Document:

Hybrid Coating Technologies Inc.: Exhibit 4.1 - Filed by newsfilecorp.com

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR
EXERCISED UNLESS (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER,
SALE OR TRANSFER. 

Date: __________ 

NANOTECH INDUSTRIES INTERNATIONAL INC. 

Warrant to Purchase Shares of Common Stock

No. W- 

     For value received, this Warrant
(“Warrant”) is hereby issued by Nanotech Industries International Inc., a Nevada
corporation (the “Company”), to ________ (the “Holder”). Subject to the
provisions of this Warrant, the Company hereby grants to Holder the right to
purchase from the Company _______ shares of Common Stock, at a price per share
equal to the par value of the Common Stock (the “Exercise Price”). 

     The term “Common Stock” means the
Common Stock of the Company as constituted on the date set forth above (the
“Base Date”). The number of shares of Common Stock to be received upon the
exercise of this Warrant may be adjusted from time to time as hereinafter set
forth. The shares of Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter referred to as “Warrant Stock.” The
term “Other Securities” means any other equity or debt securities that may be
issued by the Company in addition thereto or in substitution for the Warrant
Stock. 

     The Holder agrees with the Company
that this Warrant is issued, and all the rights hereunder shall be held, subject
to all of the conditions, limitations and provisions set forth herein. 

1.      Term and Exercise of
Warrant. This Warrant shall be deemed to be issued on ____________ (“Date of
Issuance”). Subject to the terms and conditions set forth herein, this Warrant
may be exercised in whole or in part, pursuant to the procedures provided below,
at any time as of the Date of Issuance, (following appropriate adjustment in the
event of any stock dividends, stock splits, combination or other similar
recapitalization affecting such shares). This Warrant will expire on ___________
at 5:00 p.m., Eastern time (the “Expiration Date”) or, if such day is a day on
which banking institutions in New York are authorized by law to close, then on
the next succeeding day that shall not be such a day. To exercise this Warrant
the Holder shall present and surrender this Warrant to the Company at its
principal office, with the Warrant Exercise Form attached hereto duly executed
by the Holder and accompanied by payment (either in cash or by check, payable to
the order of the Company) of the aggregate Exercise Price for the total
aggregate number of shares for which this Warrant is exercised. Upon receipt by
the Company of this Warrant, together with the executed Warrant Exercise Form
and payment of the Exercise Price for the shares to be acquired, in proper form
for exercise, and subject to the Holder’s compliance with all requirements of
this Warrant for the exercise hereof, the Holder shall be deemed to be the
holder of record of the shares of Common Stock (or Other Securities) issuable
upon such exercise, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to the Holder;
provided, however, that no exercise of this Warrant shall be
effective, and the Company shall have no obligation to issue any Common Stock or
Other Securities to the Holder upon any attempted exercise of this Warrant,
unless the Holder shall have first delivered to the Company, in form and
substance reasonably satisfactory to the Company, appropriate representations so
as to provide the Company reasonable assurances that the securities issuable
upon exercise may be issued without violation of the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act") and applicable
state securities laws, including without limitation representations that the
exercising Holder is an “accredited investor” as defined in Regulation D under
the Securities Act and that the Holder is familiar with the Company and its
business and financial condition and has had an opportunity to ask questions and
receive documents relating thereto to his reasonable satisfaction. 

1 

     2.     
Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the Fair Market Value (as defined below) of one share of Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being cancelled) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Warrant
Exercise Form and notice of such election, in which event the Company shall
issue to the Holder a number of shares of Common Stock computed using the
following formula: 

	 	X = Y (A-B) 
	 	              A
    

	 	Where 	
      X = the number of shares of Common Stock to be issued to
      the Holder 

			
      Y = the number of shares of Common Stock purchasable
      under the Warrant or, if only a portion of the Warrant is being exercised,
      the portion of the Warrant being exercised (at the date of such
      calculation) 

			
      A = the Fair Market Value (as defined below) of one share
      of the Company’s Common Stock (at the date of such calculation) 

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

     3.     
Reservation of Shares. The Company will at all times reserve for issuance
and delivery upon exercise of this Warrant all shares of Common Stock or other
shares of capital stock of the Company (and Other Securities) from time to time
receivable upon exercise of this Warrant. All such shares (and Other Securities)
shall be duly authorized and, when issued upon such exercise, shall be validly
issued, fully paid and non-assessable and free of all preemptive rights. 

