Document:

Warrant Agreement dated as of August 21, 2002

 Exhibit 4.1 
  

WARRANT AGREEMENT BETWEEN 
  
 VERICHIP CORPORATION 
  
 AND 
  
 IBM CREDIT CORPORATION 

  
 TABLE OF CONTENTS

  

					
	 	  	 	  	Page

			
	 1.
	  	Exercise and Expiration of Warrant	  	1
			
	 2.
	  	Representations	  	2
			
	 3.
	  	Certain Agreements of the Company	  	3
			
	 4.
	  	Antidilution Adjustments	  	4
			
	 5.
	  	Registration Rights	  	4
			
	 6.
	  	Treatment of Warrant in the Event of an Acquisition Transaction	  	4
			
	 7.
	  	Transfer, Exchange, Replacement, Underwriter’s Lockup	  	5
			
	 8.
	  	Notices	  	6
			
	 9.
	  	Governing Law; Jurisdiction and Venue	  	6
			
	 10.
	  	Miscellaneous	  	6

  

					
	 Appendix A
	 	—	 	Definitions
	 Appendix B
	 	—	 	Antidilution Provisions
	 Appendix C
	 	—	 	Registration Rights

  

 -i- 

  
 STOCK PURCHASE WARRANT

  
 Neither this Warrant nor the Warrant Shares as defined herein have been
registered under the Securities Act of 1933, as amended, or any applicable state securities laws. Neither this Warrant nor the Warrant Shares may be sold or transferred in the absence of such registration or any exemption from such registration.

  
 Right to Purchase 1,849,000 Shares of Common Stock

  
 Dated as of August 21, 2002 
  
 VeriChip Corporation, a Delaware corporation (the
“Company”), grants IBM Credit Corporation, a Delaware corporation, (“IBM” and each of its successors and assigns, a “Holder”) a warrant (this “Warrant”) to purchase the Warrant
Shares at the Purchase Price. Capitalized terms not otherwise defined have the definitions set forth in Appendix A. 
  
 1. Exercise and Expiration of Warrant. 
  
 (a) This Warrant is immediately exercisable and will expire upon the fifth anniversary of the date of this Warrant. “Exercise Period”
shall mean the period of time between the date hereof and the expiration of this Warrant in accordance with the terms hereof. 
  
 (b) This Warrant may be exercised during the Exercise Period by the Holder, in whole or in part, by delivering this Warrant to the Company with
(i) payment of the Purchase Price in U.S. dollars, or (ii) by delivery to the Company of a written notice of an election to effect a cashless exercise for Warrant Shares pursuant to this Section 1(b) (“Cashless Exercise”).
To effect a Cashless Exercise, the Holder will surrender this Warrant for that number of shares of Common Stock determined by multiplying the number of Warrant Shares to which it would otherwise be entitled by a fraction, the numerator of which
shall be the difference between (i) the then current Market Price of a share of the Common Stock on the date of exercise and (ii) the Purchase Price, and the denominator of which shall be the then current Market Price per share of Common
Stock. In the event that this Warrant is not exercised in full immediately prior to the end of the Exercise Period and at such time the then current Market Price of a share of the Common Stock is greater than the Purchase Price, this Warrant shall
be deemed automatically exercised as to the remaining Warrant Shares at such time by Cashless Exercise without the delivery of any written notice from the Holder. 
  
 (c) Upon exercise of this Warrant, the Company will issue to the Holder (i) a certificate or certificates for the
number of full Warrant Shares to which the Holder shall be entitled upon such exercise plus the value of any fractional share to which the Holder would otherwise be entitled, and (ii) in case such exercise is in part only, a new warrant or
warrants representing the remaining Warrant Shares. 

 (d) Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of
business on the day on which this Warrant shall have been surrendered pursuant to Section l(b). 
  
 2. Representations. 
  
 (a) By the Holder. The Holder represents and warrants to the Company as follows: 
  
 (i) It is an “accredited investor” within the meaning of Rule 501 of the Securities Act. This
Warrant is acquired for the Holder’s own account for investment purposes and not with a view to any offering or distribution within the meaning of the Securities Act and any applicable state securities laws. The Holder has no present intention
of selling or otherwise disposing of the Warrant or the Warrant Shares in violation of such laws; and 
  
 (ii) The Holder has sufficient knowledge and expertise in financial and business matters so as to be capable of evaluating the merits and
risks of its investment in the Company. The Holder understands that this investment involves a high degree of risk and could result in a substantial or complete loss of its investment. The Holder is capable of bearing the economic risks of such
investment. 
  
 The Holder acknowledges that the Company has indicated that the
Warrant and the Warrant Shares have not been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration requirements thereof, and that the Warrant Shares will bear a legend stating that such
securities have not been registered under the Securities Act and may not be sold or transferred in the absence of such registration or an exemption from such registration. 
  
 (b) By the Company. The Company represents and warrants that: 
  
 (i) It (A) is a corporation duly organized, validly existing and in good standing under the laws of the
state of its organization, (B) has all requisite power and authority to conduct its business as now conducted and as presently contemplated and to consummate the transactions contemplated hereby and (C) is duly qualified to do business and
is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary. 
  
 (ii) It has outstanding as of the date hereof but before giving effect to this Warrant, 36,979,998 shares of
Common Stock, calculated on a fully diluted basis, giving effect to the conversion of all options, warrants, rights and other securities convertible into, or exchangeable for, Common Stock. 
  
 (iii) The execution, delivery and performance by the Company
of this Warrant (A) has been duly authorized by all necessary corporate action, (B) does not and will not contravene the Company’s charter or bylaws or any other organizational document and (C) does not and will not contravene
any applicable law or any contractual restriction binding on or otherwise affecting the Company or any of its properties or result in a default under any agreement or instrument to which the Company is a party or by which the Company or its
properties may be subject. 
  

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 (iv) This Warrant has been duly executed and delivered by the Company, and is a legal,
valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium and other laws affecting the rights of creditors generally and
general principles of equity. 
  
 (v) Assuming
the accuracy of the representations made by the Holder in Section 2(a) hereof, no authorization, consent, approval, license, exemption or other action by, and no registration, qualification, designation, declaration or filing with, any
governmental authority is or will be necessary in connection with the execution and delivery by the Company of this Warrant, the issuance by the Company of the Warrant Shares, the consummation of the transactions contemplated hereby, the performance
of or compliance with the terms and conditions hereof, or to ensure the legality, validity, and enforceability hereof. 
  
 (vi) The Company has reserved solely for issuance and delivery upon the exercise of this Warrant, such number of shares of Common Stock to
provide for the exercise in full of this Warrant. 
  
 (vii) Neither the Company, nor any of its Affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that
would require registration, or the filing of a prospectus qualifying the distribution, of this Warrant being issued hereby under the Securities Act or cause the issuance of this Warrant to be integrated with any prior offering of securities of the
Company for purposes of the Securities Act. 
  
 3. Certain
Agreements of the Company. The Company agrees as follows: 
  
 (a) Shares to be Fully Paid. All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued, fully paid, and nonassessable and free from all taxes, liens, claims and encumbrances. 
  
 (b) Authorization and Reservation of Shares. During the Exercise Period, the
Company shall have duly authorized a sufficient number of shares of Common Stock, free from preemptive rights and from any other restrictions imposed by the Company without the consent of the Holder, to provide for the exercise in full of this
Warrant. The Company shall at all times during the Exercise Period reserve and keep available out of such authorized but unissued shares of Common Stock such number of shares to provide for the exercise in full of this Warrant. 
  
