Document:

Exhibit 4.2

 

TOUGHBUILT
INDUSTRIES, INC.

 

CLASS
A WARRANT AGREEMENT

 

    	 	1	 

     

    

 

Certificate No. W-A___ 

 

CLASS A WARRANT 

 

TO PURCHASE __________ SHARES OF COMMON
STOCK 

 

OF 

 

TOUGHBUILT
INDUSTRIES, INC.

 

THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR UNDER ANY
STATE SECURITIES OR "BLUE SKY" LAWS ("BLUE SKY LAWS"). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION OF THIS WARRANT OR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT OR ANY INTEREST THEREIN MAY BE MADE
EXCEPT (a) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND ANY APPLICABLE BLUE SKY LAWS OR (b) IF THE CORPORATION
HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE
CORPORATION, TO THE EFFECT THAT NO REGISTRATION IS REQUIRED BECAUSE OF THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER
THE 1933 ACT AND APPLICABLE BLUE SKY LAWS.

 

THIS CERTIFIES THAT, for good and valuable
consideration __________________ (the "Holder"), or the Holder's registered assigns, is entitled to subscribe for and
purchase from Toughbuilt Industries, Inc., a Nevada corporation (the "Corporation"), at any time after the date hereof
to and including December 31, 2018, ______________________ (____________) fully paid and nonassessable shares of the Common Stock
of the Corporation at the price of $1.00 per share (the "Warrant Exercise Price"), subject to the anti-dilution provisions
of this Warrant.

 

The shares which may be acquired upon exercise
of this Warrant are referred to herein as the "Warrant Shares." As used herein, the term "Holder" means the
Holder, any party who acquires all or a part of this Warrant as a registered transferee of the Holder, or any record holder or
holders of the Warrant Shares issued upon exercise, whether in whole or in part, of the Warrant. The term "Common Stock"
means the common stock, no par value per share, of the Corporation. This Warrant is part of a series of Warrants (the "Series")
issued in connection with a private placement by the Corporation pursuant to a Private Placement Memorandum dated January 25, 2016.

 

    	 	2	 

     

    

 

This Warrant is subject to the following
provisions, terms and conditions:

 

1.   EXERCISE; TRANSFERABILITY.

 

(a)  The rights represented by this Warrant
may be exercised by the Holder hereof, in whole or in part (but not as to a fractional share of Common Stock), by written notice
of exercise (in the form attached hereto) delivered to the Corporation at the principal office of the Corporation prior to the
expiration of this Warrant and accompanied or preceded by the surrender of this Warrant along with a check in payment of the Warrant
Exercise Price for such Warrant Shares.

 

(b)  Except as provided in Section 7 hereof,
this Warrant may not be sold, transferred, assigned, hypothecated or divided into two or more Warrants of smaller denominations,
nor may any Warrant Shares issued pursuant to exercise of this Warrant be transferred.

 

2.   EXCHANGE AND REPLACEMENT. Subject to
Sections 1 and 7 hereof, this Warrant is exchangeable upon the surrender hereof by the Holder to the Corporation at its office
for new Warrants of like tenor and date representing in the aggregate the right to purchase the number of Warrant Shares purchasable
hereunder, each of such new Warrants to represent the right to purchase such number of Warrant Shares (not to exceed the aggregate
total number purchasable hereunder) as shall be designated by the Holder at the time of such surrender. Upon receipt by the Corporation
of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of this Warrant,
if mutilated, the Corporation will make and deliver a new Warrant of like tenor, in lieu of this Warrant. This Warrant shall be
promptly canceled by the Corporation upon the surrender hereof in connection with any exchange or replacement. The Corporation
shall pay all expenses, taxes (other than stock transfer taxes), and other charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Section 2.

 

3.   ISSUANCE OF THE WARRANT SHARES.

 

(a)   The Corporation agrees that the Warrant
Shares shall be and are deemed to be issued to the Holder as of the close of business on the date on which this Warrant shall have
been surrendered and the payment made for such Warrant Shares as aforesaid. Subject to the provisions of paragraph (b) of this
Section 3, certificates for the Warrant Shares so purchased shall be delivered to the Holder within a reasonable time after the
rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant representing
the right to purchase the number of Warrant Shares, if any, with respect to which this Warrant shall not then have been exercised
shall also be delivered to the Holder.

