Document:

Exhibit 4.8

Exhibit 4.8

WARRANT CERTIFICATE

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).  THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.

 

THIS WARRANT AND THE SECURITIES DELIVERABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THIS WARRANT MAY NOT BE EXERCISED UNLESS THE WARRANT AND THE UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE

Unless permitted under securities legislation, the holder of this security must not trade the security before April 8, 2020.

 

Without prior written approval of TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented by this certificate may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until April 8,2020.

 

TIMBERLINE RESOURCES CORPORATION

 

SERIES K WARRANTS 
TO PURCHASE SHARES

OF COMMON STOCK OF

TIMBERLINE RESOURCES CORPORATION

 

[Recipient’s Name]

CERTIFICATE NO.: K-

 

Warrant to Purchase

 Shares of Common Stock

October 8, 2019

(“Issue Date”)

Warrant Certificate – Warrant Exercise Form - 1

FOR VALUE RECEIVED, TIMBERLINE RESOURCES CORPORATION, a Delaware corporation (the "Company"), hereby certifies that [Recipient’s Name], its successor or permitted assigns (the "Holder"), is entitled, subject to the provisions of this Series K Warrant, to purchase from the Company, at the times specified herein, [number] fully paid and non-assessable shares of Common Stock of the Company, par value $0.001 per share (the "Common Stock"), at a purchase price per share equal to the Exercise Price (as hereinafter defined).

1.Definitions.  (A)  The Following Terms, As Used Herein, Have The Following Meanings: 

"Affiliate" shall have the meaning given to such term in Rule 12b-2 promulgated under the Securities and Exchange Act of 1934, as amended.

"Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in the City of Coeur d’Alene, Idaho are authorized by law to close.

"Common Stock" means the Common Stock, par value $0.001 per share, of the Company.

"Duly Endorsed" means duly endorsed in blank by the Person or Persons in whose name a stock certificate is registered or accompanied by a duly executed stock assignment separate from the certificate with the signature(s) thereon guaranteed by a commercial bank or trust company or a member of a national securities exchange or of the National Association of Securities Dealers, Inc.

“Exercise Date” means the date a Warrant Certificate and Warrant Exercise Subscription Form are delivered to the Company in the manner provided in Section 10 below.

"Exercise Price" means US$0.08 per share until the Expiration Date.

"Expiration Date" means 5:00 p.m. pacific time (Coeur d’Alene, Idaho) on January 20, 2023; provided that if such date shall in the City of Coeur d’Alene, Idaho be a holiday or a day on which banks are authorized to close, then 5:00 p.m. on the next following day which in the City of Coeur d’Alene, Idaho is not a holiday or a day on which banks are authorized to close.

"Initial Warrant Exercise Date" means the date hereof.

"Person" means an individual, partnership, corporation, trust, joint stock company, association, joint venture, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Principal Market” means the OTCQB or the primary securities exchanges or market on which such security may at the time be listed or quoted for trading.

"Warrant Shares" means the shares of Common Stock deliverable upon exercise of this Warrant, as adjusted from time to time.

2.Exercise Of Warrant. 

(a)The Holder is entitled to exercise this Warrant in whole or in part at any time on or after the Initial Warrant Exercise Date until the Expiration Date.  To exercise this Warrant, the Holder shall deliver to the Company this Warrant Certificate, including the Warrant Exercise Subscription Form forming a part hereof duly executed by the Holder, together with payment of the applicable Exercise Price.  Upon such delivery and payment, the Holder shall be deemed to be the holder of record of the Warrant Shares subject to such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder.  No fractional shares will be issued. 

(b)The Exercise Price may be paid to the Company in cash or by certified or official bank check or bank cashier's check payable to the order of the Company, or by wire transfer or by any combination of cash, check or wire transfer. 

Warrant Certificate – Warrant Exercise Form - 2

 

(c)If the Holder exercises this Warrant in part, this Warrant Certificate shall be surrendered by the Holder to the Company and a new Warrant Certificate of the same tenor and for the unexercised number of Warrant Shares shall be executed by the Company.  The Company shall register the new Warrant Certificate in the name of the Holder or in such name or names of its transferee pursuant to paragraph 6 hereof as may be directed in writing by the Holder and deliver the new Warrant Certificate to the Person or Persons entitled to receive the same. 

