Document:

achv-ex104_271.htm

EXHIBIT 10.4

Amended and Restated Employment Agreement

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between Cindy Jacobs (the “Executive”) and Achieve Life Sciences, Inc., a Washington corporation (the “Employer” or the “Company”) as of September 28, 2020 (the “Effective Date”). This Agreement supersedes the Executive’s Employment Agreement with OncoGenex, Inc., dated November 3, 2009, the Executive’s Amended and Restated Employment Agreement with OncoGenex, Inc., dated September 12, 2005, the Employee Retention Agreement with OncoGenex Technologies Inc., a Canadian Corporation, dated October 23, 2007, and any other prior employment-related agreements (the “Prior Agreements”).

1.       Duties and Scope of Employment. 

For the term of this Agreement (“Employment”), the Employer agrees to employ the Executive in the position of President and Chief Medical Officer. The Executive shall report directly to the Chief Executive Officer of the Company. The Executive shall have such duties, authority and responsibilities that are commensurate with her being a senior executive officer of the Employer. During her employment, Executive will perform her duties faithfully and to the best of her ability and will, except as provided below, devote her full business efforts and time to the Employer. For the duration of the Executive’s Employment term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior written approval of the Chief Executive Officer, such approval not to be unreasonably withheld. It is understood and agreed that Executive will not be precluded from serving on boards of directors and advisory boards, provided that such activities do not materially adversely affect Executive’s ability to perform and discharge her duties to the Employer. The Executive’s primary work place shall be at the Employer’s corporate headquarters in Seattle, Washington. 

2.       Cash and Incentive Compensation. 

(a)           Salary. The Employer shall pay the Executive as compensation for her services a base salary at a gross annual rate of not less than $440,000. Such salary shall be payable in accordance with the Employer’s standard payroll procedures. The annual compensation specified in this Section 2(a), together with any increases in such compensation that the Employer may grant from time to time, is referred to in this Agreement as “Base Compensation.” 

(b)          Incentive Bonuses. The Executive shall be eligible to receive a discretionary annual fiscal year incentive bonus (“Bonus”) that the Board of Directors of the Company (the “Board”) or Compensation Committee of the Board (the “Committee”) shall determine and award in its sole discretion. Initially, the Executive shall be eligible to receive a Bonus constituting up to 40% of the Executive’s Base Compensation. Such percentage may be modified by the Board or the Committee in its discretion from time to time. The Bonus will be based upon the achievement of specific milestones that will be determined by the Board and /or the Committee and confirmed to the Executive no later than ninety (90) days after the start of each fiscal year. Payment for each year’s Bonus, if awarded, shall be made to the Executive no later than the fifteenth day of the third month after the later of the end of the calendar year or the Employer’s taxable year in which the Bonus payment is no longer subject to a substantial risk of forfeiture for purposes of Section 409A of the Internal Revenue Code, as amended (“Section 409A”). The Board or the Committee may, in its sole discretion, determine not to award a Bonus or to award a Bonus at less than maximum eligibility. The Executive acknowledges that a Bonus is neither required nor guaranteed by this Agreement. 

(c)           Equity Terms. During the Executive’s Employment, at the discretion of the Committee, the Executive shall be entitled to participate in the Company’s equity compensation plans, as in effect from time to time, and the Executive shall be eligible to receive grants of Company equity (“Compensatory Equity”), as determined by the Committee, in its discretion from time to time. 

(d)          Employee Benefits. During the Executive’s Employment, the Executive will be entitled to participate in the employee benefit plans of general applicability to other employees of the Company, as in effect from time to time, including, without limitation, the Company’s group medical, dental, vision, disability, life insurance, director and officer liability insurance and flexible-spending account plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time. 

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(e)           “Service” Definition. For purposes of Section 3(b) of this Agreement, “Service” shall mean service by the Executive as an employee and/or consultant of the Employer (or any subsidiary or parent or affiliated entity of the Employer). 

3.       Vacation and Indemnification. 

(a)           Vacation. The Executive will be eligible for paid vacation in accordance with the Employer’s vacation policy. Under the Employer’s current vacation policy, the Executive is eligible for twenty-five (25) days per year of paid vacation. Unused vacation may not be carried over for more then twelve months after the completion of each fiscal year. 

(b)          Indemnification. The Employer shall indemnify the Executive to the maximum extent permitted by applicable law and the Employer’s certificate of incorporation and bylaws with respect to the Executive’s Service. During the Executive’s Employment, the Employer shall maintain officers’ liability insurance for the Executive’s benefit on terms and conditions no less favorable than the terms and conditions generally applicable to the Employer’s other senior executive officers. The Employer’s obligations under this Section 3(b) shall survive termination of the Executive’s Service and also termination or expiration of this Agreement. 

4.       Business Expenses. 

During her Employment, the Executive shall be authorized to incur necessary and reasonable travel, entertainment and other business expenses in connection with her duties hereunder. The Employer shall promptly reimburse the Executive for such expenses upon presentation of appropriate supporting documentation, all in accordance with the Employer’s generally applicable policies. 

5.       Term of Employment. 

(a)           Employment-at-Will. The Employer and the Executive hereby acknowledge that the Executive’s Employment is at-will. The Employer may terminate the Executive’s Employment with or without Cause, by giving the Executive thirty (30) days advance notice in writing. The Executive may terminate her Employment by giving the Employer thirty (30) days advance notice in writing. The Executive’s Employment shall terminate automatically in the event of her death. 

(b)          Rights Upon Termination. Upon the termination of the Executive’s Employment for any reason (including death or Disability (as defined below)), the Executive shall be entitled to the compensation, benefits and reimbursements described in this Agreement through the effective date of the termination (the “Termination Date”), and the Employer shall make the following payments to the Executive (or her beneficiary) within 10 business days following the Termination Date: (i) all unpaid salary and unpaid vacation accrued through the Termination Date, (ii) any accrued, unpaid bonuses (provided that any such bonus has been awarded by the Board or the Committee, in accordance with the terms of any applicable plan, has been earned by the Executive and is not subject to any vesting or other similar requirement) for any fiscal year of the Employer ended prior to the Termination Date and (iii) any unreimbursed business expenses provided that Executive has submitted appropriate documentary substantiation as required by Company policy. The Executive may also be eligible for other post-Employment payments and benefits as provided in this Agreement or pursuant to other agreements (other than the Prior Agreements) or plans with the Employer. Upon the Termination Date, the Executive shall have no further rights to receive compensation or benefits from the Employer except as set forth in Section 6 and pursuant to the terms of any benefit plans (including without limitation any equity compensation plans) of the Company in which the Executive is a participant. 

6.       Termination Benefits. 

(a)           Severance Pay. If there is an Involuntary Termination (as defined below) of the Executive’s Employment, then, subject to the Executive’s execution, delivery and non-revocation of a Release (defined below) within the time period described below, following the Executive’s “separation from service” within the meaning of Section 409A, the Employer shall pay the Executive a single lump sum of cash in an amount equal to the sum of twelve (12) months (the “Severance Period”) of the Executive’s annual Base Compensation (not giving effect to any reduction in Base Compensation made in connection with such Involuntary Termination or giving rise to Good Reason). The cash lump sum amount payable under this Section 6(a) shall be made to the Executive on the first payroll date in the month following the month containing the Release Deadline. The Executive shall also receive the benefits provided in Sections 6(b) and 6(c), and all such payments and benefits shall not be subject to mitigation or offset (except as specified in Section 6(b)). In order to be entitled to receive the severance described in this Section 6(a) (including the benefits provided in Sections 6(b), 6(c) and, if applicable, 6(d)), the Executive must execute, deliver and not revoke the Release within forty-five (45) calendar days following the Executive’s separation from service (the 

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date that is forty-five (45) calendar days following the Executive’s separation from service is the “Release Deadline”). The Employer shall furnish the Release to the Executive on the date of her Involuntary Termination. The “Release” shall be a general release of all litigation and other claims against the Employer and all affiliates by the Executive and on Executive’s behalf in a form satisfactory to the Employer. 

(b)          Health Insurance. If the Executive is entitled to receive the severance payment in Section 6(a), and if the Executive elects to continue her (and her “dependents’) health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), then the Employer shall pay Executive a lump sum cash payment that is equivalent to the value of Executive’s monthly premium under COBRA for the number of months in the Severance Period. The cash lump sum amount payable under this Section 6(b) shall be made to the Executive on the first payroll date in the month following the month containing the Release Deadline. 

(c)           Equity Vesting. Notwithstanding the terms of any equity compensation plan of the Company or any agreement in connection with a grant of Compensatory Equity, if the Executive is entitled to receive the payments in Section 6(a), then the time-based vesting restrictions (if any) shall immediately lapse on an additional number of shares of Company common stock under all of the Executive’s outstanding Compensatory Equity that is equal to the number of shares that would have time-vested if the Executive had continued in employment for the number of additional months following the Termination Date that is equal to the number of months in the Severance Period. The Executive shall be entitled to exercise any of her Compensatory Equity to the extent vested pursuant to this Section 6(c) or otherwise for such period as set forth in the terms of that Compensatory Equity. 

(d)          Effect of Change in Control. If the Company is subject to a Change in Control (as defined below) and there is an Involuntary Termination of the Executive’s Employment within the period beginning three (3) months before and ending twelve (12) months after a Change in Control (or more than three (3) months prior to a Change in Control but in connection with a Change in Control), then following the Executive’s separation from service, the Executive will be entitled to all benefits described in Sections 6(a), 6(b) and 6(c) of this Agreement subject to the same terms and conditions and payment dates described above, except that (x) the cash payment amount under Section 6(a) shall be an amount equal to the sum of fifteen (15) months of the Executive’s then annual Base Compensation (not giving effect to any reduction in Base Compensation made in connection with such Involuntary Termination or giving rise to Good Reason), plus an amount equal to the sum of twelve (12) months of the Executive’s average monthly Bonus earnings, where such average is calculated over the twenty-four (24) month period immediately preceding the Executive’s separation from service and based on the Executive’s Bonus paid in such 24 month period, (y) the payment under Section 6(b) shall be equivalent to the amount of Executive’s monthly premiums under COBRA for fifteen (15) months and (z) notwithstanding the terms of any equity compensation plan of the Company or any agreement in connection with a grant of Compensatory Equity, all vesting restrictions (if any) shall immediately lapse on all of the Executive’s Compensatory Equity effective as of the Executive’s separation from service. For purposes of the preceding sentence, an Involuntary Termination shall be deemed to be in connection with a Change in Control if such termination (i) is required by the merger agreement, purchase agreement or other instrument relating to such Change in Control or (ii) is made at the express request of the other party (or parties) to the transaction constituting such Change in Control. 

(e)           Parachute Payments. In the event that the payments and benefits provided for in this Agreement and the payments and/or benefits provided to, or for the benefit of, the Executive under any other Employer plan or agreement (such payments or benefits are hereinafter collectively referred to as the “Benefits”) (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and (ii) but for this Section 6(e), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Excise Tax”), then the Benefits shall either be: 

(i)            delivered in full, or 

(ii)          delivered as to such lesser extent which would result in no portion of such Benefits being subject to the Excise Tax (such reduced amount is hereinafter referred to as the “Limited Amount”), whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Executive on an after-tax basis, of the greatest amount of Benefits, notwithstanding that all or some portion of such Benefits may be subject to the Excise Tax. If applicable, in order to effectuate the Limited Amount, the Employer shall first reduce those Benefits which are payable in cash and then reduce non-cash payments, in each case in reverse order beginning with Benefits which are to be paid the farthest in time from the date of determination that the Benefits will be limited by (e)(ii) above. Any calculations and determinations required under this Section 6(e) shall be made in writing by the Company’s independent auditor (the “Accountant”) whose determination shall be conclusive and binding. The Executive and the Company shall furnish the Accountant such documentation as the Accountant may reasonably request in order to make a determination. The Employer 

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shall pay for all costs that the Accountant may reasonably incur in connection with performing any calculations contemplated by this Section 6(e). 