 (c) Listing. In connection with the Holder’s exercise of Registration
Rights hereunder, the Company shall use its best efforts to promptly secure the listing of the shares of Common Stock issuable upon exercise of this Warrant upon each national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed or become listed (subject to official notice of issuance upon exercise of this Warrant) and shall maintain such listing for so long as any other shares of Common Stock shall be so listed. 
  
 (d) Certain Actions Prohibited. The Company will not, by amendment of its
charter 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 

  

 3 

 
of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may reasonably be requested by the Holder of this Warrant in order to protect the exercise privilege of the Holder of this Warrant against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. 
  
 (e) Successors and Assigns. Except as
expressly provided otherwise herein, this Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition of all or substantially all of the Company’s assets. 
  
 (f) Blue Sky Laws. The Company shall, on or before the date of issuance of
any Warrant Shares, take such actions as the Company shall reasonably determine are necessary to qualify the Warrant Shares for, or obtain exemption for the Warrant Shares for, sale to the Holder of this Warrant upon the exercise hereof under
applicable securities or “blue sky” laws of the states of the United States, and shall provide written evidence of any such action so taken to the Holder of this Warrant prior to such date; provided, however, that the Company shall not be
required to qualify as a foreign corporation or file a general consent to service of process in any such jurisdiction. 
  
 (g) Rule 144 Reports. For so long as the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall take all actions reasonably necessary to enable the Holder to sell the Registrable Securities without registration under the Securities Act within the limitations of the exemptions provided by Rule 144 under the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC, including filing on a timely basis all reports required to be filed by the Exchange Act. Upon the request of the Holder, the Company shall deliver to
the Holder a written statement as to whether it has complied with such requirements. 
  
 4. Antidilution Adjustments. The Purchase Price and the number of Warrant Shares may be adjusted from time to time as set forth in Appendix B. 
  
 5. Registration Rights. The Warrant shall have the Registration Rights
set forth in Appendix C. 
  
 6. Treatment of Warrant in
the Event of an Acquisition Transaction. If the Company undertakes an Acquisition Transaction then the Company shall give prompt notice of such transaction to the Holder and, at the Holder’s election, either (i) cause the Company
Acquiror to assume this Warrant and cause provision to be made so that the Holder shall thereafter be entitled to receive, upon exercise of this Warrant, the Warrant Shares (as such term is modified in accordance with this Section 6), whereupon
the Company shall be released from this Warrant, or (ii) cause the Company to pay the Warrant Value to the Holder upon consummation of the Acquisition Transaction. If the Company undertakes an Acquisition Transaction and does not pay the
Warrant Value to the Holder pursuant to the foregoing clause (ii), this Warrant shall remain outstanding in accordance with its terms and all references to the “Company” shall apply to the Company Acquiror and all references to the
“Warrant Shares” shall apply to the common stock of the Company Acquiror, and appropriate modifications to the other terms of this Warrant, including without limitation the amount of Warrant Shares and the Purchase Price, shall be made to
take into account the Warrant Value as of the date of the Acquisition Transaction. 
  

 4 

 7. Transfer, Exchange, Replacement, Underwriter’s Lockup. 
  
 (a) Transferability. (i) The Holder covenants not to transfer this
Warrant or the Warrant Shares except in compliance with this Section 7(a). Subject to compliance with the transfer restrictions set forth in clause (ii) of this Section 7(a), this Warrant, the Warrant Shares and the rights granted to
the Holder hereof are freely transferable, in whole or in part, upon surrender of this Warrant, together with an assignment form, at the office or agency of the Company referred to in Section 8 below. 
  
 (ii) The Holder shall not effect any transfer except
pursuant to a transaction either registered, or exempt from registration, under the Securities Act. Prior to any transfer in reliance upon an exemption from such registration other than Rule 144 of the Securities Act, the Holder shall provide to the
Company an opinion letter from counsel to the Holder (which counsel may include in-house counsel), reasonably satisfactory to the Company, opining that such transfer does not require registration under the Securities Act. The transferee, by
acceptance of this Warrant, acknowledges that it takes such warrant subject to the terms and conditions hereof. Until due presentment for registration of transfer on the books of the Company, the Company may treat the registered Holder hereof as the
owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary. 
  
 (b) Warrant Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Holder hereof at the office or agency
of the Company referred to in Section 8 below, for new warrants of like tenor of different denominations representing in the aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new
warrants to represent the right to purchase such number of shares as shall be designated by the Holder hereof at the time of such surrender. 
  
 (c) Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant
and, in the case of any such logs, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor. 
  
 (d) Cancellation; Payment of Expenses. Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement as provided in this
Section 7, this Warrant shall be promptly canceled by the Company. The Company shall pay all taxes (other than securities transfer taxes) and all other expenses (other than legal expenses, if any, incurred by the Holder or transferees) and
charges payable in connection with the preparation, execution, and delivery of warrants pursuant to this Section 8. The Company shall indemnify and reimburse the Holder of this Warrant for all costs and expenses (including legal fees) incurred
by such Holder in connection with the enforcement of its rights hereunder. 
  

 5 

 (e) Warrant Register. The Company shall maintain, at its principal executive offices (or such other
office or agency of the Company as it may designate by notice to the Holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name
and address of each transferee and each prior owner of this Warrant. 
  
 8. Notices. Any notices required or permitted to be given under the terms of this Warrant shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier, or by confirmed telecopy, in each case addressed to a party. The addresses for such communications
shall be: 
  

			
	 If to the Company:
	  	If to IBM:
		
	 VERICHIP CORPORATION
	  	IBM Credit Corporation
	 400 Royal Palm Way, Suite 410
	  	North Castle Drive
	 Palm Beach, FL 33480
	  	Armonk, New York 10504
	 Attention: Jerome C. Artigliere, VP,
	  	Attention: Bill Doscas, VP, Finance &
	 Secretary and Treasurer
	  	Planning

  
 If to any other Holder, at such
address as such Holder shall have provided in writing to the Company, or at such other address as any Holder furnishes by notice given in accordance with this Section 8. 
  
 9. Governing Law; Jurisdiction and Venue. This Warrant shall be governed by the laws of the State of New York,
without regard to conflicts or choice of law roles or principles. Each of the Company and the Holder submits to the exclusive jurisdiction and venue of the federal and state courts of New York, County of Westchester, to resolve all issues that may
arise out of or relate to this Warrant. The parties waive any right to a jury trial. 
  
 10. Miscellaneous. 
  
 (a)
Amendments. This Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and all Holders hereof. 
  
 (b) U.S. Dollars. All references in this Warrant to “dollars” or “$” shall mean the U.S. dollar. 
  
 (c) Fractional Shares. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the fair market value per share of Common Stock, as determined in good faith by the Board. 
  
 (d) Descriptive Headings. The descriptive headings of the several sections of
this Warrant are inserted for purposes of reference only, and shall not affect the meaning or construction of any of the provisions hereof. 
  

 6 

 (e) Business Day. For purposes of this Warrant, the term “business day” means any day,
other than a Saturday or Sunday or a day on which banking institutions in New York, New York or the city and state provided in Section 8 hereof for notices to the Company, are authorized or obligated by law, regulation or executive order to
close. 
  
 (f) Counterparts. This agreement may be executed in
counterparts, and any such executed counterpart shall be, and shall be deemed to be, an original instrument. 
  
 (g) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 
  
 (h) Successors and Assigns. This Agreement shall be binding on, and shall
inure to the benefit of, the parties hereto and their respective successors and assigns, including all Holders. 
  
