Document:

Blueprint

 

Exhibit
4.2

 

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

 

UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST NOT TRADE THE SECURITY BEFORE [THE DATE THAT IS 4 MONTHS AND ONE DAY AFTER
THE DISTRIBUTION DATE WILL BE INSERTED].

 

EXHIBIT
B

 

CLASS B COMMON SHARE PURCHASE WARRANT

 

EDESA BIOTECH, INC.

 

	

Warrant
Shares: _______

	
 

	

Initial
Exercise Date: ___, 20[__]

	
 

	
 

	

Issue
Date: ___, 2020

	
 

	
 

	
 

 

THIS
CLASS B COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, _____________ or its assigns (the
“Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the six
(6) month anniversary of the date hereof (the “Initial Exercise Date”)
and on or prior to 5:00 p.m. (New York City time) on the four month
anniversary of the Initial Exercise Date (the “Termination Date”), but
not thereafter, to subscribe for and purchase from Edesa Biotech,
Inc., a British Columbia corporation (the “Company”), up to ______
shares (as subject to adjustment hereunder, the “Warrant Shares”) of the
Company’s common shares (the “Common Shares”). The
purchase price of one Common Share under this Warrant shall be
equal to the Exercise Price, as defined in Section
2(b).

 

Section
1.       Definitions. Capitalized terms
used and not otherwise defined herein shall have the meanings set
forth in that certain Securities Purchase Agreement (the
“Purchase
Agreement”), dated January 6, 2020, among the Company
and the purchasers signatory thereto.

 

 

1

 

 

Section
2.             
Exercise.

 

a) Exercise
of Warrant. Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company of a duly executed
facsimile copy or PDF copy submitted by e-mail (or e-mail
attachment) of the Notice of Exercise in the form annexed hereto
(the “Notice of
Exercise”). Within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2(d)(i) herein) following
the date of exercise as aforesaid, the Holder shall deliver the
aggregate Exercise Price for the Warrant Shares specified in the
applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise
procedure specified in Section 2(c) below is specified in the
applicable Notice of Exercise. No ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Exercise be
required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant
Shares available hereunder and the Warrant has been exercised in
full, in which case, the Holder shall surrender this Warrant to the
Company for cancellation within three (3) Trading Days of the date
on which the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder
shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company
shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise within one (1) Trading Day
of receipt of such notice. The
Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on
the face hereof.

 

Without
limiting the rights of a Holder to receive Warrant Shares on a
“cashless exercise”, in no event will the Company be
required to net cash settle a Warrant exercise.

 

b) Exercise Price. The exercise
price per one Common Share under this Warrant shall be $4.00, subject to
adjustment hereunder (the “Exercise
Price”).

 

c) Cashless Exercise. If at the
time of exercise hereof there is no effective registration
statement registering, or the prospectus contained therein is not
available for the issuance or resale of the Warrant Shares to or by
the Holder, then this Warrant may also be exercised, in whole or in
part, at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where:

 

2

 

 

(A) =
as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such
Notice of Exercise is (1) both executed and delivered pursuant to
Section 2(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2(a) hereof on a Trading
Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the
federal securities laws) on such Trading Day, (ii) at the option of
the Holder, either (y) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise or (z) the
Bid Price of the Common Shares on the principal Trading Market as
reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of
Exercise is executed during “regular trading hours” on
a Trading Day and is delivered within two (2) hours thereafter
(including until two (2) hours after the close of “regular
trading hours” on a Trading Day) pursuant to Section 2(a)
hereof or (iii) the VWAP on the date of the applicable Notice of
Exercise if the date of such Notice of Exercise is a Trading Day
and such Notice of Exercise is both executed and delivered pursuant
to Section 2(a) hereof after the close of “regular trading
hours” on such Trading Day;

 

(B) =
the Exercise Price of this Warrant, as adjusted hereunder;
and

 

(X) =
the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.

 

If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
characteristics of the Warrants being exercised, and the holding
period of the Warrant Shares being issued may be tacked on to the
holding period of this Warrant.  The Company agrees not
to take any position contrary to this Section 2(c).

 

“Bid Price” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Shares are then listed or quoted on
a Trading Market, the bid price of the Common Shares for the time
in question (or the nearest preceding date) on the Trading Market
on which the Common Shares are then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB
or OTCQX is not a Trading Market, the volume weighted average price
of the Common Shares for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Common Shares are not
then listed or quoted for trading on OTCQB or OTCQX and if prices
for the Common Shares are then reported in the “Pink
Sheets” published by OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting
prices), the most recent bid price per Common Share so reported, or
(d) in all other cases, the fair market value of a Common
Share as determined by an independent appraiser selected in good
faith by the Holders of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.

 

“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Shares are then listed or quoted on
a Trading Market, the daily volume weighted average price of the
Common Shares for such date (or the nearest preceding date) on the
Trading Market on which the Common Shares are then listed or quoted
as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)),
(b)  if OTCQB or OTCQX is not a Trading Market, the volume
weighted average price of the Common Shares for such date (or the
nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the
Common Shares are not then listed or quoted for trading on OTCQB or
OTCQX and if prices for the Common Shares are then reported in the
“Pink Sheets” published by OTC Markets Group, Inc. (or
a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per Common Share so
reported, or (d) in all other cases, the fair market value of
a Common Share as determined by an independent appraiser selected
in good faith by the Holders of a majority in interest of the
Securities then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the
Company.

 

 

 

3

 

 

 

 

Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).

 

d) Mechanics of
Exercise.