(f)            “Change in Control” Definition. For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following events: 

(i)            the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if the Company’s stockholders immediately prior to such merger, consolidation or reorganization cease to directly or indirectly own immediately after such merger, consolidation or reorganization at least a majority of the combined voting power of the continuing or surviving entity’s securities (or, if the continuing or surviving entity is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the ultimate parent corporation of such surviving or resulting corporation) outstanding immediately after such merger, consolidation or other reorganization; 

(ii)          the consummation of the sale, transfer or other disposition of all or substantially all of the Company’s assets (other than (1) to a corporation or other entity of which at least a majority of its combined voting power is owned directly or indirectly by the Company, (2) to a corporation or other entity owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company or (3) to a continuing or surviving entity described in subsection (i) in connection with a merger, consolidation or corporate reorganization which does not result in a Change in Control under subsection (i)); 

(iii)        a change in the composition of the Board, as a result of which fewer than one-half of the incumbent directors are directors who either (1) had been directors of the Company on the date twenty-four (24) months prior to the date of the event that may constitute a Change in Control (the “original directors”) or (2) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved; 

(iv)         the consummation of any transaction as a result of which any person becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), directly or indirectly, of securities of the Company representing at least thirty-five percent (35%) of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this subsection, the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude: 

(1)           a trustee or other fiduciary holding securities under an employee benefit plan of the Company or an affiliate of the Company; 

(2)           a corporation or other entity owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company; 

(3)           the Company; and 

(4)           a corporation or other entity of which at least a majority of its combined voting power is owned directly or indirectly by the Company; or 

(v)           a complete winding up, liquidation or dissolution of the Company. 

For purposes of this Section 6(f), a transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transactions. 

(g)           “Cause” Definition. For all purposes under this Agreement, “Cause” shall mean any of the following committed by the Executive: 

(i)            Willful failure to follow the reasonable and lawful directions of Chief Executive Officer of the Company; 

(ii)          Conviction of a felony (or a plea of guilty or nolo contendere by the Executive to a felony) that materially harms the Company; 

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(iii)        Acts of fraud, dishonesty or misappropriation committed by the Executive; 

(iv)         Willful misconduct by the Executive in the performance of the Executive’s material duties required by this Agreement; or 

(v)           A material breach of this Agreement. 

The foregoing is an exclusive list of the acts or omissions that shall be considered “Cause” for the termination of the Executive’s Employment by the Employer. With respect to the acts or omissions set forth in clauses (i), (iii), (iv) and (v) above, (x) the President shall provide the Executive with one (1) month advance written notice detailing the basis for the termination of Employment for Cause, (y) during the one-month period after the Executive has received such notice, the Executive shall have an opportunity to cure such alleged Cause events before any termination for Cause is finalized and (z) the Executive shall continue to receive the compensation and benefits provided by this Agreement during the one-month cure period. In addition, no act or failure to act of Executive shall be willful or intentional if performed in good faith with the reasonable belief that the action or inaction was in the best interest of the Employer. 

(h)          “Involuntary Termination” Definition. For all purposes under this Agreement, “Involuntary Termination” shall mean any of the following: (i) termination of the Executive’s Employment by the Employer without Cause; (ii) the Executive’s resignation of Employment for Good Reason; or (iii) termination of the Executive’s Employment by the Employer for Disability. 

(i)            “Good Reason” Definition. For all purposes under this Agreement, “Good Reason” shall mean any of the following that occurs without the Executive’s prior written consent: (i) the relocation of the Executive’s primary work location by more than forty (40) miles from the Employer’s current location in Bothell, Washington; (ii) a material reduction of the Executive’s Base Compensation or Executive’s employee benefits; (iii) any material reduction or diminution of the Executive’s duties, authority or responsibilities; (iv) the Employer’s material breach of this Agreement; or (v) the failure of any successor of the Company to expressly in writing assume the Company’s obligations under this Agreement, in each case, provided that the Executive shall have provided the Employer with thirty (30) days advance written notice and an opportunity to cure such breach during such 30-day period. 

(i)            “Disability” Definition. For all purposes under this Agreement, “Disability” shall mean the Executive’s incapacity due to physical or mental illness to perform her full-time duties with the Employer for a continuous period of three (3) months or an aggregate of six (6) months in any eighteen (18) month period. 

7.       Non-Solicitation, Non-Compete and Non-Disparagement. 

(a)           Non-Solicitation. During the period commencing on the date of this Agreement and continuing until the first anniversary of the Termination Date, the Executive shall not directly or indirectly, personally or through others, solicit, recruit, or attempt to solicit or recruit any employee, agent, licensor, content provider, supplier, distributor, customer or partner of the Company to curtail, cancel or terminate such employment, agency or business relationship that it has with the Company or its affiliates. 

(b)          Non-Compete. During the period commencing on the date of this Agreement and continuing until the first anniversary of the Termination Date, the Executive shall not directly or indirectly, personally or through others, own, manage, operate, control, participate in, perform services for, make any investment in, assist, or otherwise carry on, the Company business (such business, including the business of any subsidiary or parent or affiliated entity of the Company, is referred to herein as the “Company Business”) or any business that directly competes with the Company Business (other than in the course of performing duties to the Company or any of its affiliates as an employee or other service provider). Notwithstanding the foregoing, nothing contained in this Section 7(b) shall limit or otherwise affect the ability of Executive to own not more than 1.0% of the outstanding capital stock of any entity that is engaged in a business competitive with the Company Business, provided that such investment is a passive investment and the Executive is not directly or indirectly involved in the management or operation of such business or otherwise providing consulting services to such business. For purposes of this Agreement, Company Business shall include, but shall not be limited to the research and development of the Technology, as defined herein, and such other business plans as approved by the Board from time to time and which are in effect on the Termination Date. As used herein, “Technology” means all ideas, concepts, business and trade names, trademarks, know-how, trade secrets, inventions, improvements, devices, methods, processes and discoveries, whether patentable or not, and whether or not reduced to writing or other tangible form or to actual or constructive practice which either: (i) are part of the technology licensed to 

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OncoGenex Technologies Inc. under the UBC Licenses, as defined herein, or (ii) are otherwise developed or acquired on behalf of or by the Company or any affiliate of the Company, including but not limited to the technology licensed to the Company or any affiliate of the Company by clients for work to be performed for such clients pursuant to research contracts. As used herein, “UBC Licenses” means the licenses entered into by the University of British Columbia and OncoGenex Technologies Inc. effective November 1, 2001, September 1, 2002 and April 5, 2005 which define the terms under which OncoGenex Technologies Inc. has acquired an exclusive license to certain technology. It is understood that OncoGenex Technologies Inc. has granted the Company a limited right to use certain technology licensed under the UBC Licenses solely for the Company to perform work for OncoGenex Technologies Inc. 

(c)           Confidential Information. Except as required in the good faith opinion of the Executive in connection with the performance of the Executive’s duties hereunder or as specifically set forth in this Section 7(c), the Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for her benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets of or relating to the Company or any of its affiliates, including, without limitation, information with respect to the Company’s operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, business plans, designs, marketing or other business strategies, compensation paid to employees or other terms of employment, or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets. The Company and the Executive stipulate and agree that as between them the foregoing matters are important, material and confidential proprietary information and trade secrets and affect the successful conduct of the businesses of the Company (and any successor or assignee of the Company). Upon termination of the Executive’s employment with the Company for any reason, the Executive shall promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning the Company’s customers, business plans, designs, marketing or other business strategies, products or processes, provided that the Executive may retain her rolodex, address book and similar information, whether or not the Company specifically requests it. 

(d)          Non-Disparagement. The Executive and the Company mutually agree not to disparage or defame, in writing or orally, the other party, and as applicable, its or her services, products, subsidiaries and affiliates, and/or their respective directors, officers, employees, agents, family members, successors and assigns. This non-disparagement provision shall not apply to statements made by non-management employees of the Company, so long as such statements did not originate from and were not induced or encouraged (directly or indirectly) by an officer, director or management employee of the Company. Notwithstanding the foregoing, nothing in this Section 7(d) shall limit the ability of the Company or the Executive, as applicable, to provide truthful testimony as required by law or any judicial or administrative process. 

(e)           Remedies. Without limiting the right of the Employer to pursue all other legal and equitable rights available to the Employer for violation of the provisions of Section 7 of this Agreement by Executive, it is agreed that (a) other remedies cannot fully compensate the Employer for such a violation, (b) such a violation will cause the Employer irreparable harm which may not be adequately compensated by money damages and (c) the Employer shall each be entitled to temporary, preliminary and permanent injunctive or other equitable relief, without proving actual damages or posting a bond therefore, to prevent a violation, continuing violation or threatened violation of the provisions of Section 7 of this Agreement. 

8.       Inventions and Patents. 

(a)           For purposes of this Agreement, “Inventions” includes, without limitation, information, inventions, contributions, improvements, ideas, or discoveries, whether protectable or not, and whether or not conceived or made during work hours. Executive agrees that all Inventions conceived or made by Executive during the period of employment with Employer belong to Employer, provided they grow out of Executive’s work with Employer or are related in some manner to the Company Business, including, without limitation, research and product development, and projected business of Employer or its affiliated companies. Accordingly, Executive will: 

(i)            Make adequate written records of such Inventions, which records will be Employer’s property; 

(ii)          Assign to Employer or its designee, at Employer’s request, any rights Executive may have to such Inventions for the U.S. and all foreign countries; 

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(iii)        Waive and agree not to assert any moral rights Executive may have or acquire in any Inventions and agree to provide written waivers from time to time as requested by Employer; and 

(iv)         Assist Employer (at Employer’s expense) in obtaining and maintaining patents or copyright registrations with respect to such Inventions. 

(b)          Executive understands and agrees that Employer or its designee will determine, in its sole and absolute discretion, whether an application for patent will be filed on any Invention that is the exclusive property of Employer, as set forth above, and whether such an application will be abandoned prior to issuance of a patent. Employer will pay to Executive, either during or after the term of this Agreement, the following amounts if Executive is sole inventor, or Executive’s proportionate share if Executive is joint inventor: $750 upon filing of the initial application for patent on such Invention; and $1,500 upon issuance of a patent resulting from such initial patent application, provided Executive is named as an inventor in the patent. 

(c)           Executive further agrees that Executive will promptly disclose in writing to Employer during the term of Executive’s employment and for one (1) year thereafter, all Inventions whether developed during the time of such employment or thereafter (whether or not Employer has rights in such Inventions) so that Executive’s rights and Employer’s rights in such Inventions can be determined. Except as set forth on the initialed Exhibit A (List of Inventions) to this Agreement, if any, Executive represents and warrants that Executive has no Inventions, software, writings or other works of authorship useful to Employer in the normal course of the Company Business, which were conceived, made or written prior to the date of this Agreement and which are excluded from the operation of this Agreement. 

(d)          NOTICE: In accordance with Washington law, this Section 8 does not apply to Inventions for which no equipment, supplies, facility, or trade secret information of Employer was used and which was developed entirely on Executive’s own time, unless: (a) the Invention relates (i) directly to the business of Employer or (ii) to Employer’s actual or demonstrably anticipated research or development, or (b) the Invention results from any work performed by Executive for Employer. 

9.       Successors. 

(a)           Employer’s Successors. This Agreement shall be binding upon any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Employer’s business and/or assets. For all purposes under this Agreement, the term “Employer” shall include any successor to the Employer’s business and/or assets which becomes bound by this Agreement. 