     4.     
Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant, but the Company shall
pay the Holder an amount equal to the Fair Market Value of such fractional share
of Common Stock in lieu of each fraction of a share otherwise called for upon
any exercise of this Warrant. 

     5.     
Fair Market Value. For purposes of this Warrant, the Fair Market Value of
a share of Common Stock (or Other Security) shall be determined as of any date
(the “Value Date”) by the Company’s Board of Directors in good faith; provided,
however, that where there exists a public market for the Company’s Common Stock
on the Value Date, the fair market value per share shall be either: 

    
(a)      If the Common Stock is listed on a national
securities exchange or listed for trading on the NASDAQ system, the Fair Market
Value shall be the last reported sale price of the security on such exchange or
system on the last business day prior to the Value Date or if no such sale is
made on such day, the average of the closing bid and asked prices for such day
on such exchange or system; or 

2 

    
(b)      If the Common Stock is not so listed but is
traded in the over-the-counter market, the Fair Market Value shall be the mean
of the last reported bid and asked prices reported by the over-the-counter
market on the last business day prior to the Value Date. 

     6.     
Assignment or Loss of Warrant. Subject to the transfer restrictions
herein (including Section 9), upon surrender of this Warrant to the Company or
at the office of its stock transfer agent, if any, with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this Warrant shall
promptly be canceled. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and of reasonably satisfactory indemnification by the Holder, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a replacement Warrant of like tenor and date.

     7.     
Rights of the Holder. The Holder shall not, by virtue hereof, be entitled
to any rights of a stockholder in the Company, either at law or in equity, and
the rights of the Holder are limited to those expressed in this Warrant. 

     8.     
Adjustments. 

              
8.1           Adjustment
for Recapitalization. If the Company shall at any time after the Base Date
subdivide its outstanding shares of Common Stock (or Other Securities at the
time receivable upon the exercise of the Warrant) by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock
dividend or distribute shares of Common Stock to its stockholders, the number of
shares of Common Stock (or Other Securities) subject to this Warrant immediately
prior to such subdivision shall be proportionately increased, and if the Company
shall at any time after the Base Date combine the outstanding shares of Common
Stock by recapitalization, reclassification or combination thereof, the number
of shares of Common Stock subject to this Warrant immediately prior to such
combination shall be proportionately decreased. Any such adjustment and
adjustment to the Exercise Price pursuant to this Section 8.1 shall be effective
at the close of business on the effective date of such subdivision or
combination or if any adjustment is the result of a stock dividend or
distribution then the effective date for such adjustment based thereon shall be
the record date therefor. 

Whenever the number of shares of Common Stock purchasable upon
the exercise of this Warrant is adjusted, as provided in this Section 8.1, the
Exercise Price shall be adjusted to the nearest cent by multiplying such
Exercise Price immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise immediately prior to such adjustment, and (y) the denominator
of which shall be the number of shares of Common Stock so purchasable
immediately thereafter. 

              
8.2      Adjustment for Material Transaction.
Material Transaction shall mean a consolidation, merger, exchange of shares,
recapitalization, reorganization, business combination or other similar event,
(A) following which the holders of Common Stock immediately preceding such
consolidation, merger, combination or event either (1) no longer hold a majority
of the shares of Common Stock of the Company or (2) no longer have the ability
to elect the board of directors of the Company or (B) as a result of which
shares of Common Stock shall be changed into (or the shares of Common Stock
become entitled to receive) the same or a different number of shares of the same
or another class or classes of stock or securities of the Company or another
entity (“Share Exchange”). 

