Document:

Exhibit
4.3

 

SUBSCRIPTION
AGREEMENT

 

To
subscribe for Units of Class B Preferred Stock and Warrants in the private offering of

 

TOUGHBUILT
INDUSTRIES, INC.

 

	1.	Complete
                                         and Date, Initial and Sign where applicable, the following pages included in the Subscription
                                         Agreement:

 

		-	Signature
                                         Page attached to this Subscription Agreement
		-	Accredited
                                         Investor Certification
		-	Purchaser
                                         Questionnaire
		-	Form
                                         of Payment & Securities Delivery Instructions
		-	If
                                         applicable, Bad Actor Disqualification Questionnaire
		-	If
                                         applicable, Wire Transfer Authorization

 

	2.	Return
                                         all forms to your Joseph Gunnar Account Executive or by email: elord@jgunnar.com
                                         or fax: (212) 440-9614 and send a check (if applicable) to:

 

Joseph
Gunnar & Co., LLC

30
Broad Street, 11th Floor

New
York, NY 10004

Attn:
Eric Lord

 

	3.	Please
                                         make your subscription payment payable to the order of “Signature Bank, as Escrow
                                         Agent for ToughBuilt Industries, Inc.” Account No. xxxxxx.

 

For
wiring funds directly to the escrow account, use the following instructions:

 

	 	Bank
    Name:	Signature
    Bank
	 		261
                                         Madison Avenue

                                 New
                                 York, NY 10016

	 	Acct.
    Name:	Signature
    Bank as Escrow Agent for ToughBuilt Industries,, Inc. 
	 	ABA Number:	026013576
	 	SWIFT
    Code:	SIGNUS33
	 	A/C
    Number:	xxxxxx
	 	FBO:	Investor
    Name
	 		Social
    Security Number Address

 

ALL
SUBSCRIPTION DOCUMENTS MUST BE FILLED IN AND SIGNED EXACTLY AS SET FORTH WITHIN.

 

    	 

    	 

    

 

SUBSCRIPTION
AGREEMENT

 

FOR

 

TOUGHBUILT
INDUSTRIES, INC.

 

ToughBuilt
Industries, Inc.

c/o
Joseph Gunnar & Co., LLC

30
Broad Street, 11th Floor

New
York, NY 10004

 

Ladies
and Gentlemen:

 

1.
Subscription. The undersigned (the “Purchaser”) will purchase the number of Units of ToughBuilt Industries,
Inc., a Nevada corporation (the “Company”), set forth on the signature page to this Subscription Agreement.
Each Unit consists of one share of Class B Preferred Stock and one Warrant to purchase a share of Common Stock at $6.00 per share
of Common Stock. The Units are being offered (the “Offering”) by the Company pursuant to the offering terms
set forth in the Company’s Confidential Private Placement Memorandum, dated ______ __, 2016, as may be amended and/or
supplemented, from time to time (collectively, the “Memorandum”).

 

The
Units are being offered on a “reasonable efforts, all or none” basis with respect to the minimum of $3,000,000
(the “Minimum Offering”) and thereafter on a “reasonable efforts” basis up to the maximum
of $5,000,000 (the “Maximum Offering”), (subject to the right of the Company to increase the maximum by 15%
to $5,750,000 to cover over-allotments). The Units may be sold at one or more closings of the Offering (each a “Closing,”
and, collectively, the “Closings”), at any time during the Offering Period (as hereinafter defined); provided,
however, that no Closing may be effectuated unless and until irrevocable subscriptions for at least the Minimum Offering have
been deposited in the Escrow Account (defined hereafter). The minimum investment amount that may be purchased by an Investor is
20,000 Units at a price of $5.00 per Unit (the “Investor Minimum Investment”); provided, however, the Company,
in its sole discretion, may accept an Investor subscription for an amount less than the Investor Minimum Investment. The subscription
for the Units will be made in accordance with and subject to the terms and conditions of the Subscription Agreement and the Memorandum.

 

The
Units will be offered through ______ __, 2016 commencing on the date of the Memorandum (the “Initial Offering Period”),
which period may be extended by the Company and Joseph Gunnar & Co., LLC (the “Placement Agent”) in their
sole discretion, without further notice to prospective investors by the Company to a date not later than ______ __, 2016
(the “Termination Date”), with this additional period, together with the Initial Offering Period, being referred
to herein as the “Offering Period”. In the event that (i) subscriptions for the Offering are rejected in whole
(at the sole discretion of the Company), (ii) the Minimum Offering has not been subscribed for prior to the expiration of the
Initial Offering Period or, if extended, prior to the Termination Date or (iii) the Offering is otherwise terminated by the Company,
then the Escrow Agent will refund all subscription funds held in the Escrow Account to the persons who submitted such funds, without
interest, penalty or deduction. If a subscription is rejected in part (at the sole discretion of the Company) and the Company
accepts the portion not so rejected, the funds for the rejected portion of such subscription will be returned without interest,
penalty, expense or deduction.

 

The
terms of the Offering are more completely described in the Memorandum and such terms are incorporated herein in their entirety.
Certain capitalized terms used, but not otherwise defined herein, will have the respective meanings provided in the Memorandum.

 

2.
Payment. The Purchaser encloses herewith a check payable to, or will immediately make a wire transfer payment to, “Signature
Bank, as Escrow Agent for ToughBuilt Industries, Inc.,” in the full amount of the purchase price of the Units being
subscribed for. Together with the check for, or wire transfer of, the full purchase price, the Purchaser is delivering a completed
and executed Signature Page to this Subscription Agreement along with a completed and executed Accredited Investor Certification,
which are annexed hereto.

 

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3.
Deposit of Funds. All payments made as provided in Section 2 hereof by Purchasers subscribing pursuant to the Memorandum
will be deposited by the Purchaser as soon as practicable with Signature Bank, as escrow agent (the “Escrow Agent”),
or such other escrow agent appointed by the Placement Agent and the Company, in a non-interest bearing escrow account (the “Escrow
Account”). In the event that the Company does not effect a Closing under the Subscription Agreement during the Offering
Period, the Escrow Agent will refund all subscription funds, without deduction and/or interest accrued thereon, and will return
the subscription documents to each Purchaser. If the Company rejects a subscription, either in whole or in part (at the sole discretion
of the Company), the rejected subscription funds or the rejected portion thereof will be returned promptly to such Purchaser without
interest, penalty, expense or deduction.

 

4.
Acceptance of Subscription. The Purchaser understands and agrees that the Company, in its sole discretion, reserves the
right to accept this or any other subscription for the Units, in whole or in part, notwithstanding prior receipt by the Purchaser
of notice of acceptance of this or any other subscription. The Company will have no obligation hereunder until the Company executes
and delivers to the Purchaser an executed copy of the Subscription Agreement.

 

5.
Representations and Warranties of the Purchaser. The Purchaser hereby acknowledges, represents, warrants, and agrees as
follows:

 

(a)
None of the Units, the component Preferred Stock or Warrants, nor the shares of common Stock issuable upon conversion of the Preferred
Stock or exercise of the Warrants are registered under the Securities Act of 1933, as amended (the “Securities Act”),
or any state securities laws. The Purchaser understands that the offering and sale of the Units is intended to be exempt from
registration under the Securities Act, by virtue of Section 4(a)(2) thereof and the provisions of Regulation D promulgated thereunder,
based, in part upon the representations, warranties and agreements of the Purchaser contained in this Subscription Agreement;

 

(b)
The Purchaser and the Purchaser’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively,
“Advisors”), have received and have carefully reviewed the Memorandum, this Subscription Agreement, and the
agreements and instruments referenced in the Memorandum (collectively, the “Transaction Documents”) and all
other documents requested by the Purchaser or its Advisors, if any, and understand the information contained therein, prior to
the execution of this Subscription Agreement;

 

(c)
Neither the Securities and Exchange Commission (the “Commission”) nor any state securities commission has approved
or disapproved of the Units or their component securities or passed upon or endorsed the merits of the Offering or confirmed the
accuracy or determined the adequacy of the Memorandum. The Memorandum has not been reviewed by any Federal, state or other regulatory
authority. Any representation to the contrary may be a criminal offense;

 

(d)
All documents, records, and books pertaining to the investment in the Units including, but not limited to, all information regarding
the Company and the Units, have been made available for inspection and reviewed by the Purchaser and its Advisors, if any;

 

(e)
The Purchaser and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from the Company’s
officers and any other persons authorized by the Company to answer such questions, concerning, among other related matters, the
Offering, the Units, the Transaction Documents and the business, financial condition, results of operations and prospects of the
Company and all such questions have been answered by the Company to the full satisfaction of the Purchaser and its Advisors, if
any;

 

(f)
In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or other information
(oral or written) other than as stated in the Memorandum, or as contained in documents so furnished to the Purchaser or its Advisors,
if any, by the Company in writing;

 

    	- 3 -

    	 

    

 

(g)
The Purchaser is unaware of, is in no way relying on, and did not become aware of the offering of the Units through or as a result
of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement
or other communication published in any newspaper, magazine or similar media or broadcast over television, radio or over the Internet,
in connection with the offering and sale of the Units and is not subscribing for the Units and did not become aware of the Offering
through or as a result of any seminar or meeting to which the Purchaser was invited by, or any solicitation of a subscription
by, a person not previously known to the Purchaser in connection with investments in securities generally;

 

(h)
The Purchaser has taken no action which would give rise to any claim by any person for brokerage commissions, finders’ fees
or the like relating to this Subscription Agreement or the transactions contemplated hereby (other than fees to be paid by the
Company to the Placement Agent, as described in the Memorandum);

