Document:

Exhibit 10.3

 

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

 

COMMON
SHARE PURCHASE WARRANT

 

FRANCHISE
HOLDINGS INTERNATIONAL, INC. 

 

Warrant
Shares: 900,000

Date
of Issuance: February 25, 2020 (“Issuance Date”)

 

This
COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received (in connection with the issuance
of the $544,425.09 senior secured convertible promissory note to the Holder (as defined below) of even date (the “Note”),
Leonite Capital, LLC, a Delaware limited liability company (including any permitted and registered assigns, each a “Holder”),
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date of issuance hereof, to purchase from Franchise Holdings International, Inc., an a Nevada corporation (the “Company”),
up to 900,000 common shares (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant
to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by the Company
as of the date hereof in connection with that certain securities purchase agreement, dated February 25, 2020, by and between the
Company and the Holder (the “Purchase Agreement”).

 

Capitalized
terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of
this Warrant or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.10,
subject to adjustment as provided herein (including but not limited to cashless exercise), and the term “Exercise
Period” shall mean the period commencing on the Issuance Date and ending on 6:00 p.m. eastern standard time on the five-year
anniversary thereof.

 

    	 

    	 

    

 

1. EXERCISE
OF WARRANT.

 

(a) Mechanics
of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole
or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not
be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting
in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or
before the third Trading Day (the “Warrant Share Delivery Date”) following the date on which the Company shall
have received the Exercise Notice, and upon receipt by the Company of payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the
“Aggregate Exercise Price” and together with the Exercise Notice, the “Exercise Delivery Documents”)
in cash or by wire transfer of immediately available funds (or by cashless exercise, in which case there shall be no Aggregate
Exercise Price provided), the Company shall (or direct its transfer agent to) issue and dispatch by overnight courier to the address
as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder
or its designee, for the number of Common Shares to which the Holder is entitled pursuant to such exercise. Upon delivery of the
Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates
evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own
expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised.

 

If
the Company fails to cause its transfer agent to transmit to the Holder the respective Common Shares by the respective Warrant
Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion, and such
failure shall be deemed an event of default under the Note to the extent the Note remains outstanding and any portion thereof
unpaid.

 

If
at any time after the 9-month anniversary of the Issuance Date, the Market Price of one Common Share is greater than the Exercise
Price and the Warrant Shares are not registered under an effective non-stale registration statement of the Company, the Holder
may elect to receive Warrant Shares pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant
determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant and a
Notice of Exercise, in which event the Company shall issue to Holder a number of Common Shares computed using the following formula:

 

X
= Y (A-B)

     A

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

 

Y
= the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation).

 

A
= the Market Price (at the date of such calculation).

 

B
= Exercise Price (as adjusted to the date of such calculation).

 

(b) No
Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment
pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes
of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise
would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder
otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair market
value of a Warrant Share by such fraction.

 

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(c) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise as set
forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other persons acting
as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial
Ownership Limitation, as defined below. For purposes of the foregoing sentence, the number of Common Shares beneficially owned
by the Holder and its Affiliates shall include the number of Common Shares issuable upon exercise of this Warrant with respect
to which such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise
of the remaining, non-exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise
or conversion of the unexercised or non-converted portion of any other securities of the Company (including without limitation
any other Common Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this
paragraph (d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged
by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of
the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this paragraph applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall
be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and
of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination.

 

For
purposes of this paragraph, in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding
Common Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or its transfer
agent setting forth the number of Common Shares outstanding. Upon the request of a Holder, the Company shall within two Trading
Days confirm to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares
shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by
the Holder or its affiliates since the date as of which such number of outstanding Common Shares was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of Common Shares outstanding immediately after giving effect to the
issuance of Common Shares issuable upon exercise of this Warrant. Upon no fewer than 61 days’ prior notice to the Company,
a Holder may increase or decrease the Beneficial Ownership Limitation provisions of this paragraph and the provisions of this
paragraph shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is
delivered to the Company and shall only apply to such Holder and no other Holder. The limitations contained in this paragraph
shall apply to a successor Holder of this Warrant.

 

2. ADJUSTMENTS.
The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

 

(a) Distribution
of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of Common Shares, by way of return of capital or otherwise (including without limitation any distribution of
cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in
each such case:

 

(i) any
Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders
of Common Shares entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date,
to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing Sale Price
of the Common Shares on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined
in good faith by the Company’s Board of Directors) applicable to one Common Share, and (ii) the denominator of which shall
be the Closing Sale Price of the Common Shares on the Trading Day immediately preceding such record date; and

 

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(ii) Intentionally
Omitted.

 

(b) Proportional
Adjustments of Outstanding Common Shares and Common Share Dividends. If the Company shall at any time or from time to time
after the date hereof, issue additional Common Shares to all of its current shareholders on a pro rata basis or pay a share dividend
in Common Shares, then the Exercise Price shall be proportionately adjusted. Any adjustments under this Section 2(b) shall be
effective at the close of business on the date the share split becomes effective or the date of payment of the share dividend,
as applicable. For the avoidance of doubt, this adjustment shall not apply when shares of outstanding Common Share are merged
proportionally across all shareholders to form a smaller number of outstanding shares.

 

(c) Anti-dilution
Adjustment. If at any time while this Warrant is outstanding, the Company sells or grants (or has sold or granted, as the
case may be) any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or has sold or
issued, as the case may be, or announces any sale, grant or any option to purchase or other disposition), any Common Share or
other securities convertible into, exercisable for or otherwise entitled the any person or entity the right to acquire Common
Shares at an effective price per share that is lower than the then Exercise Price (such lower price, the “Base Exercise
Price” and such issuances, collectively, a “Dilutive Issuance”) (it being agreed that if the holder
of the Common Share or other securities so issued shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which
are issued in connection with such issuance, be entitled to receive Common Shares at an effective price per share that is lower
than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive
Issuance), then the Exercise Price shall be reduced to a price equal the Base Exercise Price. Such adjustment shall be made whenever
such Common Share or other securities are issued, Notwithstanding the foregoing, no adjustment will be made under this Section
2(c) in respect of an Exempt Issuance. For purposes of this Section 2(c), an “Exempt Issuance” shall have the
meaning ascribed to such term in the Note. In the event of an issuance of securities involving multiple tranches or closings,
any adjustment pursuant to this Section 2(c) shall be calculated as if all such securities were issued at the initial closing.