 (i) Survival. The representations, warranties and covenants made by the parties hereto shall survive the execution and delivery of this Agreement until
(A) in the case of representations and warranties, three (3) years after the date hereof and (B) in the case of covenants, until such time as the Holder no longer holds either of the Warrant or any Warrant Shares. 
  

 7 

 IN WITNESS WHEREOF, the undersigned have executed this Warrant as of the date first written above.

  

					
	 VERICHIP CORPORATION

			
	By:	 	 	 	/s/    JEROME C.
ARTIGLIERE        
	 	 	 Name:
	 	Jerome C. Artigliere
	 	 	 Title:
	 	Vice President, Secretary and Treasurer
	
	 IBM CREDIT CORPORATION

			
	By:	 	 	 	/S/    STEVEN A.
FLANAGAN        
	 For
	 	 Name:
	 	Steven A. Flanagan
	 	 	 Title:
	 	Manager, Special Handling

  

 8 

 APPENDIX A – DEFINITIONS 
  
 “Acquisition Transaction” shall mean (i) the sale,
lease or other transfer, in one or a series of transactions, of all or substantially all of the Company’s assets to any person or Group, or (ii) the consummation of any transaction or series of transactions the result of which is that any
person or Group beneficially owns, directly or indirectly, 50% or more of the voting power or the voting stock of the Company. 
  
 “Affiliate” shall mean any entity directly or indirectly controlled by, controlling or under common control with another entity.

  
 “Board” shall mean the Board of Directors of
the Company. 
  
 “Cashless Exercise” shall have
the meaning specified in Section 1(b) of the Warrant. 
  
 “Company” shall have the meaning specified in the initial paragraph of the Warrant. 
  
 “Company Acquirer” means the person or Group (i) to whom the Company’s assets are transferred as described in clause
(i) of the definition of Acquisition Transaction or (ii) that would beneficially own 50% or more of the voting power or voting stock of the Company as described in clause (ii) of such definition. 
  
 “Common Stock” shall mean the common shares of the Company.

  
 “Demand Registration Rights” shall mean a
right of the Holder under Appendix C(b). 
  
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 “Exercise Period” shall have the meaning specified in Section 1(a) of the Warrant. 
  
 “Group” shall have the meaning specified in
Section 13(d)(3) of the Exchange Act. 
  
 “IBM” shall have the meaning specified in the initial paragraph of the Warrant. 
  
 “Holder” shall have the meaning specified in the initial paragraph of the Warrant. 
  
 “Market Price” shall mean the following: (i) the
average of the closing sale prices for the shares of Common Stock as reported on the principal trading market for the Common Stock for the five (5) consecutive trading days immediately preceding such date, or if no sale price is so reported for
such period, the last bid price for such period, or (ii) if the foregoing does not apply, the last sale price of such security in the over-the-counter market on the pink sheets or bulletin board for such security on the last trading day
immediately preceding such date, or if no sale price is so reported for such security, the average of the last bid and ask price for such security on the last trading day immediately preceding such date, or (iii) if market value cannot be
calculated as of such date on any of the foregoing bases, the Market Price shall be the fair market value as reasonably determined by an investment banking firm selected by the Company and reasonably acceptable to the Holder, with the costs of the
appraisal to be borne by the Company, 

  

 1 

 
provided, however, that for purposes of determining Warrant Value in accordance with Section 6 in the event of a Stock Acquisition, Market
Price shall have the meaning as set forth in the definition of “Warrant Value”. 
  
 “Person” or “person” shall mean all natural persons, corporations, business trusts, associations, companies, partnerships, joint ventures, governments, agencies, political
subdivisions and other entities. 
  
 “Piggyback
Registration Right” shall mean a right of the Holder under Appendix C(a). 
  
 “Purchase Price” shall mean $0.05 (five cents) per share of Common Stock, as may be adjusted from time to time pursuant to Appendix B. 
  
 “Registrable Securities” shall mean the Warrant Shares
issued or issuable with respect to the Warrant. 
  
 “Registration Expenses” shall mean all expenses incident to the Company’s performance of or compliance with the registration provisions of Appendix C herein, including without limitation (i) all fees and
expenses of compliance with federal securities and state securities laws; (ii) all U.S. Securities and Exchange Commission and state securities laws filing fees; (iii) all printing expenses; (iv) all fees and disbursements of counsel
for the Company; and (v) all fees and disbursements of accountants of the Company, but excluding (i) underwriter’s discounts relating to securities sold by the Selling Holder; (ii) filings made with the NASD and counsel fees in
connection therewith; and (iii) fees and disbursements of counsel for the Selling Holder. 
  
 “Registration Rights” shall mean the Piggyback Registration Right, the Demand Registration Rights and the S-3 Registration Rights set forth in Appendix C. 
  
 “S-3 Registration Rights” shall mean a right of the Holder
under Appendix C(c). 
  
 “Securities Act”
shall mean the Securities Act of 1933, as amended. 
  
 “Selling Holder” shall have the meaning specified in Appendix C(d)(ii) of the Warrant. 
  
 “Stock Acquisition” shall mean an Acquisition Transaction described in clause (ii) of the definition of Acquisition Transaction.

  
 “Warrant” shall have the meaning specified in
the initial paragraph of the Warrant. 
  
 “Warrant
Shares” shall mean 1,849,000 shares of Common Stock, as may be adjusted from time to time pursuant to Appendix B. 
  
 “Warrant Value” shall mean the value of this Warrant calculated as if the Holder had exercised this Warrant in full at such time by
Cashless Exercise pursuant to Section 1(b) hereof, except that Market Price for purposes of determining Warrant Value in the event of a Stock Acquisition shall be equal to the per share consideration paid in the Stock Acquisition. 
  

 2 

 APPENDIX B – ANTIDILUTION PROVISIONS

  
 (a) Diluting Issuances. 
  
 (i) Special Definitions. For purposes of this Appendix
B, the following definitions shall apply: (A) “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities; (B) “Conversion
Date” shall mean the first day of the Exercise Period; (C) “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for
Common Stock; (D) “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or, pursuant to (a)(iii) below, deemed to be issued) by the Company after the Conversion Date other than shares of Common Stock
issued upon exercise of this Warrant. 
  
 (ii) No
Adjustment of Purchase Price. No adjustments to the Purchase Price under this Appendix B shall be made unless the consideration per share (determined pursuant to (a)(v) below) for an Additional Share of Common Stock issued or deemed to be
issued by the Company is less than the Purchase Price in effect on the date of, and immediately prior to, the issue of such Additional Shares of Common Stock. Notwithstanding anything to the contrary contained herein, no adjustments to the Purchase
Price under this Appendix B shall be made for Common Stock issued or deemed to be issued upon the conversion of convertible preferred stock of the Company issued and outstanding as of the date hereof. 
  