 

i. Delivery of Warrant Shares Upon
Exercise. The Company shall cause the Warrant Shares
purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system
(“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by the Holder or
(B) the Warrant Shares are eligible for resale by the Holder
without volume or manner-of-sale limitations pursuant to Rule 144
(assuming cashless exercise of the Warrants), and otherwise by
physical delivery of a certificate, registered in the
Company’s share register in the name of the Holder or its
designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is the earlier of
(i) the earlier of (A) three (3) Trading Days after the delivery to
the Company of the Notice of Exercise and (B) one (1) Trading Day
after delivery of the aggregate Exercise Price to the Company and
(ii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise
(such date, the “Warrant Share Delivery
Date”). Upon delivery of the Notice of Exercise, the
Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of
delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise. The
Company agrees to maintain a transfer agent that is a participant
in the FAST program so long as this Warrant remains outstanding and
exercisable. As used herein, “Standard Settlement
Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Shares as in
effect on the date of delivery of the Notice of
Exercise.

 

 

 

4

 

 

ii. Delivery of New Warrants Upon
Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of
this Warrant, at the time of delivery of the Warrant Shares,
deliver to the Holder a new Warrant evidencing the rights of the
Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

 

iii. Reserved.

 

iv. Reserved.

 

v. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.

 

vi. Charges, Taxes and Expenses.
Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such Warrant Shares, all of which taxes
and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event that
Warrant Shares are to be issued in a name other than the name of
the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees
required for same-day processing of any Notice of Exercise and all
fees to the Depository Trust Company (or another established
clearing corporation performing similar functions) required for
same-day electronic delivery of the Warrant Shares.

 

vii. Closing
of Books. The Company will not close its shareholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

 

 

5

 

 

e) Holder’s Exercise
Limitations. Unless otherwise agreed by the Company and
Holder, the Company shall not knowingly effect any exercise of this
Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise as
set forth on the applicable Notice of Exercise, the Holder
(together with the Holder’s Affiliates, and any other Persons
acting as a group together with the Holder or any of the
Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing
sentence, the number of Common Shares beneficially owned by the
Holder and its Affiliates and Attribution Parties shall include the
number of Common Shares issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall
exclude the number of Common Shares which would be issuable upon
(i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or
Attribution Parties and (ii) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Common Share
Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by
the Holder or any of its Affiliates or Attribution Parties. 
Except as set forth in the preceding sentence, for purposes of this
Section 2(e), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to
be filed in accordance therewith. To the extent that the limitation
contained in this Section 2(e) applies, the determination of
whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates and
Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the
submission of a Notice of Exercise shall be deemed to be the
Holder’s determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with
any Affiliates and Attribution Parties) and of which portion of
this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to
verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder. For purposes
of this Section 2(e), in determining the number of outstanding
Common Shares, a Holder may rely on the number of outstanding
Common Shares as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case
may be, (B) a more recent public announcement by the Company or (C)
a more recent written notice by the Company or the Transfer Agent
setting forth the number of Common Shares outstanding.  Upon
the written or oral request of a Holder, the Company shall within
one (1) Trading Day confirm orally and in writing to the Holder the
number of Common Shares then outstanding.  In any case, the
number of outstanding Common Shares shall be determined after
giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding Common Shares was reported. The “Beneficial Ownership
Limitation” shall be 9.99% of the number of Common
Shares outstanding immediately after giving effect to the issuance
of Common Shares issuable upon exercise of this Warrant. The
Holder, upon notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of Common Shares outstanding
immediately after giving effect to the issuance of Common Shares
upon exercise of this Warrant held by the Holder and the provisions
of this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st day
after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.

 

 

 

6

 

 

Section
3.            
Certain
Adjustments.

 

a) Share Dividends and Splits. If
the Company, at any time while this Warrant is outstanding: (i)
pays a share dividend or otherwise makes a distribution or
distributions on Common Shares or any other equity or equity
equivalent securities payable in Common Shares (which, for
avoidance of doubt, shall not include any Common Shares issued by
the Company upon exercise of this Warrant), (ii) subdivides
outstanding Common Shares into a larger number of shares, (iii)
combines (including by way of reverse share split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by
reclassification of Common Shares any capital shares of the
Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of Common
Shares (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number
of Common Shares outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the
record date for the determination of shareholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

b) Reserved.

 

c) Reserved.

 

d) Reserved.

 

 

 

7

 

 

e) Fundamental Transaction. If, at
any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another
Person, (ii) the Company, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a
series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders
of Common Shares are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted
by the holders of 50% or more of the outstanding Common Shares,
(iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Shares or any compulsory share
exchange pursuant to which the Common Shares are effectively
converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a share purchase agreement or other
business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding
Common Shares (not including any Common Shares held by the other
Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such share
purchase agreement or other business combination) (each a
“Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the
number of Common Shares of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of Common Shares for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one Common Share in
such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Shares are given
any choice as to the securities, cash or property to be received in
a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the
“Successor
Entity”) to assume in writing all of the obligations
of the Company under this Warrant and the other Transaction
Documents in accordance with the provisions of this Section 3(e)
pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and
shall, at the option of the Holder, deliver to the Holder in
exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and
substance to this Warrant which is exercisable for a corresponding
number of capital shares of such Successor Entity (or its parent
entity) equivalent to the Common Shares acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on
the exercise of this Warrant) prior to such Fundamental
Transaction, and with an exercise price which applies the exercise
price hereunder to such capital shares (but taking into account the
relative value of the Common Shares pursuant to such Fundamental
Transaction and the value of such capital shares, such number of
capital shares and such exercise price being for the purpose of
protecting the economic value of this Warrant immediately prior to
the consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of
this Warrant and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant and
the other Transaction Documents with the same effect as if such
Successor Entity had been named as the Company herein.