(b)          Employee’s Successors. This Agreement and all rights of the Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 

10.    Section 409A of the Internal Revenue Code. 

In the event that the Employer determines that any of the benefits payable under this Agreement would violate Section 409A, then the Employer and the Executive shall, in good faith, agree to implement adjustments needed to comply with Section 409A. Additionally, notwithstanding anything contained in this Agreement to the contrary, if Executive is deemed by the Employer at the time of Executive’s “separation from service” to be a “specified employee,” each within the meaning of Section 409A, any compensation or benefits to which Executive becomes entitled under this Agreement (or any agreement or plan referenced in this Agreement) in connection with such separation that are subject to Section 409A shall not be made or commence until the date which is six (6) months after Executive’s “separation from service” (or, if earlier, Executive’s death). Such deferral shall only be effected to the extent required to avoid adverse tax treatment to Executive, including (without limitation) the additional twenty percent (20%) tax for which Executive would otherwise be liable under Section 409A(a)(1)(B) in the absence of such deferral. Upon the expiration of the applicable deferral period, any compensation or benefits which would have otherwise been paid during that period (whether in a single lump sum or in installments) in the absence of this Section 10 shall be paid to Executive or Executive’s beneficiary in one lump sum. To the extent that any provision of this Agreement is ambiguous as to its exemption or compliance with Section 409A, the provision will be read in such a manner so that such payments hereunder are exempt from Section 409A to the maximum permissible extent, and for any payments where such construction is not tenable, that those payments comply with Section 409A to the maximum permissible extent.  To the extent any nonqualified deferred compensation subject to Section 409A payable to  Executive hereunder could be paid in one or more taxable years depending upon  Executive completing certain employment-related actions (such as resigning after a failure to 

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cure a Good Reason event and/or returning an effective release), then any such payments will commence or occur in the later taxable year to the extent required by Section 409A.

11.    Repayment Provisions. 

If the Company is required to prepare an accounting restatement due to its material noncompliance, as a result of the Executive’s misconduct, with any financial reporting requirement under United States securities laws, then, and only if Section 304 of the Sarbanes-Oxley Act of 2002, or a successor provision, is then in effect, the Company may require the Executive to reimburse the Employer for (i) any bonus or other incentive-based or equity-based compensation received by the Executive from the Employer during the 12-month period following the first public issuance or filing with the Securities Exchange Commission (whichever first occurs) of the financial documents embodying such financial reporting requirement and (ii) any profits realized from the sale of securities of Company during such 12-month period. 

12.    Miscellaneous Provisions. 

(a)           Notice. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by overnight courier, U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Executive, mailed notices shall be addressed to her at the home address that she most recently communicated to the Employer in writing. In the case of the Employer, mailed notices shall be addressed to: 

			
	
Attention: 
	
 
	
Chief Executive Officer

Executive Chairman

	
c/o: 
	
 
	
520 Pike Street, Suite 2250

	
 
	
 
	
Seattle, Washington 98101

	
 
	
 
	
Telephone: 425-686-1500

	
 
	
 
	
Facsimile: 425-686-1600

(b)          Modifications and Waivers. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Employer (other than the Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 

(c)           Whole Agreement. Except for those agreements or plans referenced herein (including without limitation any employee benefit plans of the Company in which the Executive is a participant in as of the Effective Date), this Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any other agreements, representations or understandings (whether oral or written and whether express or implied) with respect to the subject matter hereof. In the event of any conflict in terms between this Agreement and any other agreement executed by and between the Executive and the Employer, the terms of this Agreement shall prevail and govern. 

(d)          Withholding Taxes. All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to be withheld by law. 

(e)           Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Washington (except their provisions governing the choice of law). 

(f)            Severability; Blue-Penciling. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect. Furthermore, it is the intent, agreement and understanding of each party hereto that if, in any action before any court or agency legally empowered to enforce this Agreement, any term, restriction, covenant or promise in this Agreement is found to be unreasonable and for that or any other reason unenforceable, then such term, restriction, covenant or promise shall be deemed 

8

 

modified to the minimum extent necessary to make it enforceable by such court or agency; provided further that any such court or agency shall have the power to modify such provision, to the extent necessary to make it enforceable (for the maximum duration and geographic scope permissible), and such provision as so modified shall be enforced, 

(g)           Assignment. The Employer may assign its rights under this Agreement to any entity that expressly in writing assumes the Employer’s obligations hereunder in connection with any sale or transfer of all or substantially all of the Company’s assets to such entity. 

(h)          Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

	
	
ACHIEVE LIFE SCIENCES, INC.

By: /s/ John Bencich

	
Name:  John Bencich

	
Its: Chief Executive Officer

	
CINDY JACOBS

Signed: /s/ Cindy Jacobs

 

 

 

9Exhibit 4.1

 

WARRANT AGREEMENT

 

WARRANT AGREEMENT,
(this “Agreement”) dated as of November 10, 2020, among The LGL Group, Inc.,
a Delaware corporation (the “Company”), Computershare Inc., a Delaware
corporation (“Computershare”), and its wholly-owned subsidiary, Computershare
Trust Company, N.A., a federally chartered trust company (the “Trust Company”, and together with Computershare,
the “Warrant Agent”).

 

WITNESSETH

 

WHEREAS, the Company’s
Board of Directors has declared a dividend of five (5) warrants (the “Warrants”) to purchase shares of the Company’s
common stock, par value $0.01 per share (the “Common Stock”), to be issued on November 16, 2020 (the “Issuance
Date”) for each share of Common Stock issued and outstanding at the Close of Business (as defined below) on November 9, 2020,
and five (5) Warrants shall be exercisable to purchase one (1) share of Common Stock at the Exercise Price (as defined below),
upon the terms and subject to the conditions hereinafter set forth; and

 

WHEREAS, the Company
wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance,
transfer, exchange and exercise of the Warrants.

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

		Section 1	Certain Definitions

 

For purposes of this
Agreement, the following terms have the meanings indicated:

 

(a)              
“Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Exchange Act.

 

(b)              
“Business Day” means any day other than a Saturday, Sunday, any day which is a federal legal holiday in the
United States or a day on which the New York Stock Exchange or banking institutions in the state of New York are authorized or
obligated by law or executive order to close.

 

(c)              
“Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however,
that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.

 

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

 

     

     

    

 

(e)              
“Exercise Price” means $12.50 per share of Common Stock, as adjusted from time to time pursuant to Section 10
hereof.

 

(f)               
“Expiration Date” means November 16, 2025.

 

(g)              
“Fair Market Value” of any property, securities or assets means the fair market value of such property, securities
or assets, taking into account, among other things, any consideration received by the Company or a subsidiary therefor, as determined
in good faith by the Company’s Board of Directors (which good faith determination shall be conclusive and binding).

 

(h)              
“Market Price” means, for any date, the average VWAP for the Common Stock for the consecutive 10 Trading Days
immediately prior to such date.

 

(i)                
“Person” means an individual, corporation, association, partnership, limited liability company, joint venture,
trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.

 

(j)                
 “Securities Act” means the Securities Act of 1933, as amended.

 

(k)              
“Trading Day” means a day on which the principal Trading Market for the Common Stock is open for trading.

 

(l)                
“Trading Market” means each of NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market or the New York Stock Exchange.

 

(m)            
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (i) if
the security is then listed or quoted on a Trading Market, the daily volume weighted average price of the security for such date
(or the nearest preceding date) on the Trading Market on which the security 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)), (ii) the volume weighted average
price of the security for such date (or the nearest preceding date) on the OTC Bulletin Board, (iii) if the security is not then
listed or quoted for trading on the OTC Bulletin Board and if prices for the security are then reported in the “Pink Sheets”
published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent bid price per share or unit of the security so reported, or (iv) in all other cases, the fair market value of a share or
unit of the security as determined by the Company's Board of Directors in reliance on the advice of a nationally recognized independent
investment banking firm retained and paid by the Company for this purpose.

 

(n)              
“Warrant Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto representing
such number of Warrants as is indicated on the face thereof.

 

     2

     

    

 

(o)              
“Warrant Shares” means the shares of Common Stock issuable on exercise of the Warrants.

 

		Section 2	Appointment of Warrant Agent

 

The Company hereby
appoints the Warrant Agent to act as agent for the Company for the Warrants in accordance with the express terms and conditions
hereof (and no implied terms and conditions), and the Warrant Agent hereby accepts such appointment and agrees to perform the same
in accordance with the express terms and conditions set forth in this Agreement (and no duties or obligations shall be inferred
or implied). The Company may from time to time appoint such co-warrant agents as it may, in its sole discretion, deem necessary
or desirable upon ten (10) days prior written notice to the Warrant Agent. The Warrant Agent shall have no duty to supervise, and
shall in no event be liable for, the acts or omissions of any such co-warrant agents. In the event the Company appoints one or
more co-warrant agents, the respective duties of the Warrant Agent and any co-warrant agent shall be as the Company shall reasonably
determine, provided that such duties and determination are consistent with the terms and provisions of this Agreement.

 

		Section 3	Form of Warrant Certificates

 

Each Warrant shall
be issued in registered form only, shall be in substantially the form of Exhibit 1 hereto, the provisions of which are incorporated
herein, and shall be signed by, or bear the facsimile signature of, the Chief Executive Officer, President, Chief Financial Officer
or Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile of the Company’s seal. In the event
the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such
person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to
be such at the date of issuance. All of the Warrants shall initially be represented by one or more book-entry certificates (each
a “Book-Entry Warrant Certificate”). Unless and until countersigned by the manual or facsimile signature of the Warrant
Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by a Holder (as defined
below). Notwithstanding the foregoing and anything else herein to the contrary, the Warrants may be issued in uncertificated form.

 

		Section 4	Registration

 

The Warrant Agent shall
maintain books (“Warrant Register”), for the registration of the original issuance and the registration of any transfer
of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective Holders (as defined below) in such denominations and otherwise in accordance with instructions delivered to the
Warrant Agent by the Company. To the extent the Warrants are DTC (as defined below) eligible as of the Issuance Date, all of the
Warrants shall be represented by one or more Book-Entry Warrant Certificates deposited with The Depository Trust Company (the “Depository”
or “DTC”) and registered in the name of Cede & Co., a nominee of the Depository. Ownership of beneficial interests
in the Book-Entry Warrant Certificates shall be shown on, and the transfer of such ownership shall be effected through, records
maintained (i) by the Depository or its nominee for each Book-Entry Warrant Certificate; (ii) by institutions that have accounts
with the Depository (such institution, with respect to a Warrant in its account, a “Participant”); or (iii) directly
on the book-entry records of the Warrant Agent with respect only to owners of beneficial interests that represent such direct registration.

 

     3

     

    

 

If the Warrants are
not DTC eligible as of the Issuance Date or the Depository subsequently ceases to make its book-entry settlement system available
for the Warrants, the Company may instruct the Warrant Agent to make other arrangements for book-entry settlement within ten (10)
Business Days after the Depository ceases to make its book-entry settlement available. In the event that the Company does not make
alternative arrangements for book-entry settlement within ten (10) Business Days or the Warrants are not eligible for, or it is
no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall, upon written instructions from
the Company, provide written instructions to the Depository to deliver to the Warrant Agent for cancellation each Book-Entry Warrant
Certificate, and the Company shall instruct the Warrant Agent to deliver to the Holders definitive Warrant Certificates in physical
form evidencing such Warrants. Such definitive Warrant Certificates shall be in substantially the form attached as Exhibit 1
hereto.

 

Prior to due presentment
for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such
Warrant shall be registered upon the Warrant Register (“registered holder”), as the absolute owner of such Warrant
and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate
made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Any person in whose name ownership
of a beneficial interest in the Warrants evidenced by a Book-Entry Warrant Certificate is recorded in the records maintained by
the Depository or its nominee shall be deemed the “beneficial owner” thereof; provided, that all such beneficial interests
shall be held through a Participant which shall be the registered holder of such Warrants. As used herein, the term “Holder”
refers only to a registered holder of the Warrants.