 (iii) Issue of Securities Deemed Issue of Additional Shares
of Common Stock. If the Company at any time or from time to time after the Conversion Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive
any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto without regard to any provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue
or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to
(a)(v) below) of such Additional Shares of Common Stock would be less than the Purchase Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any such case in which
Additional Shares of Common Stock are deemed to be issued: 
  
 (A) No further adjustment in the Purchase Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities; 
  
 (B) If such Options
or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Company, upon the exercise, conversion or exchange thereof, the Purchase Price computed upon 

  

 1 

 
the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such
increase becoming effective, be recomputed to reflect such increase insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; 
  
 (C) Upon the expiration or termination of any unexercised Option, the Purchase Price shall be readjusted,
and the Additional Shares of Common Stock deemed issued as the result of the original issue of such Option shall not be deemed issued for the purposes of any subsequent adjustment of the Purchase Price; 
  
 (D) In the event of any change in the number of shares of
Common Stock issuable upon the exercise, conversion or exchange of any Option or Convertible Security, including, but not limited to, a change resulting from the anti-dilution provisions thereof, the Purchase Price then in effect shall forthwith be
readjusted to such Purchase Price as would have been obtained had the adjustment which was made upon the issuance of such Option or Convertible Security not exercised or converted prior to such change been made upon the basis of such change; and

  
 (E) No readjustment pursuant to Clause
(B) or (D) above shall have the effect of increasing the Purchase Price to an amount which exceeds the lower of (i) the Purchase Price on the original adjustment date, or (ii) the Purchase Price that would have resulted from any
issuances of Additional Shares of Common Stock between the original adjustment date and such readjustment date. 
  
 (iv) Adjustment of Purchase Price Upon Issuance of Additional Shares of Common Stock. In the event the Company shall at any time after the
Conversion Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to (a)(iii) above, but excluding shares issued as a dividend or distribution or upon a stock split or combination as
provided in (b) below), without consideration or for a consideration per share less than the Purchase Price in effect on the date of and immediately prior to such issue, then and in such event, such Purchase Price shall be reduced, concurrently
with such issue, to a price (calculated to the nearest cent) determined by multiplying such Purchase Price by a fraction, (A) the numerator of which shall be (1) the number of shares of Common Stock outstanding immediately prior to such
issue plus (2) the number of shares of Common Stock which the aggregate consideration received or to be received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such Purchase Price; and
(B) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common Stock so issued; provided that, (i) for the purpose of this (a)(iv),
all shares of Common Stock issuable upon exercise or conversion of Options or Convertible Securities outstanding immediately prior to such issue shall be deemed to be outstanding (other than shares excluded from the definition of “Additional
Shares of Common Stock” by virtue of (a)(i)(D) above), and (ii) the number of shares of Common Stock deemed issuable upon conversion of such outstanding Options and Convertible Securities shall not give effect to any adjustments to the
conversion price or conversion rate of such Options or Convertible Securities resulting from the issuance of Additional Shares of Common Stock that is the subject of this calculation. 
  

 2 

 (v) Determination of Consideration. For purposes of section (a), the consideration
received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows: 
  
 (A) Cash and Property: Such consideration shall (I) insofar as it consists of cash, be computed at the aggregate of cash received by
the Company, excluding amounts paid or payable for accrued interest or accrued dividends; (II) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by
the Board; and (III) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed
as provided in clauses (I) and (II) above, as determined in good faith by the Board. 
  
 (B) Options and Convertible Securities. The consideration per share received by the Company for Additional Shares of Common Stock deemed
to have been issued pursuant to (a)(iii) above, relating to Options and Convertible Securities, shall be determined by dividing (x) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options
or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable
to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, by (y) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities. 
  
 (vi) Multiple Closing Dates. In the event the Company shall issue on more than one date Additional Shares of Common Stock which are
comprised of shares of the same series or class of capital stock, and such issuance dates occur within a period of no more than 60 days, then the Purchase Price shall be adjusted only once on account of such issuances, with such adjustment to occur
upon the final such issuance (but not later than ten days prior to the end of the Exercise Period) and to give effect to all such issuances as if they occurred on the date of the final such issuance. 
  
 (b) Recapitalizations. If outstanding shares of the Company’s Common
Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price
in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. 
  
 (c) Mergers; Transfer of Assets. Subject to Section 6 of the Warrant, if there shall occur any capital reorganization or reclassification of the
Company’s Common Stock (other than 

  

 3 

 
a subdivision or combination as provided for in (b) above), or any consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, then, as part of any such reorganization, reclassification, consolidation, merger or sale, as the case may be, lawful provision shall be made so that the Holder of this Warrant shall
have the right thereafter to receive upon the exercise hereof the kind and amount of shares of stock or other securities or property which such Holder would have been entitled to receive if, immediately prior to any such reorganization,
reclassification, consolidation, merger or sale, as the case may be, such Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of this Warrant. In any such case, appropriate adjustment (as reasonably
determined in good faith by the Board) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Holder of this Warrant, such that the provisions set forth in this Appendix
B (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the
exercise of this Warrant. 
  
 (d) Adjustment in Number of Warrant
Shares. When any adjustment is required to be made in the Purchase Price, the number of Warrant Shares purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of
shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment.

  
 (e) Certificate of Adjustment. When any adjustment is required
to be made pursuant to this Appendix B, the Company shall promptly mail to the Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such
certificate shall also set forth the kind and amount of stock or other securities or property into which this Warrant shall be exercisable following such adjustment. 
  
 (f) Adjustments for Non-Stock Dividends and Distributions. In the event that the Company shall issue or pay to holders of
Common Stock a dividend or other distribution payable other than in securities of the Company, then and in each such event provision shall be made so that Holder shall receive upon exercise of this Warrant, in addition to the Warrant Shares issued
upon exercise, the dividend or other distribution which Holder would have received if it had been the holder of such Warrant Shares at the time of such dividend or other distribution. 
  
 (g) Other Notices. In case at any time: 
  
 (i) the Company shall declare any dividend upon the Common Stock payable in shares of stock of any class or
make any other distribution (other than dividends or distributions payable in cash out of retained earnings consistent with the Company’s past practices with respect to declaring dividends and making distributions) to the holders of the Common
Stock; 
  
 (ii) the Company shall offer for
subscription pro rata to the holders of the Common Stock any additional shares of stock of any class or other rights; 
  

 4 

 (iii) there shall be any capital reorganization of the Company, or reclassification of
the Common Stock, or consolidation or merger of the Company with or into, or sale of all or substantially all of its assets to, another corporation or entity; or 
  
 (iv) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company, then,
in each such case, the Company shall give to the Holder (a) notice of the date on which the books of the Company shall close or a record shall be taken for determining the holders of Common Stock entitled to receive any such dividend,
distribution, or subscription rights or for determining the holders of Common Stock entitled to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up and (b) in the
case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, notice of the date (or, if not then known, a reasonable estimate thereof by the Company) when the same shall take place. Such
notice shall also specify the date on which the holders of Common Stock shall be entitled to receive such dividend, distribution, or subscription rights or to exchange their Common Stock for stock or other securities or property deliverable upon
such reorganization, reclassification, consolidation, meager, sale, dissolution, liquidation, or winding-up, as the case may be. Such notice shall be given at least thirty (30) days prior to the record date or the date on which the
Company’s books are closed in respect thereto. Failure to give any such notice or any defect therein shall not affect the validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above. 
  
 (h) Certain Events. If, at any time during the Exercise Period, any event
occurs of the type contemplated by the adjustment provisions of this Appendix B but not expressly provided for by such provisions, the Company will give notice of such event, and the Board will make an appropriate adjustment in the Purchase
Price and the number of shares of Common Stock acquirable upon exercise of this Warrant so that the rights of the Holder shall be neither enhanced nor diminished by such event. The Company agrees that any Options or Convertible Securities issued
during the Exercise Period shall be fixed at a sum certain. 
  

 5 

 Appendix C – REGISTRATION RIGHTS

  
 (a) Piggyback Registration. 
  