 

 

 

8

 

 

f) Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of
this Section 3, the number of Common Shares deemed to be issued and
outstanding as of a given date shall be the sum of the number of
Common Shares (excluding treasury shares, if any) issued and
outstanding.

 

g) Notice to Holder of Adjustment to
Exercise Price. Whenever the Exercise Price is adjusted
pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder by facsimile or email a notice
setting forth the Exercise Price after such adjustment and any
resulting adjustment to the number of Warrant Shares and setting
forth a brief statement of the facts requiring such
adjustment.

 

Section
4.            
Transfer of
Warrant.

 

a) Transferability. Subject to
compliance with any applicable securities laws and the conditions
set forth in Section 4(d) hereof and to the provisions of Section
4.1 of the Purchase Agreement, this Warrant and all rights
hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this
Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee
or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be
cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within two (2) Trading Days
of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if
properly assigned in accordance herewith, may be exercised by a new
holder for the purchase of Warrant Shares without having a new
Warrant issued.

 

 

 

9

 

 

b) New Warrants. This Warrant may
be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be
dated the Issue Date of this Warrant and shall be identical with
this Warrant except as to the number of Warrant Shares issuable
pursuant thereto.

 

c) Warrant Register. The Company
shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.

 

d) Transfer Restrictions. If, at
the time of the surrender of this Warrant in connection with any
transfer of this Warrant, the transfer of this Warrant shall not be
either (i) registered pursuant to an effective registration
statement under the Securities Act and under applicable state
securities or blue sky laws or (ii) eligible for resale without
volume or manner-of-sale restrictions or current public information
requirements pursuant to Rule 144, the Company may require, as a
condition of allowing such transfer, that the Holder or transferee
of this Warrant, as the case may be, comply with the provisions of
Section 4.1 of the Purchase Agreement.

 

e) Representation by the Holder.
The Holder, by the acceptance hereof, represents and warrants that
it is acquiring this Warrant and, upon any exercise hereof, will
acquire the Warrant Shares issuable upon such exercise, for its own
account and not with a view to or for distributing or reselling
such Warrant Shares or any part thereof in violation of the
Securities Act or any applicable state securities law, except
pursuant to sales registered or exempted under the Securities
Act.

 

Section
5.            
Miscellaneous.

 

a) No Rights as Shareholder Until
Exercise. This Warrant does not entitle the Holder to any
voting rights, dividends or other rights as a shareholder of the
Company prior to the exercise hereof as set forth in Section
2(d)(i).

 

b) Loss, Theft, Destruction or Mutilation
of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any share
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and
cancellation of such Warrant or share certificate, if mutilated,
the Company will make and deliver a new Warrant or share
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or share certificate.

 

 

 

10

 

 

c) Saturdays, Sundays, Holidays,
etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such
right may be exercised on the next succeeding Business
Day.

 

d) Authorized Shares.

 

The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Shares a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Shares may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.

 

 

 

11

 

 

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

 

e) Jurisdiction. All questions
concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

 

f) Restrictions. The Holder
acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, and the Holder does not utilize
cashless exercise, will have restrictions upon resale imposed by
state and federal securities laws.

 

g) Nonwaiver and Expenses. No
course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice the Holder’s rights, powers or
remedies, notwithstanding the fact that all rights hereunder
terminate on the Termination Date.

 

h) Notices. Any notice, request or
other document required or permitted to be given or delivered to
the Holder by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.

 

i) Limitation of Liability. No
provision hereof, in the absence of any affirmative action by the
Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of
any Common Shares or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.

 

j) Remedies. The Holder, in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be
adequate.

 

k) Successors and Assigns. Subject
to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company
and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder
from time to time of this Warrant and shall be enforceable by the
Holder or holder of Warrant Shares.

 

l) Amendment. This Warrant may be
modified or amended or the provisions hereof waived with the
written consent of the Company and the
Holder.

 

 

 

12

 

 

m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.

 

n) Headings. The headings used in
this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this
Warrant.

 

 

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

 

(Signature Page Follows)

 

 

13

 

 

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.

 

 

 

	
 

	

EDESA BIOTECH, INC.

	
 

	

 

 

By:__________________________________________

     Name:

     Title:

 

 

 

 

14

 

 

NOTICE OF EXERCISE

 

TO:            

EDESA
BIOTECH, INC.

 

(1) The undersigned
hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

 

(2) Payment shall take
the form of (check applicable box):

 

[ ] in
lawful money of the United States; or

 

[ ] if
permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).

 

(3) Please issue said
Warrant Shares in the name of the undersigned or in such other name
as is specified below:

 

_______________________________

 

 

The
Warrant Shares shall be delivered to the following DWAC Account
Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4) Accredited
Investor. The undersigned is an “accredited investor”
as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

 

[SIGNATURE
OF HOLDER]

 

Name of
Investing Entity:
________________________________________________________________________

Signature of Authorized Signatory of Investing
Entity:
_________________________________________________

Name of
Authorized Signatory:
___________________________________________________________________

Title
of Authorized Signatory:
____________________________________________________________________

Date:
________________________________________________________________________________________

 

 

 

 

 

 

 

 

  EXHIBIT B

 

ASSIGNMENT FORM

 (To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase
shares.)