 

3. FUNDAMENTAL
TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with or
into another entity and the Company is not the surviving entity (such surviving entity, the “Successor Entity”),
(ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii)
any tender offer or exchange offer (whether by the Company or by another individual or entity, and approved by the Company) is
completed pursuant to which holders of Common Shares are permitted to tender or exchange their Common Shares for other securities,
cash or property and the holders of at least 50% of the Common Shares accept such offer, or (iv) the Company effects any reclassification
of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged
for other securities, cash or property (other than as a result of a subdivision or combination of Common Shares) (in any such
case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have
the right to receive the number of Common Shares of the Successor Entity or of the Company and any additional consideration (the
“Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of the number of Common Shares for which this Warrant is exercisable immediately
prior to such event (disregarding any limitation on exercise contained herein solely for the purpose of such determination). For
purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one Common Share in such Fundamental Transaction,
and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any Successor Entity in such Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.

 

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4. NON-CIRCUMVENTION.
The Company covenants and agrees that it will not, by amendment of its certificate of formation, operating agreement or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any
Common Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Common
Shares upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved,
free from preemptive rights, a sufficient number of Common Shares to provide for the exercise of the rights represented by this
Warrant (without regard to any limitations on exercise).

 

5. WARRANT
HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not
entitle the Holder to any voting rights or other rights as a shareholder of the Company. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the
Company.

 

6. REISSUANCE.

 

(a) Lost,
Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof),
issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

 

(b) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which
is the same as the Issuance Date.

 

7. TRANSFER.

 

(a) Notice
of Transfer. The Holder agrees that, if practicable, but without any obligation to do so, it will give written notice to the
Company of its intent to transfer this Warrant or any Warrant Shares, describing briefly the manner of any proposed transfer.
Promptly upon receiving such written notice, the Company shall present copies thereof to the Company’s counsel. If the proposed
transfer may be effected without registration or qualification (under any federal or state securities laws), the Company, as promptly
as practicable, shall notify the Holder thereof, whereupon the Holder shall be entitled to transfer this Warrant or to dispose
of Warrant Shares received upon the previous exercise of this Warrant, all in accordance with the terms of the notice delivered
by the Holder to the Company; provided, however, that an appropriate legend may be endorsed on this Warrant or the certificates
for such Warrant Shares respecting restrictions upon transfer thereof necessary or advisable in the opinion of counsel and satisfactory
to the Company to prevent further transfers which would be in violation of Section 5 of the Securities Act and applicable state
securities laws; and provided further that the prospective transferee or purchaser shall execute the Assignment of Warrant attached
hereto as Exhibit B and such other documents and make such representations, warranties, and agreements as may be required
solely to comply with the exemptions relied upon by the Company for the transfer or disposition of the Warrant or Warrant Shares.

 

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(b) If
the proposed transfer or disposition of this Warrant or such Warrant Shares described in the written notice given pursuant to
this Section 7 may not be effected without registration or qualification of this Warrant or such Warrant Shares, the Holder will
limit its activities in respect to such transfer or disposition as are permitted by law.

 

(c) Any
transferee of all or a portion of this Warrant shall succeed to the rights and benefits of the initial Holder of this Warrant
under Section 5.9 of the Purchase Agreement.

 

8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice
(i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment
and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the Common Shares, (B) with respect to any grants, issuances or sales of any shares or other securities directly
or indirectly convertible into or exercisable or exchangeable for Common Shares or other property, pro rata to the holders of
Common Shares or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided
in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided
to the Holder.

 

9. AMENDMENT
AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the Company and the Holder.

 

10. GOVERNING
LAW. This Warrant shall be governed by and construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Warrant shall be brought only in the state courts or federal courts located in Rockland County, New York. The parties
to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be
entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Warrant
or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.

 

11. ACCEPTANCE.
Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained
herein.

 

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

 

(a) “Nasdaq”
means The Nasdaq Stock Market (www.Nasdaq.com).

 

(b) “Closing
Sale Price” means, for any security as of any date, (i) the last closing trade price for such security on the Principal
Market, as reported by Nasdaq, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Nasdaq,
or (ii) if the foregoing does not apply, the last trade price of such security in the over-the-counter market for such security
as reported by Nasdaq, or (iii) if no last trade price is reported for such security by Nasdaq, the average of the bid and ask
prices of any market makers for such security as reported by the OTC Markets or any other similar domestic or foreign exchange.
If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing
Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
All such determinations to be appropriately adjusted for any share dividend, share split, share combination or other similar transaction
during the applicable calculation period.

 

(c) “Common
Share” means the Common Shares of the Company and any other class of securities into which such securities may hereafter
be reclassified or changed.

 

(d) “Common
Share Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time
Common Shares, including without limitation any debt, preferred shares, rights, options, warrants or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares.

 

(e) “Principal
Market” means the primary national securities exchange or over the counter market on which the Common Shares are then
traded.

 

(f) “Market
Price” means the highest traded price of the Common Shares during the thirty (30) Trading Days prior to the date of
the respective Exercise Notice.

 

(g) “Trading
Day” means (i) any day on which the Common Shares are listed or quoted and traded on its Principal Market, (ii) if the
Common Shares are not then listed or quoted and traded on any national securities exchange, then a day on which trading occurs
on any over-the-counter markets, or (iii) if trading does not occur on the over-the-counter markets, any Business Day.

 

[signature
page follows]

 

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

 

	 	FRANCHISE
    HOLDINGS INTERNATIONAL, INC.
	 	 	 