 (i) Participation. If the Company elects to file a
registration statement under the Securities Act coveting the offer and sale of any Common Stock (or equity securities converted into Common Stock) in connection with any public offering, (other than a registration statement on Form S-8 or Form S-4,
or their successors, or any other form for a similar limited purpose, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another corporation), the Company shall give reasonable
written notice thereof to the Holder before filing and in any event as soon as practicable and in reasonable time to allow Holder to provide any notice required to fermented in this Appendix C. Subject to paragraph (h) of this
Appendix C, the Holder shall have a Piggyback Registration Right to participate in such offering on a pro rata basis with the Company and any other Holders upon the giving of notice to the Company. If the Holder notifies the Company of its
intent to exercise such Piggyback Registration Right, subject to (a)(ii) below, the Company shall include in such registration statement such number of shares of Registrable Securities as requested by the Holder. Such Registrable Securities shall be
included in the underwriting for the public offering on the same terms and conditions as the securities otherwise being sold in such offering. 
  
 (ii) Underwriters’ Cutback. If, in the opinion of the managing underwriter of such offering the inclusion of all of the shares of
Registrable Securities and other Common Stock requested to be registered would be inappropriate, then the number of shares of Registrable Securities and other Common Stock to be included in the offering shall be reduced, with the participation in
such offering to be in the following order of priority: (1) first, securities to be issued by the Company shall be included, and (2) second, any other Common Stock required to be included pursuant to any demand registration right granted
to such other holder of Common Stock shall be included, and (3) third Registrable Securities and any other Common Stock requested to be included, on a pro rata basis (based upon the number of registrable securities owned by the Holder and the
holders of Common Stock requesting participation in the offering), shall be included. 
  
 (iii) Registrant Controls. The Company may decline to file a Registration Statement after giving notice to any Holder, or withdraw a
Registration Statement after filing and after such notice, but prior to the effectiveness thereof, provided that such registrant shall promptly notify each Holder of Registrable Securities in writing of any such action and provided further that such
registrant shall bear all reasonable expenses incurred by such Holder of Registrable Securities or otherwise in connection with such withdrawn Registration Statement. 
  
 (iv) Underwriting Agreement. In connection with any registration under this Section (a) involving an
underwriting the Company shall not be required to include any Registrable Shares in such registration unless the Holder accepts the terms of the underwriting as determined by the underwriters selected by the Company (provided that such terms must be
consistent with this Agreement and provided, further, that any inability of the Holder to agree with the underwriters shall not restrict the ability of the Company to proceed with the registration). 
  

 1 

 (b) Demand Registration Rights. 
  
 (i) In General. Subject to paragraph (h) of this Appendix C and clause (ii) of this Section
(b), the Holder may request on one occasion by written notice to the Company that the Company file a Registration Statement under the Securities Act covering the Registrable Securities at any time, provided, however, that the Holder shall not
exercise such Demand Registration Right unless the reasonably anticipated aggregate price to the public, net of underwriting discounts and commissions, is in excess of $500,000. 
  
 (ii) Effectiveness. Subject to the following sentences, the Company shall be obligated to prepare, file and
use its best efforts to cause a Registration Statement to become effective in connection with each Demand Registration requested pursuant to (b), and to remain effective for a period of ninety days or until the sale of all securities registered
thereunder. If (A) the Company withdraws a Registration Statement filed pursuant to a Demand Registration prior to the effectiveness thereof, or (B) the sale of securities to which a Registration Statement filed pursuant to a Demand
Registration applies is not consummated other than by action of the Selling Holder, such Registration Statement shall not be counted in determining the number of registrations in which Holders securities have been included or otherwise adversely
affect Holder’s rights hereunder. 
  
 (iii)
Piggyback Registrations on Demand Registration Rights. The Company and other holders of Common Stock of the Company may include such securities in registrations made pursuant to (b) only if the managing underwriter concludes that such inclusion
will not in interfere with the successful marketing of all the Registrable Securities requested to be included in such registration. 
  
 (iv) Managing Underwriter. The managing underwriter or underwriters of any underwritten public offering covered by a Demand Registration
shall be selected by the Holders of a majority of the shares of Registrable Securities that participate in such registration, subject to the approval of the Board, which approval shall not be unreasonably withheld. 
  
 (v) Company’s Right to Defer. If the Company is
requested to effect a Demand Registration and the Company furnishes to the Holders of Registrable Securities requesting such registration a copy of a resolution of the Board certified by the Secretary of the Company stating that in the good faith
judgment of the Board it would be seriously detrimental to the Company and its stockholders for such registration statement to be filed on or before the date such filing would otherwise be required hereunder and stating the basis of such good faith
judgment, the Company shall have the right to defer such filing for a period of not more than 90 days after receipt of the request for such registration from the Holder or Holders of Registrable Securities requesting such registration; provided that
during such time the company may not file a registration statement (other than a registration statement on Form S-4 or Form S-8 or a registration statement already approved by the Board) for securities to be issued and sold for its own account or
that of anyone than the Holder or Holders of Restricted Stock requesting such registration. 
  

 2 

 (c) Registration on Form S-3. 
  
 (i) The Company will use its best efforts to qualify for the registration of its securities on Form S-3 (or
any successor form). Subject to paragraph (h) of this Appendix C if the Holder requests that the Company file a Registration Statement on Form S-3 (or any successor form) for a public offering of Registrable Securities the reasonably
anticipated aggregate price to the public of which, net of underwriting discounts and commissions, would exceed $500,000, and the Company is a registrant entitled to use Form S-3 to register the Registrable Securities for such an offering, the
Company shall use its best efforts to cause such Registrable Shares to be registered for the offering on such form and to cause such Registrable Securities to be qualified in such jurisdictions as the Holder may reasonably request; provided,
however, that the Company shall not be required to effect more than two (2) such registrations at the request of the Holder. The Company shall prepare and file any amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all the Registrable Securities. 
  
 (ii) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this section (c): (A) if the Company, within ten days of the receipt of the request of the Holder pursuant to (c)(i) above, gives notice of its bona fide intention to effect the filing of a Registration
Statement with the U.S. Securities and Exchange Commission within ninety days of receipt of such request (other than with respect to a registration statement relating to a Rule 145 transaction, an offering solely to employees or any other
registration which is not appropriate for the registration of Registrable Securities); or (B) during the period starting with the date sixty days prior to the Company’s estimated date of filing of, and effective date of any Registration
Statement pertaining to securities of the Company (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that the Company is actively employing in good faith all reasonable
effort to cause such Registration Statement to become effective. 
  
 (d) Indemnification. 
  
 (i)
Indemnification by the Company. The Company agrees to indemnify and hold harmless any Holder of Registrable Securities which has included Registrable Securities in a registration statement, its officers, directors and agents and each Person, if any,
who controls such Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable attorneys fees and costs
of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement or final prospectus relating to the Registrable Securities or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of, or are based upon, any such untrue statement or omission based upon information furnished in writing to Company by the Holder of the Registrable Securities or on such Holder’s
behalf expressly for use therein; provided, that with respect to any untrue statement or omission made in any preliminary prospectus, the indemnity 

  

 3 

 
agreement contained in this paragraph shall not apply to the extent that any such loss, claim, damage, liability or expense results from the fact that a
current copy of the prospectus was not sent or given to the person asserting any such loss, claim, damage, liability or expense at or prior to the written confirmation of the sale of the Registrable Securities concerned if it is determined that it
was the responsibility of the Holder of such Registrable Securities to provide such person with a current copy of the prospectus and such current copy of the prospectus would have cured the defect giving rise to such loss, claim, damage, liability
or expense. The Company also agrees to indemnify any underwriters of the Registrable Securities, their officers and directors and each person who controls such underwriters on substantially the same basis as that of the indemnification of the Holder
of such Registrable Securities provided in this section (d). 
  