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

 

	

Name:

	
______________________________________ 

	
 

	

(Please Print)

 

	

Address:

	
______________________________________ 

	

 

 

Phone Number:

Email Address:

 

	

(Please
Print)

______________________________________

______________________________________

 

	

Dated: _______________ __, ______

 

	
 

	

Holder’s Signature:
______________________________________

 

	
 

	

Holder’s Address:
______________________________________Blueprint

  Exhibit 4.3

 

NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

THE
REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE
HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED
HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL,
TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A
PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE DATE OF THE
SECURITIES PURCHASE AGREEMENT (DEFINED BELOW) TO ANYONE OTHER THAN
(I) BROOKLINE CAPITAL MARKETS, A DIVISION OF ARCADIA SECURITIES, OR
A SUB-PLACEMENT AGENT IN CONNECTION WITH THE OFFERING, OR (II) A
BONA FIDE OFFICER OR PARTNER OF BROOKLINE CAPITAL MARKETS, A
DIVISION OF ARCADIA SECURITIES, OR OF ANY SUCH SUB-PLACEMENT
AGENT.

 

 

THIS
PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO JULY 6, 2020. VOID
AFTER 5:00 P.M., EASTERN TIME, JANUARY 6, 2025.

 

 

 

WARRANT TO PURCHASE COMMON SHARES

 

EDESA BIOTECH, INC.

 

Warrant
Shares: 12,364

Initial
Exercise Date: January 8, 2020

 

 

THIS
WARRANT TO PURCHASE COMMON SHARES (the “Warrant”) certifies that,
for value received, Brookline Capital Markets, a division of
Arcadia Securities or its assigns (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth (including the limitations set
forth above), at any time on or after January 8, 2020 (the
“Initial Exercise
Date”) and, in accordance with FINRA Rule
5110(f)(2)(G)(i), prior to at 5:00 p.m. (New York time) on the date
that is five (5) years following the date of the Securities
Purchase Agreement (the “Termination Date”) but
not thereafter, to subscribe for and purchase from Edesa Biotech,
Inc., a British Columbia corporation (the “Company”), up to 12,364
Common Shares (the “Warrant Shares”), as
subject to adjustment hereunder. The purchase price of one Common
Share under this Warrant shall be equal to the Exercise Price, as
defined in Section 2(b).

 

Section 1. Definitions. In addition to the
terms defined elsewhere in this Agreement, the following terms have
the meanings indicated in this Section 1:

 

 

 

 

 

 

“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 under the Securities Act.

 

“Bid Price” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Shares are then listed or quoted on
a Trading Market, the bid price of the Common Shares for the time
in question (or the nearest preceding date) on the Trading Market
on which the Common Shares are then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB
or OTCQX is not a Trading Market, the volume weighted average price
of the Common Shares for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Common Shares are not
then listed or quoted for trading on OTCQB or OTCQX and if prices
for the Common Shares are then reported in the “Pink
Sheets” published by OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting
prices), the most recent bid price per Common Share so reported, or
(d) in all other cases, the fair market value of a Common
Share as determined by an independent appraiser selected in good
faith by the Holders and reasonably acceptable to the Company, the
fees and expenses of which shall be paid by the
Company.

 

“Business Day” means any
day except any Saturday, any Sunday, any day which is a federal
legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.

 

“Commission” means the
United States Securities and Exchange Commission.

 

“Common Share Equivalents”
means any securities of the Company which would entitle the holder
thereof to acquire at any time Common Shares, including, without
limitation, any debt, preferred stock, right, option, warrant or
other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Shares.

 

“Common Shares” means the
common shares, no par value per share, of the Company.

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

 

“Offering” means the
registered direct offering of Common Shares by the Company pursuant
to a shelf registration statement on Form S-3 (File No. 333-233567)
and the related prospectus supplement filed on or about the date
hereof.

 

“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.

 

“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.

 

“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

 

 

 

 

“Securities Purchase
Agreement” means the Securities Purchase Agreement
between the Company and certain purchasers in the
Offering.

 

“Trading Day” means a day
on which the principal Trading Market is open for
trading.

 

“Trading Market” means any
of the following markets or exchanges on which the Common Shares
are listed or quoted for trading on the date in question: the NYSE
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, or the New York Stock Exchange (or any
successors to any of the foregoing).

 

“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Shares then listed or quoted on a
Trading Market, the daily volume weighted average price of the
Common Shares for such date (or the nearest preceding date) on the
Trading Market on which the Common Shares are then listed or quoted
as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)),
(b)  if OTCQB or OTCQX is not a Trading Market, the volume
weighted average price of a Common Share for such date (or the
nearest preceding date) on the OTCQB or OTCQX as applicable, (c) if
the Common Shares are not then listed or quoted for trading on the
OTCQB or OTCQX and if prices for the Common Shares are then
reported in the “Pink Sheets” published by OTC Markets
Group, Inc. (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per
Common Share so reported, or (d) in all other cases, the fair
market value of the Common Shares as determined by an independent
appraiser selected in good faith by the Holder and reasonably
acceptable to the Company, the fees and expenses of which shall be
paid by the Company.

  

Section 2. Exercise.

 

a)                 
Exercise of the purchase rights represented by this Warrant may be
made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by
delivery to the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered
Holder at the address of the Holder appearing on the books of the
Company) of a duly executed facsimile copy (or e-mail attachment)
of the Notice of Exercise Form annexed hereto. Within two (2)
Trading Days following the date of exercise as aforesaid, the
Holder shall deliver the aggregate Exercise Price for the shares
specified in the applicable Notice of Exercise by wire transfer or
cashier’s check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is
specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any
Notice of Exercise form be required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within five
(5) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
Form within two (2) Business Days of receipt of such notice.
The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof.

 

 

 

 

 

 

b)                 
Exercise Price. The
exercise price per Common Share under this Warrant shall be $3.20,
subject to adjustment hereunder (the “Exercise
Price”).

