Document:

AMENDED
AND RESTATED SECURITY AGREEMENT

 

This
Amended and Restated Security Agreement (as amended, restated, supplemented and/or otherwise modified from time to time, this
“Agreement”) is dated as of August 4, 2016 (the “Effective Date”) between the lenders executing
this Agreement and listed on Schedule A attached hereto as amended from time to time (the “Lenders”),
JBI, Inc., a corporation organized under the laws of the State of Nevada (the “Debtor”), Plastic2Oil
of NY #1, LLC, a limited liability company organized under the laws of the State of New York (“P2O#1”)
and JBI RE #1, Inc., a corporation organized under the laws of the State of New York (“RE#1”, and collectively
with P2O#1 and the Debtor the “Grantors”), and Christiana Trust, a division of WSFS Bank, as collateral
agent for the Lenders (the “Collateral Agent”). This Agreement amends and restates that certain Security
Agreement, dated August 29, 2013, by and between the Lenders named therein, the Grantors and the Collateral Agent (the “Original
Agreement”). The Lender parties to the Original Agreement are sometimes referred to herein as the “Original Lenders”
and the Lender parties hereto thatwere not parties to the Original Agreement are sometimes referred to herein as the “New
Lenders.”

 

1. Grant
of Security. The Grantors, to secure the Secured Obligations (as defined below), pursuant to the Code (each term used
in this granting paragraph that is defined in the Code shall have the meaning specified in the Code), each hereby collaterally
assigns, pledges and grants to the Collateral Agent, for itself and as agent for the ratable interest of the Lenders, a continuing
security interest, in all of each Grantor’s right, title and interest in and to the following property of such Grantor,
now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interests is collectively referred to as the “Collateral”;

 

(a)
all accounts, as extracted collateral, chattel paper, deposit accounts, securities accounts and commodity accounts, documents,
equipment, general intangibles, instruments, inventory, investment property and any supporting obligations related thereto;

 

(b)
the commercial tort claims described on Schedule 1 and on any supplement thereto received by the Collateral Agent;

 

(c)
all books and records pertaining to the other property described in this Section 1;

 

(d)
(A) the Equity Interests owned by such Grantor on the date hereof (including, but not limited to, those listed on Schedule 1)
and any other Equity Interests obtained in the future by and any certificates representing all such Equity Interests (collectively,
the “Pledged Stock”); provided that the Pledged Stock shall not include (i) more than 65% of the issued
and outstanding voting Equity Interests in any “first tier” Foreign Subsidiary directly owned by such Grantor, or
(ii) any issued and outstanding Equity Interest in any Foreign Subsidiary that is not a “first tier” Foreign Subsidiary,
(B)(i) the debt obligations owed to such Grantor on the date hereof, (ii) any debt securities in the future issued to such Grantor,
and (iii) the certificates, promissory notes and any other instruments, if any, evidencing such debt securities; (C) all payments
of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise
distributed in respect of, in exchange for or upon the conversion of, and all other proceeds received in respect of, the securities
referred to in clauses (A) and (B) above; (D) all rights and privileges of such Grantor with respect to the securities and other
property referred to in clauses (A), (B) and (C) above; and (E) all proceeds of any of the foregoing;

 

(e)
all machinery, apparatus, equipment, motor vehicles, fittings, fixtures and other tangible personal property of every kind and
description, together with all parts, accessories and special tools and all increases and accessions thereto and substitutions
and replacements therefore;

 

(f)
all patents and patent applications, tradenames, servicemarks, trademarks and trademark applications, trade secrets, know-how,
copyrights and other intellectual property, including software license agreements with any other party (other than commercial
off the shelf software), including without limitation those described on Schedule 1;

 

(g)
all other goods and other personal property of such Grantor, whether tangible or intangible and wherever located; and

 

(h)
to the extent not otherwise included in the foregoing, all proceeds of the foregoing.

 

    	 	 	 

    	 	 	 

    

 

2.
Security for Obligations. This Agreement secures, and the Collateral is collateral security for (i) the prompt payment
in full when due by the Debtor under the terms of those certain 12% Secured Promissory Notes due August 31, 2018 or November 30,
2019 by Debtor in favor of the Original Lenders in a private placement of $4 million aggregate principal amount, dated in August
or September, 2013 or November 19, 2014 (as they may be amended, restated, supplemented, and/or otherwise modified from time to
time, the “First Offering Notes”); (ii) the prompt payment in full when due by the Debtor
under the terms of those certain 12% Secured Promissory Notes due August 31, 2021 by Debtor in favor of the New Lenders in a private
placement of up to $1 million aggregate principal amount, each dated on or about August 2016 (as they may be amended, restated,
supplemented, and/or otherwise modified from time to time, the “Second Offering Notes” and
collectively with the First Offering Notes, the “Notes”); and (iii) all amounts owed to Collateral Agent
hereunder including without limitation under Section 7(g) hereof (collectively, the “Secured Obligations”).

 

3.
Rights of Collateral Agent.

 

(a)
The Collateral Agent, at the direction of the Required Lenders, shall at all times be entitled to exercise, in respect of the
Collateral, all of the rights available to a secured party under applicable law, including the Code or as in effect in any relevant
jurisdiction and all legal, equitable, administrative and self-help rights and remedies. Upon the occurrence and during the continuance
of an Event of Default (as defined in the Note), the Collateral Agent, at the direction of the Required Lenders, may exercise
in respect of the Collateral, (i) all the rights and remedies of a secured party on default under the Code (whether or not the
Code applies to the affected Collateral); (ii) all of the rights and remedies provided for in this Agreement; and (iii) such other
rights and remedies as may be provided by law or otherwise (such rights and remedies of the Collateral Agent to be cumulative
and non-exclusive).

