Company, to:	
        195 Montague Street, 14th Floor

        Brooklyn, New York 11201

        Attention: Paul M. Galvin

	 	Email: pgalvin@sgblocks.com
	 	 
	 With a copy to:	
        Gracin & Marlow, LLP

        The Chrysler Building

        405 Lexington Avenue, 26th Floor

        New York, New York 10174

        Attention: Leslie Marlow

        Email: lmarlow@gracinmarlow.com

 

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	If to the Holder:	RedDiamond Partners, LLC
	 	
        156 West Saddle River Road

        Saddle River, NJ 07548

        Attention: John DeNobile

        Email: jdjr11@aol.com

	 	 

 or at such other address and/or
email and/or to the attention of such other person as the recipient party has specified by written notice given to each other
party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient
of such notice, consent, waiver or other communication, (ii) electronically generated by the sender's email service provider containing
the time, date, recipient email address or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

 

(7) Except
as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company, which are absolute
and unconditional, to pay the Principal of, interest and other charges (if any) on, this Debenture at the time, place, and rate,
and in the coin or currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this Debenture
is outstanding, the Company shall not and shall cause their subsidiaries not to, without the consent of the Holder, (i) amend its
certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder; (ii) repay,
repurchase or offer to repay, repurchase or otherwise acquire shares of its Common Stock or other equity securities; or (iii) enter
into any agreement with respect to any of the foregoing.

 

(8) This
Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the
right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders
or any other proceedings of the Company, unless and to the extent converted into shares of Common Stock in accordance with the
terms hereof.

 

(9) No
indebtedness of the Company is senior to this Debenture in right of payment, whether with respect to interest, damages or upon
liquidation or dissolution or otherwise. Without the Holder’s consent, the Company will not and will not permit any of their
subsidiaries to, directly or indirectly, enter into, create, incur, assume or suffer to exist any indebtedness of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
there from that is senior in any respect to the obligations of the Company under this Debenture other than Permitted Liens (as
such terms is defined in the Security Agreement).

 

(10) This
Debenture shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to conflicts
of laws thereof. Each of the parties consents to the jurisdiction of the state courts of the State of Delaware sitting in New
Castle County, Delaware and the federal courts sitting in Wilmington, County of New Castle, in connection with
any dispute arising under this Debenture and hereby waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens to the bringing of any such proceeding in such jurisdictions.

 

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(11) If
the Company fails to strictly comply with the terms of this Debenture, then the Company shall reimburse the Holder promptly for
all fees, costs and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action
in connection with this Debenture, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or
in connection with the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any
sums which become due to the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal;
or (iv) the protection, preservation or enforcement of any rights or remedies of the Holder.

 

(12) Any waiver by the
Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of
such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist upon strict adherence
to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this Debenture. Any waiver must be in writing.

 

(13) If
any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and
if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and
circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws
governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate
of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the Principal of or interest on this Debenture as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture,
and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law has been enacted.

 

(14) Whenever
any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

 

(15) THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

 

    10

     

    

 

(16) CERTAIN
DEFINITIONS For purposes of this Debenture, the following terms shall have the following meanings:

 

(a) “Bloomberg”
means Bloomberg Financial Markets.

 

(b) “Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or
a day on which banking institutions are authorized or required by law or other government action to close.

 

(c) “Change
of Control Transaction” means the occurrence of (i) an acquisition after the date hereof by an individual or legal entity
or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through
legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty percent (50%) of
the voting securities of the Company (except that the acquisition of voting securities by the Holder or any other current holder
of convertible securities of the Company shall not constitute a Change of Control Transaction for purposes hereof), (ii) a replacement
at one time or over time of more than one-half of the members of the board of directors of the Company (other than as due to the
death or disability of a member of the board of directors) which is not approved by a majority of those individuals who are members
of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any
date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members
on the date hereof), (iii) the merger, consolidation or sale of fifty percent (50%) or more of the assets of the Company or any
subsidiary of the Company in one or a series of related transactions with or into another entity, or (iv) the execution by the
Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth above
in (i), (ii) or (iii). No transfer to a wholly-owned subsidiary shall be deemed a Change of Control Transaction under this provision.

