Document:

Exhibit 4.2

 

UNIT WARRANT AGREEMENT

 

This Unit Warrant Agreement (“Unit
Warrant Agreement”) is made as of _______, 2016, by and between Monster Digital, Inc., a Delaware corporation (the “Company”),
and Corporate Stock Transfer, Inc. (the “Unit Warrant Agent”).

 

WHEREAS, the Company is engaged in a public
offering (the “Public Offering”) of 1,000,000 units (the “Units”) of the Company (including either
up to 150,000 additional Units, or, if the Units shall detach and our Shares of Common Stock (as defined below) and the Unit Warrant
s (as defined below) underlying the Units shall begin to separately trade before the over-allotment period expires, up to 300,000
additional Shares of Common Stock and/or up to 450,000 additional Unit Warrant s if the underwriters’ over-allotment option
is exercised in full), each Unit consisting of two Shares of common stock, par value $0.001 per share (the “Common Stock”)
and two Unit Warrant s (the “Unit  Warrant ” or “Unit Warrant s”), each Unit
Warrant entitling its holder to purchase one share of Common Stock (the “Unit Warrant Shares”);

 

WHEREAS, the Company has filed, with the
Securities and Exchange Commission (the “SEC”), a registration statement on Form S-1 (Registration No. 333-207938),
as amended (the “Registration Statement”), for the registration, under the Securities Act of 1933, as amended
(the “Act”), of, among other securities, the Unit Warrant s and the Unit Warrant Shares; and

 

WHEREAS, the Company desires the Unit Warrant
Agent to act on behalf of the Company, and the Unit Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange, redemption and exercise of the Unit Warrants; and

 

WHEREAS, the Company desires to provide
for the form, terms and provisions of the Unit Warrant, including the terms upon which they shall be issued and exercised, and
the respective rights, limitation of rights and immunities of the Company, the Unit Warrant Agent and the holders of the Unit Warrant;
and

 

WHEREAS, all acts and things have been
done and performed which are necessary to make the Unit Warrant , when executed on behalf of the Company and countersigned by or
on behalf of the Unit Warrant Agent, as provided herein, the legally valid and binding obligations of the Company, and to authorize
the execution and delivery of this Unit Warrant Agreement.

 

NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:

 

1.             Appointment
of Unit Warrant Agent. The Company hereby appoints the Unit Warrant Agent to act as agent for the Company for the Unit Warrant
, and the Unit Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions
set forth in this Unit Warrant Agreement.

2.             Unit
Warrant .

 

2.1          Form of
Unit Warrant . Each Unit Warrant shall be: (a) issued in registered form only, (b) in substantially the form of Exhibit A
hereto, the provisions of which are incorporated herein and (c) signed by, or bear the facsimile signature of, the Chairman
of the Board, the Chief Executive Officer or the Chief Financial Officer of the Company. In the event the person whose facsimile
signature has been placed upon any Unit Warrant shall have ceased to serve in the capacity in which such person signed the Unit
Warrant before such Unit Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at
the date of issuance.

 

2.2          Effect
of Countersignature. Unless and until countersigned by the Unit Warrant Agent pursuant to this Unit Warrant Agreement, a Unit
Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.

 

2.3          Registration.

 

2.3.1       Unit
Warrant Register. The Unit Warrant Agent shall maintain books (the “Unit Warrant Register”), for the registration
of the original issuance and transfers of the Unit Warrant. Upon the initial issuance of the Unit Warrant , the Unit Warrant Agent
shall issue and register the Unit Warrant in the names of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Unit Warrant Agent by the Company.

 

     

     

    

 

2.3.2       Registered
Holder. Prior to due presentment for registration of transfer of any Unit Warrant, the Company and the Unit Warrant Agent may
deem and treat the person in whose name such Unit Warrant shall be registered upon the Unit Warrant Register (“Registered
Holder”) as the absolute owner of such Unit Warrant and of each Unit Warrant represented thereby (notwithstanding any
notation of ownership or other writing on the Unit Warrant certificate made by anyone other than the Company or the Unit Warrant
gent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Unit Warrant Agent
shall be affected by any notice to the contrary.

 

2.4          Detachability
of Unit Warrant . Each of the Common Stock and the Unit Warrants comprising the Units 
will be separable at the option of the holder beginning on the first trading day following the 45th day after the date of this
prospectus, unless Joseph Gunnar & Co., as representative of the underwriters (the “Representative”),
determines that an earlier date is acceptable (such date, the “Detachment Date”).
In no event will separate trading of the securities comprising the Units commence until the Company issues a press release announcing
when such separate trading will begin.

 

3.             Terms
and Exercise of Unit Warrant .

 

3.1          Unit
Warrant Price. Each Unit Warrant shall, when countersigned by the Unit Warrant Agent, entitle the Registered Holder thereof,
subject to the provisions of such Unit Warrant and of this Unit Warrant Agreement, to purchase from the Company the number of Shares
of Common Stock stated therein, at the price of $9.375 per share of Common Stock, subject to the adjustments provided in Section 4
hereof. The term “Unit Warrant Price” as used in this Unit Warrant Agreement refers to the price per whole share
at which Common Stock may be purchased at the time such Unit Warrant is exercised.

 

3.2          Duration
of Unit Warrant . A Unit Warrant may be exercised only during the period (“Exercise Period”) commencing
on the Detachment Date and terminating at 5:00 p.m., New York City time, on the earlier to occur of (i) _____, 2021 (60 months
following the closing date of the Public Offering), or (ii) the date fixed for redemption of the Unit Warrant as provided
in Section 6 of this Unit Warrant Agreement (“Expiration Date”). Except with respect to the right to receive
the Redemption Price (as set forth in Section 6 hereunder), each Unit Warrant not exercised on or before the Expiration Date
shall become void, and all rights thereunder and all rights in respect thereof under this Unit Warrant Agreement shall cease at
the close of business on the Expiration Date. The Company may extend the duration of the Unit Warrant by delaying the Expiration
Date; provided, however, that the Company will provide notice of not less than 20 days to Registered Holders of such extension
and that such extension shall be identical in duration among all of the then outstanding Unit Warrant.

 

3.3          Exercise
of Unit Warrant .

 

3.3.1       Cash
Exercise. Subject to the provisions of the Unit Warrant and this Unit Warrant Agreement, a Unit Warrant, when countersigned
by the Company, may be exercised by the Registered Holder thereof by surrendering it at the office of the Unit Warrant Agent, or
at the office of its successor as Unit Warrant Agent, currently being:

 

Corporate Stock Transfer, Inc.

