Document:

Exhibit
10.16

 

SECOND
AMENDMENT TO THE

 

LICENSE
AGREEMENT

 

THIS
SECOND AMENDMENT TO THE LICENSE AGREEMENT (U.S.) (this “Amendment”) is made and entered into as of October
2, 2020, by and among Jay Pharma Inc., a Canada corporation (“Company”), Tikun Olam LLC, a Delaware limited
liability company (“TO LLC”), and Tikun Olam Hemp LLC, a Delaware limited liability company (“TOH”),
and amends that certain License Agreement, dated as of January 10, 2020 (the “License Agreement”), by and among
Company, TO LLC and TOH, as amended by that certain First Amendment to the License Agreement, dated as of August 12, 2020 (the
“First Amendment” and, together with the License Agreement, the “Agreement”). Capitalized
terms used but not defined herein have their respective meanings set forth in the Agreement.

 

1.
Amendments. In accordance with the terms and conditions of the Agreement, the Agreement shall be amended as follows, effective
as of the date hereof:

 

	 	a.	The
    Recitals to the Agreement are hereby deleted and replaced in their entirety by the following:

 

“WHEREAS,
the Licensors own, or have the right to license, certain intellectual property related to cannabis products;

 

WHEREAS,
the Licensors wish to license to JP, and JP wishes to receive from each of the Licensors, the right to use such intellectual property
in connection with over-the-counter cancer-related products and topical or transdermal skin care and body care beauty products;

 

WHEREAS,
in consideration of the licenses and rights granted herein, JP will pay certain royalties to TO Holdings Group LLC, a Delaware
limited liability company (“TO Holdings”) that controls or indirectly controls its Affiliates, TO LLC and TOH,
all as further described herein; and

 

WHEREAS,
JP has entered into a Securities Purchase Agreement, dated as of the date hereof (the “SPA”), with certain
other parties signatory thereto and it is the express intention of the parties hereto that the transactions contemplated hereby
will be consummated upon the satisfaction of the conditions to the closing of transactions contemplated by the SPA.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:”

 

	 	b.	Section
    10.13 of the Agreement shall be deleted and replaced in its entirety by the following:

 

“10.13
Definition of Effective Date. For purposes of this Agreement, “Effective Date” means the date the Second
Amendment to this Agreement is executed by the parties. For the avoidance of doubt, in all cases, the Effective Date shall be
deemed to have occurred prior to the consummation of the SPA. If the consummation of the SPA has not occurred by January 1, 2021,
any party hereto may terminate this Agreement by delivering written notice to the other parties.”

 

2.
Effect of Amendment. Except as specifically set forth in this Amendment, all of the terms, provisions, representations,
warranties, covenants and conditions contained in the Agreement shall remain unmodified and unwaived by the terms of this Amendment,
and shall remain in full force and effect in accordance with their respective terms, and are hereby ratified, approved and confirmed
in all respects. This Amendment shall not constitute any party’s consent or indicate its willingness to consent to any other
amendment, modification or waiver of the Agreement, the schedules thereto or any instruments or agreements referred to herein
or therein. This Amendment is supplemental to the Agreement and does, and shall be deemed to, form a part of, and shall be construed
in connection with and as a part of, the Agreement for any and all purposes.

 

3.
Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original,
but all such counterparts together shall constitute one and the same instrument. Facsimile or pdf copies of original signatures
shall be as effective as originals.

 

[Signature
Pages Follow]

 

    	 

     

    

 

IN
WITNESS WHEREOF the parties have executed this Amendment as of the date first written above.

 

	TIKUN
    OLAM HEMP LLC	 	TIKUN
    OLAM LLC 
	 	 	 	 	 
	By:	/s/
    Bernard Sucher	 	By:	/s/
    Bernard Sucher
	 	 	 	 	 
	Name:	Bernard
    Sucher	 	Name:	Bernard
    Sucher
	 	 	 	 	 
	Title:	Manager	 	Title:	Manager

 

	JAY
    PHARMA, INC.	 
	 	 	 