 

		Section 5	Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates

 

(a)              
Subject to the provisions of Section 13 hereof and the last sentence of this first paragraph of Section 5 and subject to
applicable law, rules or regulations, restrictions on transferability that may appear on Warrant Certificates in accordance with
the terms hereof or any “stop transfer” instructions the Company may give to the Warrant Agent in writing, at any time
after the Close of Business on the date hereof, at or prior to the Close of Business on the Expiration Date, any Warrant Certificate(s)
may be transferred, split up, combined or exchanged for another Warrant Certificate(s), entitling the registered holder to purchase
a like number of shares of Common Stock as the Warrant Certificate(s) surrendered then entitled such holder to purchase. Warrants
may be surrendered to the Warrant Agent, together with a written request for exchange or transfer reasonably acceptable to Warrant
Agent, duly executed by the Holder thereof, or by a duly authorized attorney, together with any other reasonable requirements of
the Warrant Agent which requirements, for any transfers, shall include reasonable evidence of authority to transfer. Such evidence
of authority shall include a signature guarantee from an eligible guarantor institution participating in a signature guarantee
program approved by the Securities Transfer Association, and any other reasonable evidence of authority that may be required by
the Warrant Agent. Thereupon, subject to the last sentence of this first paragraph of Section 5, the Warrant Agent shall issue
in exchange therefor one or more new Warrants as requested by the Holder of the Warrants so surrendered, representing an equal
aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant Certificate,
each Book-Entry Warrant Certificate may be transferred only in whole and only to the Depository, to another nominee of the Depository,
to a successor depository, or to a nominee of a successor depository; provided further, however, that in the event that a Warrant
surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in
exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be
made and indicating whether the new Warrants must also bear a restrictive legend. Upon any such registration of transfer, the Company
shall execute, and the Warrant Agent shall countersign and deliver, in the name of the designated transferee a new Warrant Certificate
or Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants. The Company
or Warrant Agent may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Warrant Certificates, together with reimbursement to the Company and the
Warrant Agent of all reasonable expenses incidental thereto.

 

     4

     

    

 

(b)              
The Warrant Agent shall issue replacement Warrant Certificates for those alleged to have been lost, stolen or destroyed,
upon receipt by the Warrant Agent of an open penalty surety bond or other indemnity satisfactory to it and holding it and the Company
harmless, absent notice to the Warrant Agent that such Warrant Certificates have been acquired by a bona fide purchaser, and reimbursement
to the Company and the Warrant Agent of all reasonable expenses incidental thereto. The Warrant Agent may, at its option, issue
replacement Warrant Certificates for mutilated certificates upon presentation thereof without such indemnity. The Company may require
the payment of a sum sufficient to cover any stamp or other tax or charge that may be imposed in connection with any such exchange.
The Warrant Agent shall have no duty or obligation to take any action under any section of this Agreement that requires the payment
of taxes and/or charges unless and until it is satisfied that all such taxes and/or charges have been paid.

 

(c)              
The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register,
upon surrender of such Warrant for transfer, accompanied by appropriate instructions for transfer and any evidence of authority
that may be required by the Warrant Agent, including but not limited to, a signature guarantee from an eligible guarantor institution
participating in a signature guarantee program approved by the Securities Transfer Association. Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent.
The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.

 

     5

     

    

 

		Section 6	Exercise of Warrants; Exercise
                                         Price; Expiration Date

 

(a)              
The Warrants shall be exercisable commencing upon the earlier of (i) the Expiration Date, or (ii) the date on which the
average VWAP for the Common Stock for the consecutive 30 Trading Days immediately prior to such date is greater than or equal to
$17.50 (as adjusted for stock splits, stock dividends, combinations, reclassifications and similar events) (the “Effective
Date”). The Warrants shall cease to be exercisable and shall terminate and become void, and all rights thereunder and under
this Agreement shall cease, at the Close of Business on the Expiration Date. The period between the Effective Date and the Close
of Business on the Expiration Date is referred to herein as the “Exercise Period”. Subject to the foregoing, a Holder
may exercise a Warrant by delivering, not later than 5:00 p.m., New York City time, on any Business Day during the Exercise Period
to the Warrant Agent at its office designated for such purpose (i) the Warrant Certificate evidencing the Warrants to be exercised,
or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised (the “Book-Entry Warrants”) shown
on the records of the Depository to an account of the Warrant Agent at the Depository designated for such purpose in writing by
the Warrant Agent to the Depository from time to time, (ii) an election to purchase the Warrant Shares underlying the Warrants
to be exercised (an “Election to Purchase”), properly completed and duly executed by the Holder on the reverse of the
Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by the Participant in accordance with
the Depository’s procedures, and (iii) the Exercise Price for each Warrant to be exercised in lawful money of the United
States of America by certified or official bank check or by bank wire transfer in immediately available funds. The Warrant Agent
shall forward funds received for Warrant exercises in a given month by the 5th Business Day of the following month by wire transfer
to an account designated by the Company. The date on which any Warrant is exercised or deemed to have been exercised (in accordance
with Section 6(b), as applicable) is referred to as the “Exercise Date.”

 

(b)              
If any of (i) the Warrant Certificate or the Book-Entry Warrants, (ii) the Election to Purchase, or (iii) the Exercise Price
therefor, is received by the Warrant Agent after 5:00 p.m., New York City time, the Warrants will be deemed to be received and
exercised on the immediately succeeding Business Day. If the date specified as the exercise date is not a Business Day, the Warrants
will be deemed to be received and exercised on the next succeeding day that is a Business Day. If the Warrants are received or
deemed to be received after the Close of Business on the Expiration Date, the exercise thereof will be null and void and any funds
delivered to the Warrant Agent will be returned to the Holder. In no event will interest accrue on funds deposited with the Warrant
Agent in respect of an exercise or attempted exercise of Warrants. The validity of any exercise of Warrants will be determined
by the Company in its sole discretion and such determination will be final and binding upon the Holder and the Warrant Agent. Neither
the Company nor the Warrant Agent shall have any obligation to inform a Holder of the invalidity of any exercise of any Warrants.

 

     6

     

    

 

(c)              
The Warrant Agent shall, for Book-Entry Warrant Certificates, within three Business Days following the Exercise Date, advise
the Company or the transfer agent and registrar in respect of (i) the number of Warrant Shares issuable upon such exercise in accordance
with the terms and conditions of this Agreement, (ii) the instructions of each Holder with respect to delivery of the Warrant Shares
issuable upon such exercise, and the delivery of definitive Warrant Certificates, as appropriate, evidencing the balance, if any,
of the Warrants remaining after such exercise, (iii) in case of a Book-Entry Warrant Certificate, the notation that shall be made
to the records maintained by the Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate,
evidencing the balance, if any, of the Warrants remaining after such exercise and (iv) such other information as the Company or
such transfer agent and registrar shall reasonably require.

 

(d)              
The Company shall, by 5:00 p.m., New York City time, on the third Business Day next succeeding the Exercise Date of any
Warrant and the clearance of the funds in payment of the aggregate Exercise Price, execute, issue and deliver to the Warrant Agent,
the Warrant Shares to which such Holder is entitled, in fully registered form, registered in such name or names as may be directed
by such Holder. Within three Business Days of receipt of the Warrant Shares, the Warrant Agent shall transmit such Warrant Shares
to, or upon the order of, such Holder.

 

(e)              
In lieu of delivering physical certificates representing the Warrant Shares issuable upon exercise of any Warrants, provided
the Company’s transfer agent is participating in the Depository’s Fast Automated Securities Transfer program, the Company
shall use its commercially reasonable efforts to cause its transfer agent to electronically transmit the Warrant Shares issuable
upon exercise to the Depository by crediting the account of the Depository or of the Participant, as the case may be, through its
Deposit Withdrawal Agent Commission system. The time periods for delivery described in the immediately preceding paragraph shall
apply to the electronic transmittals described herein.

 

(f)               
Notwithstanding the foregoing, the Company shall not be obligated to deliver any Warrant Shares pursuant to the exercise
of a Warrant unless (i) a registration statement under the Securities Act with respect to the Warrant Shares issuable upon exercise
of such Warrants is effective and a current prospectus relating to the Warrant Shares issuable upon exercise of the Warrants is
available for delivery to the Holders or (ii) in the opinion of counsel to the Company, the exercise of the Warrants is exempt
from the registration requirements of the Securities Act and such securities are qualified for sale or exempt from qualification
under applicable securities laws of the states or other jurisdictions in which the Holder resides. Warrants may not be exercised
by, or securities issued to, any Holder in any state in which such exercise or issuance would be unlawful. In the event a registration
statement under the Securities Act with respect to the Warrant Shares is not effective or a prospectus is not available, or because
such exercise would be unlawful with respect to a Holder in any state, the Holder shall not be entitled to exercise such Warrants
and such Warrants may have no value and expire worthless. The Company agrees to use its best efforts to maintain the effectiveness
of a registration statement under the Securities Act of the Warrant Shares and ensure that a prospectus is available for delivery
to the Holders until the expiration of the Warrants in accordance with the provisions of this Agreement. In addition, the Company
agrees to use its best efforts to register the Warrant Shares under the blue sky laws of the states of residence of exercising
Holders, if permitted by the blue sky laws of such jurisdictions, in the event that an exemption is not available.

 

     7

     

    

 

(g)              
In the event of any exercise, the Company shall instruct the Warrant Agent to record cost basis for newly issued Warrant
Shares as reasonably determined by the Company promptly after such exercise and prior to processing by Warrant Agent.

 

		Section 7	Cancellation and Destruction of Warrant Certificates

 

All Warrant Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to
any of its agents, be delivered to the Warrant Agent for cancellation or in canceled form, or, if surrendered to the Warrant Agent,
shall be canceled by it, and no Warrant Certificates shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and retirement, and the Warrant Agent
shall so cancel and retire, any other Warrant Certificate purchased or acquired by the Company otherwise than upon the exercise
thereof. The Warrant Agent shall deliver all canceled Warrant Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Warrant Certificates, and in such case shall deliver a certificate of destruction thereof to
the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain such canceled certificates.

 

		Section 8	Certain Representations;
                                         Reservation and Availability of Shares of Common Stock or Cash

 

(a)              
This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution
and delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against
the Company in accordance with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming
due authentication thereof by the Warrant Agent pursuant hereto, constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms and entitled to the benefits hereof; in each case except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’
rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in
equity or at law).

 

     8

     

    

 

(b)              
As of October 15, 2020, the authorized capital stock of the Company consists of 10,000,000 shares of Common Stock, of which
5,213,320 shares are issued and 5,213,320 shares are outstanding, 1,051,664 shares of Common Stock are reserved for issuance upon
exercise of the Warrants and not more than 417,787 shares of Common Stock are reserved for issuance upon exercise of employee
stock. There are no other outstanding obligations, warrants, options or other rights to subscribe for or purchase from the Company
any class of capital stock of the Company.

 

(c)              
The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued
shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the
number of shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.

 

(d)              
The Warrant Agent will create a special account for the issuance of Warrants and Warrant Shares. The Company shall provide
an opinion of counsel prior to the Issuance Date to set up a reserve of Warrants and Warrant Shares. The opinion shall state that:

 

		(i)	the Warrants and the Warrant Shares are registered under the Securities Act, or are exempt from
such registration, and all appropriate state securities law filings have been made with respect to the Warrants and the Warrant
Shares;

 

		(ii)	the Warrants are duly authorized, and, when issued and distributed by the Company in accordance
with and in the manner described in the registration statement and the prospectus supplement, the Warrants will be validly issued,
fully paid and non-assessable; and

 

		(iii)	the Warrant Shares are duly authorized, and, when issued and sold by the Company and delivered
by the Company against receipt of the exercise price therefor, in accordance with and in the manner described in the registration
statement, the prospectus supplement and the Warrants, will be validly issued, fully paid and non-assessable.

 

(e)              
The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the original issuance or delivery of the Warrants or Warrant Shares. The Company
shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer involved
in the transfer or delivery of Warrant or the issuance or delivery of Warrant Shares in a name other than that of the Holder of
the Warrant evidencing Warrants surrendered for exercise or to issue or deliver any certificate for Warrant Shares upon the exercise
of any Warrants until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable
by the holder of such Warrant at the time of surrender) or until it has been established to the Company’s reasonable satisfaction
that no such tax or governmental charge is due.