(d)Upon surrender of this Warrant Certificate in conformity with the foregoing provisions, the Company shall transfer to the Holder of this Warrant Certificate appropriate evidence of ownership of the shares of Common Stock or other securities or property to which the Holder is entitled, registered or otherwise placed in, or payable to the order of, the name or names of the Holder or such transferee as may be directed in writing by the Holder, and shall deliver such evidence of ownership and any other securities or property to the Person or Persons entitled to receive the same.   

(e)In no event may the Holder exercise these Warrants in whole or in part unless the Holder is an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended (the “U.S. Securities Act”).  

 

3.Exercise Restrictions.  Notwithstanding any other provision hereof, no Holder shall exercise these Warrants, if as a result of such conversion the holder would then become a “ten percent beneficial owner” (as defined in Rule 16a-2 under the Securities Exchange Act of 1934, as amended) of Common Stock.  For greater certainty, the Warrants shall not be exercisable by the Holder or redeemed by the Company, if, after giving effect to such exercise, the holder of such securities, together with its affiliates, would in aggregate beneficially own, or exercise control or direction over that number of voting securities of the Company which is 9.99% or greater of the total issued and outstanding voting securities of the Company, immediately after giving effect to such exercise; provided, however, that upon a holder of these Warrants providing the Company with a Waiver Notice that such holder would like to waive the provisions of this paragraph 3 with regard to any or all shares of Common Stock issuable upon exercise of these Warrants, this paragraph 3 shall be of no force or effect with regard to those shares of Common Stock referenced in the Waiver Notice; provided, further, that this provision shall be of no further force or effect during the sixty-one (61) days immediately preceding the expiration of the term of these Warrants. 

 

4.Restrictive Legend.  Certificates representing shares of Common Stock issued pursuant to this Warrant shall bear a legend substantially in the form of the legend set forth on the first page of this Warrant Certificate to the extent that and for so long as such legend is required pursuant to applicable law. 

 

6.Covenants of the Company. 

 

(a)The Company hereby agrees that at all times there shall be reserved for issuance and delivery upon exercise of this Warrant such number of its authorized but unissued shares of Common Stock or other securities of the Company from time to time issuable upon exercise of this Warrant as will be sufficient to permit the exercise in full of this Warrant.  All such shares shall be duly authorized and, when issued upon such exercise, shall be validly issued, fully paid and non-assessable, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights. 

 

(b)The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, 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, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) use its best efforts to obtain all such authorizations, exemptions or consents from any public  

Warrant Certificate – Warrant Exercise Form - 3

regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

(c)Before taking any action which would cause an adjustment reducing the current Exercise Price below the then par value, if any, of the shares of Common Stock issuable upon exercise of the Warrants, the Company shall take any corporate action which may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of such Common Stock at such adjusted Exercise Price. 

 

(d)Before taking any action which would result in an adjustment in the number of shares of Common Stock for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 

 

(e)The Company covenants that during the period the Warrant is outstanding, it will use its best efforts to comply with any and all reporting obligations under the Securities Exchange Act of 1934, as amended. 

 

(f)The Company will take all such reasonable action as may be necessary (i) to maintain a Principal Market for its Common Shares in the United States and (ii) to assure that such Warrant Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Principal Market upon which the Common Stock may be listed. 

 

(g)The Company shall preserve and maintain its corporate existence and all licenses and permits that are material to the proper conduct of its business. 

 

(h)The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant. 

 

7.Exchange, Transfer or Assignment of Warrant; Registration. 

 

(a)Each taker and holder of this Warrant Certificate by taking or holding the same, consents and agrees that the registered holder hereof may be treated by the Company and all other persons dealing with this Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby. 

 

(b)The Holder agrees that this Warrant is non-transferrable. 