 

(d)  “Closing
Bid Price” means the price per share in the last reported trade of the Common Stock on a Primary Market or on the exchange
which the Common Stock is then listed as quoted by Bloomberg.

  

(e) “Commission”
means the Securities and Exchange Commission.

 

(f) “Common
Stock” means the common stock, par value $0.001, of the Company and stock of any other class into which such shares may
hereafter be changed or reclassified.

 

    11

     

    

 

 (g) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(h) “Fundamental
Transaction” means any of the following: (i) the Company effects any merger or consolidation of the Company with
or into another Person and the Company is the non-surviving company (other than a merger or consolidation with a wholly owned subsidiary
of the Company for the purpose of redomiciling the Company), (ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other securities, cash or property.

 

(i) “Other
Debentures” means any other debentures, notes, or other instruments issued in exchange, replacement, or modification
of the foregoing.

 

(j) “Original
Issue Date” means the date of the first issuance of this Debenture regardless of the number of transfers and regardless
of the number of instruments, which may be issued to evidence such Debenture.

 

(k) “Person”
means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.

 

(l) “Primary
Market” means any of the New York Stock Exchange, the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select
Market, or the OTCQB, and any successor to any of the foregoing markets or exchanges.

 

(m) “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

(n) “Security
Agreement” means that certain Security Agreement, by and among the Company, any Subsidiary of the Company now joined
or joined in the future, and the Holder, dated November 12, 2019.

 

(o) “Trading
Day” means a day on which the shares of Common Stock are quoted or traded on a Primary Market on which the shares of
Common Stock are then quoted or listed; provided, that in the event that the shares of Common Stock are not listed or quoted, then
Trading Day shall mean a Business Day.

 

(p) “Transaction
Document(s)” shall mean this Debenture, along with the Securities Purchase Agreement and Security Agreement, and any
other documents or agreements entered into in connection with the foregoing.

 

(q) “VWAP”
means, for any security as of any date, the daily dollar volume-weighted average price for such security on the Primary Market
as reported by Bloomberg through its “Historical Prices – Px Table with Average Daily Volume” functions, or,
if no dollar volume-weighted average price is reported for such security by Bloomberg.

 

[Signature Page Follows]

 

    12

     

    

 

IN WITNESS WHEREOF, the Company has caused this Convertible
Debenture to be duly executed by a duly authorized officer as of the date set forth above.

 

	 	COMPANY:
	 	 
	 	
        SG BLOCKS, INC.

        

	 	 	 
	 	By:	/s/ Paul M. Galvin
	 	Name:	 Paul M. Galvin
	 	Title:	Chief Executive Officer

 

    13

     

    

 

EXHIBIT I

CONVERSION NOTICE

 

(To be executed by the Holder in order
to Convert the Debenture)

 

TO: SG BLOCKS, INC.

 

Via Email: 

 

The undersigned hereby
irrevocably elects to convert a portion of the outstanding and unpaid Conversion Amount of Debenture No. SG-1 into Shares
of Common Stock of SG BLOCKS, INC., according to the conditions stated therein, as of the Conversion Date written below.

 

	Conversion Date:	 
	Principal Amount to be Converted:	 
	Accrued Interest to be Converted:	 
	Total Conversion Amount to be converted:	 
	Conversion Price:	 
	Number of shares of Common Stock to be issued:	 
	Please issue the shares of Common Stock in the following name and to the following address:
	Issue to:	 

 

 

14Exhibit 4.2

 

NEITHER THIS SECURITY
NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

COMMON STOCK PURCHASE WARRANT

 

SG
BLOCKS, INC.