 

     9

     

    

 

		Section 9	Common Stock Record Date

 

Each Person in whose
name any certificate for shares of Common Stock is issued upon the exercise of Warrants shall for all purposes be deemed to have
become the holder of record for the Common Stock represented thereby on, and such certificate shall be dated, the date upon which
the Warrants were duly surrendered and payment of the Exercise Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the Common Stock transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated,
the next succeeding day on which the Common Stock transfer books of the Company are open.

 

		Section 10	Adjustment of Exercise
                                         Price, Number of Shares of Common Stock or Number of Warrants

 

The Exercise Price,
the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time
as provided in this Section 10.

 

(a)              
Dividends, Subdivisions, Reclassifications or Combinations. The issuance of Common Stock as a dividend or distribution
to all holders of Common Stock, or a subdivision or reclassification of Common Stock into a greater number of shares or the combination
of or reclassification of Common Stock into a smaller number of shares, in which event the Exercise Price will be adjusted based
on the following formula:

 

		EP1	=	EP0 x (OS0 / OS1)

 

		Where	

 

		EP0	=	the Exercise Price in effect at the Close of Business on the record date

 

		EP1	= 	the Exercise Price in effect immediately after the record date

 

		OS0	= 	the number of shares of Common Stock outstanding at the Close of Business on the record
date prior to giving effect to such event

 

		OS1	=	 the number of shares of Common Stock that would be outstanding immediately after, and solely
as a result of, such event

 

Upon each adjustment
of the Exercise Price pursuant to this subsection (a), each Warrant shall thereupon evidence the right to purchase that number
of shares of Common Stock (calculated to the nearest 1/100th of a share) obtained by multiplying the number of shares of Common
Stock purchasable immediately prior to such adjustment upon exercise of the Warrant by the Exercise Price in effect immediately
prior to such adjustment and dividing the product so obtained by the Exercise Price in effect immediately after such adjustment.

 

     10

     

    

 

(b)              
Certain Issuances of Convertible Securities. The issuance to all holders of Common Stock of rights, options or warrants
entitling them to purchase shares of Common Stock for no consideration or for consideration at less than the Market Price ending
on the Trading Day immediately preceding the announcement date of the issuance, in which event the Exercise Price will be adjusted
based on the following formula:

 

		EP1	=	 EP0 x (OS0 + Y) / (OS0 + X)

 

		where,	

 

		EP0	= 	the Exercise Price in effect at the Close of Business on the record date

 

		EP1	=	 the Exercise Price in effect immediately after the record date

 

		OS0	= 	the number of shares of Common Stock outstanding at the Close of Business on the record date

 

		X	= 	the total number of shares of Common Stock issuable pursuant to such rights, options or warrants

 

		Y	= 	the number of shares of Common Stock equal to the aggregate price payable to exercise such
rights, options or warrants divided by the Market Price ending on the Trading Day
immediately preceding the announcement date of the issuance of such rights, options or warrants

 

If such rights, options
or warrants are not issued, the Exercise Price will remain the same as had a record date for such distribution not been fixed.
Additionally, to the extent that Common Stock is not delivered after the expiration of such rights, options or warrants, the Exercise
Price will be readjusted to be the Exercise Price that would then be in effect had the adjustments made upon the issuance of such
rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered.

 

In determining whether
any rights, options or warrants entitle their holders to subscribe for or purchase shares of Common Stock at less than the Market
Price, and in determining the aggregate offering price of such shares, there shall be taken into account, among other things, any
consideration received by the Company for such rights, options or warrants and any amount payable on the exercise or conversion
thereof, as determined in good faith by the Company’s Board of Directors (which good faith determination shall be conclusive
and binding).

 

     11

     

    

 

(c)              
Other Distributions. The dividend or other distribution to all holders of Common Stock of shares of capital stock
of the Company or a subsidiary (other than Common Stock), rights to acquire capital stock of the Company or a subsidiary or evidences
of the Company’s indebtedness or the Company’s assets (excluding any dividend, distribution or issuance covered by
clauses (a) or (b) above or (d) or (e) below) in which event the Exercise Price will be adjusted based on the following formula:

 

		EP1	=	 EP0 x (SP0 — FMV) / SP0

 

		where,	

 

		EP0	=	 the Exercise Price in effect at the Close of Business on the record date

 

		EP1	= 	the Exercise Price in effect immediately after the record date

 

		SP0	=	 the Market Price as of the record date

 

		FMV	= 	the Fair Market Value, on the record date, of the shares of capital stock, rights to acquire
capital stock, evidences of indebtedness or assets so distributed, expressed as an amount per share of Common Stock

 

However, if the transaction
that gives rise to an adjustment pursuant to this subsection (c) is one pursuant to which the payment of a dividend or other distribution
on the Common Stock consists of shares of capital stock of, or similar equity interests in, a subsidiary or other business unit
of the Company (a “spin-off”), that are, or, when issued, will be, traded on a Trading Market, then the Exercise Price
will instead be adjusted based on the following formula:

 

		EP1	= 	EP0 x MP0 / (FMV0 + MP0)

 

		where,	

 

		EP0	= 	the Exercise Price in effect at the Close of Business on the record date

 

		EP1	= 	the Exercise Price in effect immediately after the record date

 

		FMV0	= 	the average of the VWAP of the capital stock or similar equity interests distributed to holders
of the Common Stock applicable to one share of Common Stock over the 10 consecutive Trading Days commencing on and including the
third Trading Day after the date on which “ex-distribution trading” commences for such dividend or distribution with
respect to the Common Stock on the NYSE American or such other Trading Market that
is at that time the principal market for the Common Stock

 

		MP0	= 	the average of the VWAP per share of the Common Stock over the 10 consecutive Trading Days
commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for
such dividend or distribution with respect to the Common Stock on the NYSE American or such other Trading Market that
is at that time the principal market for the Common Stock

 

     12

     

    

 

The adjustment of the
Exercise Price under this subsection (c) will be made immediately after the open of business on the day after the last day of the
valuation period, but will be given effect as of the open of business on the Business Day immediately following the record date
for any spin-off. For purposes of determining the Exercise Price in respect of any exercise during a valuation period, references
within the portion of this subsection (c) related to spin-offs to 10 Trading Days shall be deemed replaced with such lesser number
of consecutive Trading Days as have elapsed from, and including, the ex-dividend date
of such spin-off to, but excluding, the Exercise Date.

 

If any dividend or
distribution described in this subsection (c) results in an adjustment to the Exercise Price but such dividend or distribution
is not so made, the Exercise Price will be readjusted to be the Exercise Price that would
then be in effect had such dividend or distribution not been declared.

 

(d)              
Cash Distributions. The Company makes a distribution consisting exclusively of cash to all holders of Common Stock,
excluding (i) any cash that is distributed as part of a distribution referred to in clause (c) above, and (ii) any consideration
payable in connection with a tender offer referred to in clause (e) below, in which event, the Exercise Price will be adjusted
based on the following formula:

 

		EP1	=	 EP0 x (SP0 – C)/ SP0

 

		where,	

 

		EP0	= 	the Exercise Price in effect at the Close of Business on the record date

 

		EP1	=	 the Exercise Price in effect immediately after the record date

 

		SP0	=	 the Market Price as of the record date

 

		C	=	 the amount in cash per share distributed to holders of the Common Stock

 

If any distribution
described in this subsection (d) results in an adjustment to the Exercise Price but such distribution is not so made, the Exercise
Price will be readjusted to be the Exercise Price that would then be in effect had such distribution
not been declared.

 

     13

     

    

 

(e)              
Certain Repurchases. If the Company or one or more of its wholly owned subsidiaries purchases Common Stock in a tender
offer subject to Rule 13e-4 under the Exchange Act (not including any exchange offer pursuant to Section 3(a)(9) of the Securities
Act) where (i) the number of shares purchased in such tender offer exceeds 30% of the number of shares of Common Stock outstanding
on the last date on which tenders may be made pursuant to such tender offer (the “offer expiration date”) and (ii)
the cash and value of any other consideration included in the payment per share of Common Stock validly tendered exceeds the
average VWAP for the Common Stock for the consecutive 10 Trading Days commencing with
the Trading Day immediately after the offer expiration date, in which event the Exercise Price will be adjusted based on
the following formula:

 

		EP1	=	 EP0 x (SP1 x OS0) / (FMV + (SP1 x OS1))

 

		where,	

 

		EP0	= 	the Exercise Price in effect at the Close of Business on the offer expiration date

 

		EP1	=	 the Exercise Price in effect immediately after the offer expiration date

 

		FMV	= 	the Fair Market Value, on the offer expiration date, of the aggregate value of all cash and
any other consideration paid or payable for shares validly tendered and not withdrawn as of the offer expiration date (the “Purchased
Shares”)

 

		OS1	= 	the number of shares of Common Stock outstanding at the last time tenders may be made pursuant
to such tender offer (the “Expiration Time”) less any Purchased Shares

 

		OS0	= 	the number of shares of Common Stock outstanding at the Expiration Time, including any Purchased
Shares

 

		SP1	= 	the average VWAP for the Common Stock for the consecutive 10 Trading Days commencing
with the Trading Day immediately after the Expiration Time

 

The adjustment of the
Exercise Price under this subsection (e) will be made at the Close of Business on the 10th Trading Day immediately following,
and including, the Trading Day next succeeding the offer expiration date, but will be given effect as of the open of business on
the Business Day following the offer expiration date. For purposes of determining the Exercise Price in respect of any exercise
during the 10 Trading Days commencing on, and including, the Trading Day next succeeding the offer expiration date, references
within this subsection (e) to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed
from, and including, the Trading Day next succeeding the offer expiration date to, but excluding, the Exercise Date.

 

     14

     

    

 

If the Company or one
or more of its wholly owned subsidiaries is obligated to purchase Common Stock pursuant to any such tender offer but is permanently
prevented by applicable law from effecting any such purchase or all or any portion of such purchases are rescinded, the Exercise
Price will be readjusted to be the Exercise Price that would then be in effect had such tender
offer not been made, or had only been made in respect of the purchases that had been effected.

 

(f)               
Other Adjustments. In addition, the Company may, but shall not be required to, make such decreases in the Exercise
Price, in addition to those required by this Section 10, as the Company’s Board of Directors considers to be advisable for
any reason, including, without limitation, in order to avoid or diminish any income tax to any holders of shares of Common Stock
or to any Holders of Warrants resulting from any dividend or distribution of stock or from any event treated as such for income
tax purposes or for any other reason; so long as the Company establishes a minimum period of ten business days within which such
price reduction will be in effect.

 

(g)              
Record Date. For the purpose of this Section 10, “record date” means, with respect to any dividend, distribution
or other transaction or event in which the holders of the Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of holders of the Common Stock entitled to receive such cash, securities
or other property (whether such date is fixed by the Board or by statute, contract or otherwise).

 

(h)              
Adjustment Rules. For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Exercise
Price pursuant to this Section 10 under more than one subsection hereof, such event, to the extent fully taken into account in
a single adjustment, shall not result in multiple adjustments hereunder.

 

(i)                
Calculation of Adjustments. All calculations under the foregoing paragraphs (a), (b), (c), (d) and (e) shall be made
to the nearest cent. No adjustment of the Exercise Price need be made under the foregoing paragraphs (a), (b), (c), (d) and (e)
if such adjustment (together with any other carried-forward adjustments under this subsection (i)) would amount to a change in
the Exercise Price of less than 1.0%; provided, however, that if an adjustment is not made by reason of this subsection (i), such
amount shall be carried forward and taken into account at the time of any subsequent adjustment in the Exercise Price.

 

(j)                
Excluded Transactions. No adjustment shall be made to the Exercise Price that would reduce the Exercise Price below
the par value per share of Common Stock.