 

    	 	3	 

     

    

 

(b)   Notwithstanding the foregoing, however,
the Corporation shall not be required to deliver any certificate for Warrant Shares upon exercise of this Warrant except in accordance
with exemptions from the applicable securities registration requirements or registrations under applicable securities laws. Nothing
herein shall obligate the Corporation to effect registrations under federal or state securities laws. If registrations are not
in effect and if exemptions are not available when the Holder seeks to exercise the Warrant, the Warrant exercise period will be
extended, if need be, to prevent the Warrant from expiring, until such time as either registrations become effective or exemptions
are available, and the Warrant shall then remain exercisable for a period of at least 30 calendar days from the date the Corporation
delivers to the Holder written notice of the availability of such registrations or exemptions. The Holder agrees to execute such
documents and make such representations, warranties, and agreements as may be required solely to comply with the exemptions relied
upon by the Corporation, or the registrations made, for the issuance of the Warrant Shares.

 

4.   COVENANTS OF THE CORPORATION. The Corporation
covenants and agrees that all Warrant Shares will, upon issuance, be duly authorized and issued, fully paid, nonassessable and
free from all taxes, liens and charges with respect to the issue thereof. The Corporation further covenants and agrees that during
the period within which the rights represented by this Warrant may be exercised, the Corporation will at all times have authorized
and reserved for the purpose of issue or transfer upon exercise of the subscription rights evidenced by this Warrant a sufficient
number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant.

 

5.   ANTI-DILUTION ADJUSTMENTS. The provisions
of this Warrant are subject to adjustment as provided in this Section 5.

 

(a)  The Warrant Exercise Price shall be
adjusted from time to time such that in case the Corporation shall hereafter:

 

(i)  pay any dividends on any class of stock
of the Corporation payable in Common Stock or securities convertible into Common Stock;

 

(ii)  subdivide its then outstanding shares
of Common Stock into a greater number of shares; or

    	 	4	 

     

    

 

(iii)  combine outstanding shares of Common
Stock, by reclassification or otherwise; then, in any such event, the Warrant Exercise Price in effect immediately prior to such
event shall (until adjusted again pursuant hereto) be adjusted immediately after such event to a price (calculated to the nearest
full cent) determined by dividing (A) the number of shares of Common Stock outstanding immediately prior to such event, multiplied
by the then existing Warrant Exercise Price, by (B) the total number of shares of Common Stock outstanding immediately after such
event (including in each case the maximum number of shares of Common Stock issuable in respect of any securities convertible into
Common Stock), and the resulting quotient shall be the adjusted Warrant Exercise Price per share. An adjustment made pursuant to
this Subsection shall become effective immediately after the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this Subsection, the Holder of any Warrant thereafter surrendered for exercise shall become entitled
to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Corporation,
the Board of Directors (whose determination shall be conclusive) shall determine the allocation of the adjusted Warrant Exercise
Price between or among shares of such classes of capital stock or shares of Common Stock and other capital stock. All calculations
under this Subsection shall be made to the nearest cent or to the nearest 1/100 of a share, as the case may be. In the event that
at any time as a result of an adjustment made pursuant to this Subsection, the holder of any Warrant thereafter surrendered for
exercise shall become entitled to receive any shares of the Corporation other than shares of Common Stock, thereafter the Warrant
Exercise Price of such other shares so receivable upon exercise of any 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 Common Stock contained in this Section

 

(b)  Upon each adjustment of the Warrant
Exercise Price pursuant to Section 5(a) above, the Holder of each Warrant shall thereafter (until another such adjustment) be entitled
to purchase at the adjusted Warrant Exercise Price the number of shares, calculated to the nearest full share, obtained by multiplying
the number of shares specified in such Warrant (as adjusted as a result of all adjustments in the Warrant Exercise Price in effect
prior to such adjustment) by the Warrant Exercise Price in effect prior to such adjustment and dividing the product so obtained
by the adjusted Warrant Exercise Price.

 

(c)  In case of any consolidation or merger
to which the Corporation is a party other than a merger or consolidation in which the Corporation is the continuing corporation,
or in case of any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially
as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected
in connection with a merger of a third corporation into the Corporation), there shall be no adjustment under Subsection (a) of
this Section 5 but the Holder of each Warrant then outstanding shall have the right thereafter to convert such Warrant into the
kind and amount of shares of stock and other securities and property which he would have owned or have been entitled to receive
immediately after such consolidation, merger, statutory exchange, sale, or conveyance had such Warrant been converted immediately
prior to the effective date of such consolidation, merger, statutory exchange, sale, or conveyance and, in any such case, if necessary,
appropriate adjustment shall be made in the application of the provisions set forth in this Section with respect to the rights
and interests thereafter of any Holders of the Warrant, to the end that the provisions set forth in this Section shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock and other securities and
property thereafter deliverable on the exercise of the Warrant. The provisions of this Subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.

