Document:

Exhibit 4.1

 

CONVERTIBLE TERM NOTE

 

	$5,000,000.00	Dallas, Texas	May 24, 2016

 

FOR
VALUE RECEIVED, the undersigned, AQUA METALS, INC., a Delaware corporation (herein called
“Borrower”), hereby promises to
pay to INTERSTATE EMERGING INVESTMENTS, LLC or its permitted assigns (herein called “Lender”),
the principal sum of FIVE MILLION AND 00/100 Dollars ($5,000,000.00), together with interest
on the unpaid principal balance thereof as hereinafter set forth, both principal
and interest payable as herein provided in lawful money of the United States of America
at the offices of Lender under the Credit Agreement,
or at such other place as from time to time may be designated by the holder of this Convertible
Term Note.

 

This Convertible Term
Note (a) is issued and delivered under that certain Credit
Agreement dated as of May 18, 2016 among Borrower and Lender
(herein, as from time to time supplemented, amended or
restated, called the “Credit Agreement”), and is a “Convertible
Term Note” as defined therein, (b) is
subject to the terms and provisions of the Credit Agreement, which contains provisions for
payments and prepayments hereunder, conversion of principal and interest hereunder into common
stock of Borrower, and acceleration of the maturity hereof upon the happening of
certain stated events, and (c) is secured by and entitled to the benefits of certain
Security Documents (as identified and defined in the Credit Agreement). Payments on this
Convertible Term Note shall be made and applied as provided herein
and in the Credit Agreement. Reference is hereby
made to the Credit Agreement for a description of certain rights, limitations of
rights, obligations and duties of the parties hereto and for the meanings assigned to terms used and not defined herein
and to the Security Documents for a description of the nature and extent of the security
thereby provided and the rights of the parties thereto.

 

Unless earlier converted
into common stock of Borrower, the principal amount of this Convertible Term Note,
together with all interest accrued hereon, shall be due and payable in full on the Maturity Date
and otherwise as provided in the Credit Agreement. Interest on this Convertible Term Note
shall be payable as provided in the Credit Agreement.

 

Notwithstanding the
foregoing paragraph and all other provisions of this Convertible Term Note, in no event
shall the interest payable hereon, whether before or after maturity, exceed the maximum
amount of interest which, under applicable Law, may be contracted for, charged, or
received on this Convertible Term Note, and this Convertible Term Note
is expressly made subject to the provisions of the Credit
Agreement which more fully set out the limitations on how interest accrues hereon. In the event applicable Law
provides for an interest ceiling under Chapter 303 of the Texas Finance Code (the “Texas
Finance Code”) as amended, for that day, the ceiling shall be the “weekly
ceiling” as defined in the Texas Finance Code and shall be used in this Convertible
Term Note for calculating the Maximum Rate and for
all other purposes. The term “applicable law” as used in this Convertible Term
Note shall mean the Laws of the State of Texas or the
Laws of the United States, whichever Laws allow the greater interest, as such Laws now exist or
may be changed or amended or come into effect
in the future.

 

[Aqua
Metals, Inc. – Convertible Term Note]

 

     

     

    

 

If this Convertible
Term Note is placed in the hands of an attorney for collection after default, or
if all or any part of the indebtedness represented
hereby is proved, established or collected in any
court or in any bankruptcy, receivership, debtor relief, probate or
other court proceedings, Borrower and all endorsers, sureties and guarantors of this
Convertible Term Note jointly and severally agree to pay reasonable attorneys’ fees
and collection costs to the holder hereof in addition to the principal
and interest payable hereunder.

 

Borrower
and all endorsers, sureties and guarantors of this Convertible Term Note hereby severally
waive demand, presentment, notice of demand and of dishonor and nonpayment of this Convertible Term Note,
protest, notice of protest, notice of intention to accelerate the maturity of this Convertible Term Note,
declaration or notice of acceleration of the maturity of this Convertible Term Note,
diligence in collecting, the bringing of any suit against any party and any notice of or defense
on account of any extensions, renewals, partial payments or changes in any manner of or
in this Convertible Term Note or in any of its terms, provisions and covenants, or
any releases or substitutions of any security, or
any delay, indulgence or other act of any trustee or
any holder hereof, whether before or after
maturity.