	 	 	/s/ Steven Rossi
	 	Name:	Steven
Rossi
	 	Title: 	CEO

 

    	 

    	 

    

 

EXHIBIT
A

 

EXERCISE
NOTICE

 

(To
be executed by the registered holder to exercise this Common Share Purchase Warrant)

 

 

The
Undersigned holder hereby exercises the right
to purchase _________________ of the Common Shares (“Warrant Shares”) of 1847 Holdings LLC., a Delaware limited liability
company (the “Company”), evidenced by the attached copy of the Common Share Purchase Warrant (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

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

 

		[  ]	a
                                         cash exercise with respect to _________________ Warrant Shares; or
	 	 	 
	 	[  ]	by cashless exercise pursuant to the Warrant.

 

	2.	Payment
                                         of Exercise Price. If cash exercise is selected above, the holder shall pay the applicable
                                         Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
                                         with the terms of the Warrant.

 

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

 

	Date:
    	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	(Print
    Name of Registered Holder)
	 	 	 	 	            
	 	 	 	By: 	 
	 	 	 	Name: 	 
	 	 	 	Title: 	 

 

    	 

    	 

    

 

EXHIBIT
B

 

ASSIGNMENT
OF WARRANT

 

(To
be signed only upon authorized transfer of the Warrant)

 

 

For
Value Received, the undersigned hereby sells,
assigns, and transfers unto ____________________ the right to purchase _______________ Common Shares of Inception Mining, Inc.,
to which the within Common Share Purchase Warrant relates and appoints ____________________, as attorney-in-fact, to transfer
said right on the books of Inception Mining, Inc. with full power of substitution and re-substitution in the premises. By accepting
such transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.

 

	Dated:	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	(Signature) *
	 	 	 	 
	 	 	 	 
	 	 	 	(Name)
	 	 	 	 
	 	 	 	 
	 	 	 	(Address)
	 	 	 	 
	 	 	 	 
	 	 	 	(Social Security or Tax Identification No.)

 

*
The signature on this Assignment of Warrant must correspond to the name as written upon the face of the Common Share Purchase
Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation,
partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.Exhibit 10.4

 

SECURITY
AND PLEDGE AGREEMENT

 

This
SECURITY AND PLEDGE AGREEMENT (the “Agreement”) is made and entered into on February 25, 2020 by and between
Franchise Holdings International, Inc. (“FNHI”),
a Nevada corporation, and Worksport, Ltd. (“Worksport”),
an Ontario corporation, (collectively “the “Debtor”) and Leonite
Capital LLC, a Delaware limited liability company, and its permitted endorsees, transferees and assigns (collectively,
the “Secured Party”).

 

RECITALS

 

A.
Concurrently herewith, Debtor and the Secured Party have entered into a Securities Purchase Agreement (the “Securities
Purchase Agreement”) and certain other agreements, pursuant to which the Debtor issued that certain senior secured convertible
promissory note in the principal amount of up to $544,425.09 (the “Note”) to the Secured Party.

 

B.
The Debtor now enters into this Agreement with the Secured Party as security for Debtor’s Obligations (as defined below).

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of their respective promises contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.
Definitions. Terms used but not otherwise defined in this Agreement that are defined in Division 9 of the Uniform
Commercial Code as adopted in the state of Nevada (the “UCC”) (such as “account,” “adverse
claim,” “chattel paper,” “deposit account,” “document,” “equipment,”
“fixtures,” “general intangibles,” “goods,” “instruments,”
“inventory,” “investment property,” “proceeds,” and “supporting
obligations”) shall have the respective meanings given such terms in Division 9 of the UCC. Capitalized terms used in
this Agreement and not defined elsewhere herein or in the Securities Purchase Agreement shall have the meanings set forth below:

 

“Collateral”
means all of the collateral identified on Exhibit A hereto, as well as all of Debtor’s tangible and intangible personal
property assets, including, but not limited to, all of the following: (i) all accounts, health-care-insurance receivables, cash
and currency, chattel paper, deposit accounts, documents, equipment, fixtures, general intangibles, instruments, intellectual
property, inventory, investment property, Negotiable Collateral, loans receivable, motor vehicles, Pledged Equity, goods, supporting
obligations, Debtor’s Books, and such other assets of Debtor as may hereafter arise or Debtor may hereafter acquire or in
which the Secured Party may from time-to-time obtain a security interest, and (ii) the proceeds of any of the foregoing, including,
but not limited to, proceeds of insurance covering the foregoing or any portion thereof; provided, however, that
notwithstanding anything to the contrary contained in this Agreement, the Collateral does not include any “hazardous waste”
as that term is defined under 42 U.S.C. section 6903(5), as such section may be from time to time amended, or under any regulations
thereunder.

 

“Debtor’s
Books” means and includes all of Debtor’s books and records in any medium or form, including, but not limited
to, all records, ledgers and computer programs, disk or tape files, thumb drives, material stored in the “cloud”,
printouts and other information indicating, summarizing or evidencing the Collateral.

 

    	 	 	 

    	 

    

 

“Equity
Interests” means, with respect to any person, all of the shares of capital stock of (or other ownership or profit
interests in) such person, all of the warrants, options or other rights for the purchase or acquisition from such person of shares
of capital stock of (or other ownership or profit interests in) such person, all of the securities convertible into or exchangeable
for shares of capital stock of (or other ownership or profit interests in) such person or warrants, rights or options for the
purchase or acquisition from such person of such shares (or such other interests), and all of the other ownership or profit interests
in such person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“Event
of Default” has the meaning specified in Section 6 of this Agreement.

 

“Negotiable
Collateral” means and includes all of Debtor’s presently existing and hereafter acquired or arising letters
of credit, advices of credit, promissory notes, drafts, instruments, documents, Equity Interests in any entity, leases of personal
property and chattel paper, as well as Debtor’s Books relating to any of the foregoing.

