Document:

Exhibit 10.1

    

    

    THIRD AMENDMENT TO THE

    AGREEMENT OF LIMITED PARTNERSHIP OF

    CHERRY HILL OPERATING PARTNERSHIP, L.P.

    

    

    DESIGNATION OF 8.250% SERIES B FIXED-TO-FLOATING RATE

    CUMULATIVE REDEEMABLE PREFERRED UNITS

    

    

    February 8, 2019

    

    

    Pursuant to Sections 4.02 and 11.01 of the Agreement of Limited Partnership of Cherry Hill Operating Partnership, L.P. (the “Partnership Agreement”), the General Partner hereby amends the Partnership Agreement as follows in connection with the issuance of up to
        2,070,000 shares of 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “Series B
          Preferred Stock”) of the General Partner and the issuance to the General Partner of Series B Preferred Units (as defined below) in exchange for the contribution by the General Partner of the net proceeds from the issuance and sale of the
        Series B Preferred Stock:

    

    

    1.          Designation
            and Number. A series of Preferred Units (as defined below), designated the “8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Units” (the “Series B Preferred Units”), is hereby established. The number of authorized Series B Preferred Units shall be 2,070,000.

    

    

    2.          Defined
            Terms. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Partnership Agreement. The following defined terms used in this Amendment to the Partnership Agreement shall have the
        meanings specified below:

    

    

    “Articles Supplementary”
        means the Articles Supplementary of the General Partner filed with the State Department of Assessments and Taxation of the State of Maryland, designating the terms, rights and preferences of the Series B Preferred Stock.

    

    

    “Base Liquidation Preference”
        shall have the meaning provided in Section 6.

    

    

    “Business Day” shall have
        the meaning provided in the Articles Supplementary.

    

    

    “Calculation Agent” shall
        have the meaning provided in the Articles Supplementary.

    

    

    “Common Stock” means shares
        of the General Partner’s common stock, par value $0.01 per share.

    

    

    “Common Stock Price” shall
        have the meaning provided in the Articles Supplementary.

    

    

    “Common Stock Conversion
          Consideration” shall have the meaning provided in the Articles Supplementary.

    

    

    “Common Units” shall have
        the meaning provided in the Partnership Agreement.

    

    

    “Common Unit Economic Balance”
        shall have the meaning provided in Section 10(g).

    
      
        

    

    
    “Economic Capital Account Balance”
        shall have the meaning provided in Section 10(g).

    

    

    “Junior Units” shall have
        the meaning provided in Section 4.

    

    

    “Liquidating Gains” shall
        have the meaning provided in Section 10(g).

    

    

    “London Business Day” shall
        have the meaning provided in the Articles Supplementary.

    

    

    “Loss” shall have the
        meaning provided in Section 10(h).

    

    

    “Net Operating Income”
        shall have the meaning provided in Section 10(f).

    

    

    “Original Issue Date” shall
        have the meaning provided in the Articles Supplementary.

    

    

    “Parity Preferred Units”
        shall have the meaning provided in Section 4.

    

    

    “Partnership Agreement”
        shall have the meaning provided in the recital above.

    

    

    “Preferred Units” means all
        Partnership Interests designated as preferred units by the General Partner from time to time in accordance with Section 4.02 of the Partnership Agreement.

    

    

    “Profit” shall have the
        meaning provided in Section 10(h).

    

    

    “Reuters Page LIBOR 01”
        shall have the meaning provided in the Articles Supplementary.

    

    

    “Series B Preferred Distribution Determination Date” means the London Business Day immediately preceding the first date of the applicable Series B Preferred
        Distribution Period.

    

    

    “Series B Preferred Distribution
          Payment Date” shall have the meaning provided in Section 5(a).

    

    

    “Series B Preferred Distribution Period” means the period from, and including, a Series B Preferred Distribution Payment Date to, but excluding, the next
        succeeding Series B Preferred Distribution Payment Date, except for the initial Series B Preferred Distribution Period, which will be the period from, and including, the Original Issue Date of the Series B Preferred Units to, but excluding, April
        15, 2019.

    

    

    “Series B Preferred Distribution Record Date” shall have the meaning provided in Section 5(a).

    

    

    “Series B Preferred Return”
        shall have the meaning provided in Section 5(a).

    

    

    “Series B Preferred Stock”
        shall have the meaning provided in the recital above.

    

    

    “Series B Preferred Units”
        shall have the meaning provided in Section 1.

    

    

    “Set apart for payment”
        shall be deemed to include (without limitation), without any action other than the following: the recording by the Partnership in its accounting ledgers of any accounting or bookkeeping entry which indicates, pursuant to an authorization by the
        General Partner and a declaration of distribution by the Partnership, the allocation of funds to be so paid on any series or class of units of the Partnership; provided,
          however, that if any funds for any Junior Units or Parity Preferred Units are placed in a separate account of the Partnership or delivered to a disbursing, paying or other similar agent, then “set apart for payment” with respect to the
        Series B Preferred Units shall mean placing such funds in a separate account or delivering such funds to a disbursing, paying or other similar agent.

    
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    “Three-Month LIBOR Rate”
        shall have the meaning provided in Section 5(b).

    

    

    3.          Maturity.
        The Series B Preferred Units have no stated maturity and are not subject to any sinking fund or mandatory redemption.