3200 Cherry Creek South Drive,
Suite 430

Denver, Colorado 80209

 

with the subscription form, as
set forth in the Unit Warrant , duly executed, and by paying in full, in lawful money of the United States, by certified or bank
cashier’s check payable to the order of the Unit Warrant Agent or by wire transfer to the Unit Warrant Agent’s ________
bank account, the Unit Warrant Price for each whole Unit Warrant hare as to which the Unit Warrant is exercised and any and all
applicable taxes due in connection with the exercise of the Unit Warrant , the exchange of the Unit Warrant for the Unit Warrant
Shares, and the issuance of the Unit Warrant Shares (such exercise, a “Cash Exercise”). A Cash Exercise
in accordance with this Section 3.3.1 is available to the Registered Holder only during such times that there is an effective
registration statement registering the Unit Warrant Shares, with the prospectus contained therein being available for the resale
of the Unit Warrant Shares.

 

     

     

    

 

3.3.2       Cashless
Exercise. Notwithstanding anything contained herein to the contrary, if and only if a registration statement registering the
issuance of the Warrant Shares under the Securities Act of 1933, as amended, is not effective or available for the issuance of
the Warrant Shares, the Holder may, in its sole discretion, exercise the Unit 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 shares of Common Stock determined according to the
following formula (a “Cashless Exercise”):

 

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

      B

 

For purposes of the foregoing formula:

 

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

 

B= the Weighted Average Price of the shares of Common
Stock (as reported by Bloomberg) on the date immediately preceding the date of the Exercise Notice.

 

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

 

For purposes of this Section 3.3.2,
the fair market value of one share of Common Stock is defined as follows:

 

(i) if the Company’s
Common Stock is listed and traded on the New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Global
Market, the Nasdaq Capital Market or the OTC Bulletin Board (each, a “Trading Market”), the fair market value
shall be deemed the closing price on such Trading Market on the trading day immediately prior to the date the subscription form
is submitted to the Company in connection with the exercise of the Unit Warrant ; or

 

(ii) if the Company’s
Common Stock is not listed on a Trading Market, but is traded in the over-the-counter market, the fair market value shall
be deemed to be the closing bid price on the trading day immediately prior to the date the subscription form is submitted in connection
with the exercise of the Unit Warrant ; or

 

(iii) if there is no active
public market for the Company’s Common Stock, the fair market value of the Common Stock shall be determined in good faith
by the Company’s board of directors.

 

For purposes of Rule 144 promulgated
under the Act, it is intended, understood and acknowledged that, assuming the Registered Holder is not an affiliate of the Company,
the Unit Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Registered Holder,
and the holding period for the Unit Warrant Shares shall be deemed to have commenced, on the date this Unit Warrant was originally
issued, subject to the rules and regulations set forth under the Act.

 

3.3.3       Fractional
Shares. Notwithstanding any provision to the contrary contained in this Unit Warrant Agreement, the Company shall not be required
to issue any fraction of a Unit Warrant hare in connection with the exercise of Unit Warrant. As to any fraction of a share that
the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such
final fraction in an amount equal to such fraction multiplied by the Exercise Price; provided, that if more than one Unit Warrant
certificate is presented for exercise at the same time by the same Registered Holder, the number of whole Unit Warrant Shares which
shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of Unit Warrant Shares issuable
on exercise of all such Unit Warrant.

 

     

     

    

 

3.3.4       Issuance
of Certificates. No later than three (3) business days following the exercise of any Unit Warrant and the clearance of
the funds in payment of the Unit Warrant Price pursuant to Section 3.3.1 or cashless exercise pursuant to Section 3.3.2,
the Company shall issue,

 

or cause to be issued, to the Registered
Holder of such Unit Warrant a certificate or certificates representing (or at the option of the Registered Holder, deliver electronically
through the facilities of the Depository Trust Corporation) the number of full Shares of Common Stock to which he, she or it is
entitled, registered in such name or names as may be directed by him, her or it, and, if such Unit Warrant hall not have been exercised
or surrendered in full, a new countersigned Unit Warrant for the number of Shares as to which such Unit Warrant shall not have
been exercised or surrendered. Notwithstanding the foregoing, the Company shall not deliver, or cause to be delivered, any securities
without applicable restrictive legend pursuant to the exercise of a Unit Warrant unless (a) a registration statement under
the Act with respect to the Common Stock issuable upon exercise of such Unit Warrant is effective and a current prospectus relating
to the Shares of Common Stock issuable upon exercise of the Unit Warrant is available for delivery to the Registered Holder of
the Unit Warrant or (b) in the opinion of counsel to the Company, the exercise of the Unit Warrant is exempt from the registration
requirements of the Act and such securities are qualified for sale or exempt from qualification under applicable securities laws
of the states or other jurisdictions in which the Registered Holder resides. Unit Warrant may not be exercised by, or securities
issued to, any Registered Holder in any state in which such exercise or issuance would be unlawful.

 

3.3.5       Valid
Issuance. All Shares of Common Stock issued upon the proper exercise or surrender of a Unit Warrant in conformity with this
Unit Warrant Agreement shall be validly issued, fully paid and non-assessable.

 

3.3.6       Date
of Issuance. Each person or entity in whose name any such certificate for Shares of Common Stock is issued shall, for all purposes,
be deemed to have become the holder of record of such Shares on the date on which the Unit Warrant was surrendered and payment
of the Unit Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become
the holder of such Shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

3.3.7       Holder’s
Exercise Limitations. The Company shall not effect any exercise of a Unit Warrant , and a holder shall not have the right to
exercise any portion of a Unit Warrant to the extent that after giving effect to such issuance after exercise, the holder (together
with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s
affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing
sentence, the number of Shares of Common Stock beneficially owned by the holder and its affiliates shall include the number of
Shares of Common Stock issuable upon exercise of a Unit Warrant with respect to which such determination is being made, but shall
exclude the number of Shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion
of a Unit Warrant beneficially owned by the holder or any of its affiliates and (ii) exercise or conversion of the unexercised
or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the holder or any of its affiliates. Except as set forth in the preceding sentence,
for purposes of this Section 3.3.6, beneficial ownership shall be calculated in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated
thereunder, it being acknowledged by the holder that the Company is not representing to the holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and the holder is solely responsible for any schedules required to
be filed in accordance therewith. To the extent that the limitation contained in this Section 3.3.6 applies, the determination
of whether a Unit Warrant is exercisable (in relation to other securities owned by the holder together with any affiliates) and
of which portion of a Unit Warrant is exercisable shall be in the sole discretion of the holder, and the submission of a subscription
form shall be deemed to be the holder’s determination of whether a Unit Warrant is exercisable (in relation to other securities
owned by the holder together with any affiliates) and of which portion of a Unit Warrant is exercisable, in each case subject to
the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 3.3.6, in determining
the number of outstanding Shares of Common Stock, a holder may rely on the number of outstanding Shares of Common Stock as reflected
in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company
or its transfer agent setting forth the number of Shares of Common Stock outstanding. Upon the written or oral request of a holder,
the Company shall within two trading days confirm orally and in writing to the holder the number of 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 a Unit Warrant, by the holder or its affiliates since the date as of which
such number of outstanding Shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%
of the number of Shares of the Common Stock outstanding immediately after giving effect to the issuance of Shares of Common Stock
issuable upon exercise of the Unit Warrant up to a maximum of 9.99% . The Holder, upon not less than 61 days’ prior notice
to the Company, may waive the Beneficial Ownership Limitation provisions of this Section 3.3.6. Any such waiver will not be
effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.3.6 to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of a Unit Warrant. In addition, in no event will the Company be obligated
to pay such Registered Holder any cash consideration upon exercise or otherwise “net cash settle” the Unit Warrant.