 

(i)
The Purchaser, either alone or together with its Advisors, if any, has such knowledge and experience in financial, tax, and business
matters, and, in particular, investments in securities of private companies, so as to enable it to utilize the information made
available to it in connection with the Offering to evaluate the merits and risks of an investment in the Units and the Company
and to make an informed investment decision with respect thereto;

 

(j)
The Purchaser is not relying on the Company, the Placement Agent or any of their respective employees or agents with respect to
the legal, tax, economic and related considerations of an investment in any of the Units and the Purchaser has relied on the advice
of, or has consulted with, only its own Advisors;

 

(k)
The Purchaser is acquiring the Units solely for such Purchaser’s own account for investment and not with a view to resale
or distribution thereof, in whole or in part. The Purchaser has no agreement or arrangement, formal or informal, with any person
to sell or transfer all or any part of any of the Units and the Purchaser has no plans to enter into any such agreement or arrangement;

 

(l)
The Purchaser understands and agrees that purchase of the Units and the component securities is a high risk investment and the
Purchaser is able to afford an investment in a speculative venture having the risks and objectives of the Company. The Purchaser
must bear the substantial economic risks of the investment in the Units indefinitely because none of the Units or the component
securities may be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities Act and applicable
state securities laws or an exemption from such registration is available. Legends will be placed on the certificates representing
the component securities to the effect that such securities have not been registered under the Securities Act or applicable state
securities laws and appropriate notations thereof will be made in the Company’s books. The Purchaser understands that there
is no public market for the Units, the Preferred Stock or the Warrant to be issued in the Offering nor for the Common Stock underlying
conversion of the Preferred Stock and exercise of the Warrant and the Company has no intention of seeking an active trading market
for any of these securities;

 

(m)
The Purchaser has adequate means of providing for such Purchaser’s current financial needs and foreseeable contingencies
and has no need for liquidity from its investment in the Units for an indefinite period of time;

 

(n)
The Purchaser is aware that an investment in the Units involves a number of very significant risks and has carefully read and
considered the matters set forth in the Memorandum and, in particular, the matters under the caption “Risk Factors”
therein and understands any of such risk may materially adversely affect the Company’s operations and future prospects;

 

(o)
The Purchaser is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the Commission
under the Securities Act and has truthfully and accurately completed the Purchaser Questionnaire attached to this Subscription
Agreement and will submit to the Company such further assurances of such status as may be reasonably requested by the Company;

 

    	- 4 -

    	 

    

 

(p)
The Purchaser: (i) if a natural person, represents that the Purchaser has reached the age of 21 and has full power and authority
to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions
hereof and thereof; (ii) if a corporation, partnership, or limited liability company, or association, joint stock company, trust,
unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring
the Units, such entity is duly organized, validly existing and in good standing under the laws of the state of its organization,
the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or
its charter or other organizational documents, such entity has full power and authority to execute and deliver this Subscription
Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase
and hold the Units, the execution and delivery of this Subscription Agreement has been duly authorized by all necessary action,
this Subscription Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation
of such entity; or (iii) if executing this Subscription Agreement in a representative or fiduciary capacity, represents that it
has full power and authority to execute and deliver this Subscription Agreement in such capacity and on behalf of the subscribing
individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom
the Purchaser is executing this Subscription Agreement, and such individual, partnership, ward, trust, estate, corporation, or
limited liability company or partnership, or other entity has full right and power to perform pursuant to this Subscription Agreement
and make an investment in the Company, and represents that this Subscription Agreement constitutes a legal, valid and binding
obligation of such entity. The execution and delivery of this Subscription Agreement will not violate or be in conflict with any
order, judgment, injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound;

 

(q)
The Purchaser and its Advisors, if any, have had the opportunity to obtain any additional information, to the extent the Company
had such information in its possession or could acquire it without unreasonable effort or expense, necessary to verify the accuracy
of the information contained in the Memorandum and the documents incorporated by reference in the Memorandum, including, but not
limited to, the terms and conditions of the Units, the Preferred Stock and the Warrants as set forth therein and the Transaction
Documents and all other related documents, received or reviewed in connection with the purchase of the Units and have had the
opportunity to have representatives of the Company provide them with such additional information regarding the terms and conditions
of this particular investment and the financial condition, results of operations, business and prospects of the Company deemed
relevant by the Purchaser or its Advisors, if any, and all such requested information, to the extent the Company had such information
in its possession or could acquire it without unreasonable effort or expense, has been provided by the Company in writing to the
full satisfaction of the Purchaser and its Advisors, if any;

 

(r)
The Purchaser represents to the Company that any information which the undersigned has heretofore furnished or is furnishing herewith
to the Company is complete and accurate and may be relied upon by the Company in determining the availability of an exemption
from registration under Federal and state securities laws in connection with the offering of securities as described in the Memorandum;

 

(s)
The Purchaser has significant prior investment experience, including investment in non-listed and non-registered securities. The
Purchaser has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such a loss should
occur. The Purchaser’s overall commitment to investments which are not readily marketable is not excessive in view of the
Purchaser’s net worth and financial circumstances and the purchase of the Units will not cause such commitment to become
excessive. This investment is a suitable one for the Purchaser;

 

(t)
The Purchaser acknowledges that any and all estimates or forward-looking statements or projections included in the Memorandum
were prepared by the Company in good faith, but that the attainment of any such projections, estimates or forward-looking statements
cannot be guaranteed, will not be updated by the Company and should not be relied upon;

 

(u)
No oral or written representations have been made, or oral or written information furnished, to the Purchaser or its Advisors,
if any, in connection with the offering of the Units which are in any way inconsistent with the information contained in the Memorandum;

 

(v)
Within five (5) days after receipt of a request from the Company, the Purchaser will provide such information and deliver such
documents as may reasonably be necessary to comply with any and all laws and ordinances to which the Company is subject;

 

    	- 5 -

    	 

    

 

(w)
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID
ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL;

 

(x)
(For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has
been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to
invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA
that require diversification of plan assets and impose other fiduciary responsibilities. The Purchaser or Plan fiduciary (a) is
responsible for the decision to invest in the Company; (b) is independent of the Company and any of its affiliates; (c) is qualified
to make such investment decision; and (d) in making such decision, the Purchaser or Plan fiduciary has not relied on any advice
or recommendation of the Company or any of its affiliates; and

 

6.
Representations and Warranties of the Company. Except as set forth in the Memorandum, which Memorandum shall be deemed
a part hereof and shall qualify any representation made herein to the extent of the disclosure contained in the corresponding
section of the Memorandum, the Company hereby makes the following representations and warranties to each Purchaser:

 

(a)
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in the Memorandum. The Company owns,
directly or indirectly, all of the capital stock or other equity interests of each Subsidiary, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.

 

(b)
Organization and Qualification. The Company is an entity duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its
articles of incorporation, bylaws or other organizational or charter documents. The Company is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business,
or condition (financial or otherwise) of the Company, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no legal proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing
or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors in connection herewith or
therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it
is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

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(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents,
the issuance and sale of the Units and the consummation by it of the transactions contemplated hereby and thereby to which it
is a party do not and will not: (i) conflict with or violate any provision of the Company’s articles of incorporation, bylaws
or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the
Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of
time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding
to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) subject to the
Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses
(ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents that has
not been obtained, other than: (i) the filing of a Form D with the Commission, and (ii) such filings as are required to be made
under applicable state securities laws (collectively, the “Required Approvals”).

 

(f)
Issuance of the Units. The Units and the component Preferred Stock and Warrants are each duly authorized and, when issued
and paid for in accordance with this Subscription Agreement, will be duly and validly issued, fully paid and nonassessable, free
and clear of all liens imposed by the Company. Upon conversion of the Preferred Stock in accordance with its terms, the Conversion
Shares will be duly and validly issued, fully paid and nonassessable, and upon exercise of any Warrants in accordance with their
terms, the Warrant Shares will be duly and validly issued, fully paid and nonassessable.

 

(g)
Capitalization. The capitalization of the Company is as set forth in the Memorandum. All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in material compliance
with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. No further approval or authorization of any shareholder, the Board
of Directors or others is required for the issuance and sale of the Units.

 

(h)
Financial Statements. The financial statements of the Company included as Exhibit A to the Memorandum comply
in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as
may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may
not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(i)
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Except as described in the Memorandum, neither the Company nor any director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the
Commission or any state securities administrator involving the Company or any current or former director or officer of the Company.

 

    	- 7 -

    	 

    

 

(j)
Compliance. The Company: (i) is not in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received notice
of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation
has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to
result in a Material Adverse Effect.

 

(k)
Regulatory Permits. The Company possesses all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct its business as presently conducted, except where the failure
to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

(l)
Title to Assets. The Company has good and marketable title in all personal property owned by it that is material to the
business of the Company. Any real property and facilities held under lease by the Company are held by it under valid, subsisting
and enforceable leases with which the Company is in compliance.

 

(m)
Intellectual Property.

 

(i)
The term “Intellectual Property Rights” includes:

 

1.
the name of the Company, all, registered and unregistered trademarks, service marks, and applications (collectively, “Marks”);

 

2.
all patents, patent applications, and inventions and discoveries that may be patentable owned by the Company or licensed from
third parties (collectively, “Patents”);

 

3.
all copyrights in both published works and published works owned by the Company or licensed from third parties (collectively,
“Copyrights”);

 

4.
all rights in mask works owned by the Company
or licensed from third parties (collectively, “Rights in Mask Works”); and

 

5.
all know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology,
plans, drawings, and blue prints (collectively, “Trade Secrets”); owned, used, or licensed by the Company as
licensee or licensor.