 

“Obligations”
means and includes any and all present or future indebtedness or obligations of Debtor owing to the Secured Party under the
Note and the other Subscription Documents, including, without limitation, (i) any amendments to any of the foregoing and (ii)
all interest and other payments required thereunder that are not paid when due, and (iii) all of the Secured Party Expenses which
Debtor is required to pay or reimburse by this Agreement, by law, or otherwise.

 

“Permitted
Liens” means (i) statutory liens of landlords and liens of carriers, warehousemen, bailees, mechanics, materialmen
and other like liens imposed by law, created in the ordinary course of business and securing amounts not yet due (or which are
being contested in good faith, by appropriate proceedings or other appropriate actions which are sufficient to prevent imminent
foreclosure of such liens), and with respect to which adequate reserves or other appropriate provisions are being maintained by
Debtor in accordance with generally accepted accounting principles (“GAAP”) , (ii) deposits made (and the liens
thereon) in the ordinary course of business of Debtor (including, without limitation, security deposits for leases, indemnity
bonds, surety bonds and appeal bonds) in connection with workers’ compensation, unemployment insurance and other types of
social security benefits or to secure the performance of tenders, bids, contracts (other than for the repayment or guarantee of
borrowed money or purchase money obligations), statutory obligations and other similar obligations arising as a result of progress
payments under government contracts, (iii) liens for taxes not yet due and payable or which are being contested in good faith
and with respect to which adequate reserves are being maintained by Debtor in accordance with GAAP, (iv) purchase money liens
relating to the acquisition of equipment, machinery or other goods of Debtor approved in writing by the Secured Party (which approval
shall not be unreasonably withheld, conditioned or delayed) and (v) liens in favor of the Secured Party under the Subscription
Documents.

 

“Pledged
Equity” means, with respect to Debtor, 100% of the issued and outstanding Equity Interests of any subsidiary that
is directly owned, or will be owned, by Debtor, in each case together with the certificates (or other agreements or instruments),
if any, representing such shares, and all options and other rights, contractual or otherwise, with respect thereto, including,
but not limited to, the following:

 

(1)
all Equity Interests representing a dividend thereon, or representing a distribution or return of capital upon or in respect thereof,
or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights
or options issued to the holder thereof, or otherwise in respect thereof; and

 

(2)
in the event of any consolidation or merger involving the issuer thereof and in which such issuer is not the surviving person,
all shares of each class of the Equity Interests of the successor person formed by or resulting from such consolidation or merger,
to the extent that such successor person is a direct subsidiary of an Debtor.

 

    	 	2	 

    	 

    

 

The
term “Pledged Equity” specifically includes, but is not limited to, all rights of Debtor embodied in or arising out
of the Debtor’s status as a shareholder or member, consisting of: (a) all economic rights, including without limitation,
all rights to share in the profits and losses and all rights to receive distributions of the assets; and (b) all governance rights,
including without limitation, all rights to vote, consent to action and otherwise participate in the management.

 

“Secured
Party Expenses” means and includes (i) all costs or expenses required to be paid by Debtor under this Agreement
that are instead paid or advanced by the Secured Party, including without limitation, all taxes, insurance, satisfaction of liens,
securities interests, encumbrances or other claims at any time levied or placed on the Collateral, (ii) all reasonable costs and
expenses incurred to correct any default or enforce any provision of this Agreement, or in gaining possession of, maintaining,
disabling, handling, preserving, storing, shipping, selling, preparing for sale or advertising to sell all or any part of the
Collateral, irrespective of whether a sale is consummated, and (iii) all reasonable costs and expenses (including reasonable attorney’s
fees) incurred by the Secured Party in enforcing or defending this Agreement, irrespective of whether suit is brought.

 

2.
Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural include
the singular and vice versa, to the part include the whole, “including” is not limiting, and “or” has
the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. Section references are to this Agreement, unless otherwise specified.

 

3.
Creation of Security Interest. In order to secure Debtor’s timely payment of the Obligations and timely performance
of each and all of its covenants and obligations under this Agreement and any other document, instrument or agreement executed
by Debtor or delivered by Debtor to the Secured Party in connection with the Obligations, Debtor hereby unconditionally and irrevocably
grant, pledge and hypothecate to the Secured Party a continuing security interest in and to, a lien upon, assignment of, and right
of set-off against, all presently existing and hereafter acquired or arising Collateral. Such security interest shall be a first
priority security interest. Such security interest shall attach to all Collateral without further act on the part of the Secured
Party or Debtor.

 

4.
Filings; Further Assurances.

 

(a)
General. The Secured Party is authorized to file a UCC-1 Financing Statement (or its equivalent) with the Secretary of
State of the State of Nevada and in any other jurisdictions where the Secured Party chooses to file, with respect to the Debtor.
Debtor also authorize the filing by the Secured Party of such other UCC financing statements, continuation financing statements,
fixture filings, filing appropriate notices in federal registries including the United States Patent and Trademark Office, security
agreements, mortgages, deeds of trust, chattel mortgages, assignments, assignments of rents, motor vehicle lien acknowledgments
and other documents as the Secured Party may reasonably require in order to perfect, maintain, protect or enforce its security
interest in the Collateral or any portion thereof and in order to fully consummate all of the transactions contemplated under
this Agreement. Subject to the foregoing, if so requested by the Secured Party at any time hereafter, Debtor shall promptly execute
and deliver to the Secured Party such fixture filings, agreements, security agreements, mortgages, deeds of trust, chattel mortgages,
assignments, motor vehicle lien acknowledgments and other documents as the Secured Party may reasonably require from such Debtor
in order to perfect, maintain, protect or enforce its rights under this Agreement. Debtor shall promptly deliver to the Secured
Party all certificates and instruments constituting the Pledged Equity in suitable form for transfer by delivery and accompanied
by duly executed instruments of transfer or assignment in blank. Debtor hereby irrevocably makes, constitutes and appoints the
Secured Party as such Debtor’s true and lawful attorney with power, upon Debtor’s failure or refusal to promptly comply
with its obligations in this Section 4(a), to sign the name of Debtor on any of the above-described documents or on any other
similar documents which need to be executed, recorded or filed in order to perfect, maintain, protect or enforce the Secured Party’s
security interest in the Collateral. Debtor further agrees to enter into such control agreements with the Secured Party and such
third parties as may be necessary to obtain a first priority security interest in the Collateral, including deposit accounts and
Pledged Equity, and agrees to use best efforts to obtain the assent of the third parties to said agreements.

