Document:

EXCHANGE
AGREEMENT

 

This
Exchange Agreement (the “Agreement”) is entered into as of this 24th day of January, 2019, by and between ToughBuilt
Industries, Inc., a Nevada corporation with offices located at 25371 Commercentre Drive, Suite 200, Lake Forest, CA 9263 (the
“Company”) and the Holder signatory hereto (the “Holder”), with reference to the following
facts:

 

A.
The Company previously issued to Holder, among other things, that certain Series A Warrant (the “Existing Warrant”)
exercisable into ______ shares of Common Stock (as defined below), pursuant to (i) the Company’s Registration Statements
on Form S-1 (File numbers 333-226104 and 333-228287) and (ii) the Company’s final prospectus, dated as of November 9, 2018.

 

B.
The Company and the Holder desire to exchange such portion of the Existing Warrant exercisable into ______ shares of Common Stock
(the “Holder Warrant”) into (i) a new warrant (the “New Warrant”) to initially purchase
___ shares of Common Stock (the “New Warrant Shares”) in the form of the Holder Warrant, mutatis mutandis,
but with an initial exercise price of $3.67 (subject to adjustment as set forth in the New Warrant) and (ii) ____ shares of Common
Stock (the “New Shares”, and together with the New Warrant and New Warrant Shares, the “New Securities”)
(collectively, the “Exchange” or the “Transaction”). The New Warrant, the New Warrant Shares,
the New Shares and this Agreement and such other documents and certificates related thereto are collectively referred to herein
as the “Exchange Documents”.

 

C.
The Exchange is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act
of 1933, as amended (the “1933 Act”).

 

D.
Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Existing Warrant.

 

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter contained, the parties hereto agree
as follows:

 

1.
Exchange. On the date hereof, pursuant to Section 3(a)(9) of the 1933 Act, the Holder hereby agrees to convey, assign
and transfer the Holder Warrant to the Company in exchange for which the Company agrees to issue the New Warrant and the New Shares
to the Holder. On the date hereof, in exchange for the Holder Warrant, the Company shall (a) issue the New Warrant to the Holder
and (b) issue and deliver the New Shares to the Holder by deposit/withdrawal at custodian in accordance with the instructions
attached hereto as Schedule I, which New Shares shall be issued without restricted legend and shall be freely tradable
by the Holder. On the date hereof, the Holder shall be deemed for all corporate purposes to have become the holder of record of
the New Warrant and shall be entitled to exercise all of its rights with respect to the New Warrant and, irrespective of the date
the Company delivers the certificates evidencing the New Warrant and to the Holder.

 

2.
No Amendment or Waiver. Nothing herein shall amend, modify or waive any term or condition in any agreement by and
between the Company and the Holder or any security issued by the Company to the Holder.

 

    	 

     

    

 

3.
Representations and Warranties. As of the date hereof:

 

3.1
Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly
existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority
to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each
of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material
Adverse Effect (as defined below). As used in this Agreement, “Material Adverse Effect” means any material
adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial
or otherwise) or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated
hereby or in any of the other Exchange Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to
perform any of their respective obligations under any of the Exchange Documents (as defined below). Other than the Persons (as
defined below) listed in the SEC Documents, the Company has no Subsidiaries. “Subsidiaries” means any Person
in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar interest
of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person, and
each of the foregoing, is individually referred to herein as a “Subsidiary.” For purposes of this Agreement,
(x) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization, any other entity and any Governmental Entity or any department or agency thereof and
(y) “Governmental Entity” means any nation, state, county, city, town, village, district, or other political
jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal),
multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity
or enterprise owned or controlled by a government or a public international organization or any of the foregoing.

 

3.2
Authorization and Binding Obligation. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated
by the Exchange Documents and to consummate the Transaction (including, without limitation, the issuance of the New Shares and
the New Warrant in accordance with the terms hereof and the reservation and issuance of the New Warrant Shares in accordance with
the terms of the New Warrant, as applicable). The execution and delivery of the Exchange Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the New Shares
and the New Warrant in accordance with the terms hereof and the reservation and issuance of the New Warrant Shares in accordance
with the terms of the New Warrant, as applicable, has been duly authorized by the Company’s Board of Directors and no further
filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement and the
other Exchange Documents have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights
to indemnification and to contribution may be limited by federal or state securities laws.

 

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3.3
No Conflict. Except as set forth on Schedule 3.3, the execution, delivery and performance of the Exchange Documents
by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the New Shares and the New Warrant in accordance with the terms hereof and the reservation and issuance of the
New Warrant Shares in accordance with the terms of the New Warrant, as applicable) will not (i) result in a violation of the Certificate
of Incorporation (as defined below) or any other organizational documents of the Company or any of its Subsidiaries, any capital
stock of the Company or any of its Subsidiaries or Bylaws (as defined below) of the Company or any of its Subsidiaries, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of the Nasdaq Capital
Market (the “Principal Market”) and including all applicable federal laws, rules and regulations) applicable
to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound
or affected.