    

    

    4.          Rank.
        The Series B Preferred Units rank, with respect to rights to the payment of distributions and the distribution of assets upon the liquidation, dissolution or winding up of the Partnership, (a) senior to all classes or series of Common Units and
        LTIP Units of the Partnership and to all classes or series of units of the Partnership other than the units of the Partnership referred to in clauses (b) and (c) of this Section 4 (together with the Common Units and the LTIP Units, the “Junior Units”); (b) on parity with the Partnership’s 8.20% Series A Cumulative Redeemable Preferred Units (the “Series A Preferred Units”) and all other classes or series of units of the Partnership with terms specifically providing that such units rank on parity with the Series
        B Preferred Units with respect to rights to the payment of distributions and the distribution of assets upon the liquidation, dissolution or winding up of the Partnership (the “Parity Preferred Units”); and (c) junior to all classes or series of units of the Partnership with terms specifically providing that such units rank senior to the Series B Preferred Units with
        respect to rights to the payment of distributions and the distribution of assets upon the liquidation, dissolution or winding up of the Partnership. The term “units” shall not include convertible or exchangeable debt securities of the Partnership.

    

    

    5.          Distributions.

    

    

    (a)          Holders of Series B Preferred Units are entitled to receive, when, as and if authorized by the General Partner and declared by the Partnership, out of funds of the Partnership legally available for the payment of distributions,
          cumulative cash distributions (i) from, and including, the Original Issue Date to, but excluding, April 15, 2024 (the “Fixed Rate Period”), at a fixed rate equal to 8.250% per annum of the Base Liquidation Preference per unit (equivalent to  $2.0625 per annum per unit) and (ii) from, and including, April 15, 2024 (the “Floating Rate Period”), at a floating rate equal to the Three-Month LIBOR Rate
          plus a spread of 5.631% per annum (the “Series B Preferred Return”).
          Distributions on the Series B Preferred Units shall accumulate daily and shall be cumulative from, and including, the Original Issue Date and shall be payable quarterly in arrears on the 15th day of each January, April, July and October (each, as may be modified as provided below, a “Series B
          Preferred Distribution Payment Date”); provided, that if any Series B Preferred Distribution Payment Date is not a Business Day, then the distribution which would otherwise have been payable on such Distribution Payment Date may be paid on the next succeeding
          Business Day with the same force and effect as if paid on such Series B Preferred Distribution Payment Date and no interest, additional distributions or other sums will accumulate on the amount so payable for the period from and after such Series
          B Preferred Distribution Payment Date, to such next succeeding Business Day. Distributions payable on the Series B Preferred Units for the Fixed Rate Period, including distributions payable for any partial Series B Preferred Distribution Period,
          will be computed on the basis of a 360-day year consisting of twelve 30-day months (it being understood that the distribution payable on April 15, 2019 will be for less than the full quarterly period). Distributions payable on the Series B Preferred Units for the Floating Rate Period, including distributions payable for any partial Series B Preferred Distribution Period, will be computed based on the actual
          number of days in a Series B Preferred Distribution Period and a 360-day year. Distributions will be payable to holders of record of the Series B Preferred Units as they appear in the records of the Partnership for the Series B Preferred Units at the close of business on the applicable record date, which will be no fewer than ten days and no more than 35 days prior to the applicable Series B Preferred Distribution
          Payment Date, as shall be fixed by the General Partner (each, a “Series B Preferred Distribution Record Date”). The distributions
          payable on any Series B Preferred Distribution Payment Date shall include distributions accumulated to, but not including, such Series B Preferred Distribution Payment Date. No
          holder of any Series B Preferred Units shall be entitled to receive any distributions paid or payable on the Series B Preferred Units with a Series B Preferred Distribution Record Date before the date such Series B Preferred Units are issued.

    
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    (b)          For each Series B Preferred Distribution Period during the Floating Rate
        Period, LIBOR (the London interbank offered rate) (the “Three-Month LIBOR Rate”) will be determined by the General Partner, as of the
        applicable Series B Preferred Distribution Determination Date, in accordance with the following provisions:

    

    

    
      
        	

              	(i)	
                LIBOR will be the rate (expressed as a percentage per year) for deposits in U.S. dollars having an index maturity of three months, in amounts of at least $1,000,000, as
                    such rate appears on “Reuters Page LIBOR01” at approximately 9:00 a.m. (New York City time) on the relevant Series B Preferred Distribution Determination Date; or

              

      

    

    

    

    
      
        	