 

(b)
Without limiting the generality of the foregoing, the Collateral Agent may, at the direction of the Required Lenders, without
demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by
law referred to below) to or upon Grantors or any other Person (all and each of which demands, defenses, advertisements and notices
are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys) enter upon
the premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process,
without first obtaining a final judgment or giving any Grantor or any other Person notice and opportunity for a hearing on the
Collateral Agent’s claim or action, may collect, receive, appropriate and realize upon any Collateral, and may sell, transfer
or otherwise dispose, grant option or options to purchase and deliver any Collateral (enter into contracts to do any of the foregoing),
in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of Collateral Agent
or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. The Collateral Agent shall have the right, to be exercised at the
direction of the Required Lenders, upon any such public sale or sales, and, to the extent permitted by the Code and other applicable
law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption
of any Grantor, which right or equity is hereby waived and released. 

 

(c)
Following the receipt of any proceeds of Collateral by the Collateral Agent, such proceeds shall be distributed first,
to the accrued but unpaid fees and expenses (to the extent outstanding and otherwise reimbursable by the Grantors hereunder) of
the Collateral Agent in connection with the performance of its duties under this Agreement, including without limitation all reasonable
and documented out-of-pocket expenses of retaking, holding, preparing for sale and selling the Collateral, all reasonable and
documented attorneys’ fees, out-of-pocket travel and all other reasonable and documented out-of-pocket expenses which may
be incurred by the Collateral Agent in realizing or attempting to realize upon the Collateral and/or to enforcing this Agreement
or in the prosecution or defense of any action or proceeding related to the subject matter of this Agreement, in each case, until
paid in full, and second, ratably among the Lenders. The Collateral Agent shall be entitled to rely upon the holdings referenced
in Schedule A (or any amendments thereto which the Collateral Agent received by the date of such distribution) for purposes of
making such ratable distribution.

 

(d)
If at any time no Collateral Agent is designated under this Agreement (as a result of resignation or otherwise) or any designated
Collateral Agent, after notice from the Required Lenders, fails to act in accordance with this Agreement or in accordance with
the proper instructions of the Required Lenders, the Required Lenders may remove the Collateral Agent and, on behalf of all of
the Lenders, directly exercise all rights granted to the Collateral Agent under this Agreement.

 

4.
Representations and Warranties. Each Grantor represents and warrants that:

 

(a)
this Agreement creates a valid security interest in the Collateral of Grantor;

 

(b)
the office where it keeps its records is 20 Iroquois Street, Niagara Falls, NY 14303;

 

    	 	 	 

    	 	 	 

    

 

(c)
the correct name and jurisdiction or organization of such Grantor is set forth in the first paragraph hereto, and such Grantor
has not, during the immediately preceding five (5) years, been known under or used any other corporate name, other than “310
Holdings, Inc.” in the case of Debtor;

 

(d)
Except for the Lien (as defined below) granted to the Collateral Agent pursuant to this Agreement, such Grantor owns each item
of the Collateral free and clear of any and all Liens or claims of others, other than Existing Liens. Such Grantor (a) is the
record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or evidenced by certificates and
(b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and
clear of any other Lien, other than Existing Liens.

 

(e)
The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor
of the Collateral Agent in all Collateral (i) in which a security interest may be perfected by filing a financing statement under
the Code with the Secretary of State of Nevada, in case of the Debtor, and (ii) in which a security interest may be perfected
by filing a financing statement under the Code with the Secretary of State of New York, in case of P2O#1 and RE#1 (which financing
statements have been delivered to the Collateral Agent in completed and duly authorized form).

 

(f)
All Pledged Stock and other Equity Interest owned by such Grantor hereunder (a) is listed on Schedule 1 and constitutes
that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on such Schedule 1
and (b) has been duly authorized, validly issued and is fully paid and non-assessable (other than Pledged Stock in respect
of Equity Interests in limited liability companies and partnerships).

 

(g)
Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent, at the direction of the Required
Lenders, shall be entitled to exercise all of the rights of such Grantor granting the security interest in any Pledged Stock,
and a transferee or assignee of the applicable Equity Interests of such Person shall become a holder of such Pledged Stock to
the same extent as such Grantor in such Person and be entitled to participate in the management of such Person and, upon the transfer
of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.

 

(h)
No amount payable to such Grantor under or in connection with any account is evidenced by any instrument or tangible chattel paper
that has not been delivered to the Collateral Agent, properly endorsed for transfer.

 

(i)
Any intellectual property owned by such Grantor (or in which such Grantor has rights) is listed on Schedule 1.

 

(j)
The only commercial tort claims of such Grantor existing on the date hereof (regardless of whether the amount, defendant or other
material facts can be determined and regardless of whether such commercial tort claim has been asserted, threatened or has otherwise
been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on Schedule
1, which sets forth such information separately for such Grantor.