 

8.Anti-Dilution Provisions.  The Exercise Price in effect at any time and the number and kind of securities purchasable upon the exercise of the Warrant shall be subject to adjustment from time to time upon the happening of certain events as follows: 

 

(a)In case the Company shall (i) declare a dividend or make a distribution on its outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into a greater number of shares, or (iii) combine or reclassify its outstanding shares of Common Stock into a smaller number of shares, the number of Warrant Shares shall be proportionately adjusted to reflect such dividend, distribution, subdivision, reclassification or combination. For example, if the Company declares a 2 for 1 stock split and the number of Warrant Shares immediately prior to such event was 200,000, the number of Warrant Shares immediately after such event would be 400,000.  Such adjustment shall be made successively whenever any event listed above shall occur.   

(b)Whenever the number of Warrant Shares is adjusted pursuant to Subsection (a) above, the Exercise Price shall simultaneously be adjusted by multiplying the Exercise Price immediately prior to such event by the number of Warrant Shares immediately prior to such event and dividing the product so obtained by the number of Warrant Shares, as adjusted. If an Exercise Price has not yet been established, an adjustment thereof shall be deferred until one is established pursuant to the terms of this Warrant. 

(c)No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least five percent (5%) in such price; provided, however, that any adjustments which by  

Warrant Certificate – Warrant Exercise Form - 4

reason of this Subsection (c) are not required to be made shall be carried forward and taken into account in any subsequent adjustment required to be made hereunder. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be.

(d)Whenever the Exercise Price is adjusted, as herein provided, the Company shall promptly cause a notice setting forth the adjusted Exercise Price and adjusted number of Shares issuable upon exercise of each Warrant to be mailed to the Holder.  The Company may retain a firm of independent certified public accountants selected by the Board of Directors (who may be the regular accountants employed by the Company) to make any computation required by this Section 7, and a certificate signed by such firm shall be conclusive evidence of the correctness of such adjustment. 

(e)In the event that at any time, as a result of an adjustment made pursuant to Subsection (a) above, the Holder of this Warrant thereafter shall become entitled to receive any shares of the Company, other than Common Stock, thereafter the number of such other shares so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in Subsection (a), above. 

(f)Irrespective of any adjustments in the Exercise Price or the number or kind of shares purchasable upon exercise of this Warrant, Warrants theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in this Warrant. 

(g)In case at any time or from time to time conditions arise by reasons of action taken by the Company, which in the reasonable opinion of its Board of Directors, are not adequately covered by the provisions of Section 7 hereof, and which might materially and adversely affect the exercise rights of the Holder hereof, the Board of Directors shall appoint a firm of independent certified public accountants, which may be the firm regularly retained by the Company, which will give their opinion upon the adjustment, if any, on a basis consistent with the standards established in the other provisions of Section 7 necessary with respect to the Exercise Price then in effect and the number of shares of Common Stock for which the Warrant is exercisable, so as to preserve, without dilution, the exercise rights of the Holder.  Upon receipt of such opinion, the Board of Directors shall forthwith make the adjustments described therein. 

9.Loss or Destruction of Warrant.  Upon receipt by the Company of evidence satisfactory to it (in the exercise of its reasonable discretion) of the loss, theft, destruction or mutilation of this Warrant Certificate, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant Certificate, if mutilated, the Company shall execute and deliver a new Warrant Certificate of like tenor and date. 

Warrant Certificate – Warrant Exercise Form - 5

 

 

10.Notices.  Any notice, demand or delivery authorized by this Warrant Certificate shall be in writing and shall be given to the Holder or the Company, as the case may be, at its address (or telecopier number) set forth below, or such other address (or telecopier number) as shall have been furnished to the party giving or making such notice, demand or delivery: 

 

If to the Company:TIMBERLINE RESOURCES CORPORATION 

101 East Lakeside Avenue

Coeur d’Alene, ID  83814

Attn:  Steven Osterberg, CEO

Fax:  208-664-4860

 

With a copy to:Dorsey & Whitney LLP 

1400 Wewatta Street

Suite 400

Denver, CO 80202-5549

Fax:303-629-3450 

Attention:  Jason K. Brenkert, Esq.

 

If to the Holder: at the address set forth on the last page of this Warrant. 

 

Each such notice, demand or delivery shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified herein and the intended recipient confirms the receipt of such telecopy or (ii) if given by any other means, when received at the address specified herein.  