 

c)                 
Cashless Exercise.
If at any time on or after the Initial Exercise Date, there is no
effective registration statement registering, or the prospectus
contained therein is not available for the issuance of the Warrant
Shares to the Holder, then this Warrant may also be exercised, in
whole or in part, at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive
the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

 

(A) =
as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such
Notice of Exercise is (1) both executed and delivered pursuant to
Section 2(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2(a) hereof on a Trading
Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the
federal securities laws) on such Trading Day, (ii) at the option of
the Holder, either (y) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise or (z) the
Bid Price of the Common Shares on the principal Trading Market as
reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of
Exercise is executed during “regular trading hours” on
a Trading Day and is delivered within two (2) hours thereafter
(including until two (2) hours after the close of “regular
trading hours” on a Trading Day) pursuant to Section 2(a)
hereof or (iii) the VWAP on the date of the applicable Notice of
Exercise if the date of such Notice of Exercise is a Trading Day
and such Notice of Exercise is both executed and delivered pursuant
to Section 2(a) hereof after the close of “regular trading
hours” on such Trading Day;

 

(B) =
the Exercise Price of this Warrant, as adjusted hereunder;
and

 

(X) =
the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.

 

If Warrant Shares are issued in such a
“cashless exercise,” the parties acknowledge and agree
that in accordance with Section 3(a)(9) of the Securities Act, the
Warrant Shares shall take on the characteristics of the Warrants
being exercised, and the holding period of the Warrant Shares being
issued may be tacked on to the holding period of this
Warrant.  The Company agrees not to take any position
contrary to this Section 2(c). 

 

 Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).

 

d)                
Mechanics of
Exercise.

 

 

 

 

 

 

                                           i.           
Delivery of Warrant Shares
Upon Exercise. The Company shall cause the Warrant Shares
purchased hereunder to be transmitted by its transfer agent to the
Holder by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system
(“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder, or (B)
the Warrant Shares are eligible for resale by the Holder without
volume or manner-of-sale limitations pursuant to Rule 144 and, in
either case, the Warrant Shares have been sold by the Holder prior
to the Warrant Share Delivery Date (as defined below), and
otherwise by physical delivery of a certificate, registered in the
Company’s share register in the name of the Holder or its
designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is two
(2) Trading Days after the delivery to the Company of the
Notice of Exercise (such date, the “Warrant Share Delivery
Date”). If the Warrant Shares can be delivered via
DWAC, the transfer agent shall have received from the Company, at
the expense of the Company, any legal opinions or other
documentation required by it to deliver such Warrant Shares without
legend (subject to receipt by the Company of reasonable back up
documentation from the Holder, including with respect to affiliate
status) and, if applicable and requested by the Company prior to
the Warrant Share Delivery Date, the transfer agent shall have
received from the Holder a confirmation of sale of the Warrant
Shares (provided the requirement of the Holder to provide a
confirmation as to the sale of Warrant Shares shall not be
applicable to the issuance of unlegended Warrant Shares upon a
cashless exercise of this Warrant if the Warrant Shares are then
eligible for resale pursuant to Rule 144(b)(1)). The Warrant Shares
shall be deemed to have been issued, and Holder or any other person
so designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date
the Warrant has been exercised, with payment to the Company of the
Exercise Price (or by cashless exercise, if permitted) and all
taxes required to be paid by the Holder, if any, pursuant to
Section 2(d)(vi) prior to the issuance of such shares, having
been paid. If the Company fails for any reason to deliver to the
Holder the Warrant Shares subject to a Notice of Exercise by the
second Trading Day following the Warrant Share Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Shares on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated
damages begin to accrue) for each Trading Day after the second
Trading Day following such Warrant Share Delivery Date until such
Warrant Shares are delivered or Holder rescinds such
exercise.

    

                                                                                         
ii.           
Delivery of New Warrants
Upon Exercise. If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of
the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.

 

 

 

 

 

 

                                                                                       
iii.           
Rescission Rights.
If the Company fails to cause its transfer agent to deliver to the
Holder the Warrant Shares pursuant to Section 2(d)(i) by the
Warrant Share Delivery Date, then the Holder will have the right to
rescind such exercise; provided, however, that the Holder shall
be required to return any Warrant Shares or Common Shares subject
to any such rescinded exercise notice concurrently with the return
to Holder of the aggregate Exercise Price paid to the Company for
such Warrant Shares and the restoration of Holder’s right to
acquire such Warrant Shares pursuant to this Warrant (including,
issuance of a replacement warrant certificate evidencing such
restored right).

 

                                                                                       
iv.           
Compensation for Buy-In on
Failure to Timely Deliver Warrant Shares Upon Exercise. In
addition to any other rights available to the Holder, if the
Company fails to cause its transfer agent to transmit to the Holder
the Warrant Shares pursuant to an exercise on or before the Warrant
Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or
otherwise) or the Holder’s brokerage firm otherwise
purchases, Common Shares to deliver in satisfaction of a sale by
the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the Common Shares so purchased
exceeds (y) the amount obtained by multiplying (1) the number of
Warrant Shares that the Company was required to deliver to the
Holder in connection with the exercise at issue times (2) the price
at which the sell order giving rise to such purchase obligation was
executed, and (B) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for
which such exercise was not honored (in which case such exercise
shall be deemed rescinded) or deliver to the Holder the number of
Common Shares that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For
example, if the Holder purchases Common Shares having a total
purchase price of $11,000 to cover a Buy-In with respect to an
attempted exercise of Common Shares with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause
(A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In and, upon request of the Company, evidence
of the amount of such loss. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver Common
Shares upon exercise of the Warrant as required pursuant to the
terms hereof.