 

[Remainder of page
intentionally left blank]

 

[Aqua
Metals, Inc. – Convertible Term Note]

 

     

     

    

 

This Convertible Term
Note and the rights and duties of the parties hereto shall be governed by the Laws
of the State of Texas (without regard to principles of conflicts of law), except
to the extent the same are governed by applicable federal Law.

 

THIS Convertible
Term Note IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT
BETWEEN LENDER AND GREEN BANK, N.A. DATED AS OF THE DATE HEREOF.

 

	 	AQUA METALS, INC.
	 	 	 
	 	By:	/s/ Stephen R. Clarke
	 	 	Name:  Stephen R. Clarke
	 	 	Title: President and Chief Executive Officer

 

[Aqua
Metals, Inc. – Convertible Term Note]Exhibit 4.2

 

NEITHER THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS WARRANT (COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THIS WARRANT IS SUBJECT
TO THE TRANSFER RESTRICTIONS SET FORTH HEREIN.

 

AQUA METALS, INC.

 

Warrant
to Purchase Common Stock

 

Warrant No.: 2016-1

 

Date of Issuance: May 24, 2016 (“Issuance Date”)

 

Aqua Metals, Inc., a Delaware corporation
(the “Company”), certifies that, for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, Interstate Emerging Investments, LLC, a Delaware limited liability company, the registered holder hereof or its permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at
the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants
to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time on
or after the date hereof (the “Exercisability Date”), but not after 6:30 p.m., New York Time, on the Expiration
Date (as defined below), 702,247 fully paid and nonassessable shares of Common Stock (as defined below) (the “Warrant
Shares”).   The number of Warrant Shares purchasable upon exercise of this Warrant and the Exercise Price shall
be subject to adjustment from time to time as described herein. Except as otherwise defined herein, capitalized terms in this Warrant
shall have the meanings set forth in Section 17.

 

1.             EXERCISE
OF WARRANT.

 

(a)          Mechanics
of Exercise.  Subject to the terms and conditions hereof (including, without limitation, the limitations set forth
in Section 1(c)), this Warrant may be exercised by the Holder on any day on or after the Exercisability Date, in whole or in part
(but not as to fractional shares), by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant. The Holder may pay the Exercise Price in one of the
following manners:

 

(i)          Cash
Exercise. The Holder may make payment to the Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash
via wire transfer of immediately available funds (a “Cash Exercise”).  

 

(ii)         Cashless
Exercise. If an Exercise Notice is delivered at a time when a registration statement permitting the Holder to resell the Warrant
Shares is not then effective or the prospectus forming a part thereof is not then available to the Holder for the resale of the
Warrant Shares, then the Holder may notify the Company in an Exercise Notice of its election to utilize cashless exercise, in which
event the Company shall issue to the Holder the number of Warrant Shares determined as follows (a “Cashless Exercise”):

 

X = Y [(A-B)/A]

 

     

     

    

 

where:

 

X = the number of Warrant Shares
to be issued to the Holder.

 

Y = the number of Warrant Shares
with respect to which this Warrant is being exercised.

 

A = the average of the closing
prices for the five Trading Days immediately prior to (but not including) the Exercise Date.

 

B = the Exercise Price.

 

The term “Exercise
Delivery Documents” as used herein refers to (i) in the case of a Cash Exercise, the Exercise Notice and accompanying
payment; and (ii) in the case of a Cashless Exercise, the Exercise Notice.

 

For purposes
of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in
a Cashless Exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares
shall be deemed to have commenced, on the Issuance Date.