11.Rights of the Holder.  Prior to the exercise of any Warrant, the Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Company, including, without limitation, the right to vote, to receive dividends or other distributions, to exercise any preemptive right or any notice of any proceedings of the Company except as may be specifically provided for herein. 

12.GOVERNING LAW.  THIS WARRANT CERTIFICATE AND ALL RIGHTS ARISING HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, AND THE PERFORMANCE THEREOF SHALL BE GOVERNED AND ENFORCED IN ACCORDANCE WITH SUCH LAWS. 

13.Amendments; Waivers.  Any provision of this Warrant Certificate may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Holder and the Company, or in the case of a waiver, by the party against whom the waiver is to be effective.  No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. 

14.Company Reorganization.  In the event of any sale of substantially all the assets of the Company or any reorganization, reclassification, merger or consolidation of the Company where the Company is not the surviving entity, then as a condition to the Company entering into such transaction, the entity acquiring such assets or the surviving entity, as the case may be, shall agree to assume the Company's obligations hereunder. 

************

Warrant Certificate – Warrant Exercise Form - 6

 

IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed by its duly authorized officer and to be dated as of October 8, 2019.

TIMBERLINE RESOURCES CORPORATION

By:                                                               

 

Name:  Steven A. Osterberg

 

Title:  President & Chief Executive Officer

 

HOLDER:

 

(Name and address)

Warrant Certificate – Warrant Exercise Form - 7EXHIBIT
4.1

 

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 (WHICH COUNSEL SHALL BE SELECTED
BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS 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.

 

		Right
to Purchase ____________shares of Common Stock
    of Stem Holdings, Inc. (subject to
    adjustment as provided herein)

 

COMMON
STOCK PURCHASE WARRANT

 

	No.______________________

        Name:____________________
	 	Issue
                                         Date:____________

        Price:_________________

 

 

STEM
HOLDINGS, INC., a corporation organized under the laws of the State of Nevada (the “Company”), hereby certifies
that, for value received,_____________________ , with an address at ___________________, or its assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company at any time after the Issue Date until 5:00 p.m., E.S.T. on the two (2) year
anniversary of the Issue Date (the “Expiration Date”), up to_________________ fully paid and non-assessable shares of Common
Stock at a per share purchase price of $0.53 per share. The aforedescribed purchase price per share, as adjusted from time
to time as herein provided, is referred to herein as the “Purchase Price.” The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as provided herein. The Company may reduce the Purchase
Price for some or all of the Warrants, temporarily or permanently, provided such reduction is made as to all outstanding
Warrants for all Holders of such Warrants.

 

As
used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 

(a)
The term “Company” shall mean Stem Holdings, Inc., a Nevada corporation.

 

(b)
The term “Common Stock” includes (i) the Company’s Common Stock, $0.001 par value per share and (ii)
any other securities into which or for which any of the securities described in (i) may be converted or exchanged pursuant to
a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

 

    	 

     

    

 

(c)
The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company
or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall
have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable
or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 hereof
or otherwise.

 

(d)
The term “Warrant Shares” shall mean the Common Stock issuable upon exercise of this Warrant.

 

1.
Exercise of Warrant.

 

1.1.
Number of Shares Issuable upon Exercise. From and after the Issue Date through and including the Expiration Date, the Holder
shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of Section 1.2 hereof
or upon exercise of this Warrant in part in accordance with Section 1.3 hereof, shares of Common Stock of the Company,
subject to adjustment pursuant to Section 2 hereof.

 

1.2.
Full Exercise. This Warrant may be exercised in full by the Holder hereof by delivery to the Company of an original or
facsimile copy of the Notice of Exercise form attached as Exhibit A hereto (the “Notice of Exercise”)
duly executed by such Holder and delivered within two (2) business days thereafter of payment, in cash, wire transfer or by certified
or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Purchase Price then in effect. The original Warrant is not required to
be surrendered to the Company until it has been fully exercised.

 

1.3.
Partial Exercise. This Warrant may be exercised in part (but not for a fractional share) by delivery of a Notice of Exercise
in the manner and at the place provided in Section 1.2 hereof, except that the amount payable by the Holder on such partial
exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in
the Notice of Exercise by (b) the Purchase Price then in effect. On any such partial exercise, upon the written request of the
Holder, provided the Holder has surrendered the original Warrant, the Company, at its expense, will forthwith issue and deliver
to or upon the order of the Holder a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment
by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant
may still be exercised.