 

In addition, no adjustment
to the Exercise Price shall be made:

 

		(i)	as consideration for or to fund the acquisition by the Company of businesses and/or assets constituting
a significant part of a business;

 

		(ii)	in connection with a broadly marketed offering and sale of Common Stock or convertible securities
for cash;

 

     15

     

    

 

		(iii)	upon the issuance of any shares of Common Stock or options or rights to purchase those shares or
any other award that relates to or has a value derived from the value of the Common Stock or other securities of the Company, in
each case issued pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the
Company or any of its subsidiaries;

 

		(iv)	for a change in the par value or no par value of the Common Stock; or

 

		(v)	upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or other
security exercisable for, or exchangeable or convertible into, Common Stock that was outstanding as of the date the Warrants were
first issued.

 

(k)              
Adjustment to Warrant Certificates. Irrespective of any adjustment or change in the Exercise Price or the number
of shares of Common Stock issuable upon the exercise of the Warrants, the Warrant Certificates theretofore and thereafter issued
may continue to express the Exercise Price per share and the number of shares which were expressed upon the initial Warrant Certificates
issued hereunder. The Company, however, may at any time in its sole discretion make any change in the form of Warrant Certificates
that it may deem appropriate to give effect to such adjustments and that does not affect the substance of the Warrant Certificates
or the rights, duties, liabilities or protections of the Warrant Agent, and any Warrant Certificate thereafter issued or countersigned,
whether in exchange or substitution for any outstanding Warrant Certificates or otherwise, may be in the form as so changed. For
the avoidance of doubt, no change to the Warrant Certificates or this Agreement as a result of an adjustment pursuant to this Section
10 shall require the consent of the Holders of the Warrants or the Warrant Agent.

 

		Section 11	Certification of Adjusted
                                         Exercise Price or Number of Shares of Common Stock; Notification of Exercise Period and
                                         Expiration Date

 

(a)              
Whenever any adjustment is made pursuant to Section 10 or 12, the Company shall cause notice of such adjustment to be mailed
to the Warrant Agent within fifteen days thereafter, such notice to include in reasonable detail (i) the events precipitating the
adjustment, (ii) the computation of any adjustments, and (iii) the Exercise Price, the number of shares or the securities or other
property purchasable upon exercise of each Warrant after giving effect to such adjustment. The calculations, adjustments and determinations
included in the Company’s notice shall, absent manifest error, be final and binding on the Company, the Warrant Agent and
the Holders. The Warrant Agent shall be entitled to rely on such notice and any adjustment therein contained and shall not be deemed
to have knowledge of any such adjustment unless and until it shall have received such notice. The Warrant Agent shall, within fifteen
days after receipt of such notice from the Company (which notice must specifically direct the Warrant Agent to perform the mailing),
cause a similar notice to be mailed to each Holder.

 

     16

     

    

 

(b)              
The Company will monitor the VWAP of the Common Stock. Within four (4) Business Days after the first Trading Day after the
Issuance Date on which the Common Stock has an average VWAP for the 10 consecutive Trading Days immediately prior to such date
that is greater than or equal to $17.50, the Company will instruct the Warrant Agent to give all Holders notice that the Exercise
Period may commence on a date prior to the Expiration Date and to provide instructions on how to exercise Warrants if and when
they become exercisable. The Company will issue a press release and file a Current Report on Form 8-K to notify the public if the
Exercise Period commences because the average VWAP for the Common Stock for 30 consecutive Trading Days is greater than or equal
to $17.50 promptly, but in no less than three Business Days after the Exercise Period commences. The Company shall notify the Warrant
Agent in writing of the commencement of the Exercise Period and the Warrant Agent shall not be deemed to have knowledge of the
commencement of the Exercise Date unless and until it shall have received such notice.

 

(c)              
If the Warrants become exercisable on or prior to the date that is six (6) weeks prior to the Expiration Date because the
average VWAP for the Common Stock for 30 consecutive Trading Days is greater than or equal to $17.50, then the Warrant Agent will,
upon written instruction from the Company, notify DTC and transmit to each Holder exercise forms detailing the terms and procedure
for exercise of the Warrants. As Warrants are exercised, the Company’s transfer agent will deliver the Warrant Shares issued
therefor to stockholders and the Warrant Agent shall forward the proceeds from the Warrant exercises to the Company in accordance
with Section 6(b).

 

		Section 12	Reclassification, Consolidation,
                                         Purchase, Combination, Sale or Conveyance

 

In case of any Business
Combination or reclassification of Common Stock (other than a reclassification of Common Stock referred to in Section 10), the
Holder’s right to receive shares of Common Stock issuable upon exercise of a Warrant shall be converted into the right to
exercise a Warrant to acquire the number of shares of stock or other securities or property (including cash) that the Common Stock
issuable (at the time of such Business Combination or reclassification) upon exercise of such Warrant immediately prior to such
Business Combination or reclassification would have been entitled to receive upon consummation of such Business Combination or
reclassification (the amount of such shares, other securities or property in respect of a share of Common Stock being herein referred
to as a “Unit of Reference Property”); and in any such case, if necessary, the provisions set forth herein with respect
to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably
be achievable, to the Holder’s right to exercise such Warrant in exchange for a Unit of Reference Property pursuant to this
paragraph. If the Business Combination causes the Common Stock to be converted into, or exchanged for, the right to receive more
than a single type of consideration (determined based in part upon any form of stockholder election), then the composition of the
Unit of Reference Property into which the Warrants will be exercisable shall be deemed to be the weighted average of the types
and amounts of consideration actually received by the holders of Common Stock per share of Common Stock. For the purposes of this
section, “Business Combination” means a merger, consolidation, statutory share exchange or similar transaction that
requires the approval of the Company’s stockholders.

 

     17

     

    

 

		Section 13	Fractional Warrants; Fractional
Exercise

 

(a)              
The Company shall not issue fractions of Warrants. The Warrant Agent shall not be required to effect any registration of
transfer or exchange which will result in the issuance of a fraction of a Warrant.

 

(b)              
Warrants may be exercised only in whole numbers of Warrant Shares. No fractional Warrant Shares are to be issued upon the
exercise of a Warrant, but rather the number of Warrant Shares to be issued shall be rounded up (if the number is .5 or above)
or down (if the number is less than .5), to the nearest whole number. If fewer than all of the Warrants evidenced by a Warrant
Certificate are exercised, a new Warrant Certificate for the number of unexercised Warrants remaining shall be executed by the
Company and countersigned by the Warrant Agent as provided in Section 3 of this Agreement, and delivered to the Holder at the address
specified on the books of the Warrant Agent or as otherwise specified by such Holder. If fewer than all of the Warrants evidenced
by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the Depository, its nominee
for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after
such exercise.

 

(c)              
The holder of a Warrant by the acceptance of the Warrant expressly waives his right to receive any fractional Warrant or
any fractional Warrant Shares upon exercise of a Warrant.

 

		Section 14	Agreement of Warrant Certificate
                                         Holders

 

Every holder of a Warrant
Certificate by accepting the same consents and agrees with the Company and the Warrant Agent and with every other holder of a Warrant
Certificate that:

 

(a)              
the Warrant Certificates are transferable only on the registry books of the Warrant Agent if surrendered at the office of
the Warrant Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer and all other information
and documents required hereunder; and

 

(b)              
the Company and the Warrant Agent may deem and treat the Holder of the Warrant Certificate as the absolute owner thereof
and of the Warrants evidenced thereby (notwithstanding any notations of ownership or writing on the Warrant Certificates made by
anyone other than the Company or the Warrant Agent) for all purposes whatsoever, and neither the Company nor the Warrant Agent
shall be affected by any notice to the contrary.

 

     18

     

    

 

		Section 15	Holder Not Deemed a Stockholder

 

No Holder, solely in
its capacity as an owner of a Warrant, shall be entitled to vote, receive dividends or distributions on, or be deemed for any purpose
the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise of the Warrants
represented thereby, nor shall anything contained herein or in any Warrant Certificate be construed to confer upon such Holder,
solely in its capacity as an owner of a Warrant, any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting stockholders, or to receive dividends or distributions
or subscription rights, or otherwise, until the Warrant or Warrants have been exercised in accordance with the provisions hereof.

 

		Section 16	Concerning the Warrant
Agent

 

The Company agrees
to pay to the Warrant Agent, in accordance with a mutually agreed upon fee schedule, reasonable compensation for all services rendered
by it hereunder and, from time to time, on demand of the Warrant Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder.

 

The Company covenants
and agrees to indemnify and to hold the Warrant Agent harmless against any and all liability, judgment, fine, penalty, claim, demand,
settlement, cost, expense (including reasonable fees of its legal counsel), loss or damage, which may be paid, incurred or suffered
by or to which it may become subject, arising from or out of, directly or indirectly, any claims or liability for any actions taken,
suffered, or omitted to be taken by the Warrant Agent in connection with the execution, acceptance, administration, exercise and
performance of its duties under this Agreement, including the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly, or enforcing its rights hereunder; provided, that such covenant and agreement does not extend
to, and the Warrant Agent shall not be indemnified with respect to, such liability, judgment, fine, penalty, claim, demand, settlement,
cost, expense, loss or damage incurred or suffered by the Warrant Agent as a result of, or arising out of, its own gross negligence,
bad faith, or willful misconduct (each as determined by a final non-appealable judgment of a court of competent jurisdiction).

 

From time to time,
the Company may provide the Warrant Agent with instructions concerning the services performed by the Warrant Agent hereunder. In
addition, at any time the Warrant Agent may apply to the Chief Executive Officer, the Chief Financial Officer or the Corporate
Controller of Company for instruction, and may consult with legal counsel for the Warrant Agent or the Company with respect to
any matter arising in connection with the services to be performed by the Warrant Agent under this Agreement. The Warrant Agent
and its agents and subcontractors shall not be liable and shall be indemnified by the Company for any action taken or omitted by
the Warrant Agent in reliance upon any instructions by such officers of the Company or upon the advice or opinion of legal counsel
for the Company. The Warrant Agent shall not be held to have notice of any change of authority of any such officer of the Company
until receipt of written notice thereof from the Company.

 

     19

     

    

 

To the extent the Company
is not also a party to an action, proceeding, suit or claim against the Warrant Agent concerning this Agreement or the performance
by the Warrant Agent of its duties hereunder, the Warrant Agent shall, as promptly as practicable, notify the Company thereof in
writing in accordance with Section 21 of the assertion of such action, proceeding, suit or claim against the Warrant Agent, after
the Warrant Agent has actual notice of such assertion of an action, proceeding, suit or claim or has been served with the summons
or other first legal process giving information as to the nature and basis of the action, proceeding, suit or claim; provided that
the failure to provide such notice shall not affect the rights of the Warrant Agent hereunder, except to the extent a court of
competent jurisdiction determines that such failure actually prejudiced the Company. The Company shall be entitled to participate
at its own expense in the defense of any such action, proceeding, suit or claim. The Warrant Agent agrees not to settle any litigation
in connection with any action, proceeding, suit or claim with respect to which it may seek indemnification from the Company without
the prior written consent of the Company, which consent shall not be unreasonably withheld, delayed or conditioned.

 

Notwithstanding anything
to the contrary herein, the Warrant Agent’s aggregate liability with respect to, arising from, or arising in connection with
this Agreement or any Warrant, or from all services provided or omitted to be provided under this Agreement, whether in contract,
or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid under this Agreement by the Company to Warrant
Agent as fees and charges, but not including reimbursable expenses, during the 12 months immediately preceding the event for which
recovery from the Warrant Agent is being sought.

 

The Warrant Agent and
the Company agree that all books, records, information and data pertaining to the business of the other party, including inter
alia, personal, non-public Holder information, which are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required
by law, including, without limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and
criminal actions).

 

The provisions of this
Section 16, Section 18, and Section 30 below shall survive the expiration of the Warrants and the termination of this Agreement
and the resignation, replacement or removal of the Warrant Agent in accordance with the terms hereof..