 

3.4
No Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of,
or make any filing or registration with (other than the filing with the Securities and Exchange Commission (the “SEC”)
of a Form D with the SEC, any other filings as may be required by any state securities agencies, filing of UCC financing statements
and approval by the Principal Market of a listing of additional shares application in respect of the New Shares and the New Warrant
Shares as required by Section 7 hereof), any court, governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Exchange
Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations
which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which
might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings
contemplated by the Exchange Documents. Except as disclosed in the SEC Documents, the Company is not in violation of the requirements
of the Principal Market and has no knowledge of any facts or circumstances which would reasonably lead to delisting or suspension
of the Common Stock in the foreseeable future.

 

3.5
Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Holder contained herein,
the offer and issuance by the Company of the New Warrant Shares (assuming a cashless exercise of the New Warrant), the New Shares
and the New Warrant is exempt from registration under the 1933 Act pursuant to the exemption provided by Rule 3(a)(9) thereof.

 

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3.6
Issuance of New Securities. The issuance of the New Warrant are duly authorized and, upon issuance in accordance with the
terms of this Agreement, the New Warrant shall be validly issued, fully paid and non-assessable and free from all preemptive or
similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests
and other encumbrances (collectively “Liens”) with respect to the issue thereof. The issuance of the New Shares
has been duly authorized and upon issuance in accordance with the terms of the Exchange Documents, the New Shares will be validly
issued, fully paid and nonassessable and free from all Liens with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock. Upon exercise in accordance with the New Warrant, the New Warrant Shares,
when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with
respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. The offer and
issuance by the Company of the New Securities is exempt from registration under the 1933 Act. Each of the New Securities will
be freely tradable and (in the case of the New Warrant Shares, assuming a cashless exercise of the New Warrant) shall not be required
to bear, and shall not bear, any 1933 Act or other restrictive legend.

 

3.7
Transfer Taxes. On the date hereof, all share transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance of the New Securities to be exchanged with the Holder hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

3.8
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all
reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to
the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof, including without limitation,
Current Reports on Form 8-K filed by the Company with the SEC whether required to be filed or not (but excluding Item 7.01 thereunder),
and all exhibits and appendices included therein (other than Exhibits 99.1 to Form 8-K) and financial statements, notes and schedules
thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”).
The Company has delivered or has made available to the Holder or its representatives true, correct and complete copies of each
of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements)
and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). No other information provided by or on behalf of the Company
to the Holder which is not included in the SEC Documents (including, without limitation, information in the disclosure schedules
to this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order to
make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company is
not currently contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any
letter of the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial
Statements”), nor is the Company currently aware of facts or circumstances which would require the Company to amend
or restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with
GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend
that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate
any of the Financial Statements.

 

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3.9
Absence of Certain Changes. Except as set forth in the SEC Documents, since the date of the Company’s most recent
audited financial statements contained in a Registration Statement on Form S-1, there has been no material adverse change and
no material adverse development in the business, assets, liabilities, properties, operations (including results thereof), condition
(financial or otherwise) or prospects of the Company or any of its Subsidiaries. Since the date of the Company’s most recent
audited financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid
any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) except
as disclosed in the SEC Documents, made any capital expenditures, individually or in the aggregate, outside of the ordinary course
of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute
relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary
have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually
and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to
occur on the date hereof, will not be Insolvent (as defined below). For the purpose of this Agreement (x) “Insolvent”
means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the
Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’
total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend
to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect
to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Subsidiary’s
(as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such
Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to
incur or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature; (y) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance
with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all
reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations
evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which,
in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness
referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any
Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness,
and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A)
through (G) above; and (z) “Contingent Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person
if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

 

3.10
No Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in the SEC Documents, no event,
liability, development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the
Company, any of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including
results thereof) or condition (financial or otherwise), that (i) would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of
its Common Stock and which has not been publicly announced, (ii) would reasonably expected to have a material adverse effect on
the Holder’s investment hereunder or (iii) would reasonably be expected to have a Material Adverse Effect.

 

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3.11
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of
or in default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding
series of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of
formation, memorandum of association, articles of association, Certificate of Incorporation or bylaws, respectively. Except as
set forth in the SEC Documents, neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order
or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor
any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations
which could not, individually or in the aggregate, have a Material Adverse Effect. Except as set forth in the SEC Documents, without
limiting the generality of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of
the Principal Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension
of the Common Stock by the Principal Market in the foreseeable future. During the two years prior to the date hereof, (i) the
Common Stock has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC
or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and each
of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary
to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would
not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received
any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit. There is
no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which
the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting
or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company
or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than
such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse
Effect on the Company or any of its Subsidiaries.

 

3.12
Transactions With Affiliates. Except as set forth in the SEC Documents, no current or former employee, partner, director,
officer or stockholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the
Company, any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing,
is presently, or has ever been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement
or other arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring
payments to, any such director, officer or stockholder or such associate or affiliate or relative Subsidiaries (other than for
ordinary course services as employees, consultants, officers or directors of the Company or any of its Subsidiaries)) or (ii)
the direct or indirect owner of an interest in any corporation, firm, association or business organization which is a competitor,
supplier or customer of the Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5%
of the common stock of a company whose securities are traded on or quoted through an Eligible Market), nor does any such Person
receive income from any source other than the Company or its Subsidiaries which relates to the business of the Company or its
Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee, officer, stockholder or director of the
Company or any of its Subsidiaries or member of his or her immediate family is indebted to the Company or its Subsidiaries, as
the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit)
to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred
on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees or executives
(including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).