 

1.4.
Fair Market Value. For purposes of this Warrant, the Fair Market Value of a share of Common Stock as of a particular
date (the “Determination Date”) shall mean:

 

(a)
If the Company’s Common Stock is traded on an exchange or on the NASDAQ Capital Market, NASDAQ Global Select Market, the
New York Stock Exchange or the NYSE Euronext, the average of the closing sale prices of the Common Stock for the five (5) trading
days immediately prior to (but not including) the Determination Date;

 

    	2

     

    

 

(b)
If the Company’s Common Stock is not traded on an exchange or on the NASDAQ Global Market, NASDAQ Global Select Market,
the NASDAQ Capital Market, the New York Stock Exchange or the NYSE Euronext, but is traded on the OTC Bulletin Board or in the
over-the- counter market or Pink Sheets, the average of the closing bid and ask prices reported for the five (5) trading days
immediately prior to (but not including) the Determination Date;

 

(c)
Except as provided in clause (d) below and Section 3.1 hereof, if the Company’s Common Stock is not publicly traded,
then as the Holder and the Company shall mutually agree, or in the absence of such an agreement after good faith efforts of the
Company and the Holder to reach an agreement, by arbitration in accordance with the rules then standing of the American Arbitration
Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the
matter to be decided; or

 

(d)
If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company’s charter, then all amounts to be payable per share to holders of the Common Stock
pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of
the shares of Common Stock then issuable upon exercise of all of the Warrants are outstanding at the Determination Date.

 

1.5.
Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be
entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.

 

1.6.
Delivery of Stock Certificates, etc. on Exercise. The Company agrees that, provided the purchase price listed in the Notice
of Exercise is received as specified in Section 2 hereof, the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on
which delivery of a Notice of Exercise shall have occurred and payment made for such shares as aforesaid. As soon as practicable
after the exercise of this Warrant in full or in part and the payment is made, and in any event within five (5) business days
thereafter (“Warrant Share Delivery Date”), the Company, at its expense (including the payment by it of any
applicable issue taxes), will cause to be issued in the name of, and delivered to, the Holder hereof, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate
or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities)
to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise
be entitled, either (i) cash equal to such fraction multiplied by the then Fair Market Value of one full share of Common Stock,
together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled
upon such exercise pursuant to Section 1 hereof or otherwise (ii) an extra share of Common Stock. The Company understands
that a delay in the delivery of the Warrant Shares after the Warrant Share Delivery Date could result in economic loss to the
Holder. If a warrant holder notifies the Company of such Holder’s election to exercise and the Company does not deliver
the shares of Common Stock issuable upon such exercise, and the Holder has to buy shares of the Company’s Common Stock on
the open market because of the Holder’s obligation to deliver shares of Common Stock, then the Company will pay such Holder
the difference between the price paid on the open market and the value of such Common Stock on the date of exercise. The Company
will also pay interest at the annual rate of 15% for each day that it is late in delivering shares of its Common Stock.

.

    	3

     

    

 

2.
Adjustment for Reorganization, Consolidation, Merger, etc.

 

2.1.
Fundamental Transaction. If, at any time while this Warrant is outstanding, (A) the Company effects any merger or consolidation
of the Company with or into another entity, (B) the Company effects any sale of all or substantially all of its assets in one
or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another entity) is completed
pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property,
(D) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, or spin-off) with one or more persons or entities whereby such other persons or entities acquire more than the
50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities
making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement
or other business combination), (E) any “person” or “group” (as these terms are used for purposes of Sections
13(d) and 14(d) of the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934
Act), directly or indirectly, of 50% of the aggregate Common Stock of the Company, or (F) the Company effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, (a) upon exercise
of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable upon or
as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number
of shares of Common Stock for which this Warrant is exercisable immediately prior to such event or (b) if the Company is acquired
in (1) a transaction where the consideration paid to the holders of the Common Stock consists solely of cash, (2) a “Rule
13e-3 transaction” as defined in Rule 13e-3 under the 1934 Act, or (3) a transaction involving a person or entity not traded
on a national securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market, cash
equal to the Black-Scholes Value (as defined herein). For purposes of any such exercise, the determination of the Purchase Price
shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Purchase Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of
this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor
to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms
of any agreement pursuant to which a Fundamental Transaction is effected include terms requiring any such successor or surviving
entity to comply with the provisions of this Section 2.1 and insuring that this Warrant (or any such replacement security)
will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. “Black-Scholes Value”
shall be determined in accordance with the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg
L.P. using (i) a price per share of Common Stock equal to the Volume Weighted Average Price of the Common Stock for the Trading
Day immediately preceding the date of consummation of the applicable Fundamental Transaction, (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of such request and (iii) an
expected volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg L.P. determined as of the Trading
Day immediately following the public announcement of the applicable Fundamental Transaction.