 

(ii)
Agreements. The Memorandum accurately summarizes all contracts relating to the Intellectual Property Rights to which the
Company is a party or by which the Company is bound, except for any license implied by the sale of a product and perpetual, paid-up
licenses for commonly available software programs with a value of less than $10,000 under which the Company is the licensee. There
are no outstanding and, to Company’s knowledge, no threatened disputes or disagreements with respect to any such agreement.

 

(iii)
Know-How Necessary for the Business. The Intellectual Property Rights are all those necessary for the operation of the
Company’s businesses as it is currently conducted. The Company is the owner or licensee of all right, title, and interest
in and to each of the Intellectual Property Rights. To the Company’s knowledge, no employee of the Company has entered into
any contract that restricts or limits in any way the scope or type of work in which the employee may be engaged or requires the
employee to transfer, assign, or disclose information concerning his work to anyone other than of the Company.

 

(n)
Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company is engaged. The Company has no reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

    	- 8 -

    	 

    

 

(o)
Transactions with Affiliates and Employees. Except as described in the Memorandum, none of the officers or directors of
the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction
with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for
the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee
or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for: (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(p)
No General Solicitation. Neither the Company nor, to the knowledge of the Company, any person acting on behalf of the Company
has offered or sold any of the Units by any form of general solicitation or general advertising. The Company has offered the Units
for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the
Securities Act.

 

(q)
Certain Fees. No brokerage, finder’s fees, commissions or due diligence fees are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by the Transaction Documents except as set forth in the Memorandum. The Purchasers shall have
no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type
contemplated in this Section 6(q) that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(r)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940,
as amended. The Company intends to conduct its business in a manner so that it will not become an “investment company”
subject to registration under the Investment Company Act of 1940, as amended.

 

(s)
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 5,
no registration under the Securities Act is required for the offer and sale of the Units by the Company to the Purchasers as contemplated
hereby.

 

(t)
Disclosure. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company, its
businesses and the transactions contemplated hereby, including the Memorandum, when taken together as a whole, is true and correct
and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were made, not misleading.

 

(u)
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section
5, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Units to be integrated with prior offerings by the Company for purposes of the Securities Act which would require the registration
of any such securities under the Securities Act.

 

(v)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company (i) has made or filed all United States federal, state and local income and all foreign
income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim.

 

    	- 9 -

    	 

    

 

(w)
Foreign Corrupt Practices. The Company, nor to the knowledge of the Company, any agent or other person acting on behalf
of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law or (iv) violated in any material respect any provision of FCPA.

 

(x)
Accountants. The Company’s accounting firm is Marcum LLP. To the knowledge and belief of the Company, such accounting
firm is registered with the Public Company Accounting Oversight Board, and has expressed its opinion with respect to the financial
statements of the Company for the fiscal year ending December 31, 2015 included herewith as Exhibit A to the Memorandum.

 

(y)
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby
and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.
The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

 

7.
Demand Registration Rights.

 

(a)
Following the consummation of the Company’s planned initial public offering (the “IPO”) and the
subsequent expiration of the Lock- Up Period that shall commence upon the date of such IPO (the “Expiration
Date”), in the event that Rule 144 of the Securities Act is not then available for the resale of the Conversion
Shares and the Warrant Shares (collectively, the “Registrable Securities”), each Purchaser shall have the
right, by written notice (the “Demand Notice”) given to the Company, to request the Company to register
under and in accordance with the provisions of the Securities Act all or part of the Registrable Securities designated by
such Purchaser. Upon receipt of any such Demand Notice, the Company will promptly notify all other Purchasers of the receipt
of such Demand Notice and allow them the opportunity to include the Registrable Securities held by them in the proposed
registration by submitting their own Demand Notice. The Purchasers as a group shall be entitled to one Demand Registration
pursuant to this Agreement unless any such Demand Registration did not become effective or was not maintained effective for a
period (whether or not continuous) of at least four (4) years or such shorter period which shall terminate when all
Registrable Securities covered by such Demand Registration have been disposed of pursuant thereto. The Company will use its
commercially reasonable efforts to prepare and file with the SEC, within thirty (30) days after the Company first receives a
Demand Notice (the “Filing Deadline”) , a registration statement for the purpose of effecting a
registration under the Securities Act in accordance with the method or methods of distribution specified by such Purchasers
in the Demand Notices, and will use its reasonable best efforts to have the registration statement declared
effective promptly thereafter, subject to compliance with review by the SEC; provided, however, that the
Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect
to which the Purchaser is entitled to piggyback registration rights pursuant to Section 8 hereof and the Purchaser has
elected to participate in the offering covered by such registration statement.

 

    	- 10 -

    	 

    

 

(b)
The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to this Section
7, but the Purchasers shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Purchasers
to represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts
to qualify or register the Registrable Securities in such states as are reasonably requested by the Purchaser; provided,
however, that in no event shall the Company be required to register the Registrable Securities in a state in which such
registration would cause: (i) the Company to be obligated to register or license to do business in such State or submit to general
service of process in such State, or (ii) the principal shareholders of the Company to be obligated to escrow their shares of
capital stock of the Company. The Purchaser shall only use the prospectuses provided by the Company to sell the shares covered
by such registration statement, and will immediately cease to use any prospectus furnished by the Company if the Company advises
the Purchaser that such prospectus may no longer be used due to a material misstatement or omission.

 

(c)
In the case of each registration, qualification or compliance effected by the Company pursuant to this Agreement, the Company
will keep each Purchaser participating therein advised in writing as to the initiation of each registration, qualification and
compliance and as to the completion thereof. At its expense, the Company will:

 

(i)
use its best efforts to keep the registration statement continuously effective until four years after the date the registration
statement is first declared effective or until the holders have sold all the Registrable Securities covered by the registration
statement, whichever occurs first;

 

(ii)
furnish to the Purchasers of Registrable Securities included in such registration statement such number of copies of the registration
statement preliminary prospectus, final prospectus and other documents incident thereto as such Purchasers from time to time may
reasonably request;

 

(iii)
prepare and file with the SEC (and promptly notify the participating Purchasers of such event) such amendments and supplements
to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;
and

 

(iv)
notify each Purchaser of Registrable Securities included in such registration statement, at any time when a prospectus relating
thereto is covered by such registration statement is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein
not misleading.

 

8.
Piggyback Registration Rights.

 

(a)
In addition to the demand right of registration described in Section 7 hereof, the Purchaser shall have the right to include the
Registrable Securities as part of any other registration of securities filed by the Company in a registration statement under
Securities Act (including, but not limited to, registration statements relating to secondary offerings of securities of the Company
but excluding any registration statements (i) on Form S-4 or S-8 (or any successor or substantially similar form), or of any employee
stock option, stock purchase or compensation plan or of securities issued or issuable pursuant to any such plan, or a dividend
reinvestment plan, (ii) otherwise relating to any employee, benefit plan or corporate reorganization or other transactions covered
by Rule 145 promulgated under the Securities Act, or (iii) on any registration form that does not permit secondary sales or does
not include substantially the same information as would be required to be included in a registration statement covering the resale
of the Registrable Securities). In the event the Purchaser desires to include in any such registration statement all or any part
of the Registrable Securities held by the Purchaser, the Purchaser shall within fifteen (15) days after the above-described notice
from the Company, so notify the Company in writing, including the number of such Registrable Securities that the Purchaser wishes
to include in such registration statement. If the Purchaser decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, and Rule 144 under the Securities Act remains unavailable for the resale of such Registrable
Securities, the Purchaser shall continue to have the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company until the Purchasers have sold all of the Registrable Securities
held by them. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section
8 hereof, but the Purchasers shall pay any and all underwriting commissions and the expenses of any legal counsel selected by
the Purchasers to represent them in connection with the sale of the Registrable Securities.

 

    	- 11 -

    	 

    

 

(b)
Notwithstanding the foregoing, if the managing underwriter or underwriters of any such proposed public offering advise the Company
that the total amount or kind of securities that the Purchaser, the Company and any other persons intended to be included in such
proposed public offering is sufficiently large to adversely affect the success of such proposed public offering, then the amount
or kind of securities to be offered for the various parties wishing to have shares of the Company’s common stock registered
shall be included in the following order:

 

(i)
if the Company proposes to register treasury shares or authorized but unissued shares of its common stock (collectively, “Primary
Securities”):

 

(A)
first, the Primary Securities;

 

(B)
second, the Registrable Securities requested to be included in such registration statement, together with shares of its common
stock that do not constitute Registrable Securities or Primary Securities (“Other Securities”) held by parties
exercising similar piggy-back registration rights (or if necessary, such Registrable Securities and Other Securities pro rata
among the holders thereof based upon the number of such Registrable Securities and Other Securities requested to be registered
by each such holder).

 

(ii)
if the Company proposes to register Other Securities:

 

(A)
first, the Other Securities requested to be included in such registration by holders exercising demand registration rights;

 

(B)
second, the Registrable Securities requested to be included in such registration, together with Other Securities held by parties
exercising similar piggy-back registration rights (or if necessary, such Registrable Securities and Other Securities pro rata
among the holders thereof based upon the number of such Registrable Securities and Other Securities requested to be registered
by each such holder).

 

Anything
to the contrary in this Agreement notwithstanding, the Company may withdraw or postpone a registration statement referred to herein
(a “Registration Statement”) at any time before it becomes effective or withdraw, postpone or terminate the
offering after it becomes effective without obligation to any Purchaser.