 

5.
Covenants of the Grantors. Each Grantor hereby covenants and agrees with the Collateral Agent that it shall (i) promptly
give the Collateral Agent written notice of any change in such Grantor’s name or jurisdiction of formation; (ii) promptly
give the Collateral Agent written notice of any change in such Grantor’s office where it keeps its records; (iii) preserve
and maintain the lien created by this Agreement and will protect and defend its title to the Collateral of such Grantor; and (iv)
maintain books and records pertaining to the Collateral of such Grantor in such detail, form and scope as the Collateral Agent
may reasonably require. Not later than seven days after the Effective Date, Debtor will deliver to the Collateral Agent in suitable
form for transfer all Pledged Stock consisting of instruments and Equity Interests evidenced by certificates.

 

6.
Further Assurances. Each Grantor agrees that from time to time, it will promptly execute and deliver all further instruments
and documents, and take all further action, that the Collateral Agent may reasonably request, in order to perfect, protect, evidence,
renew and/or continue the security interest granted or purported to be granted hereby or to enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral of such Grantor or otherwise effectuate the purposes
and intents of this Agreement.

 

    	 	 	 

    	 	 	 

    

 

7. The
Collateral Agent. (a) Each of the Lenders hereby designates Christiana Trust to act on behalf of the Lenders as the Collateral
Agent and appoints the Collateral Agent to hold the Collateral on behalf of and for the benefit and security of the Lenders pursuant
to the terms of this Agreement, and the Collateral Agent hereby accepts such designation and appointment. Each Lender
authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral
Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. It is understood and agreed
that the use of the term “Collateral Agent” herein is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is
intended to create or reflect only an administrative relationship between independent contracting parties. Notwithstanding any
other provisions set forth herein, the Collateral Agent shall hold or dispose of the Collateral solely in accordance with the
instructions of Lenders holding Notes the outstanding principal amount of which is greater than fifty percent (50%) of the aggregate
outstanding principal amount of all the Notes, as set forth opposite each Lenders’ name on Schedule A as amended from time
to time (the “Required Lenders”), which instructions the Collateral Agent shall be entitled to rely
on conclusively. As to any matters not expressly provided for hereby, the enforcement or collection of any Secured Obligation
or any matter requiring the Collateral Agent to exercise discretion, the Collateral Agent shall not be required to act, enforce
or collect upon any such Secured Obligation or exercise any discretion, but shall only be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders; provided,
however, that the Collateral Agent shall not be required to take any action that exposes the Collateral Agent to personal liability
or that is contrary to this Agreement or applicable law. 

 

(b)
In acting hereunder, the Collateral Agent shall have only such duties as are specified herein and no implied duties shall be read
into this Agreement, and the Collateral Agent shall not be liable for any act done, or omitted to be done, by it in the absence
of its gross negligence or willful misconduct.

 

(c)
The Collateral Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine,
and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument and may assume
that any Person purporting to give any writing, notice, advice or instruction in connection with the provisions hereof has been
duly authorized to do so.

 

(d)
The Collateral Agent shall be entitled to consult with legal counsel in the event that a question or dispute arises with regard
to the construction of any of the provisions hereof, and shall incur no liability and shall be fully protected in acting in accordance
with the advice or opinion of such counsel.

 

(e)
The Collateral Agent shall not be required to use its own funds in the performance of any of its obligations or duties or the
exercise of any of its rights or powers, and shall not be required to take any action which, in the Collateral Agent’s sole
and absolute judgment, could involve it in expense or liability unless furnished with security and indemnity which it deems, in
its sole and absolute discretion, to be satisfactory.

 

(f)
Debtor shall pay to the Collateral Agent compensation for its services hereunder in accordance with the terms of a separate fee
agreement between the Debtor and the Collateral Agent. In the event the Collateral Agent renders any extraordinary services in
connection its role as Collateral Agent at the request of the parties, the Collateral Agent shall be entitled to additional compensation
therefor. The terms of this paragraph shall survive termination of this Agreement.

 

(g)
Grantors hereby agree, jointly and severally, to indemnify the Collateral Agent, its directors, officers, employees, agents, affiliates
and their respective successors and assigns (collectively, the “Indemnified Parties”), and reimburse
and hold the Indemnified Parties harmless from any and against all damages, claims, penalties, liabilities, losses, actions, suits,
judgments, or proceedings at law or in equity, and any other expenses, fees, costs or charges of any character or nature, including,
without limitation, attorney’s fees and expenses, which an Indemnified Party may incur or with which it may be threatened
by reason of acting as or on behalf of the Collateral Agent under this Agreement, except to the extent the same shall be caused
by the Collateral Agent’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a
final and non-appealable decision (such indemnification obligations, the “Indemnification Obligations”). All Indemnification
Obligations shall be due on demand. The terms of this paragraph shall survive termination of this Agreement and the resignation
or removal of the Collateral Agent. If and to the extent that the obligations of a Grantor under this clause (g) are unenforceable
for any reason, such Grantor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.

 

    	 	 	 

    	 	 	 

    

 

(h)
In the event the Collateral Agent receives conflicting instructions hereunder, the Collateral Agent shall be fully protected in
refraining from acting until such conflict is resolved to the satisfaction of the Collateral Agent.