 

    	 	3	 

    	 

    

 

(b)
Mortgage. Debtor hereby authorizes Secured Party to obtain a mortgage on any and all of its real estate. Debtor covenants
and agrees that it will execute any documents, provide any information and take such other action as is requested by Secured Party
to effectuate such mortgage.

 

(c)
Additional Matters. Without limiting the generality of Section 4(a), Debtor will at the reasonable written request of the
Secured Party, appear in and defend any action or proceeding which is reasonably expected to have a material and adverse effect
with respect to such Debtor’s title to, or the security interest of the Secured Party in, the Collateral.

 

5.
Representations, Warranties and Agreements. Debtor represents, warrants and agrees as follows:

 

(a)
No Other Encumbrances. Debtor has good and marketable title to its Collateral, free and clear of any liens, claims, encumbrances
and rights of any kind, except the Liens scheduled pursuant to the Securities Purchase Agreement or as otherwise approved in writing
by the Secured Party, and has the right to pledge, sell, assign or transfer the same. There exists no adverse claim with respect
to the Pledged Equity.

 

(b)
Authorization of Pledged Equity. All Pledged Equity is duly authorized and validly issued, is fully paid and, to the extent
applicable, nonassessable and is not subject to the preemptive rights of any person.

 

(c)
Security Interest/Priority. This Agreement creates a valid security interest in favor of the Secured party in the Collateral
of Debtor and, when properly perfected by filing shall constitute a valid and perfected first priority security interest in such
Collateral (including all uncertificated Pledged Equity consisting of partnership or limited liability company interests that
do not constitute securities), to the extent such security interest can be perfected by filing under the UCC, free and clear of
all liens except for liens permitted by the Securities Purchase Agreement. The taking possession by the Secured Party of the certificated
securities (if any) evidencing the Pledged Equity and all other Instruments constituting Collateral will perfect and establish
the first priority of the Secured Party’s security interest in all the Pledged Equity evidenced by such certificated securities
and such instruments. With respect to any Collateral consisting of a deposit account, investment property, securities entitlement
or held in a securities account, upon execution and delivery by the Debtor, the applicable depository bank or securities intermediary
and the Secured Party of an agreement granting control to the Secured Party over such Collateral, the Secured Party shall have
a valid and perfected first priority security interest in such Collateral.

 

    	 	4	 

    	 

    

 

(d)
Consents; Etc. There are no restrictions in any organizational document governing any Pledged Equity or any other document
related thereto which would limit or restrict (i) the grant of a security interest pursuant to this Agreement on such Pledged
Equity, (ii) the perfection of such security interest or (iii) the exercise of remedies in respect of such perfected security
interest in the Pledged Equity as contemplated by this Agreement. Except for (i) the filing or recording of UCC financing statements,
(ii) the filing of appropriate notices with the United States Patent and Trademark Office, the United States Copyright Office,
other applicable federal registries and local registries regarding assignments of rents and fixture filings, (iii) obtaining control
to perfect the security interests created by this Agreement (to the extent required under Section 4 hereof), (iv) such actions
as may be required by laws affecting the offering and sale of securities, and (v) consents, authorizations, filings or other actions
which have been obtained or made, no consent or authorization of, filing with, or other act by or in respect of, any arbitrator
or governmental authority and no consent of any other person (including, without limitation, any stockholder, member or creditor
of Debtor), is required for (A) the grant by Debtor of the security interest in the Collateral granted hereby or for the execution,
delivery or performance of this Agreement by Debtor, (B) the perfection of such security interest (to the extent such security
interest can be perfected by filing under the UCC, the granting of control (to the extent required by Section 4(a) hereof) or
by filing an appropriate notice with the United States Patent and Trademark Office, the United States Copyright Office or other
applicable registry) or (C) the exercise by the Secured party of the rights and remedies provided for in this Agreement.

 

(e)
Right to Inspect the Collateral. The Secured Party shall have the right, during usual business hours of the applicable Debtor
and upon reasonable advance notice, to inspect and examine the Collateral. Debtor agrees that any reasonable expenses incurred
by the Secured Party in connection with this Section 5(e) during the continuance of an Event of Default shall constitute Secured
Party Expenses.

 

(f)
Negative Covenants. Except for sale of inventory in the ordinary course of business, Debtor shall not (i) sell, lease or otherwise
dispose of, relocate or transfer, any of the Collateral, except dispositions of Collateral that is worn out, obsolete or no longer
necessary in the business of Debtor, (ii) allow any liens on or grant security interests in the Collateral except the Permitted
Liens or (iii) change any of their names or add any new fictitious name without the written consent of the Secured Party.

 

(g)
Relocation of Principal Place of Business. The principal place of business of Debtor, and the addresses at which the Collateral
is located at 3120 Rutherford Road, Suite 414, Vaughan, Ontario, Canada L4K 0B2, and such other address as indicated on Schedule
5(e) hereto. Debtor shall not, without at least thirty (30) days prior written notice to the Secured Party, relocate such principal
place of business or the Collateral, with no relocation being permitted outside the United States in any event.

 

(h)
Further Information. Debtor shall promptly supply the Secured Party with such information concerning Debtor’s business as
the Secured Party may reasonably request from time-to-time hereafter, and shall within five (5) business days of obtaining knowledge
thereof, notify the Secured Party of any event which constitutes an Event of Default.

 

(i)
Solvency. Debtor is now and shall be at all times hereafter able to pay its debts (including trade debts) as they mature.