 

(c)
As a condition to the inclusion of its Registrable Securities, each Purchaser shall furnish to the Company such information regarding
the Purchaser and the distribution proposed by the Purchaser as the Company may request in writing or as shall be required in
connection with any registration, qualification or compliance referred to in this Agreement.

 

(d)
The Purchaser agrees by acquisition of the Registrable Securities that, upon receipt of any notice from the Company of the happening
of any event that, in the good faith judgment of the Company’s Board of Directors, requires the suspension of the Purchaser’s
rights under this Section 8, the Purchaser will forthwith discontinue disposition of the Registrable Securities pursuant to the
then current prospectus included in the Registration Statement, as the same may be amended or supplemented (including such prospectus
subject to completion) (the “Prospectus”), until the Purchaser is advised in writing by the Company that the
use of the Prospectus may be resumed. If so directed by the Company, on the happening of such event, the Purchaser will deliver
to the Company all copies, other than permanent file copies then in the Purchaser’s possession, of the Prospectus covering
the Registrable Securities at the time of receipt of such notice.

 

(e)
The Purchaser hereby covenants with the Company (i) not to make any sale of Registrable Securities without effectively causing
the prospectus delivery requirements under the Securities Act to be satisfied, and (ii) if such Registrable Securities are to
be sold by any method or in any transaction other than on a national securities exchange, or in the over-the-counter market, in
privately negotiated transactions, or in a combination of such methods, to notify the Company at least 5 business days prior to
the date on which the Purchaser first offers to sell any such Registrable Securities.

 

    	- 12 -

    	 

    

 

(f)
The Purchaser acknowledges and agrees that the Registrable Securities sold pursuant to a registration statement described in this
Section 8 are not transferable on the books of the Company unless the stock certificate submitted to the transfer agent evidencing
the Registrable Securities is accompanied by a certificate reasonably satisfactory to the Company to the effect that (x) the Registrable
Securities have been sold in accordance with such registration statement and (y) the requirement of delivering a current Prospectus
has been satisfied.

 

(g)
The Purchaser shall not take any action with respect to any distribution deemed to be made pursuant to such registration statement
that would constitute a violation of Regulation M under the Exchange Act, or any other applicable rule, regulation or law.

 

(h)
Upon the expiration of the effectiveness of any registration statement described in this Section 8, the Purchaser shall discontinue
sales of the Registrable Securities pursuant to such registration statement upon receipt of notice from the Company of the Company’s
intention to remove from registration the Registrable Securities covered by such registration statement that remain unsold, and
the Purchaser shall notify the Company of the number of registered Registrable Securities that remain unsold immediately upon
receipt of such notice from the Company.

 

(i)
In the case of the registration of any underwritten primary offering initiated by the Company (other than any registration by
the Company on Form S-4 or Form S-8 (or any successor or substantially similar form), or of (i) an employee stock option, stock
purchase or compensation plan or of securities issued or issuable pursuant to any such plan, or (ii) a dividend reinvestment plan)
or any underwritten secondary offering initiated at the request of a holder of securities of the Company pursuant to registration
rights granted by the Company, the Purchaser agrees not to effect any public sale or distribution of securities of the Company,
except as part of such underwritten registration, during the period beginning fifteen (15) days prior to the closing date of such
underwritten offering and during the period ending ninety (90) days after such closing date (or such longer period as may be reasonably
requested by the Company or by the managing underwriter or underwriters).

 

(j)
In furtherance and not in limitation of the foregoing, the Purchaser shall have no rights pursuant to this Section 8 at such time
as all of the Purchaser’s Registrable Securities may be sold without limitation pursuant to Rule 144.

 

9.
Indemnification. The Purchaser agrees to indemnify and hold harmless the Company, the Placement Agent and each of their
respective officers, directors, managers, employees, agents, attorneys, control persons and affiliates from and against all losses,
liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to, any and all expenses incurred
in investigating, preparing or defending against any litigation commenced or threatened) based upon or arising out of any actual
or alleged false acknowledgement, representation or warranty, or misrepresentation or omission to state a material fact, or breach
by the Purchaser of any covenant or agreement made by the Purchaser herein or in any other document delivered in connection with
this Subscription Agreement.

 

10.
Irrevocability; Binding Effect. The Purchaser hereby acknowledges and agrees that the subscription hereunder is irrevocable
by the Purchaser, except as required by applicable law, and that this Subscription Agreement will survive the death or disability
of the Purchaser and will be binding upon and inure to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives, and permitted assigns. If the Purchaser is more than one person, the obligations of the Purchaser
hereunder will be joint and several and the agreements, representations, warranties and acknowledgments herein will be deemed
to be made by and be binding upon each such person and such person’s heirs, executors, administrators, successors, legal
representatives and permitted assigns.

 

11.
Modification. This Subscription Agreement will not be modified or waived except by an instrument in writing signed by the
party against whom any such modification or waiver is sought.

 

    	- 13 -

    	 

    

 

12.
Notices. Any notice or other communication required or permitted to be given hereunder will be in writing and will be mailed
by certified mail, return receipt requested, or delivered against receipt to the party to whom it is to be given (a) if to the
Company, at the address set forth in the Memorandum or (b) if to the Purchaser, at the address set forth on the signature page
hereof (or, in either case, to such other address as the party will have furnished in writing in accordance with the provisions
of this Section 12). Any notice or other communication given by certified mail will be deemed given at the time of certification
thereof, except for a notice changing a party’s address which will be deemed given at the time of receipt thereof.

 

13.
Assignability. This Subscription Agreement and the rights, interests and obligations hereunder are not transferable or
assignable by the Purchaser and the transfer or assignment of any of the Units or component securities will be made only in accordance
with all applicable laws.

 

14.
Applicable Law. This Subscription Agreement will be governed by and construed under the laws of the State of New York as
applied to agreements among New York residents entered into and to be performed entirely within New York. The parties hereto (1)
agree that any legal suit, action or proceeding arising out of or relating to this Subscription Agreement will be instituted exclusively
in New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York,
(2) waive any objection which the parties may have now or hereafter to the venue of any such suit, action or proceeding, and (3)
irrevocably consent to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District
Court for the Southern District of New York in any such suit, action or proceeding. Each of the parties hereto further agrees
to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New
York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and
agrees that service of process upon it mailed by certified mail to its address will be deemed in every respect effective service
of process upon it, in any such suit, action or proceeding. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED
HEREBY.

 

15.
Blue Sky Qualification. The purchase of Units pursuant to this Subscription Agreement is expressly conditioned upon the
exemption from qualification of the offer and sale of the Units from applicable federal and state securities laws.

 

16.
Use of Pronouns. All pronouns and any variations thereof used herein will be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the person or persons referred to may require.

 

17.
Confidentiality. The Purchaser acknowledges and agrees that any information or data the Purchaser has acquired from or
about the Company not otherwise properly in the public domain, was received in confidence. The Purchaser agrees not to divulge,
communicate or disclose, except as may be required by law or for the performance of this Subscription Agreement, or use to the
detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any confidential information
of the Company, including any trade or business secrets of the Company and any business materials that are treated by the Company
as confidential or proprietary, including, without limitation, confidential information obtained by or given to the Company about
or belonging to third parties.

 

18.
Miscellaneous.

 

(a)
This Subscription Agreement, together with the other Transaction Documents, constitute the entire agreement between the Purchaser
and the Company with respect to the subject matter hereof and supersede all prior oral or written agreements and understandings,
if any, relating to the subject matter hereof. The terms and provisions of this Subscription Agreement may be waived, or consent
for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or
provisions.

 

(b)
Each of the Purchaser’s and the Company’s representations and warranties made in this Subscription Agreement will
survive the execution and delivery hereof and delivery of the Units.

 

    	- 14 -

    	 

    

 

(c)
Each of the parties hereto will pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or
others engaged by such party) in connection with this Subscription Agreement and the transactions contemplated hereby whether
or not the transactions contemplated hereby are consummated.

 

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

 

(e)
Each provision of this Subscription Agreement will be considered separable and, if for any reason any provision or provisions
hereof are determined to be invalid or contrary to applicable law, such invalidity or illegality will not impair the operation
of or affect the remaining portions of this Subscription Agreement.

 

(f)
Paragraph titles are for descriptive purposes only and will not control or alter the meaning of this Subscription Agreement as
set forth in the text.

 

19.
Signature Page. It is hereby agreed by the parties hereto that the execution by the Purchaser of this Subscription Agreement,
in the place set forth herein below, will be deemed and constitute the agreement by the Purchaser to be bound by all of the terms
and conditions hereof as well as by the each of the other Transaction Documents, and will be deemed and constitute the execution
by the Purchaser of all such Transaction Documents without requiring the Purchaser’s separate signature on any of such Transaction
Documents.

 

    	- 15 -

    	 

    

 

ANTI-MONEY
LAUNDERING REQUIREMENTS

 

	The
    USA PATRIOT Act	 	What
    is money laundering?	 	How
    big is the problem and why is it important?
	The
    USA PATRIOT Act is designed to detect, deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money
    laundering requirements on brokerage firms and financial institutions. Since April 24, 2002 all brokerage firms have been
    required to have new, comprehensive anti-money laundering programs.	 	Money
    laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources
    or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking,
    robbery, fraud, racketeering, and terrorism	 	The
    use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets.
    According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion
    a year.
	 	 	 	 	 
	To
                                         help you understand these efforts, we want to provide you with some information about
                                         money laundering and our steps to implement the USA PATRIOT Act.