 

(i)
The Collateral Agent may resign as the Collateral Agent, and, upon its resignation, shall thereupon be discharged from any and
all further duties and obligations under this Agreement by giving notice in writing of such resignation to Grantors and Lenders,
which notice shall specify a date upon which such resignation shall take effect. Upon the resignation of the Collateral Agent,
Grantors and Lenders shall, within thirty (30) business days after receiving the foregoing notice from the Collateral Agent, designate
a substitute collateral agent (the “Substitute Collateral Agent”), which Substitute Collateral Agent
shall, upon its designation (and acceptance of such designation) and notice of such designation to the Collateral Agent, succeed
to all of the rights, duties and obligations of the Collateral Agent hereunder. In the event Grantors and Lenders shall not have
delivered to the Collateral Agent a written designation of Substitute Collateral Agent within the aforementioned thirty (30) day
period, together with the consent to such designation by the Substitute Collateral Agent, the Collateral Agent may (i) appoint
a financial institution to act as the Substitute Collateral Agent hereunder, subject to the reasonable satisfaction of the Required
Lenders and Grantors, in which case, the Collateral Agent’s resignation shall become effective upon the acceptance, in writing,
of such Substitute Collateral Agent by the Required Lenders and Grantors and such Substitute Collateral Agent’s acceptance
of such appointment and the documentation thereof or (ii) apply to a court of competent jurisdiction to appoint a Substitute Collateral
Agent, and the costs of obtaining such appointment shall be reimbursable from Grantors and Lenders and from the Collateral. After
any resigning Collateral Agent’s resignation hereunder as the Collateral Agent, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent hereunder.

 

(j)
The Collateral Agent may execute any of its duties under this Agreement by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The
Collateral Agent shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the opinion
or advice of any such counsel, consultants or experts selected by the Collateral Agent in good faith. Notwithstanding any other
provision of this Agreement to the contrary, at any time or times, in the event that the Collateral Agent or Required Lenders
shall deem it necessary or prudent in order to conform to the legal requirements of any jurisdiction in which any part of the
Collateral may at such time or times be located to make any claim or bring any suit with respect to the Collateral or any Loan
Document, or the Collateral Agent or Required Lenders shall be advised by counsel satisfactory to it that it is so necessary or
prudent, the Collateral Agent shall execute and deliver an agreement supplemental hereto and all other instruments and agreements,
in each case, reasonably acceptable to Collateral Agent, and shall take all other action necessary or proper to constitute one
or more persons, who need not meet any requirements of the Collateral Agent contained herein (and the Collateral Agent may appoint
one or more of its officers), either as co-collateral agent or co-collateral agents jointly with the Collateral Agent of all or
any part of the Collateral, or as separate collateral agent or separate collateral agents of all or any part of the Collateral
(each, a “Supplemental Collateral Agent”), and to vest in such persons, in such capacity, such title
to the Collateral or any part thereof and such rights powers, privileges or duties as may be necessary or desirable, all for such
period and under such terms and conditions as are satisfactory to the Collateral Agent and Required Lenders. In case any Supplemental
Collateral Agent shall die, become incapable of acting, resign or be removed, the title to the Collateral and all rights powers,
privileges and duties of such Supplemental Collateral Agent, so far as permitted by law, vest in and be exercised by the Collateral
Agent, without the appointment of a successor to such Supplemental Collateral Agent. Should any instrument in writing from any
Grantor be required by any Supplemental Collateral Agent so appointed by the Collateral Agent to more fully or certainly vest
in and confirm to such Supplemental Collateral Agent such rights, powers, privileges and duties, the Grantors shall execute, acknowledge
and deliver any and all such instruments promptly upon request by the Collateral Agent. No Collateral Agent shall be responsible
for the negligence (or gross negligence), misconduct or any liability of any agent, attorney-in-fact or Supplemental Collateral
Agent that it selects in accordance with the foregoing provisions of this Section 7(j) in the absence of such Collateral Agent’s
gross negligence or willful misconduct.

 

(k)
Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent shall have no duty as to any Collateral in
its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of
rights against prior parties or any other rights pertaining thereto and the Collateral Agent shall not be responsible for filing
any financing or continuation statements or recording any documents or instruments in any public office at any time or times or
otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Collateral Agent shall be deemed
to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially
equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value
of any of the Collateral, including without limitation, by reason of the act or omission of any carrier, forwarding agency or
other agent or bailee selected by the Collateral Agent in good faith.

 

    	 	 	 

    	 	 	 

    

 

(l)
The Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Liens in any of the Collateral (whether impaired by operation of law, by reason
of any of any action or omission to act on its part hereunder or otherwise, except to the extent such action or omission by Collateral
Agent constitutes gross negligence, bad faith or willful misconduct on the part of the Collateral Agent), for the accuracy of
any of the Grantors’ representations or warranties, for the validity or sufficiency of the Collateral or any agreement or
assignment contained therein, for the validity of the title of any Grantor to the Collateral, for insuring the Collateral or for
the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
The Collateral Agent shall be under no duty or responsibility to any Lender to ascertain or to inquire into the performance or
observance by any Grantor of any of the provisions of this Agreement. 

 

(m)
In any circumstance where the Collateral Agent exercises discretion (though it shall have no obligation to do so), approves documentation
or distributes proceeds, the Collateral Agent may, at its option, seek to obtain instructions or directions from the Required
Lenders with respect to such action. If the Collateral Agent so elects, then it may refrain from taking such action until such
directions or instructions are received and shall have no liability to anyone for so refraining.