 

     

     

    

 

4.             Adjustments.

 

4.1          Stock
Dividends, Splits. If, after the date hereof, and subject to the provisions of Section 4.5 below, the number of outstanding
Shares of Common Stock is increased by a stock dividend payable in Shares of Common Stock, or by a forward or reverse split of
Shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split or similar event, the
number of Shares of Common Stock issuable on exercise of each Unit Warrant shall be increased or decreased in proportion to such
increase or decrease in outstanding Shares of Common Stock.

 

4.2          Aggregation
of Shares. If, after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding Shares of
Common Stock is decreased by a consolidation, combination or reclassification of Shares of Common Stock or other similar event,
then, on the effective date of such consolidation, combination, reclassification or similar event, the number of Shares of Common
Stock issuable on exercise of each Unit Warrant shall be decreased in proportion to such decrease in outstanding Shares of Common
Stock.

 

4.3          Adjustments
in Exercise Price. Whenever the number of Shares of Common Stock purchasable upon the exercise of the Unit Warrant is adjusted,
as provided in Sections 4.1 and 4.2 above, the Unit Warrant Price shall be adjusted (to the nearest cent) by multiplying such Unit
Warrant Price, immediately prior to such adjustment, by a fraction, (a) the numerator of which shall be the number of Shares
of Common Stock purchasable upon the exercise of the Unit Warrant immediately prior to such adjustment, and (b) the denominator
of which shall be the number of Shares of Common Stock so purchasable immediately thereafter.

 

4.4          Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares
of Common Stock (other than a change covered by Sections 4.1 or 4.2 hereof or one that solely affects the par value of such Shares
of Common Stock), or, in the case of any merger or consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or
reorganization of the outstanding Shares of Common Stock), or, in the case of any sale or conveyance to another corporation or
entity of the assets or other property of the Company as an entirety or substantially as an entirety, in connection with which
the Company is dissolved, the Registered Holders shall thereafter have the right to purchase and receive, upon the basis and upon
the terms and conditions specified in the Unit Warrant and in lieu of the Shares of Common Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of Shares of stock or other
securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon
a dissolution following any such sale or transfer, that the Registered Holder would have received if such Registered Holder had
exercised his, her or its Unit Warrant (s) immediately prior to such event; and if any reclassification also results in a
change in Shares of Common Stock covered by Sections 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2,
4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.

 

     

     

    

 

4.5          Notices
of Changes in Unit Warrant . Upon every adjustment of the Unit Warrant Price or the number of Shares issuable upon exercise
of a Unit Warrant, the Company shall give written notice thereof to the Unit Warrant Agent, which notice shall state the Unit Warrant
Price resulting from such adjustment and the increase or decrease, if any, in the number of Shares purchasable at such price upon
the exercise of a Unit Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation
is based. Upon the occurrence of any event specified in Sections 4.1, 4.2 or 4.3 the Company shall give written notice to each
Registered Holder, at the last address set forth for such Registered Holder in the Unit Warrant Register, of the record date or
the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity
of such event.

 

4.6          Form of
Unit Warrant . The form of Unit Warrant need not be changed because of any adjustment pursuant to this Section 4, and
Unit Warrant issued after such adjustment may state the same Unit Warrant Price and the same number of Shares as is stated in the
Unit Warrant initially issued pursuant to this Unit Warrant Agreement. However, the Company may, at any time, in its sole discretion,
make any change in the form of Unit Warrant that the Company may deem appropriate and that does not affect the substance thereof,
and any Unit Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Unit Warrant or
otherwise, may be in the form as so changed.

 

4.7          Notice
of Certain Transactions. In the event that the Company shall (a) offer to holders of all its Common Stock rights to subscribe
for or to purchase any securities convertible into Shares of Common Stock or Shares of stock of any class or any other securities,
rights or options, (b) issue any rights, options or Unit Warrant entitling all the holders of Common Stock to subscribe for
Shares of Common Stock, or (c) make a tender offer, redemption offer or exchange offer with respect to the Common Stock, the
Company shall send to the Registered Holders a notice of such action or offer. Such notice shall be mailed to the Registered Holders
at their addresses as they appear in the Unit Warrant Register, which shall specify the record date for the purposes of such dividend,
distribution or rights, or the date such issuance or event is to take place and the date of participation therein by the holders
of Common Stock, if any such date is to be fixed, and shall briefly indicate the effect of such action on the Common Stock and
on the number and kind of any other Shares of stock and on other property, if any, and the number of Shares of Common Stock and
other property, if any, issuable upon exercise of each Unit Warrant and the Unit Warrant Price after giving effect to any adjustment
pursuant to this Section 4 which would be required as a result of such action. Such notice shall be given as promptly as practicable
after the Company has taken any such action.

 

5.            Transfer
and Exchange of Unit Warrant.

 

5.1          Transfer
of Unit Warrant . Prior to the Detachment Date, the Unit Warrant may be transferred or exchanged only together with the Unit
in which such Unit Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of
such Unit. Furthermore, each transfer of a Unit on the register relating to such Units shall operate also to transfer the Unit
Warrant included in such Unit. From and after the Detachment Date, this Section 5.1 will have no further force and effect.

 

5.2          Registration
of Transfer. The Unit Warrant Agent shall register the transfer, from time to time, of any outstanding Unit Warrant into the
Unit Warrant Register, upon surrender of such Unit Warrant for transfer, properly endorsed with signatures properly guaranteed
and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Unit Warrant representing an equal aggregate
number of Unit Warrant shall be issued and the old Unit Warrant shall be cancelled by the Unit Warrant Agent. The Unit Warrant
to cancelled shall be delivered by the Unit Warrant Agent to the Company from time to time upon the Company’s request.