	 	 	 	 

 

	What
                                         are we required to do to eliminate money laundering?

	 	 
	 	 	 
	Under
    new rules required by the USA PATRIOT Act, our anti- money laundering program must designate a special compliance officer,
    set up employee training, conduct independent audits, and establish policies and procedures to detect and report suspicious
    transaction and ensure compliance with the new laws.	 	As
    part of our required program, we may ask you to provide various identification documents or other information. Until you provide
    the information or documents we need, we may not be able to effect any transactions for you.

 

    	- 16 -

    	 

    

 

TOUGHBUILT
INDUSTRIES, INC. 

SIGNATURE PAGE TO 

SUBSCRIPTION AGREEMENT

 

Purchaser
hereby elects to purchase a total of _________ Units (the “Units”), at a purchase price of $5.00 per Unit (NOTE:
to be completed by the Purchaser).

 

Date
(NOTE: To be completed by the Purchaser): ______________, 2016

 

 

If
the Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY:

 

	 	 	 
	Print
    Name(s)	 	Social
    Security Number(s)
	 	 	 
	 	 	 
	Signature(s)
    of Purchaser(s)	 	Signature
	 	 	 
	 	 	 
	Date	 	Address

 

If
the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or TRUST:

 

	 	 	 
	Name
    of Partnership,	 	Federal
    Taxpayer
	Corporation,
    Limited	 	Identification
    Number
	Liability
    Company or Trust	 	

 

	By:	 	 	 
	Name:	 	 	State
    of Organization
	Title:	 	 	 

 

	 	 	 
	Date	 	Address

 

AGREED
AND ACCEPTED:

 

TOUGHBUILT
INDUSTRIES, INC.

 

	By:		 	
	Name:	Michael
                                         Panosian

        
	 	Date
	Title:	Chief Executive
    Officer	 	 

 

    	- 17 -

    	 

    

 

TOUGHBUILT
INDUSTRIES, INC.

ACCREDITED
INVESTOR CERTIFICATION

 

For
Individual Investors Only

(All
individual investors must INITIAL where appropriate. Where there are joint investors both parties must INITIAL):

 

	Initial
    ______	 	I
    certify that I have a “net worth” of at least $1 million either individually or
    through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership
    interest with my spouse. For purposes hereof, “net worth” shall be deemed to include all of your assets, liquid
    or illiquid (excluding the value of your principal residence), minus all of your liabilities (excluding the amount of indebtedness
    secured by your principal residence up to its fair market value.)
	 	 	 
	Initial
    ______	 	I
    certify that I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse)
    and expect my income (or joint income, as appropriate) to reach the same level in the current year.

 

For
Non-Individual Investors

(all
Non-Individual Investors must INITIAL where appropriate):

 

	Initial ______	 	The undersigned certifies that it
    is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet either of
    the criteria for Individual Investors, above.
	 	 	 
	Initial ______	 	The undersigned
    certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least
    $5 million and was not formed for the purpose of investing in Company.
	 	 	 
	Initial ______	 	The undersigned certifies that it
    is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is
    a bank, savings and loan association, insurance company or registered investment adviser.
	 	 	 
	Initial ______	 	The undersigned certifies that it
    is an employee benefit plan whose total assets exceed $5,000,000 as of the date of the Subscription Agreement.
	 	 	 
	Initial ______	 	The undersigned
    certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet
    either of the criteria for Individual Investors, above.
	 	 	 
	Initial ______	 	The undersigned certifies that it
    is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary
    capacity.
	 	 	 
	Initial ______	 	The undersigned certifies that it
    is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
	 	 	 
	Initial ______	 	The undersigned certifies that it
    is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not
    formed for the specific purpose of investing in Company.
	 	 	 
	Initial ______	 	The undersigned
    certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in
    Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that
    he is capable of evaluating the merits and risks of the prospective investment.
	 	 	 
	Initial ______	 	The undersigned
    certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality
    thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
	 	 	 
	Initial ______	 	The undersigned
    certifies that it is an insurance company as defined in §2(a)(13) of the Securities Act of 1933, as amended, or a registered
    investment company.

 

    	- 18 -

    	 

    

 

BAD
ACTOR DISQUALIFICATION QUESTIONNAIRE

 

Instructions:
On September 23, 2013, the Securities and Exchange Commission (the “SEC”) rule disqualifying securities
offerings involving certain “felons and other ‘bad actors’” from reliance on Rule 506 of Regulation D
promulgated under the Securities Act of 1933, as amended (the “Securities Act”) went into effect. The new rule
triggers disclosure of bad actors and bad acts that occurred on or prior to September 23, 2013, and provides that bad actors/bad
acts occurring after September 23, 2013 cause the disqualification from reliance on Rule 506. In order to confirm that ToughBuilt
Industries, Inc. (the “Company”) remains eligible to rely on Rule 506 and to comply with the related disclosure
requirements, each (i) director, executive officer, other officer participating in an offering of securities, general partner
or managing member of the Company, (ii) beneficial owner of 20% or more of the Company’s outstanding voting equity securities,
(iii) any promoter connected with the Company at the time of the sale of the offering, (iv) any person that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of securities in the offering
(a “Solicitor”), (v) any general partner or managing member of any Solicitor, and (vi) any director, executive
officer or other officer participating in the offering of any Solicitor or general partner or managing member of any Solicitor
is required to complete and execute this Bad Actor Disqualification Questionnaire (this “Questionnaire”).

 

If
you are a person described in clauses (i) through (vi) above, you need to complete this Questionnaire. Please answer “Yes”
or “No” with respect to each of the items set forth below. If you answer “Yes” to any of the following,
please provide a detailed written description of all relevant facts and circumstances relating the applicable event, conviction,
order, proceeding or action.

 

		(1)	Have
                                         you been convicted, within the prior ten years, of any felony or misdemeanor: (A) in
                                         connection with the purchase or sale of any security; (B) involving the making of any
                                         false filing with the SEC; or (C) arising out of the conduct of the business of an underwriter,
                                         broker, dealer, municipal securities dealer, investment adviser or paid solicitor of
                                         purchasers of securities?	[  ]
    Yes [  ] No
	 	 	 	 
		(2)	Are
                                         you subject to any order, judgment or decree of any court of competent jurisdiction,
                                         entered within the prior five years, that restrains or enjoins you from engaging or continuing
                                         to engage in any conduct or practice: (A) in connection with the purchase or sale of
                                         any security; (B) involving the making of any false filing with the SEC; or (C) arising
                                         out of the conduct of the business of an underwriter, broker, dealer, municipal securities
                                         dealer, investment adviser or paid solicitor of purchasers of securities?	[  ]
    Yes [  ] No
	 	 	 	 
	 	(3)	Are
                                         you subject to a final order of a U.S. state securities commission (or an agency or officer
                                         of a U.S. state performing like functions); a U.S. state authority that supervises or
                                         examines banks, savings associations, or credit unions; a U.S. state insurance commission
                                         (or an agency or officer of a state performing like functions); an appropriate U.S. federal
                                         banking agency; the U.S. Commodity Futures Trading Commission (the “CFTC”);
                                         or the U.S. National Credit Union Administration that: (A) bars you from: (1) association
                                         with an entity regulated by such commission, authority, agency, or officer; (2) engaging
                                         in the business of securities, insurance or banking; or (3) engaging in savings association
                                         or credit union activities; or (B) constitutes a final order based on a violation of
                                         any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct entered
                                         within the last ten years?	[  ]
    Yes [  ] No

 

    	- 19 -

    	 

    

 

		(4)	Are
                                         you subject to an order of the SEC entered pursuant to section 15(b) or 15B(c) of the
                                         Securities Exchange Act of 1934, as amended (the “Exchange Act”),
                                         or section 203(e) or (f) of the Investment Advisers Act of 1940, as amended (the “Advisers
                                         Act”), that, (A) suspends or revokes your registration as a broker, dealer,
                                         municipal securities dealer or investment adviser; (B) places limitations on your activities,
                                         functions or operations; or (C) bars you from being associated with any entity or from
                                         participating in the offering of any penny stock?	[  ]
    Yes [  ] No
	 	 	 	 
		(5)	Are
                                         you subject to any order of the SEC entered within the last five years that orders you
                                         to cease and desist from committing or causing a violation or future violation of: (A)
                                         any scienter-based anti-fraud provision of the federal securities laws, including without
                                         limitation section 17(a)(1) of the Securities Act, section 10(b) of the Exchange Act,
                                         and 17 CFR 240.10b-5, section 15(c)(1) of the Exchange Act and section 206(1) of the
                                         Advisers Act, or any other rule or regulation thereunder; or (B) Section 5 of the Securities
                                         Act?	[  ]
    Yes [  ] No
	 	 	 	 
		(6)	Are
                                         you suspended or expelled from membership in, or suspended or barred from association
                                         with a member of, a registered national securities exchange or a registered national
                                         or affiliated securities association for any act or omission to act constituting conduct
                                         inconsistent with just and equitable principles of trade?	[  ]
    Yes [  ] No
	 	 	 	 
		(7)	Have
                                         you filed (as a registrant or issuer), or were you an underwriter or were you named as
                                         an underwriter in, any registration statement or Regulation A offering statement filed
                                         with the SEC that, within the prior five years, was the subject of a refusal order, stop
                                         order, or order suspending the Regulation A exemption, or are you the subject of an investigation
                                         or proceeding to determine whether a stop order or suspension order should be issued?	[  ]
    Yes [  ] No
	 	 	 	 
		(8)	Are
                                         you subject to a United States Postal Service false representation order entered within
                                         the last five years, or are you subject to a temporary restraining order or preliminary
                                         injunction with respect to conduct alleged by the United States Postal Service to constitute
                                         a scheme or device for obtaining money or property through the mail by means of false
                                         representations?	[  ]
    Yes [  ] No
	 	 	 	 
		(9)	To
                                         the best of your knowledge, are you now the subject of any action, regulatory complaint,
                                         proceeding or other event that could result in a “yes” answer to any part
                                         of items 1-8 above?	[  ]
    Yes [  ] No

 

You
hereby certify, represent and warrant that each of the above statements is true and correct and agree to immediately notify the
company if such information becomes inaccurate in any respect. You further agree to immediately notify the company of any action,
proceeding, investigation, event, action or development that could result in a “Yes” answer to any of the statements
set forth above.