	By:	/s/
    Henoch Cohn	 
	 	 	 
	Name:	Henoch
    Cohn	 
	 	 	 
	Title:	President	 

 

Signature
Page to

Second
Amendment to the License AgreementExhibit 4.1

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS 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 WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

CLASS
A COMMON SHARE PURCHASE WARRANT

 

LIANLUO
SMART LIMITED

 

	Warrant
    Shares: [_______	Issue
    Date: March 2, 2020

 

THIS
CLASS A COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ 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 March 2, 2020 and on or prior to 5:00 p.m. (New York City time) on September 2,
2025 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Lianluo Smart Limited,
a British Virgin Islands company (the “Company”), up to ______ Class A Common Shares (as subject to adjustment
hereunder, the “Warrant Shares”). The purchase price of one Class A Common Share (“Common Share”)
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
Securities Purchase Agreement (the “Purchase Agreement”), dated February 27, 2020, among the Company and the
purchasers signatory thereto.

 

     

     

    

 

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 a PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed
hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid,
the Holder shall deliver the aggregate Exercise Price for the Warrant 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 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 three (3) Trading Days of the date on which 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) Business Day of receipt of such notice. 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.

 

b)
Exercise Price. The exercise price per Common Share under this Warrant shall be $0.70, subject to adjustment hereunder
(the “Exercise Price”).

 

c)
Cashless Exercise. If at any time after the six-month anniversary of the Closing 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); provided that
no Warrant Share may be issued for a price less than the nominal or par value of such Warrant Share, 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)(68) 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 Share 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 (including until two (2) hours after the close of “regular
trading hours” on a Trading Day) 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;

 

    2

     

    

 

(B)
= the Exercise Price of this Warrant, as adjusted hereunder; 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 Warrant Shares being issued may be tacked on to the holding period of this Warrant.  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
Share is then listed or quoted on a Trading Market, the bid price of the Common Share for the time in question (or the nearest
preceding date) on the Trading Market on which the Common Share 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 OTCQB or OTCQX is not a
Trading Market, the volume weighted average price of the Common Share for such date (or the nearest preceding date) on OTCQB or
OTCQX as applicable, (c) if the Common Share is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the
Common Share are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Share so reported, or (d) in all other cases, the fair market
value of a share of Common Share as determined by an independent appraiser selected in good faith by the Purchasers of a majority
in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall
be paid by the Company.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Share is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Share for such date (or the nearest
preceding date) on the Trading Market on which the Common Share 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 OTCQB or OTCQX is not a
Trading Market, the volume weighted average price of the Common Share for such date (or the nearest preceding date) on OTCQB or
OTCQX as applicable, (c) if the Common Share is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the
Common Share are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Share so reported, or (d) in all other cases, the fair market
value of one Common Share as determined by an independent appraiser selected in good faith by the Purchasers of a majority in
interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be
paid by the Company.

 

    3

     

    

 

Notwithstanding
anything herein to the contrary, on the Termination Date, 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. The Company shall cause the Warrant Shares purchased hereunder to 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 (assuming cashless exercise of the Warrants), and otherwise
by entering in the Company’s register of members the name of the Holder or its designee as the holder of the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise and physical delivery of a certificate in respect of such Warrant
Shares to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading
Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise
Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the
Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”); Upon the entry of the name
of the Holder or its designee in the Company’s register of members, the Holder or its designee 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 that payment of the aggregate Exercise Price (other than in the
case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period following 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 Share 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 Share as in effect on the date of delivery of the Notice of Exercise.

 

    4

     

    

 

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, Common Shares 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 Common
Shares 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 Common Shares that would have been issued had the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common Share having a total purchase price of $11,000 to cover a Buy-In
with respect to an attempted exercise of Common Shares 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 Common Shares upon exercise of the Warrant as required pursuant
to the terms hereof.

 

    5

     

    

 

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; provided that no share shall be issued for a price less
than its nominal or par value.

 

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 shareholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.

 

    6

     

    

 

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 Common Shares beneficially owned by the Holder and its Affiliates
and Attribution Parties shall include the number of Common Shares issuable upon exercise of this Warrant with respect to which
such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the
remaining, non-exercised 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 non-converted portion of any other securities of the Company (including,
without limitation, any other Common Share 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 Common Shares,
a Holder may rely on the number of outstanding Common Shares 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 Common Shares outstanding.  Upon the written
or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of
Common Shares then outstanding.  In any case, the number of outstanding Common Shares 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 Common Shares was reported. The “Beneficial Ownership Limitation”
shall be 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares 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
Common Shares outstanding immediately after giving effect to the issuance of Common Shares 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.