              	(ii)	
                if no such rate appears on “Reuters Page LIBOR01” or if the “Reuters Page LIBOR01” is not available at approximately 9:00 a.m. (New York City time) on the relevant Series B
                    Preferred Distribution Determination Date, then the General Partner will select four nationally-recognized banks in the London interbank market and request that the principal London offices of those four selected banks provide the
                    General Partner with their offered quotation for deposits in U.S. dollars for a period of three months, commencing on the first day of the applicable Series B Preferred Distribution Period, to prime banks in the London interbank market
                    at approximately 9:00 a.m. (New York City time) on that Series B Preferred Distribution Determination Date for the applicable Series B Preferred Distribution Period. Offered quotations must be based on a principal amount equal to an
                    amount that, in the General Partner’s discretion, is representative of a single transaction in U.S. dollars in the London interbank market at that time. If at least two quotations are provided, the Three-Month LIBOR Rate for such Series
                    B Preferred Distribution Period will be the arithmetic mean (rounded upward if necessary, to the nearest 0.00001 of 1%) of those quotations. If fewer than two quotations are provided, the Three-Month LIBOR Rate for such Series B
                    Preferred Distribution Period will be the arithmetic mean (rounded upward if necessary, to the nearest 0.00001 of 1%) of the rates quoted at approximately 11:00 a.m. (New York City time) on that Series B Preferred Distribution
                    Determination Date for such Series B Preferred Distribution Period by three nationally-recognized banks in New York, New York selected by the General Partner, for loans in U.S. dollars to nationally-recognized European banks (as
                    selected by the General Partner), for a period of three months commencing on the first day of such Series B Preferred Distribution Period. The rates quoted must be based on an amount that, in the General Partner’s discretion, is
                    representative of a single transaction in U.S. dollars in that market at that time. If no quotation is provided as described above, then if a Calculation Agent has not been appointed at such time, the General Partner will appoint a
                    Calculation Agent who shall, after consulting such sources as it deems comparable to any of the foregoing quotations or display page, or any such source as it deems reasonable from which to estimate LIBOR or any of the foregoing lending
                    rates, shall determine LIBOR for the second London Business Day immediately preceding the first day of such Series B Preferred Distribution Period in its sole discretion. If the Calculation Agent is unable or unwilling to determine
                    LIBOR as provided in the immediately preceding sentence, then LIBOR will be equal to the Three-Month LIBOR Rate for the then current Series B Preferred Distribution Period, or, in the case of the first Series B Preferred Distribution
                    Period in the Floating Rate Period, the most recent Series B Preferred Distribution Rate that would have been determined based on the last available Reuters Page LIBOR01 had the Floating Rate Period been applicable prior to the first
                    Series B Preferred Distribution Period in the Floating Rate Period.

              

      

    

    

    

    

    

    
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    Notwithstanding the foregoing, if the General Partner determines, on the relevant Series B
          Preferred Distribution Determination Date, that the LIBOR base rate has been discontinued, then the General Partner will appoint a Calculation Agent and the Calculation Agent will consult with an investment bank of national standing to determine
          whether there is an industry accepted substitute or successor base rate to Three-Month LIBOR Rate. If, after such consultation, the Calculation Agent determines that there is an industry accepted substitute or successor base rate, the Calculation
          Agent shall use such substitute or successor base rate. In such case, the Calculation Agent in its sole discretion may (without implying a corresponding obligation to do so) also implement changes to the business day convention, the definition of
          business day, the Series B Preferred Distribution Determination Date and any method for obtaining the substitute or successor base rate if such rate is unavailable on the relevant Business Day, in a manner that is consistent with industry
          accepted practices for such substitute or successor base rate. Unless the Calculation Agent determines that there is an industry accepted substitute or successor base rate as so provided above, the Calculation Agent will, in consultation with the
          General Partner, follow the steps specified in the second bullet point in the immediately preceding paragraph in order to determine Three-Month LIBOR Rate for the applicable Series B Preferred Distribution Period.  Notwithstanding the foregoing,
          the Series B Preferred Return shall at all times equal the dividend rate for the Series B Preferred Stock.

     

      

    
      (c)          No distributions on Series B Preferred Units shall
          be authorized by the General Partner or paid or set apart for payment by the Partnership at any time when the terms and provisions of any agreement of the General Partner or the Partnership, including any agreement relating to any indebtedness of
          either of them, prohibit the authorization, payment or setting apart for payment thereof or provide that  payment or setting apart for payment thereof would constitute a breach of the agreement or a default under the agreement, or if the
          authorization, payment or setting apart for payment is restricted or prohibited by law.

       

    
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    (d)          Notwithstanding anything to the contrary contained
        herein, distributions on the Series B Preferred Units will accumulate whether or not the terms and provisions of any laws or agreements referred to in Section 5(c) hereof at any time prohibit the current payment of distributions, whether or not the
        Partnership has earnings, whether or not there are funds legally available for the payment of those distributions and whether or not those distributions are declared. No interest, or sum in lieu of interest, will be payable in respect of any
        distribution payment or payments on the Series B Preferred Units which may be in arrears, and holders of Series B Preferred Units will not be entitled to any distributions in excess of full cumulative distributions described in Section 5(a). Any
        distribution payment made on the Series B Preferred Units will first be credited against the earliest accumulated but unpaid distribution due with respect to the Series B Preferred Units.

    

    

    (e)          Except as provided in Section 5(f), unless full
        cumulative distributions on the Series B Preferred Units have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past Series B Preferred Distribution Periods,
        (i) no distributions (other than a distribution in Junior Units) shall be declared and paid set apart for payment upon Junior Units, (ii) no other distribution shall be declared or made upon the Junior Units or the Parity Preferred Units, and (iii)
        Junior Units or Parity Preferred Units shall not be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such securities) by the Partnership (except
        by conversion into or exchange for Junior Units or options, warrants or rights to purchase or subscribe for Junior Units pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding Series B Preferred Units and
        Parity Preferred Units); provided, however, that the foregoing shall not prevent the redemption, purchase or acquisition by the General Partner of shares of
        any class or series of the General Partner’s stock pursuant to the provisions of Article VII of the Articles of Amendment and Restatement of the General Partner, including in order to preserve the General Partner’s qualification as a real estate
        investment trust for U.S. federal income tax purposes, or the redemption, purchase or acquisition by the General Partner of Common Stock for purposes of and in compliance with any incentive or benefit plan of the General Partner.