  

                                                                                         
v.           
No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which the Holder would otherwise be entitled to
purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in
an amount equal to such fraction multiplied by the Exercise Price
or round up to the next whole share.

 

 

 

 

 

 

                                                                                       
vi.           
Charges, Taxes and
Expenses. Issuance of Warrant Shares shall be made without
charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant
Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the
Holder or in such name or names as may be directed by the Holder;
provided,
however, that in
the event that Warrant Shares are to be issued in a name other than
the name of the Holder, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly
executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto. The Company shall pay all transfer
agent fees required for same-day processing of any Notice of
Exercise and all fees to the Depository Trust Company (or another
established clearing corporation performing similar functions)
required for same-day electronic delivery of the Warrant
Shares.

 

                                                                                     
vii.           
Closing of Books.
The Company will not close its stockholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant
to the terms hereof.

 

                                                                                     
viii.           
Signature. This
Section 2 and the exercise form attached hereto set forth the
totality of the procedures required of the Holder in order to
exercise this Purchase Warrant.  Without limiting the
preceding sentences, no ink-original exercise form shall be
required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any exercise form be required in
order to exercise this Purchase Warrant.  No additional legal
opinion, other information or instructions shall be required of the
Holder to exercise this Purchase Warrant.  The Company shall
honor exercises of this Purchase Warrant and shall deliver Shares
underlying this Purchase Warrant in accordance with the terms,
conditions and time periods set forth herein.

    

 

 

 

 

 

e)                 
Holder’s Exercise
Limitations. The Company shall not knowingly effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any
other Persons acting as a group together with the Holder or any of
the Holder’s Affiliates), would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below).  For
purposes of the foregoing sentence, the number of Common Shares
beneficially owned by the Holder and its Affiliates shall include
the number of Common Shares issuable upon exercise of this Warrant
with respect to which such determination is being made, but shall
exclude the number of Common Shares which would be issuable upon
(i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company (including, without
limitation, any other Common Share Equivalents) subject to a
limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its
Affiliates.  Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable, in
each case subject to the Beneficial Ownership Limitation, and the
Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in
determining the number of outstanding Common Shares, a Holder may
rely on the number of outstanding Common Shares as reflected in (A)
the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Company’s transfer agent setting forth the
number of Common Shares outstanding.  Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of Common
Shares then outstanding.  In any case, the number of
outstanding Common Shares shall be determined after giving effect
to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates since the
date as of which such number of outstanding Common Shares was
reported. The “Beneficial Ownership
Limitation” shall be 9.99% of the number of Common
Shares outstanding immediately after giving effect to the issuance
of Common Shares issuable upon exercise of this Warrant. The
Holder, upon notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of Common Shares outstanding
immediately after giving effect to the issuance of Common Shares
upon exercise of this Warrant held by the Holder and the provisions
of this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st day
after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant. 

  

 

 

 

 

 

Section 3. Certain
Adjustments.

 

a)                 
Stock Dividends and
Splits. If the Company, at any time while this Warrant is
outstanding: (i) pays a stock dividend or otherwise makes a
distribution or distributions on Common Shares or any other equity
or equity equivalent securities payable in Common Shares (which,
for avoidance of doubt, shall not include any Common Shares issued
by the Company upon exercise of this Warrant), (ii) subdivides
outstanding Common Shares into a larger number of shares, (iii)
combines (including by way of reverse stock split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by
reclassification of Common Shares any shares of capital stock of
the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number
of Common Shares (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be
the number of Common Shares outstanding immediately after such
event, and the number of shares issuable upon exercise of this
Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant shall remain unchanged. Any
adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in
the case of a subdivision, combination or re-classification. For
the purposes of clarification, the Exercise Price of this Warrant
will not be adjusted in the event that the Company or any
Subsidiary thereof, as applicable, sells or grants any option to
purchase, or sell or grant any right to reprice, or otherwise
dispose of or issue (or announce any offer, sale, grant or any
option to purchase or other disposition) any Common Shares or
Common Share Equivalents, at an effective price per share less than
the Exercise Price then in effect.

 

b)                 
[RESERVED]

  

c)                 
[RESERVED]

 

d)               
  [RESERVED]

  

 

 

 

 

 

e)                 
Fundamental
Transaction. If, at any time while this Warrant is
outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of
the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii)
any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Shares are permitted to sell,
tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the
outstanding Common Shares, (iv) the Company, directly or
indirectly, in one or more related transactions effects any
reclassification, reorganization or recapitalization of the Common
Shares or any compulsory share exchange pursuant to which the
Common Shares are effectively converted into or exchanged for other
securities, cash or property, or (v) the Company, directly or
indirectly, in one or more related transactions consummates a stock
or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person or group of
Persons whereby such other Person or group acquires more than 50%
of the outstanding Common Shares (not including any Common Shares
held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the
number of Common Shares of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate Consideration”)
receivable by holders of Common Shares as a result of such
Fundamental Transaction for each Common Share for which this
Warrant is exercisable immediately prior to such Fundamental
Transaction (without regard to any limitation in Section 2(e) on
the exercise of this Warrant). For purposes of any such exercise,
the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one Common
Share in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Shares are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this
Warrant in accordance with the provisions of this Section 3(e)
pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and
shall, at the option of the Holder, deliver to the Holder in
exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and
substance to this Warrant which is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its
parent entity) equivalent to the Common Shares acquirable and
receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but
taking into account the relative value of the Common Shares
pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and
such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of
this Warrant referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the
Company under this Warrant with the same effect as if such
Successor Entity had been named as the Company herein.