 

The Holder shall not
be required to surrender this Warrant in order to effect an exercise hereunder; provided, however, that in the event
that this Warrant is exercised in full or for the remaining unexercised portion hereof, the Holder shall deliver this Warrant to
the Company for cancellation within a reasonable time after such exercise.  Any Warrant Shares issued hereunder shall
be in uncertificated, book-entry form, as permitted by the Company’s Bylaws and the Delaware General Corporation Law. On
or before the third Trading Day following the date on which the Company has received all of the Exercise Delivery Documents (the
“Share Delivery Date”), the Company shall deliver (or cause the Company’s transfer agent for the Common
Stock (the “Transfer Agent”) to deliver) to the Holder a screen shot of the Transfer Agent’s records or
such other instrument as the Transfer Agent shall typically issue in such circumstance indicating the registration of transfer
to the Holder by book-entry of the number of shares of Common Stock issuable to the Holder upon such exercise of the Warrant (an
“Ownership Notice”). The Transfer Agent’s records and any Ownership Notices shall contain the legend set
forth in Section 16 (or an equivalent notation reflecting the transfer restrictions described in such legend) until such time as
the legend may be removed in accordance with Section 16. Upon delivery of the Exercise Notice, 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 to such Holder.  If this Warrant is submitted in connection
with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and
in no event later than three Trading Days after any such submission and at its own expense, issue a new Warrant (in accordance
with Section 7(e)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant has been and/or is being exercised.  The
Company shall pay any and all taxes and other expenses of the Company (including overnight delivery charges) that may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant; provided, however, that
the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of
any certificates for Warrants in a name other than that of the Holder or an Affiliate thereof.  The Holder shall be responsible
for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.

 

(b)          Exercise
Price.  For purposes of this Warrant, “Exercise Price” means $7.12 per share of Common Stock,
subject to adjustment as provided herein.

 

    	 	2	 

     

    

 

(c)          Limitations
on Exercises.  Notwithstanding anything contained elsewhere in this Warrant to the contrary, the Company shall not
effect any exercise of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, to the extent
that after giving effect to such issuance after exercise as set forth on the applicable Exercise Notice, 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),
would beneficially own in excess of 19.99% of the outstanding shares of Common Stock (the maximum amount of shares of Common Stock
issuable in compliance with the foregoing limitation, the “Beneficial Ownership Cap”). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates 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 that would be issuable upon (i) exercise of the remaining, nonexercised portion of
this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation, the Three Year Warrant, the Convertible Term Note
any other securities of the Company or its subsidiaries which would entitle the holder thereof to acquire at any time shares of
Common Stock) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned
by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 1(c), 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. In addition, for purposes of this Section 1(c), “group”
has the meaning set forth in Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Notwithstanding
anything contained elsewhere in this Warrant to the contrary, the Company shall not effect any exercise of this Warrant, and the
Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Exercise Notice, the cumulative aggregate of all exercises or conversions as a whole
under this Warrant, the Three Year Warrant and the Convertible Term Note, as the case may be, together with the issuance of 702,247
shares of Common Stock pursuant to the Stock Purchase Agreement, would result in the issuance of shares of Common Stock (including,
for the avoidance of doubt, any Warrant Shares issued under this Warrant, the Three Year Warrant and the Convertible Term Note)
that (i) have, or will have upon issuance, voting power in excess of 19.99% of the voting power of the Common Stock outstanding
immediately before the Issuance Date or (ii) represent, or will represent upon issuance, in excess of 19.99% of the number of shares
of Common Stock outstanding immediately before the Issuance Date (the maximum amount of shares of Common Stock issuable in compliance
with the foregoing limitations (i) and (ii), the “Total Issuance Cap”). The term “Cap” as
used herein refers to either the Beneficial Ownership Cap or the Total Issuance Cap, whichever may be applicable. To the extent
that any Beneficial Ownership Cap contained in this Section 1(c) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of an Exercise Notice 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 of which portion of this Warrant is exercisable. For purposes of this Section 1(c), in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (i) the Company’s
most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the United States Securities and Exchange
Commission, as the case may be, (ii) a more recent public announcement by the Company or (iii) a more recent notice by the Company
or the Transfer Agent to the Holder setting forth the number of shares of Common Stock then outstanding. Upon the request of the
Holder, the Company shall promptly, and in any event within one Trading Day of such request, confirm to the Holder the number shares
of Common Stock then outstanding.