    

    

    (f)          When distributions are not paid in full (or a sum
        sufficient for such full payment is not so set apart) upon the Series B Preferred Units and any Parity Preferred Units, all distributions declared upon the Series B Preferred Units and all other such units shall be declared pro rata so that the amount of distributions declared per Series B Preferred Unit and all other such units shall in all cases bear to each other the same ratio that accumulated
        distributions per Series B Preferred Unit and all other such units (which shall not include any accrual in respect of unpaid distributions for prior Series B Preferred Distribution Periods if any such units do not have a cumulative distribution)
        bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any distribution payment or payments on the Series B Preferred Units which may be in arrears.

    
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    (g)          For the avoidance of doubt, in determining whether a
        distribution (other than upon voluntary or involuntary liquidation) by distribution, redemption or other acquisition of the Partnership Units is permitted under Delaware law, no effect shall be given to the amounts that would be needed, if the
        Partnership were to be dissolved at the time of the distribution, to satisfy the preferential rights upon distribution of holders of Partnership Units whose preferential rights are superior to those receiving the distribution.

    

    

    6.          Liquidation
            Preference. Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Partnership, the holders of Series B Preferred Units are entitled to be paid out of the assets of the Partnership legally
        available for distribution to its partners, after payment of or provision for the Partnership’s debts and other liabilities, a liquidation preference of $25.00 per unit (the “Base Liquidation Preference”), plus an amount equal to any accrued but unpaid distributions (whether or not authorized or declared) thereon to, but not including, the date of payment, but without
        interest, before any distribution of assets is made to holders of Junior Units. If the assets of the Partnership legally available for distribution to partners are insufficient to pay in full the liquidation preference on the Series B Preferred
        Units and the liquidation preference on any Parity Preferred Units, all assets distributed to the holders of the Series B Preferred Units and any Parity Preferred Units shall be distributed pro rata so that the amount of assets distributed per
        Series B Preferred Units and such Parity Preferred Units shall in all cases bear to each other the same ratio that the liquidation preference per Series B Preferred Unit and such Parity Preferred Units bear to each other. Notice of any distribution
        in connection with any such liquidation, dissolution or winding up of the affairs of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be
        given not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series B Preferred Units at the respective addresses of such holders as the same shall appear on the records of the Partnership.
        After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Units will have no right or claim to any of the remaining assets of the Partnership. The consolidation or merger of the
        Partnership with or into another entity, a merger of another entity with or into the Partnership, a statutory exchange by the Partnership or a sale, lease, transfer or conveyance of all or substantially all of the Partnership’s property or business
        shall not be deemed to constitute a liquidation, dissolution or winding up of the affairs of the Partnership.

    

    

    7.          Redemption.

    

    

    (a)          The Series B Preferred Units are not redeemable
        except as otherwise provided in this Section 7.

    

    

    (b)          In connection with any redemption by the General
        Partner of any shares of Series B Preferred Stock pursuant to Section 6 of the Articles Supplementary, the Partnership shall redeem, on the date of such redemption, an equal number of Series B Preferred Units held by the General Partner. As
        consideration for the redemption of such Series B Preferred Units, the Partnership shall deliver to the General Partner an amount of cash equal to the amount of cash paid by the General Partner to the holder of such shares of Series B Preferred
        Stock in connection with the redemption thereof.

    
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    8.          Voting
            Rights. Holders of the Series B Preferred Units will not have any voting rights.

    

    

    9.          Conversion.

    

    

    (a)          The Series B Preferred Units are not convertible or
        exchangeable for any other property or securities except as otherwise provided in this Section 9.

    

    

    (b)          In the event that a holder of Series B Preferred
        Stock of the General Partner exercises its right to convert the Series B Preferred Stock into Common Stock of the General Partner in accordance with the terms of the Articles Supplementary, then, concurrently therewith, an equivalent number of
        Series B Preferred Units of the Partnership held by the General Partner shall be automatically converted into a number of Common Units of the Partnership equal to the number of shares of Common Stock issued upon conversion of such Series B
        Preferred Shares; provided, however, that if a holder of Series B Preferred Stock of the General Partner receives cash or other consideration in addition to or in lieu of Common Stock in connection with such conversion, then the General Partner, as
        the holder of the Series B Preferred Units, shall be entitled to receive cash or such other consideration equal (in amount and form) to the cash or other consideration to be paid by the General Partner to such holder of the Series B Preferred
        Stock. Any such conversion will be effective at the same time the conversion of Series B Preferred Stock into Common Stock is effective.

    

    

    (c)          No fractional units will be issued in connection with
        the conversion of Series B Preferred Units into Common Units. In lieu of fractional Common Units, the General Partner shall be entitled to receive a cash payment in respect of any fractional unit in an amount equal to the fractional interest
        multiplied by the Common Stock Price used in determining the Common Stock Conversion Consideration under the Articles Supplementary.