 

		Section 17	Purchase or Consolidation
                                         or Change of Name of Warrant Agent

 

Any Person into which
the Warrant Agent or any successor Warrant Agent may be merged or with which it may be consolidated, or any Person resulting from
any merger or consolidation to which the Warrant Agent or any successor Warrant Agent shall be party, or any Person succeeding
to the stockholder services of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under
this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided
that such Person would be eligible for appointment as a successor Warrant Agent under the provisions of Section 19. In case at
the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the Warrant Certificates shall
have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant
Agent and deliver such Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not
have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor
Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full
force provided in the Warrant Certificates and in this Agreement.

 

     20

     

    

 

In case at any time
the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so countersigned;
and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such
Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have
the full force provided in the Warrant Certificates and in this Agreement.

 

		Section 18	Duties of Warrant Agent

 

The Warrant Agent undertakes
the duties and obligations expressly imposed by this Agreement upon the following terms and conditions, by all of which the Company
and the Holders shall be bound:

 

(a)              
The Warrant Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in the absence
of bad faith and in accordance with such opinion.

 

(b)              
Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chief Executive Officer or the Chief Financial Officer of the Company and by the Treasurer or any
Assistant Treasurer or the Secretary or Assistant Secretary of the Company and delivered to the Warrant Agent; and such certificate
shall be full authentication to the Warrant Agent for any action taken, suffered or omitted to be taken by it under the provisions
of this Agreement in reliance upon such certificate.

 

(c)              
The Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct (each as
determined by a final non-appealable judgment of a court of competent jurisdiction).

 

     21

     

    

 

(d)              
The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement
or in the Warrant Certificates (except its countersignature thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company only.

 

(e)              
The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise
Price or the making of any change in the number of shares of Common Stock required under any provision of this Agreement (including
Sections 10 or 12) or responsible for the manner, method or amount of any such change or the ascertaining of the existence of facts
that would require any such adjustment or change (except with respect to the exercise of Warrants evidenced by Warrant Certificates
after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any
Warrant Certificate or as to whether any shares of Common Stock will, when issued, be duly authorized, validly issued, fully paid
and non-assessable.

 

(f)               
The Company shall perform, execute acknowledge and deliver, or cause to be performed, acknowledged, executed and delivered
all such further and other acts, documents, instruments and assurances as may be reasonably required by the Warrant Agent for the
carrying out or performing by the Warrant Agent of the provisions of this Agreement.

 

(g)              
The Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from
the Chief Executive Officer, the Chief Financial Officer or the Corporate Controller of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be liable and shall be indemnified and held harmless
for any action taken, suffered or omitted to be taken by it in accordance with instructions of any such officer.

 

(h)              
All funds received by Computershare under this Agreement that are to be distributed or applied by the Warrant Agent in the
performance of the services hereunder (the “Funds”) shall be held by Computershare as agent for the Company and deposited
in one or more bank accounts to be maintained by Computershare in its name as agent for the Company. Until paid pursuant to the
terms of this Agreement, Computershare will hold the Funds through such accounts in: deposit accounts of commercial banks with
Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating),
Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.).
Computershare shall have no responsibility or liability for any diminution of the Funds that may result from any deposit made by
Computershare in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution
or other third party. Computershare may from time to time receive interest, dividends or other earnings in connection with such
deposits. Computershare shall not be obligated to pay such interest, dividends or earnings to the Company, any holder or any other
party.

 

     22

     

    

 

(i)                
The Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of
the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for
any other Person.

 

(j)                
The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith or willful misconduct (each as determined by a final judgment of a court
of competent jurisdiction) in the selection and continued employment thereof.

 

(k)              
The Warrant Agent shall not be obligated to take any legal or other action hereunder which might, in its reasonable judgment,
subject or expose it to any expense or liability unless it shall have been furnished with an indemnity satisfactory to it.

 

(l)                
The Warrant Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations
relating to any registration statement filed with the Securities and Exchange Commission or this Agreement, including without limitation
obligations under applicable regulation or law.

 

(m)            
The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any Warrants
authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the issue and sale, or exercise, of the Warrants.

 

(n)              
The Warrant Agent shall act hereunder solely as agent for the Company. The Warrant Agent shall not assume any obligations
or relationship of agency or trust with any of the owners or holders of the Warrants.

 

		Section 19	Change of Warrant Agent

 

The Warrant Agent may
resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and,
in the event that the Warrant Agent or one of its affiliates is not also the transfer agent for the Company, to each transfer agent
of the Common Stock by registered or certified mail, and to the Holders by first-class mail. The Company may remove the Warrant
Agent or any successor Warrant Agent upon 30 days’ notice in writing, mailed to the Warrant Agent or successor Warrant Agent,
as the case may be, and to each transfer agent of the Common Stock by registered or certified mail, and to the Holders by first-class
mail. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal
or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by
a Holder (who shall, with such notice, submit his Warrant Certificate for inspection by the Company), then the Holder may apply
to any court of competent jurisdiction for the appointment of a new Warrant Agent. After appointment, the successor Warrant Agent
shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at
the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor
Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the Holders. However, failure
to give any notice provided for in this Section 19, or any defect therein, shall not affect the legality or validity of the resignation
or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.

 

     23

     

    

 

		Section 20	Issuance of New Warrant
                                         Certificates

 

Notwithstanding any
of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue new Warrant Certificates
evidencing Warrants in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise
Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the several
Warrant Certificates made in accordance with the provisions of this Agreement.

 

		Section 21	Notices

 

Notices or demands
authorized by this Agreement to be given or made (i) by the Warrant Agent or by any Holder to or on the Company, (ii) subject to
the provisions of Section 19, by the Company or by any Holder to or on the Warrant Agent or (iii) by the Company or the Warrant
Agent to any Holder, shall be deemed given (x) on the date delivered, if delivered personally or via email (other than to the Warrant
Agent), (y) on the first Business Day following the deposit thereof with Federal Express or another recognized overnight courier,
if sent by Federal Express or another recognized overnight courier, and (z) on the fourth Business Day following the mailing thereof
with postage prepaid, if mailed by registered or certified mail (return receipt requested), in each case to the parties at the
following addresses (or at such other address for a party as shall be specified by like notice):

 

     24

     

    

 

		(a)	If to the Company, to:

 

The LGL Group, Inc.

2525 Shader Rd

Orlando, Florida 32804

Attention: Joan Nano, CAO

Email: jnano@lglgroup.com

 

with a copy to:

 

Olshan Frome Wolosky LLP

1325 Avenue of the Americas,

New York, New York 10019

Attention: Elizabeth Gonzalez-Sussman; Kenneth A. Schlesinger

Email: egonzalez@olshanlaw.com; kschlesinger@olshanlaw.com

 

		(b)	If to the Warrant Agent, to:

 

Computershare Inc.

Computershare Trust Company, N.A.

150 Royall Street

Canton, Massachusetts 02021

Attention: Client Administration

Telecopy: (781) 575-2901

 

(c)              
If to any Holder, to the address of such Holder as shown on the registry books of the Company. Any notice required to be
delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company provided that
the Warrant Agent shall have no duty to deliver such notice to any Holder unless Company specifically directs the Warrant Agent
to do so in such notice.

 

		Section 22	Supplements and Amendments

 

(a)              
The Company and the Warrant Agent may from time to time supplement or amend this Agreement in writing signed by the Company
and the Warrant Agent, without the consent or approval of any Holders in order to cure any ambiguity or to cure, correct or supplement
any provision contained herein which may be defective or inconsistent with any other provisions herein, or to add, change or eliminate
any other provisions with regard to matters or questions arising hereunder which the Company and the Warrant Agent may deem necessary
or desirable and which the Company and the Warrant Agent deem shall not adversely affect the interests of any Holders.

 

(b)              
In addition to the foregoing, with the consent of the Holders entitled, upon exercise of Warrants, to receive not less than
a majority of the Warrant Shares issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose
of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or modifying in any
manner the rights of the Holders.

 

     25

     

    

 

(c)              
As a condition precedent to the Warrant Agent’s execution of any amendment to this Agreement, the Company shall deliver
to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment is in
compliance with the terms of this Section 22. Notwithstanding anything in this Agreement to the contrary, in no event shall the
Warrant Agent be required to execute any supplement or amendment to this Agreement that it has determined would adversely affect
its own rights, duties, obligations or immunities under this Agreement, without the written consent of the Warrant Agent.

 

		Section 23	Successors

 

All covenants and provisions
of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.

 

		Section 24	Benefits of this Agreement

 

Nothing in this Agreement
shall be construed to give any Person other than the Company and the Warrant Agent any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the
Holders.

 

		Section 25	Governing Law

 

This Agreement and
each Warrant Certificate issued hereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware
without giving effect to the conflicts of law principles thereof.

 

		Section 26	Counterparts

 

This Agreement may
be executed in any number of original or facsimile counterparts (by manual or facsimile signature) and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
A signature to this Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original
signature.

 

		Section 27	Captions

 

The captions of the
sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.

 

		Section 28	Information

 

The Company agrees
to promptly provide the Holders the information it is required to provide to the holders of the Common Stock.

 

     26

     

    

 

		Section 29	Force Majeure

 

Notwithstanding anything
to the contrary contained herein, the Warrant Agent shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, pandemics, epidemics, shortage of
supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures
or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.

 

		Section 30	Consequential Damages

 

Neither party to this
Agreement shall be liable to the other party for any consequential, indirect, punitive, special or incidental damages under any
provisions of this Agreement or for any consequential, indirect, punitive, special or incidental damages arising out of any act
or failure to act hereunder even if that party has been advised of or has foreseen the possibility of such damages.

 

[Signature Page Follows on Next Page]

 

     27

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	 	THE LGL GROUP, INC.
	 	 
	 	 
	 	By:	/s/ Patrick Huvane
	 	 	Name: Patrick Huvane
	 	 	Title: Senior Vice President

 

	 	COMPUTERSHARE TRUST COMPANY, N.A.
	 	 
	 	 
	 	By:	/s/ Collin Ekeogu
	 	 	Name: Collin Ekeogu
	 	 	Title: Manager, Corporate Actions

 

	 	COMPUTERSHARE INC.
	 	 
	 	 
	 	By:	/s/ Collin Ekeogu
	 	 	Name: Collin Ekeogu
	 	 	Title: Manager, Corporate Actions

 

     28

     

    

 

Exhibit 1

 

[FORM OF WARRANT CERTIFICATE]

 

EXERCISABLE ONLY IF COUNTERSIGNED BY THE
WARRANT

AGENT AS PROVIDED HEREIN.

 

Warrant Certificate Evidencing Warrants
to Purchase

Common Stock, par value of $0.01 per share, as described herein.

 

THE LGL GROUP, INC.

 

	No. ___________	CUSIP  [•]

  

VOID AFTER 5:00 p.m., NEW YORK CITY
TIME,

ON NOVEMBER 16, 2025

 

This Warrant Certificate
(“Warrant Certificate”) certifies that _______________ or its registered assigns is the registered holder (the
 “Holder”) of a Warrant (the “Warrant”) of The LGL Group, Inc., a Delaware corporation (the
 “Company”). Every five (5) Warrants entitle the holder, subject to the provisions contained herein and in the
Warrant Agreement (as defined below), to purchase one (1) share (the “Warrant Shares”) of common stock, par
value $0.01 per share, of the Company (the “Common Stock”) at the Exercise Price (as defined below). The price
per share at which each Warrant Share may be purchased at the time each Warrant is exercised (the “Exercise Price”)
is $12.50 initially, subject to adjustments as set forth in the Warrant Agreement.

 

This Warrant Certificate
is issued under and in accordance with the Warrant Agreement, dated as of November 10, 2020 (the “Warrant Agreement”),
between the Company and the Warrant Agent, and is subject to the terms and provisions contained in the Warrant Agreement, to all
of which terms and provisions the Holder of this Warrant Certificate and the beneficial owners of the Warrants represented by this
Warrant Certificate consent by acceptance hereof. Copies of the Warrant Agreement are on file and can be inspected at the below-mentioned
office of the Warrant Agent and at the office of the Company at 2525 Shader Rd, Orlando, Florida 32804. Capitalized terms used
but not defined herein shall have the meaning ascribed to them in the Warrant Agreement.