So long as any portion of this Warrant
remains outstanding, should the Company enter into or be party to a Material
Transaction, the Company shall cause any Person purchasing the Company’s assets
or Common Stock, or any successor entity resulting from such Material
Transaction (in each case, a “Successor Entity”), to assume in writing all of
the obligations of the Company under this Warrant by delivering to the holder of
this Warrant in exchange for such Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, including, without
limitation, having an exercise price equal to the Exercise Price of this
Warrant, having similar exercise rights as this Warrant (including but not
limited to similar exercise price adjustment provisions), and reasonably
satisfactory to the holder of this Warrant. Upon the occurrence of any
Material Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Material Transaction, the
provisions of this Warrant referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under the Warrant with the
same effect as if such Successor Entity had been named as the Company herein.
Upon consummation of a Material Transaction, the Successor Entity shall deliver
to the Holder confirmation that there shall be issued upon exercise or
redemption of this Warrant at any time after the consummation of the Material
Transaction, in lieu of the shares of Common Stock (or other securities, cash,
assets or other property) issuable upon the exercise of this Warrant prior to
such Material Transaction, such shares of common stock (or their equivalent) of
the Successor Entity, as adjusted in accordance with the provisions of this
Warrant and on the same terms as those of the Share Exchange applicable to all
holders of shares of Common Stock. The provisions of this Section shall apply
similarly and equally to successive Material Transactions and shall be applied
without regard to any limitations on the exercise of the Warrant.

3 

              
8.3      Certificate as to Adjustments. The
adjustments provided in this Section 8 shall be interpreted and applied by the
Company in such a fashion so as to reasonably preserve the applicability and
benefits of this Warrant (but not to increase or diminish the benefits
hereunder). In each case of an adjustment in the number of shares of Common
Stock receivable on the exercise of the Warrant, the Company at its expense will
compute such adjustment in accordance with the terms of the Warrant and prepare
a certificate executed by an officer of the Company setting forth such
adjustment and showing in detail the facts upon which such adjustment is based.
The Company will forthwith mail a copy of each such certificate to each
Holder.

              
8.4      Notices of Record Date, Etc. In the
event that: 

                        
(a)      the Company shall declare any dividend or
other distribution to the holders of Common Stock, or authorizes the granting to
all Common Stock holders of any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities; or 

                        
(b)      the Company authorizes any capital
reorganization of the Company, any reclassification of the capital stock of the
Company, any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the
Company to another corporation or entity; or 

                        
(c)      the Company authorizes any voluntary or
involuntary dissolution, liquidation or winding up of the Company, 

then, and in each such case, the Company shall mail or cause to
be mailed to the holder of this Warrant at the time outstanding a notice
specifying, as the case may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place, and the time, if any is
to be fixed, as to which the holders of record of Common Stock (or such other
securities at the time receivable upon the exercise of the Warrant) shall be
entitled to exchange their shares of Common Stock (or such Other Securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding up. Such notice shall be mailed at least 15 days prior to the date
therein specified. 

4 

              
8.5      No Impairment. The Company will not, by
any voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company, but will
at all times in good faith assist in the carrying out of all the provisions of
this Section 8 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. 

     9.     
Transfer to Comply with the Securities Act. This Warrant and any Warrant
Stock or Other Securities may only be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, as follows: (a) to a person who, in the
opinion of counsel to the Company, is a person to whom this Warrant or the
Warrant Stock or Other Securities may legally be transferred without
registration and without the delivery of a current prospectus under the
Securities Act with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section 9 with
respect to any resale or other disposition of such securities; or (b) to any
person upon delivery of a prospectus then meeting the requirements of the
Securities Act relating to such securities and the offering thereof for such
sale or disposition, and thereafter to all successive assignees,. 

     10.     
Legend. Unless the shares of Warrant Stock or Other Securities have been
registered under the Securities Act, upon exercise of this Warrant and the
issuance of any of the shares of Warrant Stock, all certificates representing
shares shall bear on the face thereof substantially the following legend: 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
SAID ACT, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY
SATISFACTORY TO COUNSEL TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.”

     11.     
Notices. All notices required hereunder shall be in writing and shall be
deemed given when sent via facsimile or e-mail, with a confirmation of the
delivery thereof, and then only if followed up with a duplicate copy sent via
regular mail, delivered personally or within two days after mailing when mailed
by certified or registered mail, return receipt requested, to the Company or the
Holder, as the case may be, for whom such notice is intended, if to the Holder,
at the address of such party shown on the books of the Company, or if to the
Company, at the address set forth on the signature page hereof, Attn: Chief
Financial Officer, or at such other address of which the Company or the Holder
has been advised by notice hereunder. 

     12.     
Applicable Law. This Warrant is issued under and shall for all purposes
be governed by and construed in accordance with the laws of the State of Nevada,
without regard to the conflict of laws provisions of such State. 