 

(d)          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 that the Holder would otherwise be entitled to purchase upon
such exercise, the Company shall round up to the next whole share.

 

2.             ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and the number of Warrant Shares shall be adjusted
from time to time as follows:

 

(a)          Adjustment
upon Subdivision or Combination of Shares of Common Stock.  If the Company at any time on or after the Issuance Date
subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately increased.  If the Company at any time on or after the
Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common
Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately decreased.  Any adjustment under this Section 2(a)
shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

    	 	3	 

     

    

 

(b)          Par
Value. Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise Price be reduced below the
par value of the Company’s Common Stock.

 

3.             FUNDAMENTAL
TRANSACTIONS.

 

(a)          If,
at any time while this Warrant is outstanding, there occurs any Fundamental Transaction (including, without limitation, one pursuant
to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for
shares of Common Stock), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, in lieu of
the shares of the Common Stock (or other securities, cash assets or other property purchasable upon the exercise of the Warrant
prior to such Fundamental Transaction), the same amount and kind of shares of stock, securities, cash, assets or any other property
whatsoever (including warrants or other purchase or subscription rights) that the Holder would have been entitled to receive upon
the consummation of such Fundamental Transaction had this Warrant been exercised immediately prior to the record date for such
Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant. Upon the occurrence of any Fundamental
Transaction, the Successor Entity, if any, 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. The provisions of this Section shall apply
similarly and equally to successive Fundamental Transactions and any adjustment under this Section 3 shall be without duplication
for any adjustment or distribution made under Section 2.

 

(b)          In
the event that the Company at any time grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase
Rights”) the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase
Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant (without regard to any limitations on the exercise of this Warrant), immediately before the record date
for the grant, issuance or sale of such Purchase Rights, or, if no such record date is established, the date as of which the record
holders of shares of Common Stock are determined for the grant, issuance or sale of such Purchase Rights.

 

4.             RESERVATION
OF WARRANT SHARES.  The Company covenants that it will at all times reserve and keep available out of the aggregate
of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares
upon exercise of this Warrant as herein provided, the number of shares of Common Stock which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive or any other contingent purchase rights of Persons other than the
Holder (taking into account the adjustments and restrictions in Sections 2 and 3).  Such reservation shall comply with
the provisions of Section 1.  The Company covenants that all shares of Common Stock so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized,
issued and fully paid and nonassessable.  The Company will take all such actions as may be necessary to assure that such
shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements
of any securities exchange or automated quotation system upon which the Common Stock may be listed. If, notwithstanding the foregoing,
and not in limitation thereof, at any time while this Warrant remains outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant
at least a number of shares of Common Stock equal to the maximum number of shares of Common Stock as shall from time to time be
necessary to effect the exercise of all this Warrant (without regard to any limitations on exercise contained herein) (the “Required
Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately take all action
necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for this entire Warrant. Without limiting the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number
of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy
statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.

 

    	 	4	 

     

    

 

5.             WARRANT
HOLDER NOT DEEMED A STOCKHOLDER; LIMITATION ON LIABILITY.  Except as otherwise specifically provided herein, the
Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends
or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed
to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder
of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon
the due exercise of this Warrant.  In addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the Company.

 

6.             REGISTRATION
AND REISSUANCE OF WARRANTS.

 

(a)          Registration
of Warrant.  The Company shall register this Warrant, upon the 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.  The Company shall
also register any transfer, exchange, reissuance or cancellation of any portion of this Warrant in the Warrant Register.