 

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3.13
Capitalization.

 

(a)
Existing Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s
shares, interests or capital stock is subject to from all preemptive or similar rights, mortgages, defects, claims, liens, pledges,
charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively “Liens”)
suffered or permitted by the Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares,
interests or capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable
for, any shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933
Act; (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption
or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of
its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the New Shares; and (F)
neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or
any similar plan or agreement.

 

(b)
Organizational Documents. The Company has furnished to the Holder true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”),
and the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms
of all Convertible Securities and the material rights of the holders thereof in respect thereto.

 

3.14
Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed in the SEC Documents,
has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound, (ii) is a party to any contract, agreement or instrument, except as disclosed in the SEC Documents, the violation
of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected
to result in a Material Adverse Effect, (iii) has any financing statements securing obligations in any amounts filed in connection
with the Company or any of its Subsidiaries, except as disclosed in the SEC Documents; (iv) is in violation of any term of, or
in default under, any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults
would not result, individually or in the aggregate, in a Material Adverse Effect, or (v) is a party to any contract, agreement
or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or
is expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries have any liabilities or obligations
required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate,
do not or could not have a Material Adverse Effect.

 

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3.15
Litigation. There is no action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market,
any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its
Subsidiaries’ officers or directors that would reasonably be expected to have a Material Adverse Effect on the Company or
its Subsidiaries, whether of a civil or criminal nature or otherwise, in their capacities as such, except as disclosed in the
SEC Documents. No director, officer or employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C. §1519
or engaged in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not been, and
to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any
of its Subsidiaries or any current or former director or officer of the Company or any of its Subsidiaries. The SEC has not issued
any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the 1933 Act
or the 1934 Act. Neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity.

 

3.16
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided the Holder or its
agents or counsel with any information that constitutes or would reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement
and the other Exchange Documents. The Company understands and confirms that the Holder will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Holder regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf
of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during the twelve (12)
months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading. No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including
results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure
at or before the date hereof or announcement by the Company but which has not been so publicly announced or disclosed.

 

4.
Holder’s Representations and Warranties. As a material inducement to the Company to enter into this Agreement
and consummate the Exchange, the Holder represents, warrants and covenants with and to the Company as follows:

 

4.1
Reliance on Exemptions. The Holder understands that the New Securities are being offered and exchanged in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Holder set forth herein and in the Exchange Documents in order to determine the availability of such
exemptions and the eligibility of the Holder to acquire the New Securities.

 

    	8

     

    

 

4.2
No Governmental Review. The Holder understands that no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of the New Securities or the fairness or suitability
of the investment in the New Securities nor have such authorities passed upon or endorsed the merits of the offering of the New
Securities.

 

4.3
Validity; Enforcement. This Agreement and the Exchange Documents to which the Holder is a party have been duly and validly
authorized, executed and delivered on behalf of the Holder and shall constitute the legal, valid and binding obligations of the
Holder enforceable against the Holder in accordance with their respective terms, except as such enforceability may be limited
by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

4.4
No Conflicts. The execution, delivery and performance by the Holder of this Agreement and the Exchange Documents to which
the Holder is a party, and the consummation by the Holder of the transactions contemplated hereby and thereby will not (i) result
in a violation of the organizational documents of the Holder or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the Holder is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Holder, except
in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Holder to perform its obligations
hereunder.

 

4.5
Investment Risk; Sophistication. The Holder is acquiring the New Securities hereunder in the ordinary course of its business.
The Holder has such knowledge, sophistication, and experience in business and financial matters so as to be capable of evaluation
of the merits and risks of the prospective investment in the New Securities, and has so evaluated the merits and risk of such
investment. The Holder is an “accredited Holder” as defined in Regulation D under the 1933 Act.

 

4.6
Ownership of Existing Warrant. The Holder owns the Existing Warrant free and clear of any Liens (other than the obligations
pursuant to this Agreement and applicable securities laws).

 

5.
Disclosure of Transaction. The Company shall, on or before 8:30 a.m., New York City Time, on or prior to the first
business day after the date of this Agreement, file a Current Report on Form 8-K describing the terms of the transactions contemplated
hereby in the form required by the 1934 Act and attaching this Agreement as an exhibit to such filing (including all attachments,
the “8-K Filing”). From and after the filing of the 8-K Filing, the Company shall have disclosed all material,
non-public information (if any) provided up to such time to the Holder by the Company or any of its Subsidiaries or any of their
respective officers, directors, employees or agents. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges
and agrees that any and all confidentiality or similar obligations under any agreement with respect to the transactions contemplated
by the Exchange Documents or as otherwise disclosed in the 8-K Filing, whether written or oral, between the Company, any of its
Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the
Holder or any of their affiliates, on the other hand, shall terminate. Neither the Company, its Subsidiaries nor the Holder shall
issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided,
however, the Company shall be entitled, without the prior approval of the Holder, to make a press release or other
public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith
or (ii) as is required by applicable law and regulations (provided that in the case of clause (i) the Holder shall be consulted
by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written
consent of the Holder (which may be granted or withheld in the Holder’s sole discretion), except as required by applicable
law, the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of the Holder in
any filing, announcement, release or otherwise.