 

(n)
NEITHER CHRISTIANA TRUST NOR THE COLLATERAL AGENT (I) WILL MAKE AN INSPECTION OF THE COLLATERAL OR ANY PART THEREOF, (II) MAKES
OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE TITLE, CONDITION, VALUE,
DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR ANY PARTICULAR PURPOSE OF THE COLLATERAL OR ANY PART THEREOF, AS TO
THE QUALITY OF THE MATERIAL OR WORKMANSHIP WITH RESPECT TO THE COLLATERAL OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT OR
OTHER DEFECTS WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR AS TO TITLE OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE COLLATERAL OR ANY PART THEREOF, OR (III) MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY AS TO THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH THE COLLATERAL
AGENT IS A PARTY, OR ANY OTHER DOCUMENT OR INSTRUMENT, OR AS TO THE CORRECTNESS OF ANY STATEMENT CONTAINED IN ANY THEREOF.

 

(o)
Except as otherwise expressly provided herein, monies received by the Collateral Agent hereunder need not be segregated in any
manner, except to the extent required by law, and may be deposited under such general conditions as may be prescribed by law,
and neither Christiana Trust nor the Collateral Agent shall be liable for any interest thereon, except as may be expressly agreed
to by Christiana Trust or the Collateral Agent in writing.

 

(p)
Action upon Instructions. (i) The Required Lenders may by joint written instruction direct the Collateral Agent in the administration
of the Collateral and any matter affecting the Collateral.

 

(ii)
Notwithstanding the foregoing, the Collateral Agent shall not be required to take any action hereunder or under any other related
document at the request of the Required Lenders or otherwise if the Collateral Agent shall have reasonably determined, or shall
have been advised by counsel, that such action is likely to result in liability on the part of the Collateral Agent or is contrary
to the terms hereof or of any other document relating to the Notes or is otherwise contrary to law; provided, however, that the
Collateral Agent shall have no obligation to make any such determination. 

 

(iii)
Whenever the Collateral Agent is unable to decide between alternative courses of action permitted or required by the terms of
this Agreement or under any other related document, or in the event that the Collateral Agent is unsure as to the application
of any provision of this Agreement or any other related document, or believes any such provision is ambiguous as to its application,
or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement or any other related
document permits any determination or discretion by the Collateral Agent or is silent or is incomplete as to the course of action
that the Collateral Agent is required to take with respect to a particular set of facts, the Collateral Agent shall promptly give
notice (in such form as shall be appropriate under the circumstances) to each Lender requesting instruction as to the course of
action to be adopted, and to the extent the Collateral Agent acts in good faith in accordance with any written instructions received
from the Required Lenders, the Collateral Agent shall not be liable on account of such action to any Person. If the Collateral
Agent shall not have received appropriate instruction within 10 days of such notice (or such shorter period as reasonably may
be specified in such notice or as may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action as it shall deem to be in the best interests of the Lenders; and the Collateral Agent shall have no liability
to any Person for such action or inaction.

 

    	 	 	 

    	 	 	 

    

 

(q)
Notwithstanding anything contained herein or elsewhere to the contrary, neither Christiana Trust nor the Collateral Agent shall
be required to take any action in any jurisdiction other than in the State of Delaware if the taking of such action will, even
after the appointment of a Supplemental Collateral Agent, (i) require Christiana Trust in its individual capacity to obtain the
consent, approval, authorization or order of or the giving of notice to, or the registration with, or taking of any action in
respect of, any state or other governmental authority or agency other than the State of Delaware; (ii) result in any fee, tax
or other governmental charge under the laws of any jurisdiction other than the State of Delaware becoming payable by Christiana
Trust in its individual capacity, or (iii) subject Christiana Trust in its individual capacity to personal jurisdiction in any
jurisdiction other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions
by the Collateral Agent contemplated hereby.

 

(r)
The Collateral Agent shall be under no obligation to exercise any right or power vested in it or duty imposed upon it by this
Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement,
either at the request, order or direction of the Required Lenders or otherwise, unless the Required Lenders shall have offered
the Collateral Agent security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred
by the Collateral Agent therein or thereby. The right of the Collateral Agent to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Collateral Agent shall not be answerable to any Lender or other Person for
other than its gross negligence, bad faith or willful misconduct in the performance of any such act as determined by a court of
competent jurisdiction in a final and non-appealable decision. 

 

(s)
In no event shall the Collateral Agent be responsible or liable for special, indirect, or consequential loss or damage of any
kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Collateral Agent has been advised
of the likelihood of such loss or damage and regardless of the form of action.

 

(t)
Christiana Trust, in its individual capacity, and its affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with any Grantor and any of their respective subsidiaries as though Christiana Trust were not the Collateral
Agent hereunder.

 

(u)
The Collateral Agent shall be entitled to assume that no Event of Default exists unless the officers of the Collateral Agent immediately
responsible for matters concerning this Agreement shall have been notified in writing by any Grantor or the Required Lenders that
it considers that an Event of Default exists and specifying the general nature thereof.

 

(v)
The Collateral Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without
limitation: acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; act of terrorism, epidemics;
riots; interruptions, loss or malfunctions of utilities, computer hardware, software or communications service; accidents; labor
disputes; or acts of civil or military authority or governmental actions; it being understood that the Collateral Agent shall
use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable
under the circumstances.