 

	Warrant Shares: [_______]	 	Original Issue Date: November 12,
2019
	 	 	Initial Exercise Date: May 12, 2020

 

THIS COMMON STOCK PURCHASE
WARRANT (this “Warrant”) certifies that, for value received, _ ThinkEquity, a division of Fordham Financial
Management, Inc. or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after the six (6) month anniversary of the Original Issue
Date (the “Initial Exercise Date”) and on or prior to the close of business on the five year anniversary of
the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from SG
Blocks, inc., a Delaware corporation (the “Company”), up to [______]1
shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one
share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Placement Agent Agreement
(the “Agreement”), dated November 12, 2019, among the Company and the Holder.

 

Section 2.Exercise.

 

a) 
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part,
at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of
a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto. Within the earlier
of (i) two (2) Trading Days (as hereinafter define) and (ii) the number of Trading Days comprising the Standard Settlement Period
(as defined in Section 2(d)(i) below) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation
within five (5) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. For purposes
of this Warrant, “Trading Day” means a day on which the Trading Market is open for trading and “Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange, OTCQX or OTCQB (or any successors to any of the foregoing). The Holder and any assignee, by acceptance
of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than
the amount stated on the face hereof.

 

 

 

1 Aggregate of
108,086 shares.

     

     

    

 

b) 
Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $[  ],2
subject to adjustment hereunder (the “Exercise Price”).

 

c) 
Cashless Exercise. If at any time on or after the Initial Exercise Date there is no effective registration statement
registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also
be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

		(A)	= as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable
Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that
is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of
“regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws)
on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of
the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg
L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed
during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section
2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading
Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular
trading hours” on such Trading Day;
	 	 	 
	 	(B)	 = the
existing Exercise Price of this Warrant at the time of such exercise; and
	 	 	 
	 	(X)	=
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant
if such exercise were by means of a cash exercise rather than a cashless exercise.

  

If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period
of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not
to take any position contrary to this Section 2(c).

 

“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on
a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the Common Stock is not then
listed or quoted for trading on a Trading Market and if prices for the Common Stock are then reported in the OTC Pink published
by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.

 

 

2 110%
of the market price.

 

    2

     

    

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the Common Stock is not then listed or
quoted for trading on a Trading Market and if prices for the Common Stock are then reported in the OTC Pink published by OTC Markets
Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (c) in all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.

 

On the Termination
Date, if there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant
Shares by the Holder, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

 

 d)  Mechanics of Exercise.

 

 i. Delivery of Warrant Shares Upon Exercise. Warrant Shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is one (1) Trading Day after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). If the Warrant Shares can be delivered via DWAC, the transfer agent shall have received from the Company, at the expense of the Company, any legal opinions or other documentation required by it to deliver such Warrant Shares without legend (subject to receipt by the Company of reasonable back up documentation from the Holder, including with respect to affiliate status) and, if applicable and requested by the Company prior to the Warrant Share Delivery Date, the transfer agent shall have received from the Holder a confirmation of sale of the Warrant Shares (provided the requirement of the Holder to provide a confirmation as to the sale of Warrant Shares shall not be applicable to the issuance of unlegended Warrant Shares upon a cashless exercise of this Warrant if the Warrant Shares are then eligible for resale pursuant to Rule 144(b)(1)).Upon delivery of the Notice of Exercise the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares; provided payment of the aggregate Exercise Price (other than in the case of a Cashless Exercise) is received within the earlier of (i) two Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period of delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

 

    3

     

    

 

ii. 
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver
to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.

 

iii. 
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares
pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv. 
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights
available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance
with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after
such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage
firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to
the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order
giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

 

    4

     

    

 

v. 
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such
exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

vi. 
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses
shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may
be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any
Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant Shares.

 

vii. 
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely
exercise of this Warrant, pursuant to the terms hereof.

 

    5

     

    

 

e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution
Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e)
applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual
report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon
the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions
of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the
61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall
apply to a successor holder of this Warrant.