 (ii) Indemnification by the Holder of Registrable Securities. The Holder of Registrable Securities, to the extent it is selling Registrable Securities (“Selling Holder”), agrees to indemnify and hold
harmless the Company, its directors and officers and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to the Selling Holder, but only with respect to, and to the extent that, information furnished in writing by the Selling Holder or on the Selling Holder’s behalf expressly for use in any registration statement or
final prospectus relating to the Registrable Securities (or any amendment or supplement thereto, or any preliminary prospectus) which contained an untrue statement or alleged untrue statement of a material fact or omitted or allegedly omitted to
state therein a material fact required to be stated therein or necessary to make the statements therein not misleading. Notwithstanding anything to the contrary contained herein, the liability of the Holder hereunder shall be limited to the
proportion of any such loss, claim, damage, liability or expense that is equal to the proportion that the public offering price of the shares of Registrable Securities sold by the Holder bears to the total public offering price of all securities
sold in such offering. In case any action or proceeding shall be brought against the Company or its directors or officers, or any such controlling Person, in respect of which indemnity may be sought against such Selling Holder, such Selling Holder
shall have the rights and duties given to the Company, and the Company or its directors or officers or such controlling Person shall have the rights and duties given to such Selling Holder, by the preceding subsection. The Selling Holder also agrees
to indemnify and hold harmless the underwriters on substantially the same basis of that of the indemnification of the Company provided in the preceding subsection. 
  
 (e) Contribution. If the indemnification provided for in this Appendix C is unavailable to the Company, the Selling
Holder or the underwriters in respect of any losses, claims, damages, liabilities, expenses or judgments referred to herein, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages, liabilities, expenses and judgments (i) as between the Company and the Selling Holder on the one hand and the underwriters on the other, in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Selling Holder on the one hand and the underwriters on the other from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law,
in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Selling Holder on the one hand and of the underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities, expenses or judgments, as well as any other 

  

 4 

 
relevant equitable considerations and (ii) as between the Company on the one hand and each Selling Holder on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of such Selling Holder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Company and the
Selling Holder on the one hand and the underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the
Company and the Selling Holder bear to the total underwriting discounts and commissions received by the underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of the Company on the one hand and
of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
supplied by such party, and the party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 
  

The Company and the Holder agree that it would not be just and equitable if contribution pursuant to this section were determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities, expenses or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the provisions of this section, no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission, and no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Selling Holder were offered to the public exceeds the amount of any
damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 
  
 (f) Registration Expenses and Enforcement. 
  
 (i) Registration Rights. The Company shall bear all Registration Expenses incurred in connection with Piggyback Registration Rights,
Demand Registration Rights and S-3 Registration Rights. 
  
 (ii) Expenses of Registrant. The Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection with any listing of the securities to be registered on a securities exchange, and the fees and expenses of any person, including special experts, retained by the Company. 
  

 5 

 (iii) Enforcement of Registration Rights. Notwithstanding anything to the contrary
contained herein, the Company hereby agrees that each Holder of Registrable Securities shall be entitled to specific performance of the registration rights hereunder, and that the Company shall pay any expenses, including without limitation
attorneys’ fees, in connection with the enforcement by any Holder of such specific performance. 
  
 (g) Assignment of Registration Rights. Any of the rights of the Holders hereunder, including the right to have the Company register Registrable Securities
pursuant to this Agreement, may be assigned by each Holder to any transferee of all or any portion of the Warrant or the Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company after such assignment, (ii) the Company is furnished with written notice of (A) the name and address of such transferee or assignee, and (B) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such transfer or assignment, the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities
laws, and (iv) such transfer shall have been made in accordance with the applicable requirements of the Warrant. The transferee, by acceptance of the transfer of any registration rights hereunder, acknowledges that it takes such rights subject
to the terms and conditions hereof. Upon any transfer of less than all of its Registrable Securities, the Holder retains registration rights with respect to Registrable Securities held by it. 
  
 (h) Exercise of Registration Rights. Notwithstanding anything to the contrary
contained herein, the Holder agrees not to exercise any of its registration rights set forth in this Appendix C at any time that it is able to sell all of its Registrable Securities under Rule 144 of the Securities Act in a single transaction
without exceeding the volume limitations thereunder. 
  

 6Form of Warrant to Purchase Common Stock of the Registrant

 Exhibit 4.2 
  
 Exhibit E to the 
 Securities Purchase Agreement 
  
 THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED UNLESS A
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH
OFFER, SALE OR TRANSFER. SUBJECT TO COMPLIANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE PLEDGED OR HYPOTHECATED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THIS WARRANT OR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT. 
  
 FORM OF WARRANT 
  
 TO PURCHASE COMMON STOCK 
  
 OF 
  
 VERICHIP
CORPORATION 
  
 Issue Date: 
 Warrant No.
  
 THIS CERTIFIES that
                             or any subsequent holder hereof (the
“Holder”), has the right to purchase from VERICHIP CORPORATION, a Delaware corporation (the “Company”), up to
                     fully paid and nonassessable shares of the Company’s common stock, par value $0.001 per share (the
“Common Stock”), subject to adjustment as provided herein, at a price per share equal to the Exercise Price (as defined below), at any time and from time to time beginning on the date on which this Warrant is
issued (the “Issue Date”) and ending at 5:00 p.m., eastern time, (i) on the one (1) year anniversary of the date on which the Company completes an initial public offering of its common stock (the
“IPO”) or (ii) if the Company does not commence the IPO on or before the two (2) year anniversary of the Closing Date, on such two year anniversary (the “Expiration
Date”). This Warrant is issued pursuant to a Securities Purchase Agreement, dated as of June 9, 2005 (the “Securities Purchase Agreement”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Securities Purchase Agreement. 

 1. Exercise. 
  
 (a) Right to Exercise; Exercise Price. The Holder shall have the right to exercise this Warrant at any time and from
time to time during the period beginning on the Issue Date and ending on the Expiration Date as to all or any part of the shares of Common Stock covered hereby (the “Warrant Shares”). The
“Exercise Price” for each Warrant Share purchased by the Holder upon the exercise of this Warrant shall be equal to eight dollars ($8.00), subject to adjustment for the events specified in Section 6 below.

  
 (b) Exercise Notice. In order to exercise this Warrant,
the Holder shall (i) send by facsimile transmission, at any time prior to 5:00 p.m., eastern time, on the Business Day on which the Holder wishes to effect such exercise (the “Exercise Date”), to the
Company an executed copy of the notice of exercise in the form attached hereto as Exhibit A (the “Exercise Notice”), (ii) deliver the original Warrant and, in the case of a Cash Exercise (as defined
below), the Exercise Price to the Company. The Exercise Notice shall also state the name or names (with address) in which the shares of Common Stock that are issuable on such exercise shall be issued. If shares are to be issued in the name of a
person other than the Holder, the Holder will pay all transfer taxes payable with respect thereto. In the case of a dispute as to the calculation of the Exercise Price or the number of Warrant Shares issuable hereunder (including, without
limitation, the calculation of any adjustment pursuant to Section 6 below), the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and shall submit the disputed calculations to a certified public
accounting firm of national recognition (other than the Company’s independent accountants) within two (2) Business Days following the date on which the Exercise Notice is delivered to the Company. The Company shall cause such accountant to
calculate the Exercise Price and/or the number of Warrant Shares issuable hereunder and to notify the Company and the Holder of the results in writing no later than three (3) Business Days following the day on which such accountant received the
disputed calculations (the “Dispute Procedure”). Such accountant’s calculation shall be deemed conclusive absent manifest error. The fees of any such accountant shall be borne by the party whose
calculations were most at variance with those of such accountant. 
  