5 

     IN WITNESS WHEREOF, the Company has
caused this Warrant to be signed on its behalf, in its corporate name, by its
duly authorized officer, all as of the day and year first above written. 

NANOTECH INDUSTRIES INTERNATIONAL INC.

By:
________________________________
       
Joseph Kristul, Chief Executive Officer 

Address: 

950 John Daly blvd., Suite 260

Daly City, CA 94015 

6 

WARRANT EXERCISE FORM 

     The undersigned hereby irrevocably
elects to (please check box): 

     ________ (i) exercise the within
Warrant to purchase __________ shares of the Common Stock of Nanotech Industries
International Inc., a Nevada corporation, pursuant to the provisions of Section
1 of the attached Warrant, and hereby makes payment of $__________ in payment
therefor, or

     ________ (ii) exercise the within
Warrant to purchase that number of shares of Common Stock purchasable pursuant
to the net issue exercise procedure set forth in Section 2 of the attached
Warrant.

     The undersigned’s execution of this
form constitutes the undersigned’s agreement to all the terms of the Warrant and
to comply therewith. 

	 
	Signature 
	Print Name: 
	  
	 
	Signature, if jointly held 
	Print Name: 
	 
	  
	Date 

7 

ASSIGNMENT FORM 

FOR VALUE RECEIVED _____________________________ (“Assignor”)
hereby sells, assigns and transfers unto _______________________________
(“Assignee”) all of Assignor’s right, title and interest in, to and under Series
A Warrant No. W-____ issued by ____________________________ , dated
______________.

DATED: ____________________________ 

	ASSIGNOR: 
	  
	  
	  
	  
	Signature 
	Print Name: 
	  
	  
	  
	Signature, if jointly held 
	Print Name: 

The undersigned agrees to all of the terms of the Series A
Warrant and to comply therewith. 

	ASSIGNEE: 
	  
	  
	  
	  
	Signature 
	Print Name: 
	  
	  
	  
	Signature, if jointly held 
	Print Name: 

8HYBRID Coating Technologies Inc.: Exhibit 4.2 - Filed by newsfilecorp.com

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY REGULATION S
PROMULGATED UNDER THE SECURITIES ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR
SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT. 

Date:__________ 

	           NANOTECH
      INDUSTRIES INTERNATIONAL INC. 
	 
	Warrant to
      Purchase                                 
      Shares of Common Stock 

No. W- 

For value received, this Warrant (“Warrant”) is hereby issued
by Nanotech Industries International Inc., a Nevada corporation (the “Company”),
to ________(the “Holder”). Subject to the provisions of this Warrant, the
Company hereby grants to Holder the right to purchase from the Company
_______shares of Common Stock, at a price per share equal to the par value of
the Common Stock (the “Exercise Price”). 

The term “Common Stock” means the Common Stock of the Company
as constituted on the date set forth above (the “Base Date”). The number of
shares of Common Stock to be received upon the exercise of this Warrant may be
adjusted from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter referred to as “Warrant Stock.” The term “Other Securities” means
any other equity or debt securities that may be issued by the Company in
addition thereto or in substitution for the Warrant Stock. 

The Holder agrees with the Company that this Warrant is issued,
and all the rights hereunder shall be held, subject to all of the conditions,
limitations and provisions set forth herein. 

1. Term and Exercise of Warrant. This Warrant shall be
deemed to be issued on ____________(“Date of Issuance”). Subject to the terms
and conditions set forth herein, this Warrant may be exercised in whole or in
part, pursuant to the procedures provided below, at any time as of the Date of
Issuance, (following appropriate adjustment in the event of any stock dividends,
stock splits, combination or other similar recapitalization affecting such
shares). This Warrant will expire on ___________at 5:00 p.m., Eastern time (the
“Expiration Date”) or, if such day is a day on which banking institutions in New
York are authorized by law to close, then on the next succeeding day that shall
not be such a day. To exercise this Warrant the Holder shall present and
surrender this Warrant to the Company at its principal office, with the Warrant
Exercise Form attached hereto duly executed by the Holder and accompanied by
payment (either in cash or by check, payable to the order of the Company) of the
aggregate Exercise Price for the total aggregate number of shares for which this
Warrant is exercised. Upon receipt by the Company of this Warrant, together with
the executed Warrant Exercise Form and payment of the Exercise Price for the
shares to be acquired, in proper form for exercise, and subject to the Holder’s
compliance with all requirements of this Warrant for the exercise hereof, the
Holder shall be deemed to be the holder of record of the shares of Common Stock (or Other
Securities) issuable upon such exercise, notwithstanding that the stock transfer
books of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the Holder;
provided, however, that no exercise of this Warrant shall be
effective, and the Company shall have no obligation to issue any Common Stock or
Other Securities to the Holder upon any attempted exercise of this Warrant,
unless the Holder shall have first delivered to the Company, in form and
substance reasonably satisfactory to the Company, appropriate representations so
as to provide the Company reasonable assurances that the securities issuable
upon exercise may be issued without violation of the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act") and applicable
state securities laws. 