    

    

    10.          Allocation
            of Profit and Loss.

    

    

    Section 5.01 of the Partnership Agreement is hereby deleted in its entirety and the following new Section 5.01 is inserted in its place:

    

    

    (a)          Profit. After giving effect to the special allocations set forth in Section 5.01(c), (d), and (e) hereof, and subject to Section 5.01(f), Profit of the Partnership for each fiscal year of the Partnership shall be allocated
        to the Partners in accordance with their respective Percentage Interests.

    

    

    (b)          Loss. After giving effect to the special allocations set forth in Section 5.01(c), (d), and (e) hereof, and subject to Section 5.01(f), Loss of the Partnership for each fiscal year of the
        Partnership shall be allocated to the Partners in accordance with their respective Percentage Interests.

    

    

    (c)          Minimum Gain Chargeback. Notwithstanding any provision to the contrary, (i) any expense of the Partnership that is a “nonrecourse deduction” within the meaning of Regulations Section
        1.704-2(b)(1) shall be allocated in accordance with the Partners’ respective Percentage Interests, (ii) any expense of the Partnership that is a “partner nonrecourse deduction” within the meaning of Regulations Section 1.704-2(i)(2) shall be
        allocated to the Partner that bears the “economic risk of loss” of such deduction in accordance with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in Partnership Minimum Gain within the meaning of Regulations Section
        1.704-2(f)(1) for any Partnership taxable year, then, subject to the exceptions set forth in Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be allocated among the Partners in accordance with Regulations Section
        1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership taxable year,
        then, subject to the exceptions set forth in Regulations Section 1.704(2)(g), items of gain and income shall be allocated among the Partners in accordance with Regulations Section 1.704-2(i)(4) and the ordering rules contained in Regulations
        Section 1.704-2(j). The manner in which it is reasonably expected that the deductions attributable to nonrecourse liabilities will be allocated for purposes of determining a Partner’s share of the nonrecourse liabilities of the Partnership within
        the meaning of Regulations Section 1.752-3(a)(3) shall be in accordance with a Partner’s Percentage Interest.

    
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    (d)          Qualified Income Offset. If a Partner receives in any taxable year an adjustment, allocation or distribution described in subparagraphs (4), (5) or (6) of Regulations Section
        1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such Partner’s Capital Account that exceeds the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as determined in accordance with
        Regulations Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated specially for such taxable year (and, if necessary, later taxable years) items of income and gain in an amount and manner sufficient to eliminate such deficit Capital
        Account balance as quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Partner in accordance with this Section 5.01(d), to the extent permitted by Regulations
        Section 1.704-1(b), items of expense or loss shall be allocated to such Partner in an amount necessary to offset the income or gain previously allocated to such Partner under this Section 5.01(d).

    

    

    (e)          Capital Account Deficits. Loss shall not be allocated to a Limited Partner to the extent that such allocation would cause a deficit in such Partner’s Capital Account (after reduction to reflect
        the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain. Any Loss in excess of that limitation shall be
        allocated to the General Partner. After the occurrence of an allocation of Loss to the General Partner in accordance with this Section 5.01(e), to the extent permitted by Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in
        an amount necessary to offset the Loss previously allocated to each Partner under this Section 5.01(e).

    

    

    (f)          Priority Allocations With Respect To Preferred Units. After giving effect to the allocations set forth in Sections 5.01(c), (d), and (e) hereof, but before giving effect to the allocations set forth in Sections
        5.01(a) and 5.01(b), Net Operating Income shall be allocated to the General Partner until the aggregate amount of Net Operating Income allocated to the General Partner under this Section 5.01(f) for the current and all prior years equals the
        aggregate amount of the Series A Preferred Return and the Series B Preferred Return paid to the General Partner for the current and all prior years; provided,
          however, that the General Partner may, in its discretion, allocate Net Operating Income based on accrued Series A Preferred Return with respect to the January Series A Preferred Distribution Payment Date, or Series A Preferred Distribution
        Payment Date if the General Partner sets the Series A Preferred Distribution Record Date for such Series A Preferred Distribution Payment Date on or prior to December 31 of the previous year; provided, further, that the General Partner may, in its discretion, allocate Net Operating Income based on accrued Series B Preferred Return with respect to the January Series B Preferred Distribution Payment
        Date if the General Partner sets the Series B Preferred Distribution Record Date for such Series B Preferred Distribution Payment Date on or prior to December 31 of the previous year. For purposes of this Section 5.01(f), “Net Operating Income”
        means the excess, if any, of the Partnership’s gross income over its expenses (but not taking into account depreciation, amortization, or any other noncash expenses of the Partnership), calculated in accordance with the principles of Section
        5.01(h) hereof.