 (c) Holder of Record. The Holder shall, for all purposes, be deemed to have become the holder of record of the Warrant Shares specified in an Exercise Notice on the Exercise Date specified therein, irrespective of the date of
delivery of such Warrant Shares, subject to, in the case of a Cash Exercise (as defined below), payment of the Exercise Price. Except as specifically provided herein, nothing in this Warrant shall be construed as conferring upon the Holder hereof
any rights as a shareholder of the Company, including, without limitation, the right to vote, the right to receive dividends or other distributions made to shareholders of the Company, and the right to exercise preemptive rights, prior to the
Exercise Date. 
  
 (d) Cancellation of Warrant. This
Warrant shall be canceled upon its exercise and, if this Warrant is exercised in part, the Company shall, at the time that it delivers Warrant Shares to the Holder pursuant to such exercise as provided herein, issue a new warrant, and deliver to the
Holder a certificate representing such new warrant, with terms identical in all respects to this Warrant (except that such new warrant shall be exercisable into the number of shares of 

  

 2 

 
Common Stock with respect to which this Warrant shall remain unexercised); provided, however, that the Holder shall be entitled to exercise all
or any portion of such new warrant at any time following the time at which this Warrant is exercised, regardless of whether the Company has actually issued such new warrant or delivered to the Holder a certificate therefor. 
  
 2. Delivery of Warrant Shares Upon Exercise. Upon receipt of an
Exercise Notice pursuant to paragraph 1 above, the Company shall, (A) in the case of a Cash Exercise (as defined below) no later than the close of business on the later to occur of (i) the third (3rd) Business Day following the
Exercise Date set forth in such Exercise Notice and (ii) the date on which the Company has received payment of the Exercise Price and the taxes specified in paragraph 1(b) above, if any, are paid in full, (B) in the case of a Cashless
Exercise (as defined below), no later than the close of business on the third (3rd) Business Day following the Exercise Date set forth in such Exercise Notice, and (C) with respect to Warrant Shares that are the subject of a Dispute
Procedure, the close of business on the third (3rd) Business Day following the determination made pursuant to
paragraph 1(b) (each of the dates specified in (A), (B) or (C) being referred to as a “Delivery Date”), issue and deliver or cause to be delivered to the Holder the number of Warrant Shares as shall be
determined as provided herein. The Company shall effect delivery of Warrant Shares to the Holder by, as long as the Transfer Agent participates in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer program (“FAST”) and the Warrant Shares are eligible for delivery through FAST, crediting the account of the Holder or its nominee at DTC (as specified in the applicable Exercise Notice) with the number
of Warrant Shares required to be delivered, no later than the close of business on such Delivery Date. In the event that the Transfer Agent is not a participant in FAST, or if the Warrant Shares are not otherwise eligible for delivery through FAST,
or if the Holder so specifies in an Exercise Notice or otherwise in writing on or before the Exercise Date, the Company shall effect delivery of Warrant Shares by delivering to the Holder or its nominee physical certificates representing such
Warrant Shares, no later than the close of business on such Delivery Date. 
  
 3. Failure to Deliver Warrant Shares. 
  
 (a) In the event that the Company fails for any reason (other than as a result of the Holder’s failure to deliver the original Warrant to the Company or, in the case of a Cash Exercise (as defined below), to
pay the aggregate Exercise Price for the Warrant Shares being purchased) to deliver to the Holder the number of Warrant Shares specified in the applicable Exercise Notice on or before the Delivery Date therefor (an “Exercise
Default”), and such default continues for five (5) Business Days following delivery of a written notice of such default by the Holder to the Company, the Company shall pay to the Holder payments (“Exercise
Default Payments”) in the amount of (i) (N/365) multiplied by (ii) the aggregate Exercise Price of the Warrant Shares which are the subject of such Exercise Default multiplied by (iii) the lower of
fifteen percent (15%) and the maximum rate permitted by applicable law (the “Default Interest Rate”), where “N” equals the number of days elapsed between the original Delivery Date of such Warrant
Shares and the date on which all of such Warrant Shares are issued and delivered to the Holder. Cash amounts payable hereunder shall be paid on or before the fifth (5th) Business Day of each calendar month following the calendar month in which
such amount has accrued. 
  

 3 

 (b) The Holder’s rights and remedies hereunder are cumulative, and no right or remedy is exclusive
of any other. In addition to the amounts specified herein, the Holder shall have the right to pursue all other remedies available to it at law or in equity (including, without limitation, a decree of specific performance and/or injunctive relief).
Nothing herein shall limit the Holder’s right to pursue actual damages for the Company’s failure to issue and deliver Warrant Shares on the applicable Delivery Date (including, without limitation, damages relating to any purchase of Common
Stock by the Holder to make delivery on a sale effected in anticipation of receiving Warrant Shares upon exercise, such damages to be in an amount equal to (A) the aggregate amount paid by the Holder for the Common Stock so purchased
minus (B) the aggregate amount of net proceeds, if any, received by the Holder from the sale of the Warrant Shares issued by the Company pursuant to such exercise).
  
 4. Exercise Limitations. In no event shall the Holder be permitted to exercise this Warrant, or part thereof,
if, at any time following the completion of the IPO, upon such exercise the number of shares of Common Stock beneficially owned by the Holder (other than shares which would otherwise be deemed beneficially owned except for being subject to a
limitation on conversion or exercise analogous to the limitation contained in this paragraph 4), would exceed 4.99% of the number of shares of Common Stock then issued and outstanding. As used herein, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder. To the extent that the limitation contained in this paragraph 4 applies, the submission of an Exercise Notice by the Holder shall be
deemed to be the Holder’s representation that this Warrant is exercisable pursuant to the terms hereof and the Company shall be entitled to rely on such representation without making any further inquiry as to whether this Section 4
applies. The Company shall have no liability to any person if the Holder’s determination of whether this Warrant is convertible pursuant to the terms hereof is incorrect. Nothing contained herein shall be deemed to restrict the right of a
Holder to exercise this Warrant, or part thereof, at such time as such exercise will not violate the provisions of this Section 4. This Section 4 may not be amended unless such amendment is agreed to in writing by the Holder and approved
by the holders of a majority of the Common Stock then outstanding; provided, however, that the Holder shall have the right to waive the provisions of this Section 4 upon prior written notice to the Company following the
announcement of a Major Transaction (as defined below), or otherwise upon sixty (60) days’ prior written notice to the Company. 
  
 5. Payment of the Exercise Price; Cashless Exercise. The Holder may pay the Exercise Price in either of the following forms or, at the election of
Holder, a combination thereof: 
  
 (a) through a cash
exercise (a “Cash Exercise”) by delivering immediately available funds, or 
  
 (b) at any time following the one year anniversary of the Issue Date and as long as the IPO has been completed, if an effective Registration
Statement is not available for the resale of all of the Warrant Shares issuable hereunder at the time an Exercise Notice is delivered to the Company, through a cashless exercise (a “Cashless Exercise”). The
Holder may effect a Cashless Exercise by surrendering this Warrant to the Company and noting on the Exercise Notice that the Holder wishes to effect a Cashless Exercise, upon which the Company shall issue to the Holder a number of Warrant Shares
determined as follows: 
  

 4 

			
	 	  	X = Y x (A-B)/A
		
	 where:
	  	X = the number of Warrant Shares to be issued to the Holder;
		
	 	  	Y = the number of Warrant Shares with respect to which this Warrant is being exercised;
		
	 	  	A = the Market Price as of the Exercise Date; and
		
	 	  	B = the Exercise Price.