 

	By:	 	 
	Name:	 	 
	Date:
    	 	 

 

    	- 20 -

    	 

    

 

TOUGHBUILT
INDUSTRIES, INC.

Investor
Profile

(Must
be completed by Investor)

 

Section
A - Personal Investor Information

 

Title
in Which Securities Should be Held: _____________________________________________

 

Individual
executing Profile: _______________________________________________________

 

Social
Security Number(s) / Federal I.D. Number: _______________________________________

 

Date
of Birth: _______________ Marital Status: _____________

 

Joint
Party Date of Birth: _________________

 

Investment
Experience (Years): ____________

 

Annual
Income: ________________

 

Liquid
Net Worth: ____________

 

Net
Worth: ______________

 

	Investment
    Objectives (circle one or more):	Long
    Term Capital Appreciation, Short Term Trading, Businessman’s Risk, Income, Safety of Principal, Tax Exempt Income or
    other

 

Home
Street Address: ___________________________________________________________

 

Home
City, State & Zip Code: ______________________________________________________________

 

Home
Phone: _______________________ Home Fax: ___________________

 

Home
Email: _____________________________

 

Employer:
_____________________________________________________________

 

Employer
Street Address: ____________________________________________________________

 

Employer
City, State & Zip Code: ____________________________________________________________

 

Bus.
Phone: ________________________ Bus. Fax: ______________________

 

Bus.
Email: ____________________________

 

Type
of Business: _______________________________________________________

 

[  ]
Please check if you are a FINRA member or affiliate of a FINRA member firm

 

JOSEPH
GUNNAR Account Executive / Outside Broker/Dealer: ___________________________________

 

    	- 21 -

    	 

    

 

TOUGHBUILT
INDUSTRIES, INC.

Investor
Profile

(Must
be completed by Purchaser)

 

Section
B – Entity Investor Information

 

Title
in Which Securities Should be Held: _________________________________________________

 

Authorized
Individual executing Profile or Trustee: __________________________________________

 

Social
Security Numbers / Federal I.D. Number: _____________________________________________

 

Investment
Experience (Years): _____________

 

Annual
Income: _______________

 

Net
Worth: ______________

 

Was
the Trust formed for the specific purpose of purchasing the Units? [  ] Yes [  ] No

 

Principal
Purpose (Trust) ___________________________________

 

Type
of Business: _____________________________________________________

 

	Investment
    Objectives (circle one or more):	Long
    Term Capital Appreciation, Short Term Trading, Businessman’s Risk, Income, Safety of Principal, Tax Exempt Income or
    other

 

Street
Address: ________________________________________________________

 

City,
State & Zip Code: ________________________________________________________

 

Phone:
____________________ Fax: _________________________

 

Email:
___________________________

 

[  ]
Please check if you are a FINRA member or affiliate of a FINRA member firm:

 

Joseph
Gunnar Account Executive / Outside Broker/Dealer: _____________________

 

    	- 22 -

    	 

    

 

TOUGHBUILT
INDUSTRIES, INC.

Form
of Payment & Securities Delivery Instructions

 

Section
C – Form of Payment – Check or Wire Transfer

 

	[  ]	Check
                                         payable to “SIGNATURE BANK, AS ESCROW AGENT FOR TOUGHBUILT INDUSTRIES, INC.”
	 	 
	[  ]	Wire
                                         funds from my outside account according to the “To subscribe for shares of Common
                                         Stock in the private offering of TOUGHBUILT INDUSTRIES, INC.” page (page “i”)
	 	 
	[  ]	Wire
                                         funds from my JOSEPH GUNNAR Account – See following page
	 	 
	[  ]	The
                                         funds for this investment are rolled over, tax deferred from ___________ within the Allowed
                                         60-day window

 

Section
D – Securities Delivery Instructions (check one)

 

	[  ]	Please
                                         deliver my securities to Joseph Gunnar for deposit into my brokerage account.
	 	 
	[  ]	Please
                                         deliver my securities to the address listed in the above Investor Profile.
	 	 
	[  ]	Please
                                         deliver my securities to the below address:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	- 23 -Exhibit
4.4

 

EXECUTION
COPY

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

TOUGHBUILT
INDUSTRIES, INC.

WARRANT TO PURCHASE COMMON STOCK

 

Warrant
No.: ____

Date
of Issuance: ________________ ___, 2016 (“Issuance Date”)

 

TOUGHBUILT
INDUSTRIES, INC., a Nevada corporation (the “Company”), hereby certifies that, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, _______, the registered holder hereof or its
permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the
Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the
“Warrant”), at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time,
on the Expiration Date (as defined below), __________(subject to adjustment as provided herein) fully paid and non-assessable
shares of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section 16. This Warrant is one of the Warrants to
Purchase Common Stock (the “Warrants”) issued pursuant to that certain Subscription Agreement, dated as
of_______ ___, 2016 (as may be amended from time to time, the “Subscription Agreement”) pursuant to which the
Company has offered and sold to the signatories thereto units (the “Units”) of the
Company’s securities consisting of Class B Convertible Preferred Stock, par value $0.0001 per share (the
“Class B Preferred Stock”), and Warrants.

 

    	 	 	 

    	 

    

 

1.
EXERCISE OF WARRANT.

 

(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth
in Section 1 (f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date, in whole or in part,
by delivery (whether via e-mail, facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the
“Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Business Day following
an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price
in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the
“Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not
notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section
1(d)). The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution
and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation
of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant
Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as
cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before
the first (1st) Business Day following the date on which the Company has received an Exercise Notice, the Company shall
transmit by e-mail or facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto
as Exhibit B, to the Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd)
Business Day following the date on which the Company has received an Exercise Notice from the Holder, the Company shall (X) provided
that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
issue and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent
or designee, in each case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice,
a certificate, registered in the Company’s share register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.
Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the
case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant
Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an
exercise, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than three (3) Business
Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) 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. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued
shall be rounded up to the nearest whole number. The Company shall pay any and all taxes and fees which may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

 

    	 	2	 

    	 

    

 

(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $6.00, subject to adjustment as
provided herein.

 

(c)
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue
to the Holder within three (3) Business Days after receipt of the applicable Exercise Notice, a certificate for the number of
shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register
or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise of this Warrant (as the case may be), then, in addition to all other remedies available to the
Holder, the Company shall pay in cash to the Holder on each day after such third (3rd) Business Day that the issuance
of such shares of Common Stock is not timely effected, (A) if the Common Stock is not then listed or quoted on an Eligible Market,
an amount equal to $10.00 per Business Day (increasing to $25.00 per Business Day on the third Business Day and increasing to
$50.00 per Business Day on the sixth Business Day after such damages begin to accrue) for each Business Day after the last possible
date on which the Company could have issued such shares of Common Stock to the Holder without violating Section 1(a) until such
shares of Common Stock are delivered or the Holder rescinds such exercise, and (B) if the Common Stock is then listed or quoted
on an Eligible Market, 2.0% of the product of (1) the aggregate number of shares of Common Stock not issued to the Holder on a
timely basis and to which the Holder is entitled and (2) the Closing Sale Price of the Common Stock on the Trading Day immediately
preceding the last possible date on which the Company could have issued such shares of Common Stock to the Holder without violating
Section 1(a). In addition to the foregoing, if within three (3) Business Days after the Company’s receipt of the applicable
Exercise Notice, the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock
on the Company’s share register or credit the Holder’s balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be), and if on or after such
third (3rd) Business Day the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any
portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of
the number of shares of Common Stock, issuable upon such exercise that the Holder so anticipated receiving from the Company, then,
in addition to all other remedies available to the Holder, the Company shall, within three (3) Business Days after the Holder’s
request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total
purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased
(including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as
the case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue
and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s
balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any
Business Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance
and payment under this clause (ii).

 

    	 	3	 

    	 

    

 

(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the
time of exercise hereof a registration statement registering the resale by the Holder of all of the Warrant Shares under the Securities
Act of 1933, as amended (the “Securities Act”), is not effective (or the prospectus contained therein is not
available for use), then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the
following formula (a “Cashless Exercise”):

 

Net
Number = (A x B) - (A x C)

     B

 

For
purposes of the foregoing formula:

 

A=
the total number of shares with respect to which this Warrant is then being exercised.

 

B=
the VWAP of the Common Stock (as reported by Bloomberg) on the date immediately preceding the date of the Notice of Exercise.

 

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

(e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number
of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.