1 

2. Net Issue Exercise. Notwithstanding any provisions
herein to the contrary, if the Fair Market Value (as defined below) of one share
of Common Stock is greater than the Exercise Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, the Holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Warrant
Exercise Form and notice of such election, in which event the Company shall
issue to the Holder a number of shares of Common Stock computed using the
following formula: 

X = Y
(A-B) 
            A

	 	Where 	X 	= 	the number of shares of Common Stock to be
      issued to the Holder 
	 	  	  	  	  
	 	  	Y 	= 	the number of shares of Common Stock
      purchasable under the Warrant or, if only a portion of the Warrant is
      being exercised, the portion of the Warrant being exercised (at the date
      of such calculation) 
	 	  	
	 	  	A 	= 	the Fair Market Value (as defined below) of one
      share of the Company’s Common Stock (at the date of such calculation)
  
	 	  	  	  	  
	 	  	B 	= 	Exercise Price (as adjusted to the date of such
      calculation) 

3. Reservation of Shares. The Company will at all times
reserve for issuance and delivery upon exercise of this Warrant all shares of
Common Stock or other shares of capital stock of the Company (and Other
Securities) from time to time receivable upon exercise of this Warrant. All such
shares (and Other Securities) shall be duly authorized and, when issued upon
such exercise, shall be validly issued, fully paid and non-assessable and free
of all preemptive rights. 

4. Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but the Company shall pay the Holder an amount equal to the Fair Market
Value of such fractional share of Common Stock in lieu of each fraction of a
share otherwise called for upon any exercise of this Warrant. 

5. Fair Market Value. For
purposes of this Warrant, the Fair Market Value of a share of Common Stock (or
Other Security) shall be determined as of any date (the “Value Date”) by the
Company’s Board of Directors in good faith; provided, however, that where there
exists a public market for the Company’s Common Stock on the Value Date, the
fair market value per share shall be either: 

(a) If the Common
Stock is listed on a national securities exchange or listed for trading on the
NASDAQ system, the Fair Market Value shall be the last reported sale price of
the security on such exchange or system on the last business day prior to the
Value Date or if no such sale is made on such day, the average of the closing
bid and asked prices for such day on such exchange or system; or 

2 

(b) If the Common Stock is not so listed but is traded in the
over-the-counter market, the Fair Market Value shall be the mean of the last
reported bid and asked prices reported by the over-the-counter market on the
last business day prior to the Value Date. 

6. Assignment or Loss of Warrant. Subject to the
transfer restrictions herein (including Section 9), upon surrender of this
Warrant to the Company or at the office of its stock transfer agent, if any,
with the Assignment Form annexed hereto duly executed and funds sufficient to
pay any transfer tax, the Company shall, without charge, execute and deliver a
new Warrant in the name of the assignee named in such instrument of assignment
and this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and of reasonably satisfactory indemnification by
the Holder, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver a replacement Warrant of like tenor and
date.

7. Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity, and the rights of the Holder are limited to those expressed in
this Warrant. 