 

     

     

    

 

5.3          Procedure
for Surrender of Unit Warrant . Unit Warrant may be surrendered to the Unit Warrant Agent, together with a written request
for exchange or transfer, and, thereupon, the Unit Warrant Agent shall issue in exchange therefor one or more new Unit Warrant
as requested by the Registered Holder of the Unit Warrant so surrendered, representing an equal aggregate number of Unit Warrant;
provided, however, that, in the event a Unit Warrant surrendered for transfer bears a restrictive legend, the Unit Warrant Agent
shall not cancel such Unit Warrant and shall issue new Unit Warrant in exchange therefor until the Unit Warrant Agent has received
an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Unit Warrant must also
bear a restrictive legend.

 

5.4          Fractional
Unit Warrant . The Unit Warrant Agent shall not be required to effect any registration of transfer or exchange which will result
in the issuance of a Unit Warrant certificate for a fraction of a Unit Warrant.

 

5.5          Service
Charges. No service charge shall be made for any exchange or registration of transfer of Unit Warrant.

 

5.6          Unit
Warrant Execution and Countersignature. The Unit Warrant Agent is hereby authorized to countersign and to deliver, in accordance
with the terms of this Unit Warrant Agreement, the Unit Warrant required to be issued pursuant to the provisions of this Section 5,
and the Company, whenever required by the Unit Warrant Agent, will supply the Unit Warrant Agent with Unit Warrant duly executed
on behalf of the Company for such purpose.

 

6.            Redemption.

 

6.1          Redemption.
Subject to the second sentence of this Section 6.1, all (and not less than all) of the outstanding Unit Warrant may be redeemed,
at the option of the Company, at any time from and after one year following their issuance and prior to their expiration, at the
office of the Unit Warrant Agent, upon the notice referred to in Section 6.2, at the price of $.001 per Unit Warrant (“Redemption
Price”); provided that the last sales price of the Common Stock has been equal to or greater than 160% of the Unit Warrant
exercise price (subject to adjustment for splits, dividends, recapitalizations and other similar events), on any twenty (20) consecutive trading day period ending on the third business day prior to the date on which notice
of redemption is given.  Notwithstanding the foregoing, a registration statement under the Act with respect to the Shares
of Common Stock issuable upon exercise must be effective and a current prospectus must be available for use by the Registered Holders
hereof during such thirty (30) consecutive trading day period in order for the Company to exercise its redemption rights pursuant
to this Section 6.

 

6.2          Date
Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem all of the Unit Warrant, the Company shall
fix a date for the redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less
than 30 days prior to the date fixed for redemption to the Registered Holders of the Unit Warrant to be redeemed at their last
addresses as they shall appear on the Unit Warrant Register. Any notice mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Registered Holder received such notice.

 

6.3          Exercise
After Notice of Redemption. The Unit Warrant may be exercised in accordance with Section 3 of this Unit Warrant Agreement
at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the
time and date fixed for redemption. On and after the redemption date, the Registered Holder of the Unit Warrant shall have no further
rights except to receive, upon surrender of the Unit Warrant, the Redemption Price.

 

6.4          No
Other Rights to Cash Payment. Except for a redemption in accordance with this Section 6, no Registered Holder of any Unit
Warrant hall be entitled to any cash payment whatsoever from the Company in connection with the ownership, exercise or surrender
of any Unit Warrant under this Unit Warrant Agreement.

 

7.            Other
Provisions Relating to Rights of Registered Holders of Unit Warrant .

 

7.1          No
Rights as Stockholder. A Unit Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder
of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive
rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of
directors of the Company or any other matter.

 

     

     

    

 

7.2          Lost,
Stolen Mutilated or Destroyed Unit Warrant . If any Unit Warrant is lost, stolen, mutilated or destroyed, the Company and the
Unit Warrant Agent may, on such terms as to indemnity or otherwise as they may in their discretion impose (which terms shall, in
the case of a mutilated Unit Warrant, include the surrender thereof), issue a new Unit Warrant of like denomination, tenor and
date as the Unit Warrant lost, stolen, mutilated or destroyed. Any such new Unit Warrant shall constitute a substitute contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Unit Warrant shall be at any time
enforceable by anyone.

 

7.3          Reservation
of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued Shares of
Common Stock that will be sufficient to permit the exercise in full of all outstanding Unit Warrant issued pursuant to this Unit
Warrant Agreement.

 

7.4          Registration
of Common Stock. The Company has registered the Unit Warrant and the Common Stock issuable upon exercise of the Unit Warrant
pursuant to the Registration Statement.  Until the expiration of the Unit Warrant in accordance with the provisions of this
Unit Warrant Agreement, the Company shall use its best efforts to maintain the effectiveness of such Registration Statement and
the current status of the prospectus.  If the Company fails to maintain the effectiveness of the Registration Statement, the
Registered Holders have no right to a Cash Exercise as set forth in Section 3.3.1 and their sole recourse shall be to have the
right to exercise the Unit Warrant on a cashless basis as set forth in Section 3.3.2 and the Company shall not have any other
penalties for failure maintain the effectiveness of the Registration Statement or the current status of the prospectus at the time
of exercise by the Registered Holder.

 

8.            Concerning
the Unit Warrant Agent and Other Matters.

 

8.1          Payment
of Taxes. The Company will, from time to time, promptly pay all taxes and charges that may be imposed upon the Company or
the Unit Warrant Agent in respect of the issuance or delivery of Shares of Common Stock upon the exercise of Unit Warrant, but
the Company shall not be obligated to pay any transfer taxes in respect of the Unit Warrant or such Shares.

 

8.2          Resignation,
Consolidation, or Merger of Unit Warrant Agent.

 

8.2.1       Appointment
of Successor Unit Warrant Agent. The Unit Warrant Agent, or any successor to it hereafter appointed, may resign its duties
and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing
to the Company. If the office of the Unit Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint, in writing, a successor Unit Warrant Agent in place of the Unit Warrant Agent. If the Company shall fail to make
such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Unit
Warrant Agent or by the Registered Holder of the Unit Warrant (who shall, with such notice, submit his, her or its Unit Warrant
for inspection by the Company), then the Registered Holder of any Unit Warrant may apply to the Supreme Court of the State of New
York for the County of New York for the appointment of a successor Unit Warrant Agent. Any successor Unit Warrant Agent, whether
appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York,
in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and be authorized under
such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authorities. After appointment,
any successor Unit Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties and obligations of
its predecessor Unit Warrant Agent with like effect as if originally named as Unit Warrant Agent hereunder, without any further
act or deed; but, if for any reason it becomes necessary or appropriate, the predecessor Unit Warrant Agent shall execute and deliver,
at the expense of the Company, an instrument transferring to such successor Unit Warrant Agent all the authority, powers, and rights
of such predecessor Unit Warrant Agent hereunder; and, upon request of any successor Unit Warrant Agent, the Company shall make,
execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to
such successor Unit Warrant Agent all such authority, powers, rights, immunities, duties and obligations.