 

    7

     

    

 

Section
3. Certain Adjustments.

 

a)
Floor Price. In no event, at any time while this Warrant is outstanding, shall the Exercise Price be adjusted to a price less
than $0.18 (the “Floor Price”), including, for the avoidance of doubt, any adjustments provided in this Warrant
or any other provisions of the Transaction Documents.

 

b)
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 its Common Shares or any other equity or equity equivalent securities payable
in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding Common Shares into a smaller number of shares or (iv) issues by reclassification of Common Shares any
shares 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 Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of Common Shares 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(b) shall become effective immediately after the record date for the determination
of shareholders 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.

 

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c)
Adjustment Upon Issuance of Common Shares. If and whenever on or after the date of issuance (the “Issuance Date”),
the Company issues or sells, announces any offer, sale, or other disposition of, or in accordance with this Section 3(c) is deemed
to have issued or sold (or makes an announcement regarding the same), any Common Shares and/or Common Share Equivalents (including
the issuance or sale of Common Shares owned or held by or for the account of the Company, but excluding any Exempt Issuance issued
or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”) less than
a price equal to the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such Exercise
Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then immediately upon such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New
Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and
the New Issuance Price under this Section 3(c)), the following shall be applicable:

 

i.
Issuance of Options. If the Company in any manner grants or sells any rights, warrants or options to subscribe for or purchase
shares of preferred stock and/or Common Share or Common Share Equivalents (“Options”) and the lowest price per share
for which one share of Common Share is at any time issuable upon the exercise of any such Option or upon conversion, exercise
or exchange of any Common Share Equivalents issuable upon exercise of any such Option or otherwise pursuant to the terms thereof
is less than the Applicable Price, then such Common Share shall be deemed to be outstanding and to have been issued and sold by
the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 3(c)(i),
the “lowest price per share for which one Common Share is issuable upon the exercise of any such Options or upon conversion,
exercise or exchange of any Common Share Equivalents issuable upon exercise of any such Option or otherwise pursuant to the terms
thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable
by the Company with respect to any one Common Share upon the granting or sale of such Option, upon exercise of such Option and
upon conversion, exercise or exchange of any Common Share Equivalents issuable upon exercise of such Option or otherwise pursuant
to the terms thereof and (y) the lowest exercise price set forth in such Option for which one Common Share is issuable upon the
exercise of any such Options or upon conversion, exercise or exchange of any Common Share Equivalents issuable upon exercise of
any such Option or otherwise pursuant to the terms thereof. Except as contemplated below, no further adjustment of the Exercise
Price shall be made upon the actual issuance of such Common Shares or of such Common Share Equivalents upon the exercise of such
Options or otherwise pursuant to the terms of or upon the actual issuance of such Common Shares upon conversion, exercise or exchange
of such Common Share Equivalents. This Section 3(c)(i) shall not apply to any Exempt Issuance.

 

    9

     

    

 

ii.
Issuance of Common Share Equivalents. If the Company in any manner issues or sells any Common Share Equivalents and the
lowest price per share for which one Common Share is at any time issuable upon the conversion, exercise or exchange thereof or
otherwise pursuant to the terms thereof is less than the Exercise Price, then such Common Share shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the issuance or sale of such Common Share Equivalents for such
price per share. For the purposes of this Section 3(c)(ii), the “lowest price per share for which one Common Share is issuable
upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the
lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one
Common Share upon the issuance or sale of the Common Share Equivalent and upon conversion, exercise or exchange of such Common
Share Equivalent or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Common Share
Equivalent for which one Common Share is issuable upon conversion, exercise or exchange thereof or otherwise pursuant to the terms
thereof minus (2) the sum of all amounts paid or payable to the holder of such Common Share Equivalent (or any other Person) upon
the issuance or sale of such Common Share Equivalent plus the value of any other consideration received or receivable by, or benefit
conferred on, the holder of such Common Share Equivalent (or any other Person). Except as contemplated below, no further adjustment
of the Exercise Price shall be made upon the actual issuance of such Common Shares upon conversion, exercise or exchange of such
Common Share Equivalents or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Common Share Equivalents
is made upon exercise of any Options for which adjustment of the Warrant has been or is to be made pursuant to other provisions
of this Section 3(c), except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such
issuance or sale.