 

(b)          Transfer
of Warrant.  This Warrant may not be offered for sale, sold, transferred or assigned without the consent of the Company,
and only in accordance with applicable securities laws.  Subject to applicable securities laws, if this Warrant is to
be transferred, the Holder shall surrender this Warrant to the Company together with all applicable transfer taxes, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(e)), registered
as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and,
if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(e)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(c)          Lost,
Stolen or Mutilated Warrant.  Upon receipt by the Company of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form or the provision of reasonable security by the Holder to the Company
and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder
a new Warrant (in accordance with Section 7(e)) representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(d)          Exchangeable
for Multiple Warrants.  This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company together with all applicable transfer taxes, for a new Warrant or Warrants (in accordance with Section 7(e)) representing
in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will
represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, that the Company shall not be required to issue Warrants for fractional shares of Common Stock
hereunder.

 

    	 	5	 

     

    

 

(e)          Issuance
of New Warrants.  Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant,
such new Warrant shall (i) be of like tenor with this Warrant, (ii) represent, as indicated on the face of such new Warrant, the
right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section
7(b) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date and
(iv) have the same rights and conditions as this Warrant.

 

7.             NOTICES.  Whenever
notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with
the information set forth in the Warrant Register.  The Company shall provide the Holder with prompt written notice of
all actions taken pursuant to this Warrant, including, in reasonable detail, a description of such action and the reason or reasons
therefor.  Without limiting the generality of the foregoing, the Company will give written notice to the Holder immediately
upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment
and; provided, that in each case, such information shall be made known to the public prior to or in conjunction with such
notice being provided to the Holder.

 

8.             NONCIRCUMVENTION.  The
Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights
of the Holder.  Without limiting the generality of the foregoing, the Company (i) shall not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall
use all reasonable efforts to take all such actions as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii) shall, so long as
any of the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the exercise of the Warrants, the Required Reserve Amount. If the Company
is restricted by the Principal Market from issuing and delivering the lesser of the (i) Beneficial Ownership Cap or (ii) Total
Issuance Cap, then the Company shall use its best efforts to obtain the approval of the requisite holders of the issued and outstanding
voting capital stock of the Company required by the listing requirements of the Principal Market.

 

9.             AMENDMENT
AND WAIVER.  Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Holder.  

 

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

 

11.           CONSTRUCTION;
HEADINGS.  This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed
against any Person as the drafter hereof.  The headings of this Warrant are for convenience of reference and shall not
form part of, or affect the interpretation of, this Warrant.

 

12.           DISPUTE
RESOLUTION.  In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation
of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two
Trading Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder.  If the
Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within
five Trading Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall,
within two Trading Days submit via facsimile the disputed determination of the Exercise Price or the disputed arithmetic calculation
of the Warrant Shares to an independent, outside accountant.  The Company shall cause the accountant to perform the determinations
or calculations and notify the Company and the Holder of the results no later than 10 Trading Days from the time it receives the
disputed determinations or calculations.  Such accountant’s determination or calculation, as the case may be, shall
be binding upon all parties absent demonstrable error.  The expenses of the accountant will be borne by the Company unless
the accountant determines that the Holder failed to act in good faith in its determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares, in which case the expenses of the accountant will be borne by the Holder.

 

    	 	6	 

     

    

 

13.           REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Warrant shall be cumulative and
in addition to all other remedies available under this Warrant, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure
by the Company to comply with the terms of this Warrant.  The Company acknowledges that a breach by it of its obligations
hereunder may cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.  The
Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to seek an injunction restraining any breach.  

 

14.           SUCCESSORS
AND ASSIGNS.  This Warrant shall bind and inure to the benefit of and be enforceable by the Company and the Holder
and their respective permitted successors and assigns.