 

     

     

    

 

8.2.2       Notice
of Successor Unit Warrant Agent. In the event a successor Unit Warrant Agent shall be appointed, the Company shall give notice
thereof to the predecessor Unit Warrant Agent and the transfer agent for the Common Stock not later than the effective date of
any such appointment.

 

8.2.3       Merger
or Consolidation of Unit Warrant Agent. Any corporation into which the Unit Warrant Agent may be merged or with which it may
be consolidated or any corporation resulting from any merger or consolidation to which the Unit Warrant Agent shall be a party
shall be the successor Unit Warrant Agent under this Unit Warrant Agreement without any further act on the part of the Company
or the Unit Warrant Agent.

 

8.3          Fees
and Expenses of Unit Warrant Agent.

 

8.3.1       Remuneration.
The Company agrees to pay the Unit Warrant Agent reasonable remuneration for its services as Unit Warrant Agent hereunder and will
reimburse the Unit Warrant Agent upon demand for all expenditures that the Unit Warrant Agent may reasonably incur in the execution
of its duties hereunder.

 

8.3.2       Further
Assurances. The Company agrees to perform, execute, acknowledge and deliver, or cause to be performed, executed, acknowledged
and delivered, all such further and other acts, instruments and assurances as may reasonably be required by the Unit Warrant Agent
for the carrying out or performing of the provisions of this Unit Warrant Agreement.

 

8.4          Liability
of Unit Warrant Agent.

 

8.4.1       Reliance
on Company Statement. Whenever, in the performance of its duties under this Unit Warrant Agreement, the Unit Warrant Agent
shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed
to be conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer or Chairman
of the Board of the Company and delivered to the Unit Warrant Agent. The Unit Warrant Agent may rely upon such statement for any
action taken or suffered in good faith by it pursuant to the provisions of this Unit Warrant Agreement.

 

8.4.2       Indemnity.
The Unit Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith. The Company agrees
to indemnify the Unit Warrant Agent and hold it harmless against any and all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by the Unit Warrant Agent in the execution of this Unit Warrant Agreement, except as
a result of the Unit Warrant Agent’s negligence, willful misconduct or bad faith.

 

8.4.3       Exclusions.
The Unit Warrant Agent shall have no responsibility with respect to the validity of this Unit Warrant Agreement or with respect
to the validity or execution of any Unit Warrant (except its countersignature thereof); nor shall it be responsible for any breach
by the Company of any covenant or condition contained in this Unit Warrant Agreement or in any Unit Warrant ; nor shall it be responsible
to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it, by any
act hereunder, be deemed to make any representation or warranty as to the authorization or reservation of any Shares of Common
Stock to be issued pursuant to this Unit Warrant Agreement or any Unit Warrant or as to whether any Shares of Common Stock will
when issued be valid and fully paid and non-assessable.

 

8.5          Acceptance
of Agency. The Unit Warrant Agent hereby accepts the agency established by this Unit Warrant Agreement and agrees to perform
the same upon the terms and conditions herein set forth and, among other things, shall account promptly to the Company with respect
to Unit Warrant exercised and concurrently account for, and pay to the Company, all moneys received by the Unit Warrant Agent for
the purchase of Shares of the Company’s Common Stock through the exercise of Unit Warrant.

 

     

     

    

 

9.           Miscellaneous
Provisions.

 

9.1          Successors.
All the covenants and provisions of this Unit Warrant Agreement by or for the benefit of the Company or the Unit Warrant Agent
shall bind and inure to the benefit of their respective successors and assigns.

 

9.2          Notices.
Any notice, statement or demand authorized by this Unit Warrant Agreement to be given or made by the Unit Warrant Agent or by the
Registered Holder of any Unit Warrant to or on the Company shall be delivered by hand or sent by registered or certified mail or
overnight courier service, addressed (until another address is filed in writing by the Company with the Unit Warrant Agent) as
follows:

 

Monster Digital, Inc.

2655 Park Center Drive, Unit C

Simi Valley, CA 93065

Attention: Chief Executive Officer

 

and

 

Manatt, Phelps & Phillips,
LLP

695 Town Center Drive, 14th
Floor

Costa Mesa, CA 92626

Attention: Thomas J. Poletti, Esq.

 

Any notice, statement or demand authorized
by this Unit Warrant Agreement to be given or made by the Registered Holder of any Unit Warrant or by the Company to or on the
Unit Warrant Agent shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until
another address is filed in writing by the Unit Warrant Agent with the Company), as follows:

 

Corporate Stock Transfer, Inc.

3200 Cherry Creek South Drive,
Suite 430

Denver, Colorado 80209

 

Any notice, sent pursuant to this Unit
Warrant Agreement shall be effective, if delivered by hand, upon receipt thereof by the party to whom it is addressed, if sent
by overnight courier, on the next business day of the delivery to the courier, and if sent by registered or certified mail on the
third day after registration or certification thereof

 

9.3          Applicable
Law. The validity, interpretation, and performance of this Unit Warrant Agreement and of the Unit Warrant shall be governed
in all respects by the laws of the State of New York, without giving effect to conflict of laws. The Company and the Unit Warrant
Agent hereby agree that any action, proceeding or claim against either of them arising out of or relating in any way to this Unit
Warrant Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for
the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company
and the Unit Warrant Agent hereby waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any such process or summons to be served upon the Company or the Unit Warrant Agent may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in
Section 9.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the party receiving
such service in any action, proceeding or claim.

 

9.4          Persons
Having Rights under this Unit Warrant Agreement. Nothing in this Unit Warrant Agreement expressed and nothing that may be implied
from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other
than the parties hereto and the Registered Holders of the Unit Warrant and, for the purposes of Sections 9.2 hereof, the Representative
and the underwriters, any right, remedy, or claim under or by reason of this Unit Warrant Agreement or of any covenant, condition,
stipulation, promise, or agreement hereof. The Representative, and each of the underwriters, shall be deemed to be a third party
beneficiary of this Unit Warrant Agreement with respect to Sections 6.1, 7.4, 9.2 and 9.8 hereof. All covenants, conditions, stipulations,
promises, and agreements contained in this Unit Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto
(and the Representative and underwriters with respect to the Sections 9.2 hereof) and their successors and assigns and of the Registered
Holders of the Unit Warrant.

 

     

     

    

 

9.5          Examination
of the Unit Warrant Agreement. A copy of this Unit Warrant Agreement shall be available at all reasonable times at the office
of the Unit Warrant Agent in the city of Denver and State of Colorado, for inspection by the Registered Holder of any Unit Warrant.
The Unit Warrant Agent may require any such Registered Holder to submit his, her or its Unit Warrant for inspection.