 

    	9

     

    

 

6.
No Integration. None of the Company, its Subsidiaries, any of their affiliates, or any Person acting on their behalf
shall, directly or indirectly, make any offers or sales of any security (as defined in the 1933 Act) or solicit any offers to
buy any security or take any other actions, under circumstances that would require registration of any of the New Shares or New
Warrant Shares (collectively, the “New Common Securities”) under the 1933 Act or cause this offering of the
New Shares to be integrated with such offering or any prior offerings by the Company for purposes of Regulation D under the 1933
Act.

 

7.
Listing. The Company shall promptly secure the listing or designation for quotation (as applicable) of all of the
New Common Securities upon the Principal Market (subject to official notice of issuance) and shall maintain such listing of all
the New Shares from time to time issuable under the terms of the Exchange Documents. The Company shall maintain the Common Stock’s
authorization for quotation on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action which
would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company
shall pay all fees and expenses in connection with satisfying its obligations under this Section 7.

 

8.
Fees. Each party to this Agreement shall bear its own expenses in connection with the structuring, documentation,
negotiation and closing of the transactions contemplated hereby, except as provided in the previous sentence and except that the
Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer agent fees,
Depository Trust Company (“DTC”) fees relating to or arising out of the transactions contemplated hereby.

 

9.
Holding Period. For the purposes of Rule 144, the Company acknowledges that the holding period of (x) the New Shares
may be tacked onto the holding period of the Holder Warrant, (y) the New Warrant may be tacked onto the holding period of the
Holder Warrant and (z) the New Warrant Shares (assuming a cashless exercise of the New Warrant) may be tacked onto the holding
period of the Holder Warrant, and, in each case, the Company agrees not to take a position contrary to this Section 9. The Company
acknowledges and agrees that (assuming the Holder is not an affiliate of the Company) (i) the New Warrant Shares (assuming a cashless
exercise of the New Warrant), the New Warrant and the New Shares are as of the date hereof, eligible to be resold pursuant to
Rule 144, (ii) the Company is not aware of any event reasonably likely to occur that would reasonably be expected to result in
the New Warrant Shares (assuming a cashless exercise of the New Warrant), the New Warrant or the New Shares, as applicable, becoming
ineligible to be resold by the Holder pursuant to Rule 144 and (iii) in connection with any resale of any New Warrant Shares (assuming
a cashless exercise of the New Warrant), the New Warrant and/or any New Shares pursuant to Rule 144, the Holder shall solely be
required to provide reasonable assurances that such applicable New Common Securities are eligible for resale, assignment or transfer
under Rule 144, which shall not include an opinion of Holder’s counsel. The Company shall be responsible for any transfer
agent fees or DTC fees or legal fees of the Company’s counsel with respect to the removal of legends, if any, or issuance
of any New Common Securities in accordance herewith or in accordance with the terms of the New Warrant.

 

    	10

     

    

 

10.
Blue Sky. The Company shall make all filings and reports relating to the Exchange required under applicable securities
or “Blue Sky” laws of the states of the United States following the date hereof, if any.

 

11.
Most Favored Nation. The Company hereby represents and warrants as of the date hereof and covenants and agrees that
none of the terms offered to any Person with respect to any exchange of Series A Warrants, including, without limitation with
respect to any consent, release, amendment, settlement, or waiver relating thereto (each an “Settlement Document”),
is or will be more favorable to such Person (other than any reimbursement of legal fees) than those of the Holder and this Agreement.
If, and whenever on or after the date hereof for a period of six (6) months after the date hereof, the Company enters into a Settlement
Document, then (i) the Company shall provide notice thereof to the Holder immediately following the occurrence thereof and (ii)
the terms and conditions of this Agreement shall be, without any further action by the Holder or the Company, automatically amended
and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable
terms and/or conditions (as the case may be) set forth in such Settlement Document, provided that upon written notice to the Company
at any time the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the
term or condition contained in this Agreement shall apply to the Holder as it was in effect immediately prior to such amendment
or modification as if such amendment or modification never occurred with respect to the Holder. The provisions of this Section
11 shall apply similarly and equally to each Settlement Document.

 