    
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    (g)          Special Allocations Regarding LTIP Units. Notwithstanding the provisions of Sections 5.01(a) and (b) hereof, Liquidating Gains shall first be allocated to the LTIP Unitholders until their Economic Capital Account
        Balances, to the extent attributable to their ownership of LTIP Units, are equal to (i) the Common Unit Economic Balance, multiplied by (ii) the number of their LTIP Units. For this purpose, “Liquidating Gains” means net capital gains realized in
        connection with the actual or hypothetical sale of all or substantially all of the assets of the Partnership, including but not limited to net capital gain realized in connection with an adjustment to the value of Partnership assets under Section
        704(b) of the Code. The “Economic Capital Account Balances” of the LTIP Unitholders will be equal to their Capital Account balances plus shares of Partner Nonrecourse Debt Minimum Gain or Partnership Minimum Gain (after reduction to reflect the
        items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to the extent attributable to their ownership of LTIP Units. Similarly, the “Common Unit Economic Balance” shall mean (i) the Capital Account balance of the General
        Partner, plus the amount of the General Partner’s share of any Partner Nonrecourse Debt Minimum Gain or Partnership Minimum Gain (after reduction to reflect the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)), in either
        case to the extent attributable to the General Partner’s direct or indirect ownership of Common Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation is made under this Section
        5.01(g), divided by (ii) the number of Common Units directly or indirectly owned by the General Partner. Any such allocations shall be made among the LTIP Unitholders in proportion to the amounts required to be allocated to each under this Section
        5.01(g). The parties agree that the intent of this Section 5.01(g) is to make the Capital Account balance associated with each LTIP Unit to be economically equivalent to the Capital Account balance associated with Common Units directly or
        indirectly owned by the General Partner (on a per-Unit basis).

    

    

    (h)          Definition of Profit and Loss. “Profit” and “Loss” and any items of income, gain, expense or loss referred to in this Agreement shall be determined in
        accordance with federal income tax accounting principles, as modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss shall not include items of income, gain and expense that are specially allocated pursuant to Sections
        5.01(c), 5.01(d), 5.01(e), or 5.01(f) hereof. All allocations of income, Profit, gain, Loss and expense (and all items contained therein) for federal income tax purposes shall be identical to all allocations of such items set forth in this Section
        5.01, except as otherwise required by Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). With respect to properties acquired by the Partnership, the General Partner shall have the authority to elect the method to be used by the
        Partnership for allocating items of income, gain and expense as required by Section 704(c) of the Code with respect to such properties, and such election shall be binding on all Partners.

    
      10

      
        

    

    

    

    (i)          Allocations Between Transferor and Transferee. If a Partner transfers any part or all of its Partnership Interest, the distributive shares of the various items of Profit and Loss allocable among the Partners during such
        fiscal year of the Partnership shall be allocated between the transferor and the transferee Partner either (i) as if the Partnership’s fiscal year had ended on the date of the transfer, or (ii) based on the number of days of such fiscal year that
        each was a Partner without regard to the results of Partnership activities in the respective portions of such fiscal year in which the transferor and the transferee were Partners. The General Partner, in its sole and absolute discretion, shall
        determine which method shall be used to allocate the distributive shares of the various items of Profit and Loss between the transferor and the transferee Partner.

    

    

    11.          Except as modified herein, all terms and conditions of the Partnership
        Agreement shall remain in full force and effect, which terms and conditions the General Partner hereby ratifies and confirms.

    
      11

      
        

    

    

    

    IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first set forth above.

    

    

    

    

    	 	
            GENERAL PARTNER:

          
	 	 	 
	 	 
	 	
            CHERRY HILL MORTGAGE INVESTMENT

            CORPORATION, a Maryland corporation

          
	 	 	 
	 	 	 
	 	
            By:  

          	
            /s/ Martin J. Levine

          
	 	
            Name:

          	
            Martin J. Levine

          
	 	
            Title:

          	
            Chief Financial Officer, Treasurer and Secretary

          
	 	 	 

    

    

    

    

    

    

    

    

    [Signature page for Third Amendment to Partnership Agreement — February 2019]COMMON
STOCK PURCHASE WARRANT 

 

Taronis
Technologies, INC.

 

	Warrant
    Shares: [                  ]	Closing
    Date: February [__], 2019

 

This
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [_______________________].,
a [____] corporation or assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, on the Initial Exercise Date (as defined below) and on or prior to 5:00 PM
(Eastern time) on the date that is five years from the Closing Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Taronis Technologies, Inc. f/k/a MagneGas Applied Technology Solutions, Inc., a Delaware corporation
(the “Company”), up to [ ] shares (as subject to adjustment hereunder, the “Warrant Shares”)
of the Company’s common stock, par value $0.001 per share (the “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 1(b). Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in Section 5 below.

 

Section
1. Exercise.

 

a)
Subject to Section 1(e) herein, exercise of the purchase rights represented by this Warrant may be made, in whole or in part,
on the Closing Date (the “Initial Exercise Date”) and on or before the Termination Date by delivery to the
Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the
address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice
of Exercise in the form annexed hereto (the “Notice of Exercise”). Within one (1) Trading Day of the date said
Notice of Exercise is delivered to the Company, 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 1(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 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. 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

     

    

 

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

 

c)
Cashless Exercise. If at the time of exercise hereof, there is no effective registration statement registering, or the
prospectus contained therein is not available for the issuance of the Warrant Shares to 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 1(a) hereof on a day that is not a Trading Day or (2) both
    executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours”
    (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
    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 hours thereafter (including until two hours after the close
    of “regular trading hours” on a Trading Day) pursuant to Section 1(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 1(a) hereof after the close of “regular trading hours” on such Trading
    Day;
	 	 	 
	 	(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 registered characteristics of the Warrants being exercised. The Company
agrees not to take any position contrary to this Section 1(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 OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” 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 (d)
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 holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the
fees and expenses of which shall be paid by the Company.

 

    	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 OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” 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 Common Stock so reported, or (d) 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 holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.

 

Notwithstanding
anything herein to the contrary, subject to the limitations set forth in Section 1(e), on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 1(c), if the value of “A” in Section 1(c)
at the time of exercise is greater than the Exercise Price.