 

    	 	4	 

    	 

    

 

(f)
Limitations on Exercises. Notwithstanding anything to the contrary contained in this Warrant, from and after such date
(the “Registration Date”) that shares of the Company’s Common Stock are registered under Section 12 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Warrant shall not be exercisable
by the Holder hereof to the extent (but only to the extent) that the Holder or any of its affiliates would beneficially own in
excess of 4.99% (the “Maximum Percentage”) of the Common Stock outstanding immediately after giving effect
to such issuance. To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis
other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities
shall be exercisable (as among all such securities owned by the Holder) shall, subject to such Maximum Percentage limitation,
be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No
prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions
of this paragraph with respect to any subsequent determination of exercisability. For the purposes of this paragraph, beneficial
ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership)
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage
beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect
to such Maximum Percentage limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.
The holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not amend or waive this paragraph
without the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request
of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities
into Common Stock, including, without limitation, pursuant to this Warrant or securities issued pursuant to the Subscription Agreement.
By written notice to the Company, at any time the Holder may increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the 61st day
after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder sending such
notice and not to any other holder of Warrants.

 

(g)
Insufficient Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of
shares of Common Stock equal to not less than 150% of the maximum number of shares of Common Stock issuable upon exercise of this
Warrant (without regard to any limitation otherwise contained herein with respect to the number of shares of Common Stock that
may be acquirable upon exercise of this Warrant) (the “Required Reserve Amount”). If, notwithstanding the foregoing,
and not in limitation thereof, at any time while any of the Warrants remain outstanding the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of
this Warrant at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the Warrants then outstanding. Without
limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share
Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold
a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal.

 

    	 	5	 

    	 

    

 

2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.

 

(a)
Stock Dividends and Splits. Without limiting any provision of Section 2(b) or Section 4, if the Company, at any time
on or after the date of the Subscription Agreement, (i) pays a stock dividend on one or more classes of its then outstanding shares
of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares
of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more
classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii)
or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If
any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder,
then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

 

(b)
Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the date on which no shares of Class B
Preferred Stock shall remain outstanding, the Company issues or sells, or in accordance with this Section 2(b) is deemed to have
issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the
account of the Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration
per share (the “New Issuance Price”) less than a price equal to the Exercise Price in effect immediately prior
to such issue or sale or deemed issuance or sale (such Exercise Price then in effect is referred to as the “Applicable
Price”) (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the
Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing
(including, without limitation, determining the adjusted Exercise Price and consideration per share under this Section 2(b)),
the following shall be applicable:

 

    	 	6	 

    	 

    

 

(i)
Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which
one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at the time of the grant or sale of such Option for
such price per share. For purposes of this Section 2(b)(i), the “lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option and (y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon
the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the
granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price
shall be made upon the actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

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

 

    	 	7	 

    	 

    

 

(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time, the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted,
issued or sold. For purposes of this Section 2(b)(iii), if the terms of any Option or Convertible Security that was outstanding
as of the date of issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence,
then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section
2(b) shall be made if such adjustment would result in an increase of the Exercise Price then in effect.

 

(iv) Calculation
of Consideration Received. If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of consideration received
by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except
where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company
for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Business Days immediately
preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable
to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other
than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following
such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company.

 

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

 

    	 	8	 

    	 

    

 

(c)
Adjustment of Exercise Price Upon Adjustment of Class B Preferred Stock. If and whenever on or after the date hereof and
so long as any shares of Class B Preferred Stock shall remain outstanding, the Company issues or sells, or is deemed to have issued
or sold, any shares of Common Stock, Options or Convertible Securities resulting in an adjustment in the Conversion Price (as
defined in the Class B Certificate of Designations) or Conversion Rate (as defined in the Class B Certificate of Designations)
for the Class B Preferred Stock pursuant to Section 6 of the Class B Certificate of Designations (each, a “Class B Preferred
Dilutive Event”), then, in each case, immediately after such Class B Preferred Dilutive Event and automatically, without
any further action by the Company or the Holder of this Warrant, the Exercise Price of this Warrant shall be reduced to a price
per share that shall be equal to the product of (I) the Conversion Price of the Class B Preferred Shares, as so adjusted, multiplied
by (II) 1.20. For the purposes of clarity, the provisions of this Section 2(c) shall apply in lieu of Section 2(b) for so long
as any shares of Class B Preferred Stock shall remain outstanding, and the provisions of Section 2(b) shall apply in lieu of this
Section 2(c) from and after the date on which no shares of Class B Preferred Stock shall remain outstanding.

 

(d)
Other Events. In the event that the Company or any Subsidiary shall take any action to which the provisions hereof are
not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the
type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without limitation,
the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number
of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this
Section 2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this
Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder
against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent
investment bank to make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses
shall be borne fifty percent (50%) by the Holder and fifty percent (50%) by the Company.

 

(e)
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest one-hundred thousandth of
a cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall
be considered an issue or sale of Common Stock.

 

    	 	9	 

    	 

    

 

3.
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall declare
or make any dividend or other distribution of its assets (or rights to acquire its assets) to all or substantially all of the
holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this
Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the
Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent
that the Holder’s right to participate in any such Distributions would result in the Holder exceeding the Maximum Percentage,
then the Holder shall not be entitled to participate in such Distribution to such extent (or the beneficial ownership of any such
shares of Common Stock as a result of such Distribution to such extent) and such Distribution to such extent shall be held in
abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the Maximum Percentage).

 

4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all
or substantially all of the record holders of any class of shares of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which such record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result
in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to
such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such
Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Maximum Percentage).

 

    	 	10	 

    	 

    

 

(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor
Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined
in the Subscription Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and
substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to
deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number
of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which
applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares
of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the
number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction) and (ii) the Successor Entity (including its Parent Entity)
is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation
of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date
of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor
Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the
consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter))
issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common
stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the
provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of
each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets
with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate
provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after
the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common
Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above,
which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction,
such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had
this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on
the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in form and substance reasonably satisfactory
to the Holder.

 

(c)
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under the Exchange Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).

 

 

    	 	11	 

    	 

    

 

5.
 NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its articles
of incorporation or bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as
may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not
increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then
in effect, (ii) shall 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 shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any
of the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares
of Common Stock, solely for the purpose of effecting the exercise of the Warrants, 150% of the maximum number of shares of Common
Stock as shall from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations
on exercise).

 

6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity
as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

7.
REISSUANCE OF WARRANTS.

 

(a)
Transfer of Warrant. Subject to Section 15, if this Warrant is to be transferred, the Holder shall surrender this Warrant
to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance
with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred,
a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares
not being transferred.

 

    	 	12	 

    	 

    

 

(b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this
Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the
right to purchase the Warrant Shares then underlying this Warrant.

 

(c)
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right
to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase
such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants
for fractional shares of Common Stock shall be given.

 

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

 

8.
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall
be given in the manner and to the addresses set forth in the Subscription Agreement. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder
(i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail,
and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) 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 shares of Common Stock, (B) with
respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to all or substantially all of the holders of shares of Common Stock 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 and (iii) at least ten (10) Business
Days prior to the consummation of any Fundamental Transaction. From and after the Registration Date, to the extent that any notice
provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries,
the Company shall simultaneously file such notice with the Commission (as defined in the Subscription Agreement) pursuant to a
Current Report on Form 8-K.

 

    	 	13	 

    	 

    

 

9.
AMENDMENT AND WAIVER. Except as otherwise expressly set forth herein, the provisions of this Warrant (other than Section
1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Holder. The Holder shall be entitled, at its option, to the
benefit of any amendment of (i) any other similar warrant issued under the Subscription Agreement or (ii) any other similar warrant.
Except as otherwise expressly set forth herein, no waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.

 

10.
SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).

 

11.
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.
The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New
York, County of New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall (i) be deemed or
operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to
collect on the Company’s obligations to the Holder or to enforce a judgment or other court ruling in favor of the Holder
or (ii) limit, or be deemed to limit, any provision of Section 13. 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.

 

    	 	14	 

    	 

    

 

12.
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not
be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall
not form part of, or affect the interpretation of, this Warrant.

 

13.
DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation
of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via email or facsimile
within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder.
If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant
Shares within five (5) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then
the Company shall, within two (2) Business Days submit via email or facsimile (a) the disputed determination of the Exercise Price
to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause the investment
bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder
of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties
absent demonstrable error. The expenses of the investment bank and accountant will be borne by the Company unless the investment
bank or accountant determines that the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares
by the Holder was incorrect, in which case the expenses of the investment bank and accountant will be borne by the Holder.

 

14.
REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall
be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or
in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right
of the Holder to pursue damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants
to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder
to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without
limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon
the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in
respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

    	 	15	 

    	 

    

 

15.
RESTRICTIONS ON TRANSFER; LEGENDS.

 

(a)
Registration or Exemption Required. Assuming the accuracy of the representations and warranties of the Holder contained
in the Subscription Agreement, this Warrant has been issued in a transaction exempt from the registration requirements of the
Securities Act by virtue of Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and exempt from state
registration or qualification under applicable state laws. The Holder acknowledges that the Holder has been advised by the Company
that this Warrant and the Warrant Shares issuable upon exercise thereof have not been registered under the Securities Act. Neither
this Warrant nor the Warrant Shares may be pledged, transferred, sold or assigned except pursuant to an effective registration
statement or an exemption to the registration requirements of the Securities Act and applicable state laws. If, at the time of
the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws,
the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case
may be, will furnish to the Company such documentation as reasonably requested to enable the Company to obtain an opinion of counsel
(at the Company’s expense) to the effect that such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment
letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as
defined in Rule 501(a) promulgated under the Securities Act or a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.