 

(j)
Secured Party Expenses. Debtor shall, within fifteen (15) business days of written demand from the Secured Party accompanied by
adequate documentation of such expenses, reimburse the Secured Party for all sums expended by it which constitute Secured Party
Expenses and, in the event that Debtor does not pay any Secured Party Expenses payable to a third party within fifteen (15) business
days after notice thereof, then the Secured Party may immediately and without further notice pay such Secured Party Expenses on
Debtor’s behalf. All such expenses shall become a part of the Obligations and, at the Secured Party’s option, will
(i) be payable on demand or (ii) be added to the balance of the Note and be payable proportionately with any installment payments
that become due during the remaining term of the Note or, (iii) at Secured Party’s option, may be treated as a balloon payment
which will be due and payable at the maturity of the Note. This Agreement shall also secure payment of those amounts.

 

    	 	5	 

    	 

    

 

(k)
Commercial Tort Claims. Debtor have no pending commercial tort claim (as a plaintiff) against any individual or entity (a “Commercial
Claim”). Debtor shall promptly deliver to the Secured Party notice of any Commercial Claim that a Debtor may bring against
any individual or entity, together with such information with respect thereto as the Secured Party may reasonably request. Within
ten (10) days after a written request by the Secured Party, Debtor shall grant the Secured Party a security interest in any pending
Commercial Claim to the extent such security interest is permitted by applicable law.

 

(l)
Reliance by the Secured Party; Representations Cumulative. Each representation, warranty and agreement contained in this Agreement
shall be conclusively presumed to have been relied on by the Secured Party regardless of any investigation made or information
possessed by the Secured Party. The representations, warranties and agreements set forth herein shall be cumulative and in addition
to any and all other representations, warranties and agreements set forth in the Subscription Documents or any other documents
created after the Closing Date and signed by Debtor.

 

6.
Events of Default. The occurrence of any Event of Default under the Note, after the expiration of any applicable
grace or cure period, shall constitute an “Event of Default” by Debtor under this Agreement.

 

7.
Rights and Remedies.

 

(a)
Rights and Remedies of the Secured Party.

 

(i)
Upon the occurrence and during the continuance of an Event of Default, without notice of election and without demand, the Secured
Party may cause any one or more of the following to occur, all of which are authorized by Debtor:

 

(A)
The Secured Party may make such payments and do such acts as it reasonably considers necessary to protect its security interest
in the Collateral. Debtor agree to promptly assemble and make available the Collateral if the Secured Party so requires. Debtor
authorize the Secured Party to enter the premises where the Collateral is located, take and maintain possession of the Collateral,
or any part thereof, and pay, purchase, contest or compromise any encumbrance, claim, right or lien which, in the reasonable opinion
of the Secured Party, appears to be prior or superior to its security interest in violation of this Agreement, and to pay all
reasonable expenses incurred in connection therewith.

 

(B)
The Secured Party shall be automatically deemed to be granted a license or other appropriate right to use, without charge or representation
or warranty, Debtor’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, and any other property of a similar nature, as it pertains to the Collateral, in completing production of,
advertising for sale and selling any Collateral.

 

(C)
The Secured Party may ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale and sell (in
the manner provided for herein) the Collateral.

 

    	 	6	 

    	 

    

 

(D)
The Secured Party may sell the Collateral at either a public or private sale, or both (which in the case of a private sale of
Pledged Equity, shall be to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such
securities for their own accounts, for investment and not with a view to the distribution or resale thereof), by way of one or
more contracts or transactions, for cash or on terms, in such manner and at such places (including Debtor’s premises) as
is commercially reasonable (it not being necessary that the Collateral be present at any such sale). In the case of a sale of
Pledged Equity, the Secured party shall have no obligation to delay sale of any such securities for the period of time necessary
to permit the issuer of such securities to register such securities for public sale under the Securities Act of 1933. Debtor further
acknowledges and agrees that any offer to sell any Pledged Equity which has been (i) publicly advertised on a bona fide basis
in a newspaper or other publication of general circulation in the financial community of New York, New York (to the extent that
such offer may be advertised without prior registration under the Securities Act of 1933), or (ii) made privately in the manner
described above shall be deemed to involve a “public sale” under the UCC, notwithstanding that such sale may not constitute
a “public offering” under the Securities Act of 1933, and the Secured Party may, in such event, bid for the purchase
of such securities

 

(E)
The Secured Party shall be entitled to give notice of the disposition of the Collateral as follows: (1) the Secured Party shall
give Debtor a notice in writing of the time and place of public sale, or, if the sale is a private sale or some other disposition
other than a public sale is to be made of the Collateral, the time on or after which the private sale or other disposition is
to be made, (2) the notice shall be personally delivered or mailed, postage prepaid, to Debtor at least ten (10) days before the
date fixed for the sale, or at least ten (10) days before the date on or after which the private sale or other disposition is
to be made, unless the Collateral is perishable or threatens to decline speedily in value in which case the Secured Party shall
use commercially reasonable efforts to provide such notice to Debtor as far in advance of such disposition as is practicable.

 

(F)
The Secured Party may purchase all or any portion of the Collateral at any public sale by credit bid or other appropriate payment
therefor.

 

(G)
To the extent permitted by applicable law, the Secured Party shall have the following rights and remedies regarding the appointment
of a receiver: (1) the Secured Party may have a receiver appointed as a matter of right, (2) the receiver may be an employee of
the Secured Party and may serve without bond, and (3) all fees of the receiver and his or her attorney shall be Secured Party
Expenses and become part of the Obligations and shall be payable on demand, with interest at the Rate specified in the Note from
the date of expenditure until repaid.