 

    	4

     

    

 

2.2.
Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 2 hereof, this Warrant shall continue in full force and effect and the terms hereof shall be
applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding
upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially
all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant
as provided in Section 5hereof.

 

3.
Accredited Investor Status. This Warrant may only be exercised by a Holder that is an “accredited investor”
as that term is defined in Rule 501 promulgated under the Securities Act of 1933, as amended.

 

4.
Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of Common
Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or
(c) combine its outstanding shares of the Common Stock into a smaller number of shares of Common Stock, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price
by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event
and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product
so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in
the same manner upon the happening of any successive event or events described in this Section 4. The number of shares
of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof, be entitled to receive shall be adjusted
to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise
(but for the provisions of this Section 4) be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.

 

    	5

     

    

 

5.
Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable on the exercise of the Warrants or in the Purchase Price, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment
or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional
shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price and the number of shares
of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and
as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the
Holder of the Warrant and any Warrant Agent (as defined herein) of the Company (appointed pursuant to Section 11 hereof).
Holder will be entitled to the benefit of the adjustment regardless of the giving of such notice. The timely giving of such notice
to Holder is a material obligation of the Company.

 

6.
Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements. The Company will at all times reserve
and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities)
from time to time issuable on the exercise of the Warrant. This Warrant entitles the Holder hereof, upon written request, to receive
copies of all financial and other information distributed or required to be distributed to the holders of the Company’s
Common Stock.

 

7.
Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced
hereby, may be transferred by any registered holder hereof (a “Transferor”). On the surrender for exchange
of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor
Endorsement Form”) and together with an opinion of counsel reasonably satisfactory to the Company that the transfer
of this Warrant will be in compliance with applicable securities laws, the Company will issue and deliver to or on the order of
the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified
in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof
for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

 

    	6

     

    

 

8.
Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new Warrant
of like tenor.

 

9.
Maximum Exercise. The Holder shall not be entitled to exercise this Warrant on an exercise date, in connection with that
number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially
owned by the Holder and its Affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise
of this Warrant with respect to which the determination of this limitation is being made on an exercise date, which would result
in beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock on such
date. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the 1934 Act and Rule 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to aggregate exercises
which would result in the issuance of more than 4.99%. The restriction described in this paragraph may be waived, in whole or
in part, upon sixty-one (61) days’ prior notice from the Holder to the Company to increase such percentage. The Holder may
decide whether to convert the Preferred Stock or exercise this Warrant to achieve an actual 4.99% or increase such ownership position
as described above.

 

10.
Warrant Agent. The Company may, by written notice to the Holder, appoint an agent (a “Warrant Agent”)
for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1 hereof,
exchanging this Warrant pursuant to Section 7 hereof, and replacing this Warrant pursuant to Section 8 hereof, or
any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office
by such Warrant Agent.

 

11.
Transfer on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company may treat
the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

12.
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received), or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: (i) if to the Company, to Stem Holdings, Inc., 2201 NW Corporate Blvd,
Ste 205, Boca Raton, FL 33431 Attn: Adam Berk, with a copy by fax only to (which shall not constitute notice) Law Offices of Robert
Diener, 41 Ulua Place, Haiku, HI 96708, Attn: Robert L. B. Diener, Esq., facsimile: (310) 362-8887, and (ii) if to the Holder,
to the address and facsimile number of record with the Company.