 

9.6          Counterparts-
Facsimile Signatures. This Unit Warrant Agreement may be executed in any number of counterparts, and each of such counterparts
shall, for all purposes, be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.
Facsimile signatures shall constitute original signatures for all purposes of this Unit Warrant Agreement.

 

9.7          Effect
of Headings. The section headings herein are for convenience only and are not part of this Unit Warrant Agreement and shall
not affect the interpretation thereof

 

9.8          Amendments.
No provision of this Unit Warrant Agreement may be amended, modified or waived, except in a written document signed by both parties.
The Company and the Unit Warrant Agent may amend or supplement this Unit Warrant Agreement without the consent of any Registered
Holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein
or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may
deem necessary or desirable and that the parties determine, in good faith, shall not adversely affect the interest of the Registered
Holders.  All other amendments and supplements shall require the vote or written consent of Registered Holders of at
least 50.1% of the then outstanding Unit Warrants, provided that adjustments may be made to the Unit Warrant terms and rights in
accordance with Section 4 without the consent of the Registered Holders.

 

9.9          Severability.
This Unit Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of this Unit Warrant Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of
this Unit Warrant Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be
valid and enforceable.

 

[SIGNATURE PAGE FOLLOWS]

 

     

     

    

 

[SIGNATURE PAGE TO
THE UNIT WARRANT AGREEMENT]

 

IN WITNESS WHEREOF, this Unit Warrant Agreement
has been duly executed by the parties hereto as of the day and year first above written.

 

	 	 	MONSTER DIGITAL, INC.
	 	 	 	 
	 	 	By:	 
	 	 	 	Name:
	 	 	 	Title:
	 	 	 	 
	 	 	CORPORATE STOCK TRANSFER, INC.
	 	 	 	 
	 	 	By:	 
	 	 	 	Name:
	 	 	 	Title:Exhibit 4.4

 

MONSTER DIGITAL,
INC.

 

WARRANT TO PURCHASE
COMMON STOCK

 

	Warrant No.:	Number of Warrant Shares: 
	Date of Issuance: [February [•], 2016] (“Issuance Date”)	 
	Expiration Date: [February [•], 2021] (“Expiration Date”)	 

 

MONSTER DIGITAL, INC.,
a Delaware corporation (the “Company”), certifies that, for good and valuable consideration, the receipt and
sufficiency of which are 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 surrender 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 “Exercisability
Date”), but not after 5:30 p.m., New York Time, on the Expiration Date, such number of shares, as set forth above, of
fully paid and nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as
otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 16.

 

1. EXERCISE
OF WARRANT; COMPANY REDEMPTION RIGHT.

 

(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(d)),
this Warrant may be exercised by the Holder on any day on or after the Exercisability Date, in whole or in part (but not as to
fractional shares), by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant and (ii) if both (A) the Holder is not electing
a Cashless Exercise (as defined below) pursuant to Section 1(c) of this Warrant and (B) a registration statement registering
the issuance of the Warrant Shares under the Securities Act of 1933, as amended (the “Securities Act”), is effective
and available for the issuance of the Warrant Shares, payment to the Company of an amount equal to the applicable Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”)
in cash or wire transfer of immediately available funds (a “Cash Exercise”). The Holder shall be required to
surrender this warrant, either physically or electronically by DTC, in order to effect an exercise hereunder, provided that
in the event of an exercise of this Warrant for all Warrant Shares then issuable hereunder, the Holder shall surrender this Warrant
to the Company by the third (3rd) Trading Day following the Share Delivery Date (as defined below). On or before the first (1st)
Trading Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by email or facsimile
an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and Corporate Stock Transfer, the Company’s
transfer agent for the Common Stock and Warrants (the “Transfer Agent”). On or before the later of (i) the third
(3rd) Trading Day following the date on which the Company has received the Exercise Notice duly completed and executed
by the Holder, so long as the Aggregate Exercise Price, in the case of a Cash Exercise, is delivered to the Company within two
(2) Trading Days following delivery of the Exercise Notice and (ii) if the Holder has not delivered the Aggregate Exercise Price
to the Company, in the case of a Cash Exercise, within two (2) Trading Days following delivery of the Exercise Notice, the first
(1st) Trading Day following the date on which the Holder delivers such Aggregate Exercise Price (such later date, the
“Share Delivery Date”), the Company shall, 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 The Depository Trust Company (“DTC”) through its Deposit Withdrawal At Custodian system, or if
the Transfer Agent is not participating in the Fast Automated Securities Transfer Program (the “FAST Program”)
or if the Warrant Shares are required by law to bear a legend regarding restriction on transferability, issue and dispatch by overnight
courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in
the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such
exercise. The Company shall deliver any objection to the Exercise Notice on or before the Trading Day following the date on which
the Exercise Notice has been delivered to the Company. Upon delivery of the Exercise Notice, so long as the Aggregate Exercise
Price, in the case of a Cash Exercise, is delivered to the Company within two (2) Trading Days following delivery of the 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, then the Company shall as soon as practicable
and in no event later than three (3) Trading Days after any exercise and at the Company’s own expense, issue a new Warrant
(in accordance with Section 7(e)) 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. The
Company shall pay any and all taxes that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise
of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be
payable based on the income of the Holder or in respect of any transfer involved in the registration of any certificates for Warrant
Shares or Warrants in a name other than that of the Holder or an affiliate thereof. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

    1 

     

    

 

In
addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder
a certificate or the certificates representing the Warrant Shares or to credit the Holder’s balance account with DTC for
such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise pursuant to an exercise on or before
the Share Delivery Date, and if after such date the Holder purchases (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall within three
(3) Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder
in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate
(and to issue such Warrant Shares or credit such Holder’s balance account with DTC) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares or credit such Holder’s
balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock, times (B) the Weighted Average Price of a share of Common Stock on the
date of exercise. While this Warrant remains outstanding, the Company shall maintain a transfer agent that participates in the
DTC’s FAST Program.

 

(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means [$] per share of Common Stock, subject
to adjustment as provided herein.

 

(c) Cashless
Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement registering the issuance of
the Warrant Shares under the Securities Act is not effective or available for the issuance of the Warrant Shares, 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 shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

    2 

     

    

 

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

B

 

For purposes of the foregoing formula:

 

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

 

B= the Weighted Average Price of the shares of Common
Stock (as reported by Bloomberg) on the date immediately preceding the date of the Exercise Notice.

 

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

  

The
Company hereby agrees that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder
pursuant to Rule 3(a)(9) and the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.