  

 

 

 

 

 

f)                  
Calculations. All
calculations under this Section 3 shall be made to the nearest cent
or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of Common Shares deemed to be issued
and outstanding as of a given date shall be the sum of the number
of Common Shares (excluding treasury shares, if any) issued and
outstanding.

 

g)                 
Notice to Holder of
Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to any provision of this Section 3, the Company
shall promptly mail to the Holder a notice setting forth the
Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement
of the facts requiring such adjustment.

   

Section 4. Transfer of
Warrant.

 

a)
Transferability.
Pursuant to FINRA Rule 5110(g)(1), neither this Warrant nor any
Warrant Shares issued upon exercise of this Warrant shall be sold,
transferred, assigned, pledged, or hypothecated, or be the subject
of any hedging, short sale, derivative, put, or call transaction
that would result in the effective economic disposition of the
securities by any person for a period of 180 days immediately
following the date of effectiveness or commencement of sales of the
offering pursuant to which this Warrant is being issued, except the
transfer of any security:

 

                            i.by
operation of law or by reason of reorganization of the
Company;

 

                           ii.
to any FINRA member firm participating in the offering and the
officers or partners thereof, if all securities so transferred
remain subject to the lock-up restriction in this Section 4(a) for
the remainder of the time period;

 

                          iii.
if the aggregate amount of securities of the Company held by the
Holder or related person do not exceed 1% of the securities being
offered;

 

                          iv.
that is beneficially owned on a pro-rata basis by all equity owners
of an investment fund, provided that no participating member
manages or otherwise directs investments by the fund, and
participating members in the aggregate do not own more than 10% of
the equity in the fund; or

 

                         v.  the
exercise or conversion of any security, if all securities received
remain subject to the lock-up restriction in this Section 4(a) for
the remainder of the time period.

  

Subject
to the foregoing restriction and any applicable securities laws,
this Warrant and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or
in part, upon surrender of this Warrant at the principal office of
the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and
this Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days
of the date the Holder delivers an assignment form to the Company
assigning this Warrant in full. The Warrant, if properly assigned
in accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.

 

 

 

 

 

 

b)
New Warrants. This
Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. All Warrants issued on
transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to
the number of Warrant Shares issuable pursuant
thereto.

 

c)
Warrant Register.
The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.

 

d)
Representation by the
Holder. The Holder, by the acceptance hereof, represents and
warrants that it is acquiring this Warrant and, upon any exercise
hereof, will acquire the Warrant Shares issuable upon such
exercise, for its own account and not with a view to or for
distributing or reselling such Warrant Shares or any part thereof
in violation of the Securities Act or any applicable state
securities law, except pursuant to sales registered or exempted
under the Securities Act.

 

Section 5. Registration Rights.

 

5.1           Intentionally
Omitted.

 

5.2            

“Piggy-Back” Registration.

 

5.2.1          Grant
of Right. The Holder shall have the right, for a period of
no more than two (2) years from the Initial Exercise Date in
accordance with FINRA Rule 5110(f)(2)(G)(v), to include all or any
portion of the Warrant Shares (collectively, the
“Registrable
Securities”) as part of any other registration of
securities filed by the Company (other than in connection with a
transaction contemplated by Rule 145(a) promulgated under the
Securities Act or pursuant to Form S-8 or any equivalent form);
provided, however, that if, solely in connection with any primary
underwritten public offering for the account of the Company, the
managing underwriter(s) thereof shall, in its reasonable
discretion, impose a limitation on the number of Common Shares
which may be included in the Registration Statement because, in
such underwriter(s)’ judgment, marketing or other factors
dictate such limitation is necessary to facilitate public
distribution, then the Company shall be obligated to include in
such Registration Statement only such limited portion of the
Registrable Securities with respect to which the Holder requested
inclusion hereunder as the underwriter shall reasonably permit. Any
exclusion of Registrable Securities shall be made pro rata among
the Holders seeking to include Registrable Securities in proportion
to the number of Registrable Securities sought to be included by
such Holders; provided, however, that the Company shall not exclude
any Registrable Securities unless the Company has first excluded
all outstanding securities, the holders of which are not entitled
to inclusion of such securities in such Registration Statement or
are not entitled to pro rata inclusion with the Registrable
Securities.

 

 

 

 

 

 

5.2.2
          Terms.
The Company shall bear all fees and expenses attendant to
registering the Registrable Securities pursuant to Section 5.2.1
hereof, but the Holders shall pay any and all underwriting
commissions and the expenses of any legal counsel selected by the
Holders to represent them in connection with the sale of the
Registrable Securities. In the event of such a proposed
registration, the Company shall furnish the then Holders of
outstanding Registrable Securities with not less than thirty (30)
days written notice prior to the proposed date of filing of such
registration statement. Such notice to the Holders shall continue
to be given for each registration statement filed by the Company
during the two (2) year period following the Initial Exercise Date
until such time as all of the Registrable Securities have been sold
by the Holder. The holders of the Registrable Securities shall
exercise the “piggy-back” rights provided for herein by
giving written notice within ten (10) days of the receipt of the
Company’s notice of its intention to file a registration
statement. Except as otherwise provided in this Warrant, there
shall be no limit on the number of times the Holder may request
registration under this Section 5.2.2; provided, however, that such
registration rights shall terminate on the second anniversary of
the Initial Exercise Date.