 

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 or applicable exemption permitting
the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) this Warrant is being exercised via
cashless exercise, 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 the earlier of (A) the earlier of (i) two
Trading Days after the delivery to the Company of the Notice of Exercise and (ii) one Trading Day after delivery of both the aggregate
Exercise Price (other than in the case of a cashless exercise) to the Company and the Notice of Exercise, provided that both the
Exercise Price (other than in the case of a cashless exercise) and the Notice of Exercise have been received by the Company prior
to 12:00 noon, and (B) 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 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 one (1) Trading Day 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 (5th) 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, the “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 1(d) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise by delivering
written notice to the Company at any time prior to the Company delivering such Warrant Shares.

 

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 1(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 multiplied by (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 cause any exercise of this Warrant, and a Holder shall not have
the right to exercise any portion of this Warrant, pursuant to Section 1 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, 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 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 1(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (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 1(d)
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 1(d), 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 (2) 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 1(d),
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 1(d) 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 1(d) 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
2. Certain Adjustments.

 

a)
So long as the Warrant remains outstanding, the Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant
are subject to adjustment from time to time as set forth in this Section 2(a).

 

i.
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (A) 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), (B) subdivides outstanding shares of Common Stock into a larger number of shares, (C) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) 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 adjust proportionately. Any adjustment made pursuant to this Section
2(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.

 

ii.
Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the date hereof, the Company issues or
sells (or announces any agreement to issue or sell), or in accordance with this Section 2(a)(ii) is deemed to have issued
or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding any Excluded Securities 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 after 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 2(a)(ii)),
the following shall be applicable:

 

    	7

     

    

 

(A)
Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which
one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof is less than
the Applicable Price, then such share of Common Stock 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 2(a)(ii)(A),
the “lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Options
or upon conversion, exercise or exchange of any Convertible Securities 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 share of Common Stock upon the granting or sale of such Option,
upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security 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 share
of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such Options
or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person)
upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus the value of any other consideration
received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated below,
no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or otherwise pursuant to the terms of or upon the actual issuance of such shares
of Common Stock upon conversion, exercise or ex-change of such Convertible Securities.

 

(B)
Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest
price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof
or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock 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 Convertible Securities
for such price per share. For the purposes of this Section 2(a)(ii)(B), the “lowest price per share for which one
share of Common Stock is at any time 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 share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price
set forth in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible
market conditions) 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 Convertible Security (or any other Person) upon the issuance or sale of such
Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder
of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price
shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this
Section 2(a)(ii), except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of
such issuance or sale.

 

    	8

     

    

 

(C)
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 Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock 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 2(a)(i)), 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 Convertible Securities 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 2(a)(ii)(C), if the terms of any Option or Convertible
Security that was outstanding as of the Closing Date are increased or decreased in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the shares of Common Stock 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 2(a)(ii) shall be made if such adjustment would result in an increase of the Exercise Price then in effect.

 

(D)
Calculation of Consideration Received. If any Option and/or Convertible Security 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 Convertible Security 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 share of Common Stock with respect to such Primary Security shall be deemed to be
the lowest of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the
lowest price per share for which one share of Common Stock is at any time issuable upon the exercise or conversion of the Primary
Security in accordance with Section 2(a)(ii)(A) or 2(a)(ii)(B) above and (z) the lowest VWAP of the Common Stock
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 applicable Trading Market on
a Trading Day, such Trading Day shall be the first Trading Day in such four Trading Day period); provided, further that if this
Warrant is exercised, in whole or in part, during such four Trading Day period, solely with respect to the shares of Common Stock
to be issued in any such exercise, such period shall be deemed to end as of the time of exercise of this Warrant (the “Adjusted
Period’) and the exercise price of this Warrant with respect to such shares of Common Stock shall be adjusted to the
lowest VWAP of the Common Stock on any Trading Day in such Adjusted Period. If any shares of Common Stock, Options or Convertible
Securities 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 shares of Common Stock, Options or Convertible
Securities 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 shares of Common Stock, Options or Convertible
Securities 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 shares of Common Stock, Options or Convertible Securities (as the case
may be). The fair market 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 market 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.

 

    	9

     

    

 

(E)
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (I)
to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (II) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issuance or sale of the shares of Common Stock 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).

 

(F)
Definitions. For the purpose of this Warrant, the following definitions shall apply:

 

(I)
“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 Section 2) of shares of Common Stock (other than
rights of the type described in Section 2(b) hereof) 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).

 

(II)
“Approved Stock Plan” means any employee benefit plan or similar agreement which has been approved by the board
of directors of the Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock and standard options
to purchase Common Stock may be issued to any employee, officer, director or consultants for services provided to the Company
in their capacity as such.

 

    	10

     

    

 

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

 

(IV)
“Excluded Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued
to directors, officers, employees or consultants of the Company for services rendered to the Company in their capacity as such
pursuant to an Approved Stock Plan (as defined above), provided that the exercise price of any such options is not lowered, none
of such options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such
options are otherwise materially changed in any manner that adversely affects any of the holders of the Registered Warrants (as
defined below); (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior
to the Closing Date, provided that the conversion price of any such Convertible Securities (other than standard options to purchase
Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered (except pursuant to
an existing reset or other adjustment mechanism contained in the Convertible Security on the date hereof), none of such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by
clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any
such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the holders of the
Registered Warrants; and (iii) the shares of Common Stock issuable upon exercise of the warrants issued on the Closing Date pursuant
to the Underwriting Agreement (the “Registered Warrants”); provided, that the terms of such warrants are not
amended, modified or changed on or after the Closing Date (other than antidilution adjustments pursuant to the terms thereof in
effect as of the Closing Date).