12.
Additional Issuance of Securities. The Company agrees that for the period commencing on the date hereof and ending
on the date immediately following the 20th Trading Day after the date hereof (the “Restricted Period”), neither
the Company nor any of its Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to purchase,
or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition
of) any equity security or any equity-linked or related security (including, without limitation, any “equity security”
(as that term is defined under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined below), any preferred
stock or any purchase rights). Notwithstanding the foregoing, this Section 12 shall not apply in respect of the issuance of (i)
shares of Common Stock or standard options to purchase Common Stock to directors, officers or employees of the Company in their
capacity as such pursuant to an Approved Stock Plan (as defined below), provided that (1) all such issuances (taking into account
the shares of Common Stock issuable upon exercise of such options) after the date hereof pursuant to this clause (i) do not, in
the aggregate, exceed more than 5% of the Common Stock issued and outstanding immediately prior to the date hereof and (2) the
exercise price of any such options is not lowered, none of such options are amended to increase the number of shares issuable
thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely
affects the Holder; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior
to the date hereof, provided that the conversion, exercise or other method of issuance (as the case may be) of any such Convertible
Security is made solely pursuant to the conversion, exercise or other method of issuance (as the case may be) provisions of such
Convertible Security that were in effect on the date immediately prior to the date of this Agreement, the conversion, exercise
or issuance price of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to
an Approved Stock Plan that are covered by clause (i) above) is not lowered, none of such Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to
increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other
than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
are otherwise materially changed in any manner that adversely affects the Holder; (iii) the New Shares, (iv) the New Warrant Shares
and (v) subject to the Company’s compliance with Section 11 above, such shares of common stock and warrants with substantially
identical terms to the New Securities issued in exchange for a Series A Warrant held as of the date hereof by a single investor
that is exercisable as of the date hereof into no more than 610,000 shares of Common Stock, which exchange is consummated pursuant
to an agreement on substantially identical in terms to this Agreement (each of the foregoing in clauses (i) through (v), collectively
the “Excluded Securities”). “Approved Stock Plan” means any employee benefit plan which
has been approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which shares
of Common Stock and standard options to purchase Common Stock may be issued to any employee, officer or director for services
provided to the Company in their capacity as such.

 

    	11

     

    

 

13.
Miscellaneous.

 

13.1
Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

13.2
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state or federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any
such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    	12

     

    

 

13.3
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.

 

13.4
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
delivery, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on
file by the sending party) or by electronic mail; or (iii) one Trading Day after deposit with an overnight courier service, in
each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such
communications shall be as set forth on the signature pages attached hereto or to such other address, facsimile number and/or
e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile
machine or e-mail containing the time, date, recipient facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

 

13.5
Finder’s Fees. Each party represents that it neither is nor will be obligated for any finders’ fee or commission
in connection with this transaction. The Company shall indemnify and hold harmless the Holder from any liability for any commission
or compensation in the nature of a finders’ fee (and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or representatives is responsible.

 

13.6
Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent
of the Company and the Holder.

 

13.7
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded
and shall be enforceable in accordance with its terms so long as this Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in
good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect
of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

    	13

     

    

 

13.8
Entire Agreement. This Agreement together with the other Exchange Documents, represents the entire agreement and understandings
between the parties concerning the Exchange and the other matters described herein and therein and supersedes and replaces any
and all prior agreements and understandings solely with respect to the subject matter hereof and thereof. Except as expressly
set forth herein, nothing herein shall amend, modify or waive any term or condition of the other Exchange Documents.

 

13.9
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

 

13.10
Interpretation. Unless the context of this Agreement clearly requires otherwise, (a) references to the plural include the
singular, the singular the plural, the part the whole, (b) references to any gender include all genders, (c) “including”
has the inclusive meaning frequently identified with the phrase “but not limited to” and (d) references to “hereunder”
or “herein” relate to this Agreement.

 

13.11
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

13.12
Survival. The representations, warranties and covenants of the Company and the Holder contained herein shall survive the
consummation of the Exchange and the issuance and delivery of the New Securities.

 

13.13
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.

 

13.14
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.

 

[The
remainder of the page is intentionally left blank]

 

    	14

     

    

 

IN
WITNESS WHEREOF, Holders and the Company have executed this Agreement as of the date set forth on the first page of this Agreement.

 

	 	COMPANY:
	 	 
	 	TOUGHBUILT
    INDUSTRIES, INC.
	 	 	               
	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	Address:	 
	 	 
	 	 
	 	 

 

    	 

     

    

 

IN
WITNESS WHEREOF, Holders and the Company have executed this Agreement as of the date set forth on the first page of this Agreement.

 

	 	HOLDER:
	 	 	       
	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	Address:FORM
OF SERIES A WARRANT

 

THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 1(a) OF
THIS WARRANT.

 

Toughbuilt
Industries, Inc.

 

Warrant
To Purchase Common Stock

 

Warrant
No.: J-1-

 

Date
of Issuance: January 25, 2019 (“Issuance Date”)

 

TOUGHBUILT
INDUSTRIES, INC., a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, ______ , the registered holder hereof or its permitted assigns (the
“Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or
after the six month anniversary of the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined
below), _______ (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below)
(the “Warrant Shares”, and such number of Warrant Shares, the “Warrant Number”). Except
as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 17. This Warrant is
one of the Warrants to Purchase Common Stock (the “Registered Warrants”) issued pursuant to that certain Exchange
Agreement, dated as of the Issuance Date, by and between the Company and the original Holder (the “Exchange Agreement”)
in exchange for that certain warrant to purchase _________ shares of Common Stock (the “Original Warrant”)
issued pursuant to (i) Section 1 of that certain Underwriting Agreement, dated as of November 8, 2018 (the “Subscription
Date”), by and among the Company and the underwriter(s) referred to therein, as amended from time to time (the “Underwriting
Agreement”) and (ii) the Company’s Registration Statement on Form S-1 (File number 333-226104) (the “Registration
Statement”).