 

(H)
To the extent permitted by applicable law, the Secured Party, either itself or through a receiver, may collect the payments, rents,
income, and revenues from the Collateral. The Secured Party may at any time, in its reasonable discretion, transfer any Collateral
into its own name or that of its nominee(s) and receive the payments, rents, income, and revenues therefrom and hold the same
as security for the Obligations or apply it to payment of the Obligations in such order of preference as the Secured Party may
determine. Insofar as the Collateral consists of accounts, general intangibles, loans receivable, insurance policies, instruments,
chattel paper, choses in action, or similar property, the Secured Party may demand, collect, issue receipts for, settle, compromise,
adjust, sue for, foreclose, or otherwise realize on the Collateral as the Secured Party may determine (in its reasonable discretion),
whether or not the Obligations are then due. For these purposes, the Secured Party may, on behalf of and in the name of Debtor,
(1) receive, open and dispose of mail addressed to Debtor, (2) change any address to which mail and payments are to be sent, and
(3) endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to the payment, shipment,
or storage of any Collateral. To facilitate collection, the Secured Party may notify account debtors and Debtor on any Collateral
to make payments directly to the Secured Party.

 

    	 	7	 

    	 

    

 

(ii)
The Secured Party may deduct from the proceeds of any sale of the Collateral all Secured Party Expenses incurred in connection
with the enforcement and exercise of any of the rights and remedies of the Secured Party provided for herein, irrespective of
whether suit is commenced. If such deduction does not occur (in the Secured Party’s reasonable discretion), upon demand,
Debtor shall pay all of such Secured Party Expenses. Any deficiency which exists after disposition of the Collateral as provided
herein will be paid immediately by Debtor, and any excess that exists will be returned, without interest and subject to the rights
of third parties, to Debtor by the Secured Party; provided, however, that if any excess exists at a time when any
of the Obligations remain outstanding, such excess shall instead remain as part of the Collateral and continue to be subject to
the security interest in Section 3(a) above until such time as all of the Obligations have been fully satisfied or otherwise terminated.

 

(iii)
Voting and payment Rights in Respect of the Pledged Equity.

 

(A)
So long as no Event of Default shall exist, Debtor may (1) exercise any and all voting and other consensual rights pertaining
to the Pledged Equity of such Debtor or any part thereof for any purpose not inconsistent with the terms of this Agreement or
the Securities Purchase Agreement and (2) receive and retain any and all dividends (other than stock dividends and other dividends
constituting Collateral which are addressed hereinabove), principal or interest paid in respect of the Pledged Equity to the extent
they are allowed under the Securities Purchase Agreement; and

 

(B)
During the continuance of an Event of Default, (1) all rights of an Debtor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to clause (A)(1) above shall cease and all such rights shall thereupon
become vested in the Secured Party which shall then have the sole right to exercise such voting and other consensual rights, (2)
all rights of an Debtor to receive the dividends, principal and interest payments which it would otherwise be authorized to receive
and retain pursuant to clause (A)(2) above shall cease and all such rights shall thereupon be vested in the Secured Party which
shall then have the sole right to receive and hold as Collateral such dividends, principal and interest payments, and (3) all
dividends, principal and interest payments which are received by a Debtor contrary to the provisions of clause (B)(2) above shall
be received in trust for the benefit of the Secured Party, shall be segregated from other property or funds of such Debtor, and
shall be forthwith paid over to the Secured Party as Collateral in the exact form received, to be held by the Secured Party as
Collateral and as further collateral security for the Secured Obligations.

 

(b)
Rights and Remedies Cumulative. The rights and remedies of the Secured Party under this Agreement and any other agreements
and documents delivered or executed in connection with the Obligations shall be cumulative. The Secured Party shall also have
all other rights and remedies not inconsistent herewith as are provided under applicable law, or in equity. No exercise by the
Secured Party of any one right or remedy shall be deemed an election.

 

    	 	8	 

    	 

    

 

8.
Additional Waivers. The Secured Party shall not in any way or manner be liable or responsible for (i) the safekeeping
of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution
in the value thereof or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency or other person whomsoever,
except to the extent that such loss, damage, liability, cost or expense has resulted from the gross negligence or willful misconduct
of the Secured Party or its affiliates. If the Secured Party at any time has possession of any Collateral, whether before or after
an Event of Default, the Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the
Collateral if the Secured Party takes such action for that purpose as Debtor shall request or as the Secured Party, in its reasonable
discretion, shall deem appropriate under the circumstances, but failure to honor any request by Debtor shall not of itself be
deemed to be a failure to exercise reasonable care. The Secured Party shall not be required to take any steps necessary to preserve
any rights in the Collateral against prior parties, nor to protect, preserve, or maintain any security interest given to secure
the Obligations.

 

9.
Notices. All notices or demands by any party relating to this Agreement shall be made in writing as provided in
the Note, such notices shall be delivered to the addresses indicated herein. Each party shall provide written notice to the other
party of any change in address.

 

10.
Choice of Law. The validity of this Agreement, its construction, interpretation and enforcement, and the rights
of the parties hereunder and concerning the Collateral, shall be determined under, governed by, and construed in accordance with
the laws of the state of New York as applied to contracts made and to be fully performed in such state, without regard to the
conflicts of laws provisions thereof, except to the extent that the validity, perfection or enforcement of a security interest
hereunder in respect of any Collateral is governed by the laws of the state of New York or some other state, in which case such
laws shall govern.

 

11.
Waiver of Jury Trial. THE DEBTOR WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT.

 

12.
General Provisions.

 

(a)
Effectiveness. This Agreement shall be binding and deemed effective against Debtor when executed by Debtor and the Secured
Party.

 

(b)
Successors and Assigns. This Agreement shall bind and inure to the benefit of the successors and permitted endorsees, transferees
and assigns of the Secured Party. Debtor shall not assign this Agreement or any rights or obligations hereunder, and any such
assignment shall be absolutely void.

 

(c)
Section Headings. Section headings are for convenience only.

 

(d)
Interpretation. No uncertainty or ambiguity herein shall be construed or resolved against the Secured Party or Debtor,
whether under any rule of construction or otherwise. This Agreement shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions of the parties.

 

(e)
Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement
for the purpose of determining the legal enforceability of any specific provision.

 

(f)
Entire Agreement; Amendments. This Agreement and the agreements and documents referenced herein contain the entire understanding
of the parties with respect to the subject matter covered herein and supersede all prior agreements, negotiations and understandings,
written or oral, with respect to such subject matter. No provision of this Agreement shall be waived or amended other than by
an instrument in writing signed by Debtor and the Secured Party.