 

15.           LEGENDS.
The Holder understands that the Warrant and the Warrant Shares issuable and deliverable upon exercise of this Warrant have not
been registered pursuant to the provisions of the Securities Act, and the Warrant or Warrant Shares will bear the following restrictive
legend (in addition to any legend required under applicable state securities laws):

 

THESE SECURITIES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

 

The Company, at its sole
cost, shall remove the legend described in Section 15 (or instruct the Transfer Agent to so remove such legend) from the certificates
evidencing the Warrant and Warrant Shares, as applicable, if (A) such Warrant Shares are sold pursuant to an effective registration
statement under the Securities Act, (B) such Warrant or Warrant Shares, as applicable, are sold or transferred pursuant to Rule
144 (if the transferor is not an Affiliate of the Company), or (C) such Warrant or Warrant Shares, as applicable, are eligible
for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required
under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as to such securities and without volume or manner of sale restrictions.
In connection with a sale of the Warrant or Warrant Shares, as applicable, by any Holder in reliance on Rule 144, such Holder or
its broker shall deliver to the Transfer Agent and the Company a customary broker representation letter providing to the transfer
agent and the Company any information the Company deems reasonably necessary to determine that the sale of the Warrant or Warrant
Shares, as applicable, is made in compliance with Rule 144, including, where and as may be appropriate, a certification that such
Holder is not an Affiliate of the Company and regarding the length of time the Warrant or Warrant Shares, as applicable, have been
held. Upon receipt of such representation letter, the Company shall promptly remove the legend refereed to in this Section 15 from
the Warrant or direct its Transfer Agent to remove the legend referred to in this Section 15 from the Warrant Shares from the appropriate
book-entry accounts maintained by the Transfer Agent, in each case within two (2) Business Days, and the Company shall bear all
costs associated therewith. If a Holder is not an Affiliate of the Company and has held the Warrant or Warrant Shares, as applicable,
for at least one year, if the book-entry account of such Warrant Shares or certificate for the Warrant still bears the legend referred
to in this Section 15, the Company agrees, upon request of Purchaser, to take all steps necessary to effect the removal of the
legend described in this Section 15 within two (2) Business Days from the appropriate book-entry accounts maintained by the Transfer
Agent or the Warrant, and the Company shall bear all costs associated therewith, regardless of whether the request is made in connection
with a sale or otherwise, so long the Holder provides to the Company any information the Company deems reasonably necessary to
determine that the legend is no longer required under the Securities Act or applicable state laws, including (if there is no such
registration statement), where and as may be appropriate, a certification that such Holder is not an Affiliate of the Company and
regarding the length of time the Warrant or Warrant Shares, as applicable, have been held.

 

    	 	7	 

     

    

 

16.           CERTAIN
DEFINITIONS.  For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)          “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used herein, the term “control” means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.

 

(b)          “Bloomberg”
means Bloomberg LP or, if Bloomberg ceases to provide quotations for the Common Stock, such other nationally recognized quotation
service as the Company shall select.

 

(c)          “Business
Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Dallas, Texas are authorized
or required by Law to be closed for business.

 

(d)          “Common
Stock” means (i) the Company’s shares of Common Stock, $0.001 par value per share, and (ii) any share capital into
which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

 

(e)          “Convertible
Term Note” means that certain convertible promissory note, dated May 23, 2016, by and between the Company and the Holder,
and all renewals, replacements, amendments, modifications and extensions thereof, such note issued pursuant to Section 2.1 of that
certain Credit Agreement, dated May 18, 2016, by and between the Company and the Holder.

 

(f)          “Eligible
Market” means The New York Stock Exchange, Inc., the NYSE MKT, The Nasdaq Stock Market, the NASDAQ Global Select Market
or the Nasdaq Capital Market.

 

(g)          “Expiration
Date” means the date 24 months after the Issuance Date or, if such date falls on a day other than a Trading Day or on
which trading does not take place on the Principal Market, or, if the Principal Market is not the principal trading market for
the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded (a “Holiday”),
the next date that is not a Holiday.  