 

(d) Limitations
on Exercises. (1) The Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to
exercise this Warrant, to the extent that after giving effect to such exercise, such Holder (together with such Holder’s
affiliates and any other Persons acting as a group together ("Attribution Parties")) would beneficially own in
excess of 4.99% (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 such Person and its affiliates and Attribution Parties shall include 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 (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such
Person and its affiliates and Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion
of any other securities of the Company beneficially owned by such Person and its affiliates and Attribution Parties (including,
without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or
exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph,
beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), it being acknowledged that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act, and the Holder is solely responsible for any schedules required to
be filed in accordance therewith. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock,
the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent
Form 10-K, Proxy Statement, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission,
as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or
oral request of the Holder, where such request indicates that it is being made pursuant to this Warrant, the Company shall within
one (1) Trading Day confirm orally and in writing 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 the Warrants, by the Holder and its affiliates and Attribution Parties since the date as of which such
number of outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may increase or decrease
the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided, that (i) any
such increase will not be effective until the 61st day after such notice is delivered to the Company and (ii) any such increase
or decrease will apply only to the Holder and not to any other holder of Warrants. 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(d) to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or
to make changes or supplement necessary or desirable to properly give effect to such limitation.

 

    3 

     

    

 

(e) No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share that the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise
Price.

 

(f)Company
Optional Redemption. From and after one year following the Date of Issuance, (i) the last closing trade price for the Common
Stock on the Principal Market, as reported by Bloomberg is equal to or greater than $[160% OF THE EXERCISE PRICE] per share (as
adjusted for stock splits, stock combinations and the like occurring from and after the Issuance Date) (the “Trigger Price”)
for a period of twenty (20) consecutive Trading Days (the “Measuring Period”), and (ii) a registration statement
relating to the Warrant Shares has been effective and current during the Measuring Period, then the Company shall have the right
to purchase all of then-remaining portion of this Warrant from the Holder as set forth below (a “Company Redemption”).
The Company may exercise its right to purchase the entire then-remaining portion of this Warrant under this Section 1(f) by delivering
(provided that all of the conditions set forth in clauses (i) and (ii) above are then satisfied), on the third (3rd) Trading Day
immediately following such satisfaction, a written notice thereof to the Holder (the “Redemption Notice” and
the date the Holder receives such notice is referred to as the “Redemption Notice Date”). The Redemption Notice
shall be irrevocable. The Redemption Notice shall state the Trading Day selected for the Company Redemption, which Trading Day
shall be at least thirty (30) days following the Redemption Notice Date (the “Redemption Date”). On the Redemption
Date, the Company shall pay an amount equal to the product of (x) the number of Warrant Shares then issuable upon exercise of this
Warrant (without regard to any limitations of exercise set forth herein) and (y) $0.001 (the “Redemption Price”)
to the Holder on the Redemption Date by wire transfer of immediately available funds to an account specified by the Holder. Notwithstanding
anything contained in this Section 1(f) to the contrary, if a registration statement relating to the Warrant Shares is not effective
and current at any time during the period commencing on the Redemption Notice Date and ending on the Redemption Date, then the
applicable Redemption Notice delivered to the Holder shall be null and void ab initio and the Company Redemption shall not occur.
If the Company elects to cause a Company Redemption of this Warrant pursuant to this Section 1(f), then it must simultaneously
take the same action with respect to all of the other Warrants that are then eligible to be purchased in the same proportion as
the Company Redemption of this Warrant. Notwithstanding the foregoing, the Holder may exercise all or any portion of this Warrant
at any time and from time to time after the Redemption Notice Date until the Holder’s receipt of the Redemption Price from
the Company and any such exercise of this Warrant shall proportionally reduce the Redemption Price.

 

2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:

 

(a) Adjustment
upon Subdivision or Combination of Shares of Common Stock. If the Company at any time on or after the Issuance Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines
(by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(a) shall become effective
at the close of business on the date the subdivision or combination becomes effective.

 

    4 

     

    

 

(b) Other
Events. If any event occurs of the type contemplated by the provisions of Section 2(a) 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 to the holders of the Company’s equity securities), then the Company’s Board of Directors will
make an appropriate adjustment in the Exercise Price and the number of Warrant Shares so as to protect the rights of the Holder; provided,
that no such adjustment pursuant to this Section 2(b) will increase the Exercise Price or decrease the number of Warrant Shares
as otherwise determined pursuant to this Section 2.

 

(c) Par
Value. Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise Price be reduced below the
par value of the Company’s Common Stock.

 

3. RIGHTS
UPON DISTRIBUTION OF ASSETS. 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 or options 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:

 

(a)
any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders
of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be the
Weighted Average Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value
of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock,
and (ii) the denominator shall be the Weighted Average Price of the shares of Common Stock on the Trading Day immediately
preceding such record date; and

 

(b)
the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph
(a); provided, that in the event that the Distribution is of shares of Common Stock or common stock of a company whose
common shares are traded on a national securities exchange or a national automated quotation system (“Other Shares of
Common Stock”), then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an
increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant
shall be exercisable for the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant
to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise
price equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph (a) and the number of Warrant Shares calculated in accordance
with the first part of this paragraph (b).

 

4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a) Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time prior to the Expiration Date the Company
grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property
pro rata to all of the record holders of any class of shares 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 on the exercise of this Warrant) 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, issue 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 exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership
of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the
Maximum Percentage, at which time the Holder shall be granted such right to the same extent as if there had been no such limitation).

 

    5 

     

    

 

(b) Fundamental
Transactions. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
Upon consummation of the 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 Fundamental Transaction, in lieu of the shares
of the Common Stock (or other securities, cash, assets or other property purchasable 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), if any, that the Holder would have been entitled to receive upon the happening of such
Fundamental Transaction had this Warrant been exercised immediately prior to such Fundamental Transaction, as adjusted in accordance
with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation
of any 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 ensure that the Holder will thereafter have the right to receive upon exercise of this Warrant within
90 days after the consummation of the Fundamental Transaction but, in any event, prior to the Expiration Date, in lieu of the shares
of the Common Stock (or other securities, cash, assets or other property) purchasable 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 such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental Transaction.

 

5. RESERVATION
OF WARRANT SHARES. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise
of this Warrant as herein provided, the number of shares of Common Stock which are then issuable and deliverable upon the exercise
of this entire Warrant, free from preemptive or any other contingent purchase rights of Persons other than the Holder (taking into
account the adjustments and restrictions in Section 2). Such reservation shall comply with the provisions of Section 1.
The Company covenants that all shares of Common Stock so issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The
Company will take all such actions as may be reasonably necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation
system upon which the Common Stock may be listed.

 

6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
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
such Person’s 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 such Person 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.