 

1.
EXERCISE OF WARRANT.

 

(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth
in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise
Date”), in whole or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice,
in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election
to exercise this Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver
payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number
of Warrant Shares as to which this Warrant was so exercised (the “Aggregate Exercise Price”) in cash or via
wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise
was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original
of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than
all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant
evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all
of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery
of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following the date
on which the Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment
of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and
the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading
Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the
1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable
Exercise Date), the Company shall (i) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock
to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian system, or (ii) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address
as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder
shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the
date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection
with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the Company
by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2)
Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued
shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes,
costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to
the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing, except in the case where
an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant Shares
to the Holder on or prior to the later of (A) two (2) Trading Days after delivery of the applicable Exercise Notice (or such earlier
date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant
Shares initiated on the applicable Exercise Date) and (B) one (1) Trading Day after the Company’s receipt of the Aggregate
Exercise Price (or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall
not be deemed to be a breach of this Warrant. From the Issuance Date through and including the Expiration Date, the Company shall
maintain a transfer agent that participates in the DTC’s Fast Automated Securities Transfer Program. Notwithstanding any
other provision in this Agreement, the Holder may elect, at its sole discretion, to receive unregistered Warrant Shares issued
in response to an Exercise Notice instead of Warrant Shares (i) registered pursuant to a registration statement or (ii) issued
pursuant to Section 1(c).

 

    	 

     

    

 

(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $3.67, subject to adjustment as
provided herein.

 

(c)
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or
prior to the Share Delivery Date, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer
Program, to issue and deliver to the Holder (or its designee) a certificate for the number of Warrant Shares to which the Holder
is entitled and register such Warrant Shares on the Company’s share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, to credit the balance account of the Holder or the Holder’s designee
with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as
the case may be) or (II) if a registration statement (or prospectus contained therein) covering the issuance of the Warrant Shares
that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the issuance
of such Unavailable Warrant Shares and the Company fails to promptly (x) so notify the Holder and (y) deliver the Warrant Shares
electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice
Failure” and together with the event described in clause (I) above, a “Delivery Failure”), and if
on or after such Share Delivery Date the Holder purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common Stock issuable upon
such exercise that the Holder is entitled to receive from the Company (a “Buy-In”), then, in addition to all
other remedies available to the Holder, the Company shall, within two (2) Business Days after the Holder’s request and in
the Holder’s discretion, either (i) as an indemnity for loss hereunder, pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the
“Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate (and
to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case
may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the
Holder a certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s
designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) and, as an indemnity for loss hereunder, pay cash to the Holder in an amount equal to the excess
(if any) of the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any)
for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the
Holder) (the “Buy-In Price”) over the product of (A) such number of Warrant Shares multiplied by (B) the lowest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Exercise
Notice and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In Payment Amount”).
Nothing shall limit the 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 certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise
of this Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause its transfer
agent to participate in the DTC Fast Automated Securities Transfer Program. In addition to the foregoing rights, (i) if the Company
fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery
Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the
rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior to the
date of such notice pursuant to this Section 1(c) or otherwise except with respect to any returned portion of an exercise under
this subclause (i), and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale
of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such
Exercise Notice Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability
of such registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or
in part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such
Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any
payments that have accrued prior to the date of such notice pursuant to this 1(c) or otherwise, and/or (y) switch some or all
of such Exercise Notice from a cash exercise to a Cashless Exercise.

 

    	2

     

    

 

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

 

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

   D

 

For
purposes of the foregoing formula:

 

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

 

B
= the quotient of (x) the sum of the VWAP of the Common Stock of each of the twenty (20) Trading Days ending at the close of business
on the Principal Market immediately prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (y)
twenty (20).

 

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

 

D
= the Spot Price.

 

If
the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the 1933 Act, the Warrant Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule
144(d) promulgated under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant Shares issued in
a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the date the Original Warrant was originally issued pursuant to the Underwriting Agreement.

 

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

 

    	3

     

    

 

(f)
Limitations on Exercises. The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall
not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such
exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder
together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (or 9.99% if specified by the
Holder prior to the Date of Issuance) (the “Maximum Percentage”) of the shares of Common Stock outstanding
immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held
by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the
other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of
the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including other
Registered Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or
exercise analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall
be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of
Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be,
(y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if
any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”).
If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock
is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares
of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial
ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company of
a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase
is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to
the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral
request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the
Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that
the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution
Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares
of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s
and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer
the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the
Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice
to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st)
day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified
in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st)
day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the
other Attribution Parties and not to any other holder of Registered Warrants that is not an Attribution Party of the Holder. For
purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage
shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1)
of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability
of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the
extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended
beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder
of this Warrant.

 

    	4

     

    

 

(g)
Reservation of Shares.

 

(i)
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for
issuance under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under this Warrant (without
regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the
number of shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection
with any exercise or redemption of this Warrant or such other event covered by Section 2(a) below.

 

(ii)
Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while
this Warrant remains outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common
Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”), then
the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval
of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that
they approve such proposal. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of
this Warrant due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but unissued
shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”),
in lieu of delivering such Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation
of such portion of this Warrant exercisable into such Authorization Failure Shares at a price equal to the sum of (i) the product
of (x) such number of Authorization Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date the Holder delivers the applicable Exercise Notice with respect to such Authorization
Failure Shares to the Company and ending on the date of such issuance and payment under this Section 1(f); and (ii) to the extent
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Holder of Authorization Failure Shares, any Buy-In Payment Amount, brokerage commissions and other out-of-pocket expenses,
if any, of the Holder incurred in connection therewith.