 

(w)
Any corporation or other entity into which the Collateral Agent may be merged or converted or with which it may be consolidated,
or any corporation or other entity resulting from any merger, conversion or consolidation to which the Collateral Agent shall
be a party, or any corporation or other entity to which substantially all the corporate trust business of the Collateral Agent
may be transferred, shall be the collateral agent under this Agreement without further act.

 

(x)
Each Lender, upon its execution of a counterpart to this Agreement, agrees to be bound by the terms and provisions herein and
shall promptly provide the Collateral Agent with a copy of such executed counterpart.

 

8.
Governing Law. This Agreement shall be governed by the internal laws of the State of New York, without reference to
principles of conflicts of law.

 

9.
Amendments; Etc. No amendment or waiver of any provision of this Agreement, and no consent to any departure by any
Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Collateral Agent, Grantors
and Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose
for which given. This agreement represents the entire understanding of the parties with respect to the subject matter described
herein and supersedes any and all prior agreements and understandings with respect to such matters. Notwithstanding the foregoing,
from time to time as necessary to update Lender information and other relevant information, the Debtor shall have the authority
to amend Schedule A. The Debtor shall provide the Collateral Agent with any such amendments on a timely basis and the Collateral
Agent shall conclusively rely on the most recent version of Schedule A provided to it by the Debtor.

 

    	 	 	 

    	 	 	 

    

 

10.
Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted
assigns of the parties hereto. For the avoidance of doubt, the Collateral Agent may assign its rights or delegate its duties or
obligations as Collateral Agent hereunder to any other Lender.

 

11.
Severability. The provisions of this Agreement are severable. If any clause or provision hereof shall be held invalid
or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause
or provision or part thereof in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction
or any other clause or provision in this Agreement in any jurisdiction.

 

12.
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of
which shall constitute one document.

 

13.
Authorization. Without obligating Collateral Agent to make any of such filings, each Grantor hereby authorizes
the Collateral Agent to file financing and/or continuation statements, intellectual property security agreements and amendments
to any of the foregoing, in any jurisdictions and with any filing offices, in each case, in the United States as the Required
Lenders may determine, in their sole discretion, are necessary or advisable to perfect or otherwise protect the security interest
granted to the Collateral Agent herein. Such financing statements may describe the Collateral in the same manner as described
herein or may contain an indication or description of collateral that describes such property in any other manner as the Required
Lenders may determine, in their sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest
in the Collateral granted to the Collateral Agent herein, including, without limitation, describing such property as “all
assets, whether now owned or hereafter acquired, developed or created” or words of similar effect. Each Grantor shall furnish
to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such
other reports in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail.

 

14.
Grantors’ Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each
Grantor shall remain liable to perform all of its obligations, if any, assumed by it with respect to the Collateral and neither
the Collateral Agent nor any Lender shall have any obligations or liabilities with respect to any Collateral by reason of or arising
out of this Agreement or otherwise, except as set forth herein, nor shall the Collateral Agent nor any Lender be required or obligated
in any manner to perform or fulfill any of the obligations of any Grantor under or with respect to any Collateral.

 

15. Release;
Termination.

 

(a)
Upon the payment in full in cash of the Secured Obligations, the pledge and security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the applicable Grantor. Upon any such termination, the Collateral Agent will, at
the applicable Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination provided that (i) the Collateral Agent has received written instructions from the Required Lenders
notifying the Collateral Agent that all Secured Obligations have been paid in full in cash and directing Collateral Agent to so
execute and deliver such documents (which instructions the Collateral Agent shall be entitled to rely on conclusively) and (ii)
such documents are in form and substance reasonably satisfactory to Collateral Agent.

 

(b)
Upon any sale, lease, transfer or other disposition of any item of Collateral of any Grantor (other than sales of inventory in
the ordinary course of business, which Liens will be deemed to be released automatically in connection with such sale with no
further action required by the Collateral Agent), the Collateral Agent will, upon receipt of written instructions from the Required
Lenders and at such Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence the release of such item of Collateral from the assignment and security interest granted hereby provided that
such documents are in form and substance reasonably satisfactory to Collateral Agent.

 

16. Additional
Definitions.

 

(b)
Each of the following terms has at any time the meaning given it at such time for purposes of the Code: account, as-extracted
collateral, chattel paper, commercial tort claim, commodity account, deposit account, document, equipment, financing statement,
fixtures, general intangible, goods, instrument, inventory, investment property, issuer, letter-of-credit right, proceeds, products,
record, securities account, security, software, supporting obligation, uncertificated security.

 

    	 	 	 

    	 	 	 

    

 

(c)
As used in this Agreement, the following terms shall have the meanings specified in this Section 16 unless the context otherwise
requires.

 

(i)
“Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York;
provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority
of, or remedies with respect to, any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction
other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions hereof relating to such perfection, priority or remedies.

 

(ii)
“Equity Interests” in any Person means any and all shares, interests, rights to purchase, warrants,
options, participation or other equivalents of or interests in (however designated) equity in such Person, including any preferred
stock, any limited or general partnership interest and any limited liability company membership interest. 

 

(iii)
“Existing Liens” shall have the meaning set forth on Schedule 2 attached hereto.

 

(iv)
“Foreign Subsidiary” means any subsidiary that is incorporated or organized under the laws of the jurisdiction
other than the United States of America, any State thereof or the District of Columbia.

 

(v)
“Lien” means with respect to any asset, any mortgage, lien, pledge, adverse claim, charge, security
interest or other encumbrance, or any other type of preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset.