 

    6 

     

    

 

7. REGISTRATION
AND REISSUANCE OF WARRANTS.

 

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

 

(b) Transfer
of Warrant. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except
as may otherwise be required by applicable securities laws. Subject to applicable securities laws, if this Warrant is to be transferred,
the Holder shall surrender this Warrant to the Company or its Transfer Agent, as directed by the Company, together with all applicable
transfer taxes, whereupon the Company will, or will cause its Transfer Agent to, forthwith issue and deliver upon the order of
the Holder a new Warrant (in accordance with Section 7(e)), 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(e)) to the Holder representing the
right to purchase the number of Warrant Shares not being transferred. The acceptance of the new Warrant by the transferee thereof
shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the new Warrant that the Holder
has in respect of this Warrant.

 

(c) 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, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form or the provision of reasonable security by the Holder to the Company and, in the case
of mutilation, upon surrender and cancellation of this Warrant, the Company or its Transfer Agent, as directed by the Company,
shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(e)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(d) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company or its Transfer Agent, as directed by the Company, together with all applicable transfer taxes, for a new Warrant or Warrants
(in accordance with Section 7(e)) 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, that the Company or its Transfer Agent,
as directed by the Company, shall not be required to issue Warrants for fractional shares of Common Stock hereunder.

 

(e) Issuance
of New Warrants. Whenever the Company or its Transfer Agent, as directed by the Company, is required to issue a new Warrant
pursuant to the terms of this Warrant, such new Warrant shall (i) be of like tenor with this Warrant, (ii) 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(b) 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) have an issuance date, as indicated on the
face of such new Warrant which is the same as the Issuance Date and (iv) have the same rights and conditions as this Warrant.

 

8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the information set forth in the Warrant Register. The Company shall give written notice to the Holder (i) reasonably
promptly following any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of
such adjustment and (ii) at least ten (10) 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 pro rata to
the record holders of any class of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation; provided, that in each case, such information shall be made known to the public
prior to or in conjunction with such notice being provided to the Holder.

 

    7 

     

    

 

9. NONCIRCUMVENTION. 
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, 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 (i) 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, (ii) shall use all
reasonable efforts to take all such actions as may be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii) shall, so long as any of
the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares
of Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).

 

10. AMENDMENT
AND WAIVER. No provision of this Warrant may be amended, modified or waived, except in a written document signed by both parties.
The Company and the Warrant may amend or supplement this Warrant without the consent of any Holder for the purpose of curing any
ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions
with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties
determine, in good faith, shall not adversely affect the interest of the Holders. All other amendments and supplements shall require
the vote or written consent of Holders of at least 50.1% of the then outstanding Warrants, provided that adjustments may be made
to the Warrant terms and rights in accordance with Section 2 without the consent of the Holders. 

 

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

 

12. 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.

 

13. 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.

 

14. DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via email or facsimile within two (2) Trading
Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within five (5) Trading
Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2)
Trading Days submit via email or facsimile (a) the disputed determination of the Exercise Price to an independent, reputable
investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant
Shares to the Company’s independent, outside accountant. The Company shall cause the investment bank or the accountant, as
the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than
ten (10) Trading Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. The expenses of
the investment bank and accountant will be borne by the Company unless the investment bank or accountant determines that the determination
of the Exercise Price or the arithmetic calculation of the Warrant Shares by the Holder was incorrect, in which case the expenses
of the investment bank and accountant will be borne by the Holder.

 

    8 

     

    

 

15. REMEDIES,
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 damages for any failure by the Company
to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder may 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 seek an injunction restraining any breach. Notwithstanding the foregoing or anything else herein to the contrary,
if the Company is for any reason unable to issue and deliver Warrant Shares upon exercise of this Warrant as required pursuant
to the terms hereof, the Company shall have no obligation to pay to the Holder any cash or other consideration or otherwise “net
cash settle” this Warrant.

 

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

 

(a)
“Bloomberg” means Bloomberg Financial Markets.

 

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

 

(c)
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock.

 

(d)
“Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., the NYSE MKT, The Nasdaq Stock
Market, or the OTC Bulletin Board.

 

(e)
“Fundamental Transaction” means that (A) the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person,
or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the
Company to another Person, or (iii) allow another Person providing to make a purchase, tender or exchange offer that is accepted
by the holders of more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the
Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or
exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more
than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other
Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement
or other business combination), or (v) reorganize, recapitalize or reclassify the Common Stock or (B) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall
become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of
the aggregate ordinary voting power represented by issued and outstanding Common Stock.

 

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

 

(g)
“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.

 

    9 

     

    

 

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

 

(i)
“Principal Market” means The Nasdaq Capital Market.

 

(j)
“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.

 

(k)
“Trading Day” means 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).

 

(l)
“Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m.,
New York City time, as reported by Bloomberg through its “Volume at Price” function 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 City time, and ending at 4:00:00 p.m., New York City 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 Pink OTC Markets Inc. If the Weighted Average Price cannot be calculated for such security on
such date on any of the foregoing bases, the Weighted Average 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 pursuant to Section 14 with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any share
dividend, share split or other similar transaction during such period.

 

[Signature Page
Follows]

 

    10 

     

    

 

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.

 

	 	MONSTER DIGITAL, INC.
	 	 	 
	 	By:	

	 	 	Name: 
	 	 	Title: 

 

    11 

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY
THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE
COMMON STOCK

 

MONSTER DIGITAL,
INC.

 

The undersigned holder
hereby exercises the right to purchase [•] of the shares of Common Stock (“Warrant Shares”)
of MONSTER DIGITAL, INC., a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase
Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.

 

1. Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as (check one):

 

 ̈ Cash
Exercise under Section 1(a).

 

 ̈ Cashless
Exercise under Section 1(c).

 

2. Cash
Exercise. If the Holder has elected a Cash Exercise, the Holder shall pay the sum of [$] to the Company in accordance
with the terms of the Warrant.

 

3. Delivery
of Warrant Shares. The Company shall deliver to the holder [•] Warrant Shares in accordance with the terms
of the Warrant.

 

4. Representations
and Warranties. By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving
effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock
(determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under
Section 1(d) of this Warrant to which this notice relates.

 

DATED:                                 

 

	(Signature must conform in all respects
	to name of the Holder as specified on
	the face of the Warrant)
	 
	 
	Registered Holder
	 	 
	Address:	 
	 	 
	 

 

    12 

     

    

 

ACKNOWLEDGMENT

 

The
Company hereby acknowledges this Exercise Notice.

 

	 	MONSTER DIGITAL, INC.
	 	 	 
	 	By:	

	 	 	Name:
	 	 	Title:

 

[Corporate Stock Transfer],

 

as Warrant Agent

 

	By:  	 	 
	 	 
	Name:	 
	 	 
	Title:	 

 

    13

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