 

    	5

     

    

 

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

 

(a)
Stock Dividends and Splits. Without limiting any provision of Section 4, if the Company, at any time on or after the Subscription
Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares
or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common
Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective
immediately after the effective date of such subdivision or combination. Number of Warrant Shares. Simultaneously with
any adjustment to the Exercise Price pursuant to this Section 2, the number of Warrant Shares that may be purchased upon exercise
of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable
hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior
to such adjustment (without regard to any limitations on exercise contained herein).

 

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

 

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

 

    	6

     

    

 

(d)
Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant, subject to the prior consent
of the Principal Market if less than $1.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions), and with the prior written consent of the Holder, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the board of directors of the Company.

 

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

 

4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

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

 

    	7

     

    

 

(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor
Entity assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section
4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such
Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation,
which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the
purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction)
and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or
listed for trading on an Eligible Market. Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this
Warrant 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. Upon consummation of each Fundamental Transaction, the Successor Entity
shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property
(except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable
upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock
(or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the
provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at
its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction
without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation
of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other
assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make
appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at
any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares
of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and
4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase
or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any
limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Holder.

 

    	8

     

    

 

(c)
Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder
delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y) the
consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through the
date that is thirty (30) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant
to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this
Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value.
Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder on or prior to the later
of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation of such Fundamental
Transaction; provided, however, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors or the consideration is not in all stock of the Successor Entity, the Holder
shall only be entitled to receive from the Company or any Successor Entity, as of the date of consummation of such Fundamental
Transaction, the same type or form of consideration (and in the same proportion), at the Black Scholes Value (as defined below)
of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection
with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether
the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the
Fundamental Transaction.

 

(d)
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).

 

    	9

     

    

 

5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will
not, by amendment of its certificate of incorporation, bylaws or other organizational documents or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good
faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.
Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common
Stock upon the exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day
anniversary of the Issuance Date, the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant
to restrictions set forth in Section 1(f) hereof), the Company shall use its best efforts to promptly remedy such failure, including,
without limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of Common Stock.

 

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

 

7.
REISSUANCE OF WARRANTS.

 

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

 

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

 

    	10

     

    

 

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

 

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

 

8.
NOTICES. (a) General. Whenever notice is required to be given under this
Warrant, unless otherwise provided herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic
United States, by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid,
electronic mail or by facsimile or (b) from outside the United States, by International Federal Express, electronic mail or facsimile,
and (ii) will be deemed given (A) if delivered by first-class registered or certified mail domestic, three (3) Business Days after
so mailed, (B) if delivered by nationally recognized overnight carrier, one (1) Business Day after so mailed, (C) if delivered
by International Federal Express, two (2) Business Days after so mailed and (D) if delivered by electronic mail, when sent (provided
that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not
receive an automatically generated message from the recipient’s email server that such e-mail could not be delivered to
such recipient) and (E) if delivered by facsimile, upon electronic confirmation of receipt of such facsimile, and will be delivered
and addressed as follows:

 

(i)
         if to the Company, to:

 

ToughBuilt
Industries, Inc.

25371 Commercentre Drive

 

Lake
Forest, California, 92630

Attention: Michael Panosian

E-Mail: michael@toughbuilt.com

 

    	11

     

    

 

	 	(ii)	if
    to the Holder, at such address or other contact information delivered by the Holder to Company or as is on the books and records
    of the Company.

 

(b)
Required Notices. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this
Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares,
setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least ten Trading Days prior
to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the
shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote
with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be
made known to the public prior to or in conjunction with such notice being provided to the Holder, and (iii) at least ten (10)
Trading Days prior to the consummation of any Fundamental Transaction. To the extent that any notice provided hereunder constitutes,
or contains, material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously
file such notice with the SEC pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of
execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

9.
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this
Warrant (other than Section 1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. No waiver shall
be effective unless it is in writing and signed by an authorized representative of the waiving party.

 

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

 

    	12

     

    

 

11.
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in
accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall
be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. The Company hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to the Company at its principal executive office and agrees
that such service shall constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court
ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

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

 

13.
DISPUTE RESOLUTION.

 

(a)
Submission to Dispute Resolution.

 

(i)
In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price, Black Scholes Value or fair market
value or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute
relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute
to the other party via facsimile or electronic mail (A) if by the Company, within two (2) Business Days after the occurrence of
the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances
giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Exercise
Price, such Closing Sale Price, such Bid Price, Black Scholes Value or such fair market value or such arithmetic calculation of
the number of Warrant Shares (as the case may be), at any time after the second (2nd) Business Day following such initial
notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then
the Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.

 

    	13

     

    

 

(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 13 and (B) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute
Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of
the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required
Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation
or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based
solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).
Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither
the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).

 

(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline.
The fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution
of such dispute shall be final and binding upon all parties absent manifest error.