 

Subject to the terms
of the Warrant Agreement, each Warrant evidenced hereby shall be exercisable commencing upon the earlier of (i) November 16, 2025
(the “Expiration Date”) or (ii) the date on which the average VWAP for the Common Stock for the consecutive
30 Trading Days immediately prior to such date is greater than or equal to $17.50 (as adjusted for stock splits, stock dividends,
combinations, reclassifications and similar events) (the “Effective Date”). The Warrants shall cease to be exercisable
and shall terminate and become void, and all rights thereunder and under the Warrant Agreement shall cease, at the 5:00 p.m., New
York City time, on the Expiration Date. The period between the Effective Date and 5:00 p.m., New York City time, on the Expiration
Date is referred to herein as the “Exercise Period”.

 

The Holder of the Warrants
represented by this Warrant Certificate may exercise any Warrant evidenced hereby by delivering, not later than 5:00 p.m., New
York City time, on any Business Day during the Exercise Period to Computershare Inc.,
a Delaware corporation (“Computershare”), and its wholly-owned subsidiary, Computershare Trust Company, N.A.,
a federally chartered trust company (the “Trust Company”, and together with Computershare, the “Warrant
Agent”, which term includes any successor warrant agent under the Warrant Agreement) at 150 Royall Street, Canton, Massachusetts
02021, Attention: Client Administration, (i) this Warrant Certificate or, in the case of a Book-Entry Warrant Certificate (as defined
in the Warrant Agreement), the Warrants to be exercised (the “Book-Entry Warrants”) as shown on the records
of The Depository Trust Company (the “Depository”) to an account of the Warrant Agent at the Depository designated
for such purpose in writing by the Warrant Agent to the Depository, (ii) an election to purchase (“Election to Purchase”),
properly completed and duly executed by the Holder hereof on the reverse of this Warrant Certificate or properly delivered in accordance
with the Depositary’s procedures by the institution in whose account the Warrant is recorded on the records of the Depository
(the “Participant”), and (iii) the Exercise Price for each Warrant to be exercised in lawful money of the United
States of America by certified or official bank check or by bank wire transfer in immediately available funds, in each case payable
to the order of the Company.

 

     29

     

    

 

As used herein, the term
 “Business Day” means any day other than a Saturday, Sunday, any
day which is a federal legal holiday in the United States or a day on which the New York
Stock Exchange Inc. or banking institutions in the state of New York are authorized or obligated by law or executive order
to close.

 

Notwithstanding anything
else in this Warrant Certificate, or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration
statement covering the Warrant Shares to be issued upon exercise is effective under the Act and (ii) a prospectus thereunder relating
to the Warrant Shares is current. In no event shall the registered holder of this Warrant be entitled to receive a net-cash settlement,
shares of common stock or other consideration in lieu of physical settlement in shares of Common Stock.

 

Warrants may be exercised
only in whole numbers of Warrants. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather
the number of Warrant Shares to be issued shall be rounded up or down, as applicable, to the nearest whole number. If fewer than
all of the Warrants evidenced by this Warrant Certificate are exercised, a new Warrant Certificate for the number of Warrants remaining
unexercised shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 3 of the Warrant Agreement,
and delivered to the Holder of this Warrant Certificate at the address specified on the books of the Warrant Agent or as otherwise
specified by such Holder.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (i) if the security is then listed
or quoted on a Trading Market, the daily volume weighted average price of the security for such date (or the nearest preceding
date) on the Trading Market on which the security 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)), (ii) the volume weighted average price of the security
for such date (or the nearest preceding date) on the OTC Bulletin Board, (iii) if the security is not then listed or quoted for
trading on the OTC Bulletin Board and if prices for the security are then reported in the “Pink Sheets” published by
OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per share or unit of the security so reported, or (iv) in all other cases, the fair market value of a share or unit of the security
as determined by the Company's Board of Directors in reliance on the advice of a nationally recognized independent investment banking
firm retained by the Company for this purpose.

 

The Exercise Price and
the number of Warrant Shares purchasable upon the exercise of each Warrant shall be subject to adjustment as provided pursuant
to Section 10 of the Warrant Agreement.

 

Upon due presentment
for registration of transfer or exchange of this Warrant Certificate and all other documents and information required under Section
5 of the Warrant Agreement at the office of the Warrant Agent designated for such purpose, the Company shall execute, and the Warrant
Agent shall countersign and deliver, as provided in Section 5 of the Warrant Agreement, in the name of the designated transferee
one or more new Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants,
subject to the limitations provided in the Warrant Agreement.

 

Neither this Warrant
Certificate nor the Warrants evidenced hereby entitles the Holder to any of the rights of a stockholder of the Company, including,
without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent
or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or
any other matter.

 

The Warrant Agreement
and this Warrant Certificate may be amended as provided in the Warrant Agreement including, under certain circumstances described
therein, without the consent of the Holder of this Warrant Certificate or the Warrants evidenced thereby.

 

     30

     

    

 

THIS
WARRANT CERTIFICATE AND ALL RIGHTS HEREUNDER AND UNDER THE WARRANT AGREEMENT SHALL BE governed by, and construed in accordance
with, the laws of the State of Delaware without giving effect to the conflicts of law principles thereof.

 

This Warrant Certificate
shall not be entitled to any benefit under the Warrant Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
hereby may be exercised, unless this Warrant Certificate has been countersigned by the manual signature of the Warrant Agent.

 

IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed.

 

Dated: ______________ ____, 20__

 

	 	 	 	THE LGL GROUP, INC.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	COMPUTERSHARE INC., and	 	 	 
	COMPUTERSHARE TRUST COMPANY, N.A.	 	 	 
	as Warrant Agent	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	Name:	 	 	 
	 	Title:	 	 	 

 

     31

     

    

 

[REVERSE]

 

Instructions for Exercise of Warrant

 

To exercise the Warrants
evidenced hereby, the Holder must, by 5:00 p.m., New York City time, deliver to the Warrant Agent at its office designated
for such purpose, a certified or official bank check or a bank wire transfer in immediately available funds, in each case payable
to the Company, in an amount equal to the Exercise Price in full for the Warrants exercised. In addition, the Holder must provide
the information required below and deliver this Warrant Certificate to the Warrant Agent at the address set forth below and the
Book-Entry Warrants to the Warrant Agent in its account with the Depository designated for such purpose. The Warrant Certificate
and this Election to Purchase must be received by the Warrant Agent by 5:00 p.m., New York City time, on the exercise date
specified below or the Warrants will be deemed to be received and exercised on the immediately succeeding Business Day.

 

ELECTION TO PURCHASE

TO BE EXECUTED IF WARRANT HOLDER DESIRES

TO EXERCISE THE WARRANTS EVIDENCED HEREBY

 

The undersigned hereby
irrevocably elects to exercise, on __________, ____ (the “Exercise Date”), __________ Warrants, evidenced by
this Warrant Certificate, to purchase, __________ shares (the “Warrant Shares”) of Common Stock, par value of
$0.01 per share (the “Common Stock”) of The LGL Group, Inc., a Delaware corporation (the “Company”),
and represents that on or before the Exercise Date, such Holder has tendered payment for such Warrant Shares by certified or official
bank check payable to the order of the Company c/o Computershare Inc. and Computershare Trust Company, N.A., as Warrant Agent,
150 Royall Street, Canton, Massachusetts 02021, Attention: Client Administration, or by bank wire transfer in immediately available
funds payable to the Company at Account No. [     ], in each case in the amount of $_______ in accordance with the terms hereof

 

The undersigned requests that said number of Warrant Shares
be in fully registered form, registered in such names and delivered, all as specified in accordance with the instructions set forth
below.

 

If said number of Warrant
Shares is less than all of the Warrant Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate evidencing
the remaining balance of the Warrants evidenced hereby be issued and delivered to the Holder of the Warrant Certificate unless
otherwise specified in the instructions below.

 

     32

     

    

 

Dated: ______________ __, ____

 

Name__________________________ 

   (Please Print)

 

/   /   /   / - /   /   / - /   /   /   /   / 

(Insert Social Security or Other Identifying Number
of Holder)

 

Address__________________________

 

 

Signature__________________________

 

This Warrant may only be exercised by presentation
to the Warrant Agent at one of the following locations:

 

	 	By hand at:	Computershare Inc.	 
	 	 	Computershare Trust Company, N.A.
	 	 	150 Royall Street	 
	 	 	Canton, Massachusetts 02021
	 	 	Attention: Client Administration
	 	 	 	 
	 	By mail at:	Computershare Inc.	 
	 	 	Computershare Trust Company, N.A.
	 	 	150 Royall Street	 
	 	 	Canton, Massachusetts 02021
	 	 	Attention: Client Administration

 

The method of delivery of this Warrant Certificate is at the
option and risk of the exercising Holder and the delivery of this Warrant Certificate will be deemed to be made only when actually
received by the Warrant Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended.
In all cases, sufficient time should be allowed to ensure timely delivery.

 

(Instructions as to form and delivery of Warrant Shares and/or
Warrant Certificates)

 

	Name in which Warrant Shares are to be registered if other than in the name of the Holder of this Warrant Certificate:	 	 
	 	 	 
	Address to which Warrant Shares are to be mailed if other than to the address of the Holder of this Warrant Certificate as shown on the books of the Warrant Agent:	 	 
	 	 	(Street Address)
	 	 	 
	 	 	 
	 	 	(City and State) (Zip Code)
	 	 	 
	Name in which Warrant Certificate evidencing unexercised Warrants, if any, is to be registered if other than in the name of the Holder of this Warrant Certificate:	 	 
	 	 	 
	Address to which certificate representing unexercised Warrants, if any, is to be mailed if other than to the address of the Holder of this Warrant Certificate as shown on the books of the Warrant Agent:	 	 
	 	 	(Street Address)

 

     33

     

    

  

	 	 	 
	 	 	(City and State) (Zip Code)
	 	 	 
	 	 	Date:
	 	 	 
	 	 	 
	 	 	Signature
	 	 	 
	 	 	Signature must conform in all respects to the name of the Holder as specified on the face of this Warrant Certificate.
    If Warrant Shares, or a Warrant Certificate evidencing unexercised Warrants, are to be issued in a name other than that of
    the Holder hereof or are to be delivered to an address other than the address of such Holder as shown on the books of the
    Warrant Agent, the above signature must be guaranteed by a an Eligible Guarantor Institution (as that term is defined in Rule
    17Ad-15 of the Securities Exchange Act of 1934, as amended).

 

	SIGNATURE GUARANTEE	 	 	 
	 	 	 	 	 
	Name of Firm	 	 	 	 
	Address	 	 	 	 
	Area Code and Number	 	 	 	 
	Authorized Signature	 	 	 	 
	Name	 	 	 	 
	Title	 	 	 	 
	Dated:	 	, 20	 	 

 

     34

     

    

 

ASSIGNMENT

 

(FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT
HOLDER

DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY)

 

FOR VALUE RECEIVED, ____________ HEREBY SELL(S), ASSIGN(S) AND
TRANSFER(S) UNTO

 

	
	 	 
	
	 	 
	
	 	 
	
	 	

	(Please print name and address

including zip code of assignee)	 	(Please insert social security or

other identifying number of assignee)

 

the rights represented by the within Warrant Certificate and
does hereby irrevocably constitute and appoint ____________ Attorney to transfer said Warrant Certificate on the books of the Warrant
Agent with full power of substitution in the premises.

 

	 	Dated:
	 	 
	 	

	 	Signature
	 	 
	 	(Signature must conform in all respects to the name of the Holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended).

 

	SIGNATURE GUARANTEE	 	 	 
	 	 	 	 	 
	Name of Firm	 	 	 	 
	Address	 	 	 	 
	Area Code and Number	 	 	 	 
	Authorized Signature	 	 	 	 
	Name	 	 	 	 
	Title	 	 	 	 
	Dated:	 	, 20	 	 

 

35

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