 

    	 	9	 

    	 

    

 

(g)
Good Faith. The parties intend and agree that their respective rights, duties, powers, liabilities and obligations shall
be performed, carried out, discharged and exercised reasonably and in good faith.

 

(h)
Waiver and Consent. No delay or omission on the part of the Secured Party in exercising any right shall operate as a waiver
of such right or any other right. A waiver by the Secured Party of a provision of this Agreement or any other agreement between
or among the parties shall not prejudice or constitute a waiver of the Secured Party’s right otherwise to demand strict
compliance with that provision or any other provision of this Agreement. No prior waiver by the Secured Party, nor any course
of dealing between the Secured Party and Debtor, shall constitute a waiver of any of the Secured Party’s rights or of any
of Debtor’s obligations as to any future transactions. Whenever the consent of the Secured Party is required under this
Agreement, the granting of such consent by the Secured Party in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be granted or withheld in the reasonable discretion
of the Secured Party.

 

(i)
Counterparts. This Agreement may be executed in any number of counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement.

 

(j)
Termination. Upon full satisfaction or other termination of the Obligations (i) the Secured Party shall release and return
to Debtor all of the Collateral and any and all certificates and other documentation representing or relating to the Collateral
and (ii) the security interests provided for under this Agreement shall be terminated and of no further force and effect. At Debtor’s
expense, the Secured Party shall take all actions reasonably requested by Debtor in connection with the foregoing.

 

(k)
Consent of Debtor as Issuers of Pledged Equity. Debtor/issuer of Pledged Equity party to this Agreement hereby acknowledges,
consents and agrees to the grant of the security interests in such Pledged Equity pursuant to this Agreement, together with all
rights accompanying such security interest as provided by this Agreement and applicable law, notwithstanding any anti-assignment
provisions in any operating agreement, limited partnership agreement or similar organizational or governance documents of such
issuer.

 

[remainder
of page intentionally left blank]

 

    	 	10	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized persons on the
date first written above.

 

	 	The
    Debtor:
	 	 	 
	 	Franchise
    Holdings International, Inc.
	 	 	 
	 	By:
    	/s/
    Steven Rossi
	 	Name:
    	Steven
    Rossi
	 	Title:
    	CEO
	 	 	 
	 	Worksport,
    Ltd.
	 	 	 
	 	By:
    	/s/
    Steven Rossi
	 	Name:
    	Steven
    Rossi
	 	Title:
    	CEO
	 	 	 
	 	The
    Secured Party:
	 	 	 
	 	Leonite
    Capital LLC
	 	 	 
	 	By:
    	/s/
    Avi Geller
	 	Name:
    	Avi
    Geller
	 	Title:
    	Chief
    Investment Officer

 

    	 	11	 

    	 

    

 

Schedule
5(e)

 

Locations
of Collateral/Addresses of Debtor

 

    	 	 	 

    	 

    

 

EXHIBIT
A

 

COLLATERAL

 

1.
All accounts, chattel paper, contracts, contract rights, accounts receivable, tax refunds, tax credits, Notes receivable, Pledged
Equity, documents, choses in action and general intangibles, including, but not limited to, proceeds of inventory and returned
goods and proceeds from the sale of goods and services, and all rights, liens, securities, guaranties, remedies and privileges
related thereto, including the right of stoppage in transit and rights and property of any kind forming the subject matter of
any of the foregoing;

 

2.
All certificates of deposit and all time, savings, demand, or other deposit accounts in the name of Debtor or in which Debtor
has any right, title or interest, including but not limited to all sums now or at any time hereafter on deposit, and any renewals,
extensions or replacements of and all other property which may from time to time be acquired directly or indirectly using the
proceeds of any of the foregoing;

 

3.
All inventory and equipment of every type or description wherever located, including, but not limited to all raw materials, parts,
containers, work in process, finished goods, goods in transit, wares, merchandise, furniture, fixtures, hardware, machinery, tools,
parts, supplies, automobiles, trucks, other intangible property of whatever kind and wherever located associated with the Debtor’s
business, tools and goods returned for credit, repossessed, reclaimed or otherwise reacquired by Debtor;

 

4.
All documents of title and other property from time to time received, receivable or otherwise distributed in respect of, exchange
or substitution for or addition to any of the foregoing including, but not limited to, any documents of title;

 

5.
All know-how, information, labels, permits, patents, copyrights, goodwill, trademarks, trade names, licenses and approvals held
by Debtor, including all other intangible property of Debtor;

 

6.
All assets of any type or description that may at any time be assigned or delivered to or come into possession of Debtor for any
purpose for the account of Debtor or as to which Debtor may have any right, title, interest or power, and property in the possession
or custody of or in transit to anyone for the account of Debtor, as well as all proceeds and products thereof and accessions and
annexations thereto; and

 

7.
Debtor’s tangible and intangible personal property assets, including, but not limited to, all of the following: (i) all
accounts, health-care-insurance receivables, cash and currency, chattel paper, deposit accounts, documents, equipment, fixtures,
general intangibles, instruments, intellectual property, inventory, investment property, Negotiable Collateral, loans receivable,
motor vehicles, Pledged Equity, goods, supporting obligations, Debtor’s Books, and such other assets of Debtor as may hereafter
arise or Debtor may hereafter acquire or in which the Secured Party may from time-to-time obtain a security interest, and (ii)
the proceeds of any of the foregoing, including, but not limited to, proceeds of insurance covering the foregoing or any portion
thereof; provided, however, that notwithstanding anything to the contrary contained in this Agreement, the Collateral does
not include any “hazardous waste” as that term is defined under 42 U.S.C. section 6903(5), as such section may be
from time to time amended, or under any regulations thereunder.

 

8.
All proceeds (including but not limited to insurance proceeds) and products of and accessions and annexations to any of the foregoing.

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