 

iii.
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Common Share Equivalents, or the rate at
which any Common Share Equivalents are convertible into or exercisable or exchangeable for Common Shares increases or decreases
at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred
to in Section 3(b)), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price
which would have been in effect at such time had such Options or Common Share Equivalents provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially
granted, issued or sold. For purposes of this Section 3(c)(iii), if the terms of any Option or Common Share Equivalents that was
outstanding as of the Issuance Date are increased or decreased in the manner described in the immediately preceding sentence,
then such Option or Common Share Equivalents and the Common Shares deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3(c) shall
be made if such adjustment would result in an increase of the Exercise Price then in effect.

 

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iv.
Calculation of Consideration Received. If any Option and/or Common Share Equivalent and/or Adjustment Right is issued in
connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder,
the “Primary Security”, and such Option and/or Common Share Equivalent and/or Adjustment Right, the “Secondary
Securities” and together with the Primary Security, each a “Unit”), together comprising one integrated transaction,
the aggregate consideration per Common Share with respect to such Primary Security shall be deemed to be the lower of (x) the
purchase price of such Unit, (y) if such Primary Security is an Option and/or Common Share Equivalent, the lowest price per share
for which one Common Share is at any time issuable upon the exercise or conversion of the Primary Security in accordance with
Section 3(c)(i) or 3(c)(ii) above and (z) the lowest VWAP of the Common Share on any Trading Day during the four Trading Day period
immediately following the public announcement of such Dilutive Issuance (for the avoidance of doubt, if such public announcement
is released prior to the opening of the Trading Market on a Trading Day, such Trading Day shall be the first Trading Day in such
four Trading Day period). If any Common Shares, Options or Common Share Equivalents are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor will be deemed to be the net amount of consideration received by
the Company therefor. If any Common Shares, Options or Common Share Equivalents are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such
securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding
the date of receipt. If any Common Shares, Options or Common Share Equivalents are issued to the owners of the non-surviving entity
in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed
to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common
Shares, Options or Common Share Equivalents (as the case may be). The fair value of any consideration other than cash or publicly
traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within
ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such
consideration will be determined within five (5) Trading Days after the tenth (10th) day following such Valuation Event by an
independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be
final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
For purposes of hereof, “Adjustment Right” means any right granted with respect to any securities issued in connection
with, or with respect to, any issuance or sale (or deemed issuance or sale in accordance with this Section 3(c)) of Common Shares
that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such
securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).

 

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v.
Holder’s Right of Alternative Exercise Price. In addition to and not in limitation of the other provisions of this
Section 3, if the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Share, Options
or Common Share Equivalents (any such securities, “Variable Price Securities”) after the date the Company enters into
the Purchase Agreement that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for Common
Shares pursuant to such Options or Common Share Equivalents, as applicable, at a price which varies or may vary with the market
price of the Common Shares, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting
customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each
of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall
provide written notice thereof via a facsimile and overnight courier to the Holder on the date of such agreement and/or the issuance
of such Common Share Equivalents or Options, as applicable. From and after the date the Company enters into such agreement or
issues any such Variable Price Securities, the Holder shall have the right, but not the obligation, in its sole discretion to
substitute the Variable Price for the Exercise Price upon exercise of this Warrant by designating in the Notice of Exercise delivered
upon any exercise of this Warrant that solely for purposes of such exercise the Holder is relying on the Variable Price rather
than the Exercise Price then in effect. The Holder’s election to rely on a Variable Price for a particular exercise of this
Warrant shall not obligate the Holder to rely on a Variable Price for any future exercise of this Note.

 

vi.
Record Date. If the Company takes a record of the holders of Common Shares for the purpose of entitling them (A) to receive
a dividend or other distribution payable in Common Shares, Options or in Common Share Equivalents or (B) to subscribe for or purchase
Common Shares, Options or Common Share Equivalents, then such record date will be deemed to be the date of the issuance or sale
of the Common Shares deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).