 

    	7

     

    

 

13.
Law Governing This Warrant. Section 22 of the Securities Act of 1933, as amended provides the the district courts of
the United States and the United States courts of any Territory shall have jurisdiction of offenses and violations of under the
Securities Act of 1933 and the Securities Exchange Act of 1934 and under the rules and regulations promulgated by the U.S. Securities
and Exchange Commission in respect thereto (“Federal Securities Law”), and, concurrent with State and Territorial
courts, of all suits in equity and actions at law brought to enforce any liability or duty created under Federal Securities Laws.
Any such suit or action may be brought in the district wherein the defendant is found or is an inhabitant or transacts business,
or in the district where the offer or sale took place, if the defendant participated therein, and process in such cases may be
served in any other district of which the defendant is an inhabitant or wherever the defendant may be found. With respect
to actions other than actions under Federal Securities Law, the Company and the Subscriber hereby agree that any dispute that
may arise between them arising out of or in connection with this Agreement shall be adjudicated before a court located in the
City of Boca Raton, Palm Beach County, and they hereby submit to the exclusive jurisdiction of the federal and state courts of
the State of Florida located in the City of Boca Raton, Palm Beach County with respect to any action or legal proceeding commenced
by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding
brought in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Agreement
or any acts or omissions relating to the sale of the securities hereunder, and consent to the service of process in any such action
or legal proceeding by means of registered or certified mail, return receipt requested, postage prepaid, in care of the address
set forth herein or such other address as either party shall furnish in writing to the other. In this regard, upon becoming aware
of any potential action, the Company will immediately advise investors whether the proposed action arises under the Securities
Act of 1933 or the Securities Exchange Act of 1934, and whether the exclusive jurisdiction provisions of this section are applicable. 

   

The
prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event
that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform to, such statute or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereto hereby
irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection
with this Warrant or any other transaction document by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any other manner permitted by law.

 

[-Signature
Page Follows-]

 

    	8

     

    

 

IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

 

	 	STEM
    HOLDINGS, INC.
	 	By:	
	 	Name:	Adam
    Berk
	 	Title:	CEO/President

 

    	9

     

    

 

Exhibit
A

FORM
OF EXERCISE

(to
be signed only on exercise of Warrant)

 

TO:
STEM HOLDINGS, INC.

FROM:_____________

Warrant
#__________

 

The
undersigned, pursuant to the provisions set forth in the attached Warrant (No.« ____________), hereby irrevocably
elects to purchase (check applicable box):

 

____________shares
of the Common Stock covered by such Warrant; or _______.

 

The
undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant,
which is $____________. Such payment takes the form of (check applicable box or boxes):

 

___________
$_________in lawful money of the United States; and/or

 

The
undersigned requests that the certificates for such shares be issued in the name of, and delivered to ____________________________________,
whose address is_____________________________________________

_______________________________________________________________________________________________.

 

The
undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the
within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities
Act”), or pursuant to an exemption from registration under the Securities Act. The undersigned hereby represents an d warrants
that the undersigned in an “accredited investor” as that term is defined in Rule 501 promulgated under the Securities
Act.

 

	Dated:
	 	 	 
	 	 	 	(Signature
    must conform to name of holder as specified on the face of the Warrant)
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	(Address)

 

EIN/SSN:

 

    	 

     

    

 

Exhibit
B

 

FORM
OF TRANSFEROR ENDORSEMENT

Name:_______________;
Warrant #____________

(To
be signed only on transfer of Warrant)

 

For
value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees”
the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of STEM HOLDINGS,
INC. to which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on
the books of STEM HOLDINGS, INC., with full power of substitution in the premises.

 

	Transferees
    	 	Percentage
    Transferred 	 	Number
    Transferred

 

	Dated:
_____________,_____	 	 
	 	 	(Signature
                                         must conform to name of holder as specified

        on
        the face of the warrant)

	Signed
    in the presence of:	 	 
	 	 	 
	 	 	 
	(Name)
    	 	
	 	 	(address)
	ACCEPTED
    AND AGREED: 	 	 
	[TRANSFEREE]
    	 	 
	 	 	(address)
	 	 	 
	(Name)	 	 

 

EIN/SSN:

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