8. Adjustments. 

8.1 Adjustment for Recapitalization. If the Company
shall at any time after the Base Date subdivide its outstanding shares of Common
Stock (or Other Securities at the time receivable upon the exercise of the
Warrant) by recapitalization, reclassification or split-up thereof, or if the
Company shall declare a stock dividend or distribute shares of Common Stock to
its stockholders, the number of shares of Common Stock (or Other Securities)
subject to this Warrant immediately prior to such subdivision shall be
proportionately increased, and if the Company shall at any time after the Base
Date combine the outstanding shares of Common Stock by recapitalization,
reclassification or combination thereof, the number of shares of Common Stock
subject to this Warrant immediately prior to such combination shall be
proportionately decreased. Any such adjustment and adjustment to the Exercise
Price pursuant to this Section 8.1 shall be effective at the close of business
on the effective date of such subdivision or combination or if any adjustment is
the result of a stock dividend or distribution then the effective date for such
adjustment based thereon shall be the record date therefor. 

Whenever the number of shares of Common Stock purchasable upon
the exercise of this Warrant is adjusted, as provided in this Section 8.1, the
Exercise Price shall be adjusted to the nearest cent by multiplying such
Exercise Price immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise immediately prior to such adjustment, and (y) the denominator
of which shall be the number of shares of Common Stock so purchasable
immediately thereafter. 

8.2 Adjustment for Material Transaction. Material
Transaction shall mean a consolidation, merger, exchange of shares,
recapitalization, reorganization, business combination or other similar event,
(A) following which the holders of Common Stock immediately preceding such
consolidation, merger, combination or event either (1) no longer hold a majority
of the shares of Common Stock of the Company or (2) no longer have the ability
to elect the board of directors of the Company or (B) as a result of which
shares of Common Stock shall be changed into (or the shares of Common Stock
become entitled to receive) the same or a different number of shares of the same
or another class or classes of stock or securities of the Company or another
entity (“Share Exchange”). 

So long as any portion of this Warrant
remains outstanding, should the Company enter into or be party to a Material
Transaction, the Company shall cause any Person purchasing the Company’s assets
or Common Stock, or any successor entity resulting from such Material
Transaction (in each case, a “Successor Entity”), to assume in writing all of
the obligations of the Company under this Warrant by delivering to the holder of
this Warrant in exchange for such Warrant a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant,
including, without limitation, having an exercise price equal to the Exercise
Price of this Warrant, having similar exercise rights as this Warrant (including
but not limited to similar exercise price adjustment provisions), and reasonably
satisfactory to the holder of this Warrant. Upon the occurrence of any
Material Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Material Transaction, the
provisions of this Warrant referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under the Warrant with the
same effect as if such Successor Entity had been named as the Company herein.
Upon consummation of a Material Transaction, the Successor Entity shall deliver
to the Holder confirmation that there shall be issued upon exercise or
redemption of this Warrant at any time after the consummation of the Material
Transaction, in lieu of the shares of Common Stock (or other securities, cash,
assets or other property) issuable upon the exercise of this Warrant prior to
such Material Transaction, such shares of common stock (or their equivalent) of
the Successor Entity, as adjusted in accordance with the provisions of this
Warrant and on the same terms as those of the Share Exchange applicable to all
holders of shares of Common Stock. The provisions of this Section shall apply
similarly and equally to successive Material Transactions and shall be applied
without regard to any limitations on the exercise of the Warrant.

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8.3 Certificate as to Adjustments. The adjustments
provided in this Section 8 shall be interpreted and applied by the Company in
such a fashion so as to reasonably preserve the applicability and benefits of
this Warrant (but not to increase or diminish the benefits hereunder). In each
case of an adjustment in the number of shares of Common Stock receivable on the
exercise of the Warrant, the Company at its expense will compute such adjustment
in accordance with the terms of the Warrant and prepare a certificate executed
by an officer of the Company setting forth such adjustment and showing in detail
the facts upon which such adjustment is based. The Company will forthwith mail a
copy of each such certificate to each Holder.

8.4 Notices of Record Date, Etc. In the event that: 

(a) the Company shall declare any dividend or other
distribution to the holders of Common Stock, or authorizes the granting to all
Common Stock holders of any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities; or 

(b) the Company authorizes any capital reorganization of the
Company, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation, or any
conveyance of all or substantially all of the assets of the Company to another
corporation or entity; or 

(c) the Company authorizes any voluntary or involuntary
dissolution, liquidation or winding up of the Company, then, and in each such case, the Company shall mail or cause to
be mailed to the holder of this Warrant at the time outstanding a notice
specifying, as the case may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place, and the time, if any is
to be fixed, as to which the holders of record of Common Stock (or such other
securities at the time receivable upon the exercise of the Warrant) shall be
entitled to exchange their shares of Common Stock (or such Other Securities) for
securities or other property deliverable upon such reorganization,
reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding up. Such notice shall be mailed at least 15 days prior to the date therein specified. 