 

(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 13 constitutes an agreement to arbitrate
between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501,
et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for
an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 13, (ii) the terms
of this Warrant shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment
bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment
bank determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving
such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Warrant, (iii) the
Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 13
to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth
in this Section 13 and (iv) nothing in this Section 13 shall limit the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any matters described in this Section 13).

 

    	14

     

    

 

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

 

15.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant
is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or
the holder otherwise takes action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b)
there occurs any bankruptcy, reorganization, receivership of the company or other proceedings affecting company creditors’
rights and involving a claim under this Warrant, then the Company shall pay the costs incurred by the Holder for such collection,
enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without
limitation, attorneys’ fees and disbursements.

 

16.
TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without
the consent of the Company.

 

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

 

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

 

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

 

(c)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control”
of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the
election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by
contract or otherwise.

 

    	15

     

    

 

(d)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle,
including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly
managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect
Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together
with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock
would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934
Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the
Maximum Percentage.

 

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

 

(f)
“Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the
Holder’s request pursuant to Section 4(c), which value is calculated using the greater of the Black Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, as a put option or a call option, utilizing (i) an underlying
price per share equal to, at the Holder’s election, either, (1) the highest or lowest (at the Holder’s election) Closing
Sale Price of the Common Shares during the period beginning on the Trading Day immediately preceding the announcement of the applicable
Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading
Day of the Holder’s request pursuant to Section 4(c) the sum of the price per share being offered in cash in the applicable
Fundamental Transaction (if any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction
(if any), (ii) (1) if calculating as a call option, a strike price equal to the Exercise Price in effect on the date of the Holder’s
request pursuant to Section 4(c) if calculating as a put option, a strike price equal to $5.50 (as adjusted for share splits,
share dividends, share combinations, recapitalizations or other similar events), (iii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s
request pursuant to Section 4(c) the remaining term of this Warrant as of the date of consummation of the applicable Fundamental
Transaction or as of the date of the Holder’s request pursuant to Section 4(c) if such request is prior to the date of the
consummation of the applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility equal to the
greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365
day annualization factor) as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the
applicable Fundamental Transaction, (B) the consummation of the applicable Fundamental Transaction and (C) the date on which the
Holder first became aware of the applicable Fundamental Transaction.

 

    	16

     

    

 

(g)
“Bloomberg” means Bloomberg, L.P.

 

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

 

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

 

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

 

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

 

    	17

     

    

 

(l)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market or the Principal Market.

 

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

 

(n)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of
Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company
to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of
the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding;
or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule
13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire,
either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number
of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common
Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued
and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock not held by all such Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by
all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued
and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to
effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender their shares
of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction
structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary
to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment
of such instrument or transaction.

 

    	18

     

    

 

(o)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in
Rule 13d-5 thereunder.

 

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

 

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

 

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

 

(s)
“Principal Market” means the Nasdaq Capital Market.

 

(t)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.

 

(u)
“Spot Price” means, as applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately
preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section
1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(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) the Bid Price of the Common Stock as of the time of the Holder’s
execution of the applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on
a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price
of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such
Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours”
on such Trading Day.

 

(v)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.

 

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

 

    	19

     

    

 

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

 

(y)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New
York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted
average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending
at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of
the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets
LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures
in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination,
recapitalization or other similar transaction during such period.

 

[signature
page follows]

 

    	20

     

    

 

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

 

	 	TOUGHBUILT
    INDUSTRIES, INC.
	 	 	 
	 	By:	                            
	 	Name:	 
	 	Title:	 

 

    	 

     

    

 

EXHIBIT
A

 

EXERCISE
NOTICE

 

TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

TOUGHBUILT
INDUSTRIES, INC.

 

The
undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”)
of ToughBuilt Industries, Inc., a Nevada corporation (the “Company”), evidenced by Warrant to Purchase Common
Stock No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.

 

1.
Form of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:

 

	 	____________	a
    “Cash Exercise” with respect to _________________ Warrant Shares; and/or

 

	 	____________	a
    “Cashless Exercise” with respect to _______________ Warrant Shares.

 

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

 

2.
Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the
Warrant Shares to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________
to the Company in accordance with the terms of the Warrant.

 

3.
Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________
Warrant Shares in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:

 

[  ]Check
here if requesting delivery as a certificate to the following name and to the following address:

 

	 	Issue
    to:	 
	 	 	 
	 	 	 

 

    	 

     

    

 

[  ]Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

 

	 	DTC
    Participant:	 
	 	 	 
	 	DTC
    Number:	 
	 	 	 
	 	Account
    Number:	 

 

	Date:
    _____________ __, ___	 
	 ________________________	 
	Name
    of Registered Holder	 

 

	By:
    	 ____________________________	 
	Name:	 	 
	Title:	 	 

 

Tax
ID:____________________________

 

Facsimile:__________________________

 

E-mail
Address:_____________________

 

    	 

     

    

 

EXHIBIT
B

 

ACKNOWLEDGMENT

 

The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated _________, 201_, from the Company and acknowledged and
agreed to by _______________.

 

	 	toughbuilt
    industries, inc.
	 	 	 
	 	By:	                
	 	Name:	
	 	Title:

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