 

5.3            

General Terms

 

5.3.1          Indemnification.
The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement
hereunder and each person, if any, who controls such Holders within
the meaning of Section 15 of the Securities Act or Section 20 (a)
of the Exchange Act against all loss, claim, damage, expense or
liability (including all reasonable attorneys’ fees and other
expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or
otherwise, arising from such registration statement but only to the
same extent and with the same effect as the provisions pursuant to
which the Company has agreed to indemnify the placement agent
contained in the Financial Advisory Agreement (as defined below).
The Holder(s) of the Registrable Securities to be sold pursuant to
such registration statement, and their successors and assigns,
shall severally, and not jointly, indemnify the Company, against
all loss, claim, damage, expense or liability (including all
reasonable attorneys’ fees and other expenses reasonably
incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Securities
Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of such Holders, or their successors or
assigns, in writing, for specific inclusion in such registration
statement to the same extent and with the same effect as the
foregoing provisions.

 

5.3.2
          Exercise
of Warrants. Nothing contained in this Warrant shall be
construed as requiring the Holder(s) to exercise their Warrants
prior to or after the initial filing of any registration statement
or the effectiveness thereof.

 

5.3.3
          Documents
to be Delivered by Holder(s). Each of the Holder(s)
participating in any of the foregoing offerings shall furnish to
the Company a completed and executed questionnaire provided by the
Company requesting information customarily sought of selling
security holders.

 

5.3.4
          Damages.
Should the Company fail to comply with Section 5.2.1, the Holder(s)
shall, in addition to any other legal or other relief available to
the Holder(s), be entitled to obtain specific performance or other
equitable (including injunctive) relief against the threatened
breach of such provisions or the continuation of any such breach,
without the necessity of proving actual damages and without the
necessity of posting bond or other security.

  

 

 

 

 

 

Section 6. Miscellaneous.

 

a)                 
No Rights as Stockholder
Until Exercise. This Warrant does not entitle the Holder to
any voting rights, dividends or other rights as a stockholder of
the Company prior to the exercise hereof as set forth in Section
2(d)(i).

 

b)                 
Loss, Theft, Destruction
or Mutilation of Warrant. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.

 

c)                 
Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking
of any action or the expiration of any right required or granted
herein shall not be a Trading Day, then, such action may be taken
or such right may be exercised on the next succeeding Trading
Day.

 

d)                
Authorized
Shares.

 

The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Shares a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Shares may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

  

Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.

 

 

 

 

 

 

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

 

e)                 
Jurisdiction. All
questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance
with the provisions of the Financial Advisory Agreement, dated
November 5, 2019, as amended on December 20, 2019, by and between
the Company and Brookline Capital Markets, a division of Arcadia
Securities, LLC, as placement agent (the “Financial Advisory
Agreement”).

 

f)                  
Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale
imposed by state and federal securities laws.

 

g)                 
Nonwaiver and
Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s
rights, powers or remedies. Without limiting any other provision of
this Warrant or the Financial Advisory Agreement, if the Company
willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the
Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate
proceedings, incurred by the Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

 

h)                 
Notices. Any
notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Financial Advisory
Agreement.

  

i)                   
Limitation of
Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to
purchase Warrant Shares, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Shares or as a
stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

 

j)                   
Remedies. The
Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law
would be adequate.

 

k)                 
Successors and
Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns
of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit
of any Holder from time to time of this Warrant and shall be
enforceable by the Holder or holder of Warrant Shares.

 

l)                   
Amendment. This
Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company and the
Holder.

 

 

 

 

 

 

m)               
Severability.
Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.

 

n)                 
Headings. The
headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this
Warrant.

 

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

 (Signature Page Follows)

             

IN WITNESS WHEREOF,
the Company has caused this Warrant to be executed by its officer
thereunto duly authorized as of the date first above
indicated.

 

	
 

	

EDESA BIOTECH, INC.

	
 

	
 

	
 

	
 

	
 

	

By:__________________________________________

Name:

Title:

 

 

 

 

 

NOTICE OF EXERCISE

 

 

TO:                           EDESA
BIOTECH, INC.

_________________________

 

(1)   The
undersigned hereby elects to purchase ________ Warrant Shares of
the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.

 

(2)  
Payment shall take the form of (check applicable box):

 

[ ] in
lawful money of the United States; or

 

[ ] if
permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).

 

(3)  
Please register and issue said Warrant Shares in the name of the
undersigned or in such other name as is specified
below:

 

_______________________________

 

 

The
Warrant Shares shall be delivered to the following DWAC Account
Number or by physical delivery of a certificate to:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4)  
Accredited
Investor. If the Warrant is being exercised via cash
exercise, the undersigned is an “accredited investor”
as defined in Regulation D promulgated under the Securities Act of
1933, as amended

 

 

[SIGNATURE
OF HOLDER]

 

Name of
Investing Entity:
_______________________________________________________________

Signature of Authorized Signatory of Investing Entity:
_________________________________________

Name of
Authorized Signatory:
___________________________________________________________

Title
of Authorized Signatory:
____________________________________________________________

Date:
________________________________________________________________________________

 

 

 

 

 

 

ASSIGNMENT FORM

 

(To
assign the foregoing warrant, execute

this
form and supply required information.

Do not
use this form to exercise the warrant.)

 

 

 

FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing
Warrant and all rights evidenced thereby are hereby assigned
to

 

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

 

 

_______________________________________________________________

 

Dated:
______________, _______

 

 

Holder’s
Signature: _____________________________

 

Holder’s
Address: _____________________________

 

_____________________________

 

 

 

NOTE:
The signature to this Assignment Form must correspond with the name
as it appears on the face of the Warrant, without alteration or
enlargement or any change whatsoever. Officers of corporations and
those acting in a fiduciary or other placement agent capacity
should file proper evidence of authority to assign the foregoing
Warrant.

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