 

    	 	5	 

     

    

 

(d)  Upon any adjustment of the Warrant
Exercise Price, then and in each such case, the Corporation shall give written notice thereof, by first-class mail, postage prepaid,
addressed to the Holder as shown on the books of the Corporation, which notice shall state the Warrant Exercise Price resulting
from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon
the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation
is based.

 

6.   NO VOTING RIGHTS. This Warrant shall
not entitle the Holder to any voting rights or other rights as a shareholder of the Corporation.

 

7.   NOTICE OF TRANSFER OF WARRANT OR RESALE
OF THE WARRANT SHARES.

 

(a)  Subject to the sale, assignment, hypothecation,
or other transfer restrictions set forth in Section 1 hereof, the Holder, by acceptance hereof, agrees to give written notice to
the Corporation before transferring this Warrant or transferring any Warrant Shares of such Holder's intention to do so, describing
briefly the manner of any proposed transfer. Promptly upon receiving such written notice, the Corporation shall present copies
thereof to the Corporation's counsel. If in the opinion of such counsel the proposed transfer may be effected without registration
or qualification (under any federal or state securities laws), the Corporation, as promptly as practicable, shall notify the Holder
of such opinion, whereupon the Holder shall be entitled to transfer this Warrant or to dispose of Warrant Shares received upon
the previous exercise of this Warrant, all in accordance with the terms of the notice delivered by the Holder to the Corporation;
provided that an appropriate legend may be endorsed on this Warrant or the certificates for such Warrant Shares respecting restrictions
upon transfer thereof necessary or advisable in the opinion of counsel and satisfactory to the Corporation to prevent further transfers
which would be in violation of Section 5 of the 1933 Act and applicable state securities laws; and provided further that the prospective
transferee or purchaser shall execute such documents and make such representations, warranties, and agreements as may be required
solely to comply with the exemptions relied upon by the Corporation for the transfer or disposition of the Warrant or Warrant Shares.

 

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

 

    	 	6	 

     

    

 

8.   FRACTIONAL SHARES. Fractional shares
shall not be issued upon the exercise of this Warrant, but in any case where the holder would, except for the provisions of this
Section, be entitled under the terms hereof to receive a fractional share, the Corporation shall, upon the exercise of this Warrant
for the largest number of whole shares then called for, pay a sum in cash equal to the sum of (a) the excess, if any, of the Market
Price of such fractional share over the proportional part of the Warrant Exercise Price represented by such fractional share, plus
(b) the proportional part of the Warrant Exercise Price represented by such fractional share. For purposes of this Section, the
term "Market Price" with respect to shares of Common Stock of any class or series means the last reported sale price
or, if none, the average of the last reported closing bid and asked prices on any national or regional securities exchange or quoted
in the National Association of Securities Dealers, Inc.'s Automated Quotations System ("Nasdaq"), or if not listed on
a national or regional securities exchange or quoted in Nasdaq, the average of the last reported closing bid and asked prices as
reported by the Electronic Bulletin Board of the National Association of Securities Dealers, Inc. from quotations by market makers
in such Common Stock on the over-the-counter market, or if no quotations in such Common Stock are available, the fair market value
of the shares as determined in good faith by the Board of Directors of the Corporation.

 

9.   REDEMPTION. The Warrants may be redeemed
by the Corporation, in whole or in part, at a redemption price of $0.05 per Warrant (subject to appropriate adjustment as determined
by the Corporation's Board of Directors in the event of the occurrence of the events described in Sections 5(a)(i), (ii) and (iii))
upon notice of such redemption given by the Corporation not less than thirty (30) days prior to the date fixed for redemption mailed
to the holders of Warrants at their last registered addresses. The Corporation shall be entitled to redeem the Warrants as provided
in this Section 9 only if the average closing bid price of the Common Stock exceeds $2.00 per share (subject to appropriate adjustment
as determined by the Corporation's Board of Directors in the event of the occurrence of the events described in Sections 5(a)(i),
(ii) and (iii)) for any ten (10) consecutive trading days prior to third day such notice of redemption has been given. If notice
of redemption shall have been given to the Holders, the exercise rights of the Warrants identified for redemption shall expire
at the close of business on such date of redemption, unless extended by the Corporation.