 

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

 

    	11

     

    

 

(G)
For the avoidance of doubt, and notwithstanding anything in this section to the contrary, this Section 2(a)(ii) shall not apply
to, or be triggered by changes (in accordance with the terms of such securities) with respect to or the issuance of (as the case
may be), the following securities (including the issuance of shares of Common Stock or other securities upon the exercise or conversion
of any of such securities): (x) Series C Convertible Preferred Stock and Series C Convertible Preferred Warrants, sold pursuant
to that certain Securities Purchase Agreement, dated as of June 12, 2017, by and among the Company and the investors identified
on the signature pages thereto, provided that neither the Series C Convertible Preferred Stock nor Series C Convertible Preferred
Warrants are amended to decrease the conversion price (except pursuant to an existing reset or other adjustment mechanism contained
in the Convertible Security on the date hereof) or increase the number of shares issuable thereunder and none of the terms or
conditions of any such securities are otherwise materially changed in any manner that adversely affects any of the holders of
the Registered Warrants; (y) warrants to purchase Common Stock sold pursuant to that certain Securities Purchase Agreement, dated
as of January 11, 2019, by and among the Company and the investors identified on the signature pages thereto, provided that no
such warrants are amended to lower the exercise price (except pursuant to an existing reset or other adjustment mechanism contained
in the Convertible Security on the date hereof) or increase the number of shares issuable thereunder and none of the terms or
conditions of any such warrants are otherwise materially changed in any manner that adversely affects any of the holders of the
Registered Warrants; and (z) grants of unregistered shares of Common Stock to vendors of the Company that are not subsequently
registered for resale.

 

b)
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 all (or substantially all) of the 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, 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 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).

 

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c)
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 (except in the
case of a merger for the purposes of changing the Company’s domicile), (ii) the Company, directly or indirectly, effects
any irrevocable 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 1(d) 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 1(d) 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 other Transaction Documents in accordance with the provisions of this Section
2(c) 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 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 with the same effect as if such Successor Entity had been named as the Company herein.

 

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d)
Calculations. All calculations under this Section 2 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 2, 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.

 

e)
Notice to Holder.

 

i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 2,
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 (except in the case of a merger for purposes of changing the Company’s domicile), 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 ten (10) 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 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, 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.

 

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f)
Voluntary Adjustment by Company. The Company may at any time during the term of this Warrant reduce the then-current Exercise
Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company with the prior written
consent of the holders of a majority in interest of the Warrants then outstanding.

 

Section
3. Transfer of Warrant.

 

a)
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder 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 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 3(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 issuance date of this Warrant 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.

 

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Section
4. 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 1, except as expressly set
forth in Section 2.

 

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 executing stock certificates to execute and issue 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 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).

 

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.

 

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e)
Jurisdiction. This Warrant shall be governed by and construed in accordance with the laws of the State of New York,
without regard for conflict of laws principles. Each of the parties hereto hereby submits to the non-exclusive jurisdiction
of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Warrant or the transactions contemplated hereby. Each of the parties irrevocably and unconditionally waives any
objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby in Federal and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient
forum. The parties agree, to the extent permitted by law, to waive their rights to a jury trial in any proceeding arising out
of this Warrant.

 

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, 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 reasonable 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 and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally
recognized overnight courier service, addressed to the Company, at 11885 44th Street N. Clearwater, Florida 33762, Attention:
Tyler B. Wilson, Esq., General Counsel, email address: tylerwilson@taronistech.com, or such other email address or address as
the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries
to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized
overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the
Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i)
the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at
the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after
the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K.

 

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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 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.

 

k)
Successors and Assigns. This Warrant may be assigned by the Holder in accordance with 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 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.

 

Section
5. Definitions.

 

In
addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 5:

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

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

 

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“Common
Stock Equivalents” means any securities of the Company or its subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

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

 

“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.

 

“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
or the New York Stock Exchange (or any successors to any of the foregoing).

 

“Transfer
Agent” means Corporate Stock Transfer, Inc., the current transfer agent of the Company, with a mailing address of 3200
Cherry Creek S Dr # 430, Denver, CO 80209, and any successor transfer agent of the Company.

 

[Signature
Page Follows]

 

[The
Remainder of This Page is Intentionally Blank]

 

    	19

     

    

 

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.

 

	TARONIS
    TECHNOLOGIES, INC.	 
	 	 
	By:
    	                          	 
	Name:	Scott Mahoney	 
	Title:	Chief Executive
    Officer	 

 

    	20

     

    

 

NOTICE
OF EXERCISE

 

TO:
TARONIS TECHNOLOGIES, 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

 

[    ]
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
1(c) to exercise this Warrant with respect to the Warrant Shares noted in (1) above, purchasable pursuant to the cashless exercise
procedure set forth in subsection 1(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:
    	 
	 	 	 	 

    	21

     

    

 

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: ________________________________	 	 

 

    	22

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