4 

  8.5 No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in
the carrying out of all the provisions of this Section 8 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment. 

 9. Transfer to Comply with the Securities Act. This Warrant and any Warrant Stock or Other Securities may only be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, as follows: (a) to a person who, in the opinion of
counsel to the Company, is a person to whom this Warrant or the Warrant Stock or Other Securities may legally be transferred without registration and without the delivery of a current prospectus under the Securities Act with respect thereto and then
only against receipt of an agreement of such person to comply with the provisions of this Section 9 with respect to any resale or other disposit ion of such securities; or (b) to any person upon delivery of a prospectus then meeting the requirements
of the Securities Act relating to such securities and the offering thereof for such sale or disposition, and thereafter to all successive assignees,. 

 10. Legend.  Unless the shares of Warrant Stock or Other Securities have been registered under the Securities Act, upon exercise of this Warrant and the issuance of any of the shares of Warrant Stock, all certificates representing shares
shall bear on the face thereof substantially the following legend: 

The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold, offered for sale, assigned, transferred or otherwise disposed of, unless registered pursuant to the
provisions of that Act or unless an opinion of counsel to the Corporation is obtained stating that such disposition is in compliance with an available exemption from such registration. 

 11. Notices. All notices required hereunder shall be in writing and shall be deemed given when sent via facsimile or e-mail, with a confirmation of the delivery thereof, and then only if followed up with a duplicate copy sent via regular
mail, delivered personally or within two days after mailing when mailed by certified or registered mail, return receipt requested, to the Company or the Holder, as the case may be, for whom such notice is intended, if to the Holder, at the address
of such party shown on the books of the Company, or if to the Company, at the address set forth on the signature page hereof, Attn: Chief Financial Officer, or at such other address of which the Company or the Holder has been advised by notice
hereunder. 

12. Applicable Law.  This Warrant is issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of Nevada, without regard to the conflict of laws provisions of such State. 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its behalf, in its corporate name, by its duly authorized officer, all as of the day and year first above written. 

 5 

     NANOTECH INDUSTRIES INTERNATIONAL INC. 

	 	By:
  
	 	           
             Joseph Kristul, Chief Executive Officer
  

Address: 

950 John Daly blvd., Suite 260

Daly City, CA 94015 

WARRANT EXERCISE FORM 

The undersigned hereby irrevocably elects to (please check
box): 

________(i) exercise the within Warrant to purchase
__________shares of the Common Stock of Nanotech Industries International Inc.,
a Nevada corporation, pursuant to the provisions of Section 1 of the attached
Warrant, and hereby makes payment of $__________in payment therefor, or

________(ii) exercise the within Warrant to purchase that
number of shares of Common Stock purchasable pursuant to the net issue exercise
procedure set forth in Section 2 of the attached Warrant.

The undersigned’s execution of this form constitutes the
undersigned’s agreement to all the terms of the Warrant and to comply therewith.

	 	 
	 	Signature 
	 	Print Name: 
	 	  
	 	Signature, if jointly held 
	 	 
	 	Print Name: 
	 	  
	 	 
	 	Date 

6 

ASSIGNMENT FORM 

FOR VALUE RECEIVED_____________________________(“Assignor”)
hereby sells, assigns and transfers unto
_______________________________(“Assignee”) all of Assignor’s right, title and
interest in, to and under Series A Warrant No. W-____ issued by
____________________________, dated ______________.

DATED: _____________________________

	 	ASSIGNOR: 
	 	  
	 	  
	 	  
	 	  
	 	Signature 
	 	Print Name: 
	 	  
	 	  
	 	  
	 	Signature, if jointly held 
	 	Print Name: 

The undersigned agrees to all of the terms of the Series A
Warrant and to comply therewith. 

	 	ASSIGNEE: 
	 	  
	 	  
	 	  
	 	  
	 	Signature 
	 	Print Name: 
	 	  
	 	  
	 	  
	 	Signature, if jointly held 
	 	Print Name: 

7

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