 

10.   MISCELLANEOUS.

 

(a)  NOTICES. All notices
required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient,
if not, then on the next business day, or (c) two (2) business days after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be sent to the Corporation at the
address as set forth on the signature page hereof, to the Holder at _____________________________________________________________
or at such other address as the Corporation or Holder may designate by ten (10) days advance written notice to the other party
hereto.

 

(b)  ATTORNEYS' FEES.
If any action at law or in equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and disbursements in addition to any other relief to which such party may be entitled.

 

    	 	7	 

     

    

 

(c)  AMENDMENTS AND WAIVERS.
This Warrant may be amended or modified only upon the written consent of both Holder and the Corporation. This Warrant and any
provision hereof may be waived only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

(d)  SEVERABILITY. If
one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from
this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.

 

(e)  GOVERNING LAW. This
Warrant shall be governed by and construed and enforced in accordance with the laws of the State of California, without giving
effect to its conflicts of laws principles.

 

IN WITNESS WHEREOF, Toughbuilt Industries,
Inc. has caused this Warrant to be signed by its duly authorized officer and this Warrant to be dated ________________, 2016.

 

	 	TOUGHBUILT INDUSTRIES, INC.
	 	a Nevada corporation
	 	 	 
	 	By:	 
	 	 	Michael Panosian
	 	 	President & CEO
	 	 	
	 	 	655 N. Central Ave. Ste. 1700
	 	 	Glendale, CA 91203
	 	 	(800) 604-3259 Fax

 

    	 	8	 

     

    

 

(To Be Executed by the Registered Holder
in Order to Exercise the Warrant)

 

To: Toughbuilt Industries, Inc.

 

The undersigned hereby irrevocably elects
to exercise the attached Warrant to purchase for cash, ____________ of the shares issuable upon the exercise of such Warrant, and
requests that certificates for such shares (together with a new Warrant to purchase the number of shares, if any, with respect
to which this Warrant is not exercised) shall be issued in the name of:

 

	NAME:	 	 

 

	 	SOC. SEC. or	 
	 	TAX I.D. NO.	 
	 	 	 
	 	ADDRESS:	 
	 	 	 
	 	 	 

 

	Date:	 	, 20__.	 	Signature *

 

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

 

ASSIGNMENT FORM 

 

(To be Executed by the Registered Holder
in Order to Transfer the Warrant)

 

To: Toughbuilt Industries, Inc.

 

FOR VALUE RECEIVED, the undersigned hereby
sells, assigns, and transfers unto _________________________________ the right to purchase the securities of Toughbuilt Industries,
Inc. to which the within Warrant relates and appoints _______________________________, attorney, to transfer said right on the
books of Toughbuilt Industries, Inc. with full power of substitution in the premises.

 

	Dated:	 	 	 	 
	 	 	 	 	Signature
	 	 	 	Address:	 
	 	 	 	 	 
	 	 	 	 	 

 

    	 	9Exhibit 4.3

 

SUBSCRIPTION AGREEMENT

 

To subscribe for Units of Class B Preferred
Stock and Warrants

in the private offering of

 

TOUGHBUILT
INDUSTRIES, INC.

 

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

 

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

 

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

 

	 	Joseph Gunnar & Co., LLC
	 	30 Broad Street, 11th Floor
	 	New York, NY 10004
	 	Attn: Eric Lord

 

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

 

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

 

	 	Bank Name:	Signature Bank
	 	 	261 Madison Avenue
	 	 	New York, NY 10016
	 	Acct. Name: 	Signature Bank as Escrow Agent for ToughBuilt Industries,, Inc. 
	 	ABA Number:	026013576
	 	SWIFT Code:	SIGNUS33
	 	A/C Number:	xxxxxx
	 	FBO:	Investor Name
	 	 	Social Security Number
	 	 	Address

 

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

 

     

     

    

 

SUBSCRIPTION AGREEMENT

 

FOR

 

TOUGHBUILT INDUSTRIES, INC.

 

ToughBuilt Industries, Inc.

c/o Joseph Gunnar & Co., LLC

30 Broad Street, 11th Floor

New York, NY 10004

 

Ladies and Gentlemen:

 

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

 

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

 

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

 

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

 

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

 

    	 	- 2 -	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	- 3 -	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	- 4 -	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	- 5 -	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	- 6 -	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	- 7 -	 

     

    

 

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

 

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

 

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

 

(m)          Intellectual
Property.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

    	 	- 8 -	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	- 9 -	 

     

    

 

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

 

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

 

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

 

7.          Demand
Registration Rights.

 

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

    	 	- 10 -	 

     

    

 

 

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

 

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

 

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

 

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

 

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

 

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

 

8.          Piggyback
Registration Rights.

 

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

 

    	 	- 11 -	 

     

    

 

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

 

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

 

(A)         first,
the Primary Securities;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	- 12 -	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	- 13 -	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

18.         Miscellaneous.

 

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

 

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

 

    	 	- 14 -	 

     

    

 

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

 

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

 

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

 

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

 

 

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

    	 	- 15 -	 

     

    

 

ANTI-MONEY LAUNDERING REQUIREMENTS

 

	The USA PATRIOT Act	 	What is money laundering?	 	How big is the problem and 

why is it important?
	