 

(b)
Representation of Holder. The Holder represents and warrants that the Holder has acquired this Warrant and will acquire
the Warrant Shares for the Holder’s own account for investment and not with a view to the sale or distribution thereof or
the granting of any participation therein, and that the holder has no present intention of distributing or selling to others any
of such interest or granting any participation therein. The Holder acknowledges that the Warrant and Warrant Shares must be held
indefinitely unless a subsequent disposition thereof is registered under the Securities Act or registered or qualified under any
applicable state securities or “blue-sky” laws or is exempt from registration or qualification. The Holder has no
need for liquidity in its investment in the Company, and is able to bear the economic risk of such investment for an indefinite
period and to afford a complete loss thereof. The Holder is an “accredited investor” as such term is defined in Rule
501 (the provisions of which are known to the Holder) promulgated under the Securities Act.

 

(c)
Restrictive Legend. The Holder understands that until such time as the Warrant Shares have been registered under the Securities
Act, or otherwise may be sold pursuant to Rule 144 under the Securities Act or an exemption from registration under the Securities
Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, this Warrant
and the Warrant Shares, as applicable, shall bear a restrictive legend in substantially the form set forth on the cover page of
this Warrant (and a stop-transfer order may be placed against transfer of the certificates for such securities).

 

    	 	16	 

    	 

    

 

(d)
Disposition of Warrant or Warrant Shares. With respect to any offer, sale or other disposition of this Warrant or any Warrant
Shares prior to registration of such Warrant Shares, the Holder agrees to give written notice to the Company prior thereto, describing
briefly the manner thereof, together with evidence, reasonably satisfactory to the Company (which shall include such representation
of the transferee regarding investment intent as the Company may request), to the effect that such offer, sale or other disposition
may be effected without registration or qualification (under the Securities Act as then in effect or any federal or state securities
law then in effect) of this Warrant or such Warrant Shares and indicating whether or not under the Securities Act certificates
for this Warrant or Warrant Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions
on transferability in order to ensure compliance with such law. Upon receiving such written notice and reasonably satisfactory
evidence, the Company, as promptly as practicable but no later than seven (7) days after receipt of the written notice, shall
notify the Holder that the Holder may sell or otherwise dispose of this Warrant or Warrant Shares, all in accordance with the
terms of the notice delivered to the Company. If the Company determines that the evidence is not reasonably satisfactory to the
Company, the Company shall so notify the Holder promptly with details thereof after such determination has been made. Notwithstanding
the foregoing, any Warrant Shares may be offered, sold or otherwise disposed of in accordance with Rule 144 under the Securities
Act and in compliance with the applicable statutory resale restrictions imposed by state securities laws, provided that the Company
shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the
provisions of Rule 144 and the applicable resale restrictions imposed by state securities laws have been satisfied. Each certificate
representing this Warrant or the Warrant Shares thus transferred shall bear a legend as to the applicable restrictions on transferability
in order to ensure compliance with such laws, unless pursuant to an opinion of counsel for the Holder, such legend is not required
in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in connection
with such restrictions.

 

(e)
Removal of Restrictive Legends. The certificates evidencing the Warrant Shares shall not contain any legend restricting
the transfer thereof: (A) while a registration statement covering the sale or resale of the Warrant Shares is effective under
the Securities Act and such legend removal is permitted under applicable securities laws (including compliance with the prospectus
delivery requirements of the Securities Act), or (B) following any sale of such Warrant Shares pursuant to Rule 144, or (C) if
such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission) and the Company shall have received an opinion of counsel to the Holder in form reasonably
acceptable to the Company to such effect (collectively, the “Unrestricted Conditions”); provided that the Company
shall bear the reasonable expense of any legal opinions relating to (I) sales of Warrants or Warrant Shares made in reliance on
Rule 144 by any Purchaser that is not an “affiliate” as defined in Rule 144 made after the first anniversary of the
Closing Date or (II) any private sale or other transfer of this Warrant or the Warrant Shares. The Company shall cause its counsel
to issue a legal opinion to its transfer agent if required by the transfer agent to effect the issuance of the Warrant Shares,
as applicable, without a restrictive legend or removal of the legend hereunder. The Company agrees that at such time as the Unrestricted
Conditions are met, it will, no later than three (3) Business Days following the delivery by the Holder to the Company or the
transfer agent of a certificate representing Warrant Shares, issued with a restrictive legend, deliver or cause to be delivered
to such Holder a certificate (or electronic transfer) representing such Warrant Shares that is free from all restrictive and other
legends.

 

    	 	17	 

    	 

    

 

16.
REGISTRATION RIGHTS. This Warrant shall be subject to the registration rights set forth in the Subscription Agreement.

 

17.
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

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

 

(b)
“Bid Price” means, for any security as of the particular time of determination, the bid price for such security
on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing
does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of
such time of determination, the average of the bid prices of any market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. as of such time of determination. If the Bid Price cannot be calculated for a security
as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in
Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.

 

(c)
“Bloomberg” means Bloomberg, L.P.

 

(d)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.

 

(e)
“Class B Certificate of Designations” means that certain Certificate of Designations of Preferences,
Rights and Limitations of Class B Convertible Preferred Stock, dated July ____, 2016, a form of which is included as Exhibit D to
the Memorandum.

 

    	 	18	 

    	 

    

 

(f)
“Closing Sale Price” means, for any security as of any date, the last trade price for such security on the
Principal Market, as reported by Bloomberg, 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 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last
trade price of such security on the principal securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security
by Bloomberg, the average of the ask prices of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. 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. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction during such period.

 

(g)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii)
any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification
of such common stock.

 

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

 

(i)
“Eligible Market” means The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market,
the New York Stock Exchange, the NYSE MKT, the NYSE Arca, or the OTCQB or OTCQX operated by the OTC Markets Group, Inc. (or any
nationally recognized successor to any of the foregoing).

 

(j)
“Excluded Securities” shall have the meaning ascribed thereto in the Class B Certificate of Designations.

 

(k)
“Expiration Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if
such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.

 

    	 	19	 

    	 

    

 

(l)
“Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly,
in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries
is the surviving corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of
all or substantially all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase,
tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination),
or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchage Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued
and outstanding Voting Stock of the Company.

 

(m)
“Memorandum” means the Company’s Confidential Private Placement Memorandum, dated July 11, 2016, as may
be amended and/or supplemented, from time to time, setting forth the terms of the sale of the units under the Subscription Agreement.

 

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

 

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

 

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

 

(q)
“Principal Market” means The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market,
the New York Stock Exchange, the NYSE MKT, the NYSE Arca, or the OTCQB or OTCQX operated by the OTC Markets Group, Inc. (or any
nationally recognized successor to any of the foregoing), whichever is at the time the principal trading exchange or market for
the Common Stock.

 

(r)
“Subsidiary” or
“Subsidiaries” of any Person means (i) any corporation with respect to which more than 50% of the issued and outstanding
voting equity interests of such corporation is at the time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries, or (ii) any partnership
or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether
in the form of voting or participation in profits or capital contribution) of more than 50% or of which any such Person is a general
partner or may exercise the powers of a general partner.

 

    	 	20	 

    	 

    

 

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

 

(t)
“Trading Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock,
any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then
traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such
exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of
trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on
such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as
a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the
Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.

 

(u)
“Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the
holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors,
managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).

 

(v)
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Common Stock is then listed or quoted on an Eligible Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Eligible Market on which the Common Stock is then listed or quoted as reported
by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common
Stock is not then listed or quoted for trading on an Eligible Market and if prices for the Common Stock 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 of the Common Stock so reported, or (c) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section
13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.

 

[signature
page follows]

 

    	 	21	 

    	 

    

 

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

 

	 	TOUGHBUILT
    INDUSTRIES, INC.
	 	 	 
	 	By:	                      
	 	Name:	 
	 	Title:	 

 

    	 	 	 

    	 

    

 

EXHIBIT
A

 

EXERCISE
NOTICE

 

TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT
TO PURCHASE COMMON STOCK

 

TOUGHBUILT
INDUSTRIES, INC.

 

The
undersigned holder hereby exercises the right to purchase _______________of the shares of Common Stock (“Warrant
Shares”) of TOUGHBUILT INDUSTRIES, INC., a Nevada corporation (the “Company”), evidenced by Warrant
to Purchase Common Stock No. _____ (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:
	 	 	 
	 	 	__________
                                                            
                                         a “Cash Exercise” with respect to ______________Warrant Shares;
                                         and/or
	 	 	 
	 	 	__________
                                                             a
                                         “Cashless Exercise” with respect to ___________Warrant Shares.

 

In
the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at _________________
[a.m.][p.m.] on the date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice
was $_________.

 

  2. Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the 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 Holder, or its designee
or agent as specified below, _____Warrant Shares in accordance with the terms of the Warrant. Delivery shall be made to
Holder, or for its benefit, to the following address:

 

	 	_______________________	 
	 	_______________________	 
	 	_______________________	 
	 	_______________________	 

 

Date:
____________ __________, _______

 

___________________________________

Name
of Registered Holder

 

	By:	 	 
	Name:	 	 
	Title:	 	 

 

    	 	 	 

    	 

    

 

EXHIBIT
B

 

ACKNOWLEDGMENT

 

The
Company hereby acknowledges this Exercise Notice and hereby directs _________________ to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated _______, 20 ___, from the Company and acknowledged
and agreed to by_______________.

 

	 	TOUGHBUILT
    INDUSTRIES, INC.
	 	 	 
	 	By:	                        
	 	Name:	 
	 	Title:

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