 

(vi)
“Loan Document” means each any of this Agreement, the Note, or the Subscription Agreement pursuant to
which the Lender acquired the Note,

 

(vii)
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other entity.

 

    	 	 	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, the Grantors and the Collateral Agent have executed and delivered this Amended and Restated Security Agreement
as of the date first above written.

 

	 	“GRANTORS”
	 	 	 
	 	PLASTIC2OIL,
    INC.
	 	 	 
	 	By:	/s/
    Rahoul Banerjea
	 	Name:	Rahoul
    Banerjea
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	PLASTIC2OIL
    OF NY #1, LLC
	 	 	 
	 	By:	/s/
    Rahoul Banerjea
	 	Name:	Rahoul
    Banerjea
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	JBI
    RE#1, INC.
	 	 	 
	 	By:	/s/
    Rahoul Banerjea
	 	Name:	Rahoul
    Banerjea
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	“COLLATERAL
    AGENT”
	 	 	 
	 	CHRISTIANA
    TRUST, a division of WSFS Bank
	 	 	 
	 	By:	/s/
    S. Amanda Wilson
	 	Name:	S.
    Amanda Wilson
	 	Title:	Trust
    Officer

 

The
undersigned hereby consent (pursuant to Section 9 of the Original Agreement) to this Amended and Restated Security Agreement as
of the date first above written:

 

	REQUIRED
    LENDERS	 
	 	 	 
	 	/s/
    Rick Heddle	 
	 	Rick
    Heddle	 
	 	 	 
	Heddle
    Marine, Inc.	 
	 	 	 
	By:	/s/
    Rick Heddle	 
	 	Rick
    Heddle, President	 

 

    	 	 	 

    	 	 	 

    

 

PLASTIC2OIL,
INC.

SECURITY
AGREEMENT

LENDER
SIGNATURE PAGE

 

Acknowledged
and agreed to as of the date first above written:

 

	“LENDER”	 
	 	 
	/s/
    Lawrence Leahy	 
	[Signature]	 
	 	 
	Lawrence
    Leahy	 
	[Print
    Name/Title]	 

 

    	 	 	 

    	 	 	 

    

 

SCHEDULE
A

 

	LENDER	 	PROMISSORY
                                         NOTE

        PRINCIPAL
        AMOUNT

	Richard
    Heddle	 	$1,000,000
    (August 2013)
	Richard
    Heddle	 	$2,000,000
    (September 2013)
	Heddle
    Marine Services Inc.	 	$1,000,000
    (November 2014)

 

    	 	 	 

    	 	 	 

    

 

SCHEDULE
1

 

PLEDGED
STOCK

 

JBI,
Inc. is the registered owner of 100% of the outstanding equity interests of the following companies:

 

	 	1.	Plastic2Oil
    (Canada), Inc., an Ontario, Canada Corporation
	 	2.	Plastic2Oil
    RE ONE, Inc., and Ontario, Canada, Corporation
	 	3.	Plastic2Oil
    of NY #1, LLC, a New York limited liability company
	 	4.	Plastic2Oil
    Land, Inc., a Nevada Corporation
	 	5.	Plastic2Oil
    Marine, Inc., a Nevada Corporation
	 	6.	PAK-IT,
    LLC, a Florida Corporation
	 	7.	Javaco,
    Inc., an Ohio Corporation
	 	8.	JBI
    RE #1, Inc., a New York Corporation

 

INTELLECTUAL
PROPERTY

 

	 	1.	Patent-pending
    P2O conversion process/processor 

 

	 	a.	U.S.
    Patent Application No., 61/512,733, titled “SYSTEM AND PROCESS FOR CONVERTING PLASTICS TO PETROLEUM PRODUCTS,”
    filed with the United States Patent and Trademark Office filed on July 28, 2011.
	 	 	 
	 	b.	International
    Publication No. WO 2013/015819, titled “SYSTEM AND PROCESS FOR CONVERTING PLASTICS TO PETROLEUM PRODUCTS”.

 

	 	2.	Patent
    relating to our Data Business for the recovery of tape information.

 

	 	a.	U.S.
    Patent Application No., 13/884,075, titled “SYSTEM AND METHOD FOR READING A MAGNETIC TAPE” filed with the United
    States Patent and Trademark Office filed on May 8, 2013. 
	 	 	 
	 	b.	International
    Publication No. WO 2012/064691, titled “SYSTEM AND METHOD FOR READING A MAGNETIC TAPE”. 

 

	 	3.	Registered
    trademark for Plastic2OilTM 

 

	 	a.	U.S.
    Reg. No. 3,960,050 

 

	 	4.	Registered
    trademark for P2OTM 

 

	 	a.	U.S.
    Reg. No. 4,102,871

 

COMMERCIAL
TORT CLAIMS

 

None.

 

    	 	 	 

    	 	 	 

    

 

SCHEDULE
2

 

EXISTING
LIENS

 

	 	1.	Mechanic’s
    lien against JBI, Inc. and Plastic2Oil of NY #1, LLC in favor of National Mechanic’s Contracting Corp. in the amount
    of approximately $10,000.Exhibit 4.1

 

EXHIBIT C

 

THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I)
SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE
SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER
MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

COMMON STOCK PURCHASE WARRANT

 

NEONODE
INC.