 

d)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(b) above, if at any time the Company
grants, issues or sells any Common Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of Common Shares (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 Common Shares 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 Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the
Holder 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 Common Shares 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).

 

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e)
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 Common Shares, 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 Common Shares 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 Common Shares are to be determined for the participation in such Distribution
(provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder 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 Common Shares 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). To the extent that this Warrant has not been partially
or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit
of the Holder until the Holder has exercised this Warrant.

 

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f)
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 Share 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 Share, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Share or any compulsory share exchange pursuant to which the Common Share 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, merger or scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the outstanding Common Shares (not including any Common Shares 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 Common Shares 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 Common Shares 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 Common
Share 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
Share 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. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any
Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within
30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable
Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes
Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental
Transaction; provided, however, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors or the consideration is not in all stock of the Successor Entity, Holder shall
only be entitled to receive from the Company or any Successor Entity, as of the date of consummation of such Fundamental Transaction,
the same type or form of consideration (and in the same proportion), at the Black Scholes Value (as defined below) of the unexercised
portion of this Warrant, that is being offered and paid to the holders of Common Shares in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Shares are
given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided,
further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction,
such holders of Common Stock shall be deemed to have received common stock of the Successor Entity (which entity may be the Company
following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value
of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P.
(“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing
purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately
following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation
shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration,
if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public
announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction
and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds
within five Business Days of the Holder’s election (or, if later, on the effective date of the 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 other Transaction Documents
in accordance with the provisions of this Section 3(f) 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 Common Shares 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 Common Shares 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 other
Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

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g)
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 Common Shares deemed to be issued and outstanding as of a given
date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.

 

h)
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.
Notwithstanding anything to the contrary herein, no Warrant Share or share of the Company shall be issued for a price that is
less than the par value of such share.

 

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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 Share, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Share, (C) the Company shall authorize the granting to all holders of the Common Share 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 shareholders of the Company shall
be required in connection with any reclassification of the Common Share, 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 Share 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 20 calendar 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 Share 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 Share of record shall be entitled to exchange their Common Shares 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 Report of Foreign Private Issuer on Form 6-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.

 

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Section
4. Transfer of Warrant.

 

a)
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d)
hereof and to the provisions of Section 4.1 of the Purchase Agreement, 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 and subject to Sections 2(a) and 2(d)(ii),
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 on which
the Holder delivers an assignment form to the Company assigning this Warrant in 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)
Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant,
the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions
or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,
that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.

 

e)
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.

 

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Section
5. Miscellaneous.

 

a)
No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other
rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i) and entry of the issuance
of the relevant Warrant Shares in the register of members of the Company. Notwithstanding the foregoing, prior to the exercise
of the Warrant, the Holder shall have all the rights as a Holder of the Warrant, including, without limitation, as set forth in
Section 3.

 

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 share 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 share certificate,
if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or share 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 Business Day, then, such action may be taken or such right may be exercised on the next
succeeding Business Day.

 

d)
Authorized Shares.

 

The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common
Shares 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 completing to issuance of 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 Share 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 non-assessable 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).

 

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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 memorandum of association and articles of association 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 non-assessable 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.

 

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)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be determined in accordance with the provisions of the Purchase Agreement.

 

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)
Non-waiver 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. Without limiting
any other provision of this Warrant or the Purchase Agreement, 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 Purchase Agreement.

 

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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 Share or as a shareholder 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.

 

k)
Successors and Assigns. Subject to applicable securities laws, 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 the 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 a 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)

 

    20

     

    

 

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.

	 	LIANLUO SMART LIMITED
	 	 	 
	 	By:	 
	 	Name: 	Ping Chen
	 	Title:	Chief Executive
    Officer

 

    21

     

    

 

NOTICE
OF EXERCISE

 

TO:
LIANLUO SMART LIMITED

 

(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

 

☐ if permitted 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:
________________________________________________________________________________________

 

     

     

    

 

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:	 	 
	 	 	(Please Print)
	 	 	 
	Phone Number:	 	 
	 	 	 
	Email Address:	 	 
	 	 	 
	Dated: _______________
    __, ______	 	 
	 	 	 
	Holder’s
    Signature: _____________________	 	 
	 	 	 
	Holder’s
    Address: ______________________

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