        The USA PATRIOT Act is designed to detect,
        deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage
        firms and financial institutions. Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money
        laundering programs.

         

        To help you understand these efforts, we
        want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.
	 	Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities.  Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism	 	The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets.  According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.

 

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

 

    	 	- 16 -	 

     

    

 

TOUGHBUILT INDUSTRIES, INC.

SIGNATURE PAGE TO

SUBSCRIPTION AGREEMENT 

 

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

 

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

 

 

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

 

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

 

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

 

	 	 	 
	Name of Partnership,	 	Federal Taxpayer
	Corporation, Limited	 	Identification Number
	Liability Company or Trust	 	 
	 	 	 
	 	 	 
	By:	 	 	 
	 	Name:	 	State of Organization
	 	Title:	 	 
	 	 	 
	 	 	 
	Date	 	Address

 

AGREED AND ACCEPTED:

 

TOUGHBUILT INDUSTRIES, INC.         

  

	By:	 	 	 
	 	Name:	Michael Panosian	 	Date
	 	Title:	Chief Executive Officer	 	 

 

    	 	- 17 -	 

     

    

 

TOUGHBUILT INDUSTRIES, INC.

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

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

 

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

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

 

    	 	- 18 -	 

     

    

 

BAD ACTOR DISQUALIFICATION
QUESTIONNAIRE 

 

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

 

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

 

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

 

    	 	- 19 -	 

     

    

 

 

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

 

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

 

	By:	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Date:	 	 

 

    	 	- 20 -	 

     

    

 

TOUGHBUILT INDUSTRIES, INC.

Investor Profile

(Must be completed by Investor)

 

Section A - Personal Investor Information

 

Title in Which Securities Should be Held: ___________________________________________________________

 

Individual executing Profile: _____________________________________________________________________

 

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

 

Date of Birth: _________________ Marital Status: _________________

 

Joint Party Date of Birth:_________________ 

 

Investment Experience (Years): ___________

 

Annual Income: _________________

 

Liquid Net Worth:_____________

 

Net Worth: ________________

 

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

 

Home Street Address: ________________________________________________________________________

 

Home City, State & Zip Code: ________________________________________________________________________

 

Home Phone: ________________________ Home Fax: _____________________

 

Home Email: _______________________________

 

Employer: ________________________________________________________________________

 

Employer Street Address: ________________________________________________________________________

 

Employer City, State & Zip Code: _____________________________________________________________________

 

Bus. Phone: __________________________ Bus. Fax: _______________________

 

Bus. Email: ________________________________

 

Type of Business: ________________________________________________________________________

 

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

 

JOSEPH GUNNAR Account Executive / Outside Broker/Dealer: _____________________________________________

 

    	 	- 21 -	 

     

    

 

TOUGHBUILT INDUSTRIES, INC.

Investor Profile

(Must be completed by Purchaser)

 

Section B – Entity Investor Information

 

 

Title in Which Securities Should be Held: _______________________________________________________________

 

Authorized Individual executing Profile or Trustee: ________________________________________________________

 

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

 

Investment Experience (Years): ___________

 

Annual Income: _______________

 

Net Worth: ________________

 

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

 

Principal Purpose (Trust)______________________________________

 

Type of Business: ________________________________________________________

 

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

 

Street Address: ________________________________________________________________________

 

City, State & Zip Code: ________________________________________________________________________

 

Phone: ________________________ Fax: ________________________

 

Email: __________________________

 

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

 

Joseph Gunnar Account Executive / Outside Broker/Dealer: _______________________

 

    	 	- 22 -	 

     

    

 

TOUGHBUILT INDUSTRIES, INC.

Form of Payment & Securities Delivery
Instructions

 

Section C – Form of Payment –
Check or Wire Transfer

 

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

 

Section D – Securities Delivery
Instructions (check one)

 

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

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	 	- 23 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00285-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00285-of-00352.parquet"}]]