 

	Warrant Shares:
    _______	Initial Exercise
    Date: February __, 2017
	 	Issue Date: August __, 2016

 

THIS COMMON STOCK PURCHASE WARRANT
(the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the six month anniversary of the Issue Date (the “Initial Exercise Date”) and on or prior to the close
of business on the five year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Neonode Inc., a Delaware corporation (the “Company”), up to ______ shares
(as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share
of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the “Purchase Agreement”), dated August 11, 2016, among the Company and the purchasers signatory
thereto.

 

Section 2.Exercise.

 

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

 

    	 	1	 

     

    

 

b)Exercise Price.
The exercise price per share of the Common Stock under this Warrant shall be $1.12, subject to adjustment hereunder (the
“Exercise Price”).

 

c)Cashless Exercise.
If at any time after the six-month anniversary of the Closing Date, there is no effective Registration Statement registering,
or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised,
in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive
a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = the VWAP (as defined
below) immediately preceding the time of delivery of the Notice of Exercise giving rise to the applicable “cashless exercise”,
as set forth in the applicable Notice of Exercise (to clarify, the “last VWAP” will be the last VWAP as calculated
over an entire Trading Day such that, in the event that this Warrant is exercised at a time that the Trading Market is open, the
prior Trading Day’s VWAP shall be used in this calculation);

 

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

 

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

 

    	 	2	 

     

    

 

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

 

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

 

    	 	3	 

     

    

 

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

 

d)
Mechanics of Exercise.

 

i.Delivery of
Warrant Shares Upon Exercise. Warrant Shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder
by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through
its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the
Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale
limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share
register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is one (1) Trading Day after
the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon
delivery of the Notice of Exercise the Holder shall be deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant
Shares; provided payment of the aggregate Exercise Price (other than in the case of a Cashless Exercise) is received within three
Trading Days of delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares
subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock
on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant
Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in
the FAST program so long as this Warrant remains outstanding and exercisable.

 

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

 

iii.Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

    	 	4	 

     

    

 

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

 

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

 

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

 

    	 	5	 

     

    

 

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

 

e)Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder 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 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 this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e)
applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding 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 Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a
more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of a Holder, the Company shall within three 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 this Warrant, by the Holder
or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be 4.99%[1]
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 this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99%
of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase
in the Beneficial Ownership Limitation will not be effective until the 61st day after such written notice is delivered
to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

    	 	6	 

     

    

 

Section 3.Certain
Adjustments.

 

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

 

b)Reserved.

 

c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all 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 exercise hereof, including without limitation, the Beneficial Ownership Limitation) 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, to the extent that the Holder’s right to participate in any such Purchase Right would result in the
Holder exceeding the Beneficial Ownership Limitation, 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 Beneficial Ownership Limitation).

 

d)Pro
Rata Distributions. During such time as this Warrant is outstanding, 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, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

 

 

1
9.99% for SSF Purchasers. 

 

    	 	7	 

     

    

 

e)Fundamental
Transaction.

 

(1) If, at any time while
this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or
consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license,
assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related
transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company,
directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of
the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (other than as a result of a stock split, combination or reclassification of shares of
Common Stock covered by Section 3(a) above), or (v) the Company, directly or indirectly, in one or more related transactions consummates
a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than
50% of the outstanding 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 or share purchase agreement
or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately
prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section
2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any
Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within
30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the Holder
an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black and
Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined
as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100
day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date. The payment of the Black Scholes Value will be made by wire transfer of immediately available
funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction).
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the
“Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance
reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

    	 	8	 

     

    

 

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

 

g)Notice to Holder.

 

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

 

ii.Notice to
Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email
to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least
ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is
not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such
notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

    	 	9	 

     

    

 

Section 4.Transfer
of Warrant.

 

a)Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
The Holder shall be required to physically surrender this Warrant to the Company within
three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The
Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.

 

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

 

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

 

    	 	10	 

     

    

 

d)Transfer
Restrictions. If, at the time
of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either
(i) registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws or (ii) eligible
for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the
Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may
be, comply with the provisions of Section 5.7 of the Purchase Agreement.

 

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

 

Section 5.Miscellaneous.

 

a)No Rights as
Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a
stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section
3.

 

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

 

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

 

    	 	11	 

     

    

 

d)Authorized
Shares.

 

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

 

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

 

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

 

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

 

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

 

    	 	12	 

     

    

 

g)Nonwaiver and
Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that
all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall
be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those
of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(Signature Page Follows)

 

    	 	13	 

     

    

 

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

 

	 	NEONODE
INC. 

         

	 	By: __________________________________

               Name:

               Title: 

 

    	 	14	 

     

    

 

NOTICE OF EXERCISE

 

To:    Neonode
inc. 

 

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

 

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

 

[   ] in lawful money of
the United States; or

 

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

 

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

_______________________________

  

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

 

_______________________________

 

_______________________________

 

_______________________________

  

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

  

[SIGNATURE
OF HOLDER]

  

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing
Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

    

     

    

 

EXHIBIT B

 

ASSIGNMENT FORM

 

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

 

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

 

	Name:	______________________________________
	 	(Please Print)
	 	 
	Address:	______________________________________
	

         

        Phone
Number: 

         

        Email
        Address: 
	(Please
Print) 

        ______________________________________

         

        ______________________________________

	Dated: _______________ __, ______	 
	Holder’s Signature: _______________	 
	Holder’s Address: _______________

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