 

(h)          “Fundamental
Transaction” means that, after the Issuance Date, the Company shall, directly or indirectly, in one or more related transactions,
(i) consolidate or merge with or into another Person, (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Company to another Person, (iii) allow another Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than 50% of the outstanding shares of Common Stock (not including any shares of Common
Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase,
tender or exchange offer), (iv) consummate a stock purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person 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 purchase agreement
or other business combination immediately prior to such stock purchase or business combination), (v) reorganize, recapitalize or
reclassify its Common Stock, or (vi) any “person” or “group” (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act), other than the Holder and its Affiliates or any Related Party thereof, is or shall become
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
ordinary voting power represented by issued and outstanding Common Stock (excluding any debt securities convertible into equity)
normally entitled to vote in the election of directors (“Voting Stock”) of the Company (or its successor by merger,
consolidation or purchase of all or substantially all of its assets) (for purposes of this clause, such person or group shall be
deemed to beneficially own any Voting Stock held by a Parent Entity) or 50% of the aggregate economic interests in the Company
(or its successor by merger, consolidation or purchase of all or substantially all of its assets).

 

    	 	8	 

     

    

 

(i)          “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(j)          
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

 

(k)          “Principal
Market” means the Nasdaq Capital Market; provided, however, that in the event that the Company’s
Common Stock is ever listed or traded on the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
the NYSE Amex, or the OTC Bulletin Board (it being understood that as used herein “OTC Bulletin Board” shall also mean
any successor or comparable market quotation system or exchange to the OTC Bulletin Board such as the OTCQB operated by the OTC
Markets Group, Inc.), then the “Principal Market” shall mean such other market or exchange on which the Company’s
Common Stock is then listed or traded.

 

(l)          “Related
Party” means, with respect to any specified Person, such Person’s affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person’s affiliates.

 

(m)          “Stock
Purchase Agreement” means that certain Stock Purchase Agreement, dated May 18, 2016, by and between the Company and the
Holder.

 

(n)          “Successor
Entity” means the Person formed by, resulting from or surviving any Fundamental Transaction or the Person with which
such Fundamental Transaction shall have been entered into.

 

(o)          “Three
Year Warrant” means that certain Three Year Warrant to purchase shares of Common Stock (Warrant No. 2016-2), dated the
Issuance Date, by and between the Company and the Holder.

 

(p)          “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded including any day on which the Principal Market is open for trading for a period of time less than the customary
time.

 

17.           INVESTOR
RIGHTS AGREEMENT. This Warrant and the Warrant Shares issuable upon exercise hereof shall be subject to the terms and conditions
of that certain Investor Rights Agreement, dated as of the date hereof and the Holder shall be entitled to all of the rights and
subject to all of the obligations under such Investor Rights Agreement. The Warrant Shares shall be deemed “Registrable Securities”
as defined in such Investor Rights Agreement.

 

[Signature Page Follows]

 

    	 	9	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	 	AQUA METALS, INC.
	 	 	 	 
	 	 	By:	/s/ Stephen R. Clarke
	 	 	 	Stephen R. Clarke 
	 	 	 	President and Chief Executive Officer

 

     

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

AQUA METALS, INC.

 

The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock (“Warrant Shares”) of Aqua Metals, Inc., a Delaware corporation
(the “Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).  Capitalized
terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1.          Exercise
Price.  The Holder intends that payment of the Exercise Price shall be made as (check one):

 

		·	Cash Exercise under Section 1(a)(i).

 

		·	Cashless Exercise under Section 1(a)(ii).

 

2.          Cash
Exercise. If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $______________ to the Company in accordance
with the terms of the Warrant.

 

3.          Delivery
of Warrant Shares.  The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms
of the Warrant.

 

4.          Representations
and Warranties.  By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company
that in giving effect to the exercise evidenced hereby the Holder will be in compliance with the provisions of Section 1(c) of
this Warrant to which this notice relates.

 

Date: _______________ __, ______

 

	 	 	 
	Name of Registered Holder	 	Name of Signatory

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

     

     

    

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exercise Notice.

 

	 	AQUA METALS, INC.
	 	 	 	 
	 	 	By:	 
	 	 	 	Name: 
	 	 	 	Title:

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