 

    6

     

    

 

Section 3.Certain
Adjustments.

 

a) 
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted
such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a)
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) 
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before
the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in
the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase
Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent)
and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

c) 
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a "Distribution"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record
is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock
are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's
right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the
Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of
Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for
the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

    7

     

    

 

d) 
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly,
in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the
outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more
related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other
Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held
by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then,
upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder
(without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the Agreement in accordance with the provisions of this Section 3(d) pursuant
to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this
Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations
on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price
hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to
such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant and the Agreement referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company
under this Warrant and the Agreement with the same effect as if such Successor Entity had been named as the Company herein.

 

    8

     

    

 

e) 
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a
share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding
as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f) 
Notice to Holder.

 

i. 
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3,
the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment
and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii. 
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile
or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company,
at least 5 Trading Days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is
not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such
notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

    9

     

    

 

Section 4.Transfer
of Warrant.

 

a) 
Transferability. Pursuant to the Agreement, neither this Warrant nor any Warrant Shares issued upon exercise of this
Warrant shall be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative,
put or call transaction that would result in the effective economic disposition of the securities by any person for a period of
six (6) months immediately following the date of effectiveness or commencement of sales of the offering pursuant to which this
Warrant is being issued, except the transfer of any security:

 

i.by operation
of law or by reason of reorganization of the Company;

 

ii. 
to any FINRA member firm participating in the offering and the officers and partners thereof, if all securities so transferred
remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;

 

iii. 
that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating
member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10%
of the equity in the fund; or

 

iv. 
the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this
Section 4(a) for the remainder of the time period.

 

    10

     

    

 

Subject to
the foregoing restrictions, compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof,
this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment
of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder
delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith,
may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b) 
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid
office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated
the Original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c) 
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

d) 
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring
this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and
not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act
or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5.Miscellaneous.

 

a) 
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3.

 

    11

     

    

 

b) 
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

 

c) 
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of
any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised
on the next succeeding Trading Day.

 

d) 
Authorized Shares.

 

The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

Except and
to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

    12

     

    

 

Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

e) 
Governing Law. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York.

 

f) 
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not
registered and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities
laws.

 

g) 
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part
of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding
the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with
any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts
as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.

 

h) 
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the
Company shall be delivered in accordance with the notice provisions of the Agreement.

 

i) 
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.

 

j) 
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

    13

     

    

 

k) 
Successors and Assigns. Subject to applicable securities laws and the conditions set forth in Section 4(d) hereof,
this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and
permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended
to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant
Shares.

 

l) 
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the
Company and the Holder.

 

m) 
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

 

n) 
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose,
be deemed a part of this Warrant.

 

 

********************

 

 

(Signature Page Follows)

    14

     

    

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	SG BLOCKS, INC.	 
	 	 	 
	By:	 	 
	 	Name: Paul M. Galvin	 
	 	Title:  Chief Executive Officer	 

  

    15

     

    

 

NOTICE OF EXERCISE

 

To: SG
BLOCKS, INC.

 

(1) 
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.

 

(2) 
Payment shall take the form of (check applicable box):

 

[  ] in lawful
money of the United States; or

 

[  ] the cancellation
of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth
in subsection 2(c).

 

(3) 
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

 

The Warrant Shares shall be delivered to
the following DWAC Account Number:

 

_______________________________

 

  

[SIGNATURE
OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of
Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

  

    16

     

    

  

ASSIGNMENT
FORM

 

(To assign the foregoing Warrant, execute
this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant
and all rights evidenced thereby are hereby assigned to

 

	Name:	                                                                                          
	 	(Please Print)
	Address:	                                                                                            
	
         

         

        Phone Number:

         

        Email Address:

         
	
        (Please Print)

         

        ______________________________________

         

        ______________________________________

         

	Dated: _______________ __, ______	 
	Holder’s Signature:                                                      	 
	Holder’s Address:                                                          	 

 

 

17

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