  
 It is intended and
acknowledged that the Warrant Shares issued in a Cashless Exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares required by Rule 144 shall be deemed to have been commenced, on the
Issue Date. For purposes hereof, (A) “Market Price” means, as of a particular date, the average of the daily VWAP for the Common Stock occurring during the ten (10) Trading Day period ending on (and including)
the Trading Day immediately preceding such date, and (B) “VWAP” on a Trading Day means the volume weighted average price of the Common Stock for such Trading Day on the Principal Market as reported by Bloomberg Financial
Markets or, if Bloomberg Financial Markets is not then reporting such prices, by a comparable reporting service of national reputation selected by the Holders and reasonably satisfactory to the Company. If VWAP cannot be calculated for the Common
Stock on such Trading Day on any of the foregoing bases, then the Company shall submit such calculation to an independent investment banking firm of national reputation reasonably acceptable to the Investors, and shall cause such investment banking
firm to perform such determination as is necessary to establish the value of the Common Stock and notify the Company and the Investors of the results of determination no later than two (2) Business Days from the time such calculation was
submitted to it by the Company. All such determinations shall be appropriately adjusted for any stock dividend, stock split or other similar transaction during such period. 
  
 6. Anti-Dilution Adjustments; Distributions; Other Events. The Exercise Price and the number of Warrant Shares
issuable hereunder shall be subject to adjustment from time to time as provided in this Section 6. 
  
 (a) Subdivision or Combination of Common Stock. If the Company, at any time after the Issue Date, subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its shares of Common Stock into a greater number of shares, then after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to
such subdivision will be proportionately reduced. If the Company, at any time after the Issue Date, combines (by reverse stock split, recapitalization, reorganization, reclassification or otherwise) its shares of Common Stock into a smaller number
of shares, then, after the date of record for effecting such combination, the Exercise Price in effect immediately prior to such combination will be proportionally increased. 
  

 5 

 (b) Distributions. If the Company shall declare or make any distribution of its assets (or rights
to acquire its assets) to holders of Common Stock as a partial liquidating dividend or otherwise (including without limitation any dividend or distribution to the Company’s stockholders in cash or shares (or rights to acquire shares) of capital
stock of a subsidiary) (a “Distribution”), the Company shall deliver written notice of such Distribution (a “Distribution Notice”) to the Holder at least ten
(10) Business Days prior to the earlier to occur of (i) the record date for determining stockholders entitled to such Distribution (the “Record Date”) and (ii) the date on which such Distribution
is made (the “Distribution Date”). The Holder shall be entitled, at its option (to be exercised by written notice delivered to the Company on or before the tenth (10th) Business Day following the date on which a Distribution Notice is delivered to the Holder), either (A) upon any exercise of this Warrant on or
after the Record Date, to be entitled to receive on the Distribution Date (for any exercise effected on or prior to the Distribution Date) or the applicable Delivery Date (for any exercise effected after the Distribution Date), the amount of such
assets which would have been payable to the holder with respect to the shares of Common Stock issuable upon such exercise (without giving effect to any limitations on such exercise contained in this Warrant) had the Holder been the holder of such
shares of Common Stock on the Record Date or (B) upon any exercise of this Warrant on or after the Record Date, to reduce the Exercise Price applicable to such exercise by reducing the Exercise Price in effect on the Business Day immediately
preceding the Record Date by an amount equal to the fair market value of the assets to be distributed divided by the number of shares of Common Stock as to which such Distribution is to be made, such fair market value to be reasonably
determined in good faith by the independent members of the Board of Directors of the Company. 
  
 (c) Major Transactions. In the event of a merger, consolidation, business combination, tender offer, exchange of shares, recapitalization, reorganization, redemption or other similar event, as a result of which
shares of Common Stock shall be changed into the same or a different number of shares of the same or another class or classes of stock or securities or other assets of the Company or another entity or the Company shall sell all or substantially all
of its assets (each of the foregoing being a “Major Transaction”), the Company will give the Holder at least ten (10) Trading Days’ written notice prior to the earlier of (I) the closing or
effectiveness of such Major Transaction and (II) the record date for the receipt of such shares of stock or securities or other assets, and the Holder shall be permitted to exercise this Warrant in whole or in part at any time prior to the record
date for the receipt of such consideration and shall be entitled to receive, for each share of Common Stock issuable to the Holder upon such exercise, the same per share consideration payable to the other holders of Common Stock in connection with
such Major Transaction. If and to the extent that the Holder retains this Warrant or any portion hereof following such record date, the Company will cause the surviving or, in the event of a sale of assets, purchasing entity, as a condition
precedent to such Major Transaction, to assume the obligations of the Company with respect to this Warrant, with such adjustments to the Exercise Price and the securities covered hereby as may be necessary in order to preserve the economic benefits
of this Warrant to the Holder. 
  
 (d) Adjustments; Additional
Shares, Securities or Assets. In the event that at any time, as a result of an adjustment made pursuant to this paragraph 6, the Holder of this Warrant shall, upon exercise of this Warrant, become entitled to receive securities or assets (other
than 

  

 6 

 
Common Stock) then, wherever appropriate, all references herein to shares of Common Stock shall be deemed to refer to and include such shares and/or other
securities or assets; and thereafter the number of such shares and/or other securities or assets shall be subject to adjustment from time to time in a manner and upon terms as nearly equivalent as practicable to the provisions of this paragraph 6.
Any adjustment made herein other than pursuant to Section 6(c) hereof that results in a decrease in the Exercise Price shall also effect a proportional increase in the number of shares of Common Stock into which this Warrant is exercisable.

  
 6A. Registration Rights. 
  
 If (i) the Company at any time after the completion of an IPO proposes
to register shares of Common Stock under the Securities Act in connection with the public offering of such shares for cash (a “Proposed Registration”) other than a registration statement on Form S-8 or Form S-4
or any successor or other forms promulgated for similar purposes and (ii) a Registration Statement covering the sale of all of the Warrant Shares is not then effective and available for sales thereof by the Holder, the Company shall, at such
time, promptly give each Holder written notice of such Proposed Registration. The Holder shall have ten (10) Business Days from its receipt of such notice to deliver to the Company a written request specifying the amount of Warrant Shares that
the Holder intends to sell and the Holder’s intended method of distribution. Upon receipt of such request, the Company shall use its commercially reasonable efforts to cause all Registrable Securities which the Company has been requested to
register to be registered under the Securities Act to the extent necessary to permit their sale or other disposition in accordance with the intended methods of distribution specified in the request of the Holder; provided, however,
that the Company shall have the right to postpone or withdraw any registration effected pursuant to this Section 6A without obligation to the Holder. 
  
 7. Fractional Interests. 
  
 No fractional shares or scrip representing fractional shares shall be issuable upon the exercise of this Warrant. If, on exercise of this Warrant, the
Holder hereof would be entitled to a fractional share of Common Stock or a right to acquire a fractional share of Common Stock, the Company shall, in lieu of issuing any such fractional share, pay to the Holder an amount in cash equal to the product
resulting from multiplying such fraction by the Market Price as of the Exercise Date. 
  
 8. Transfer of this Warrant. 
  
 The Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant, in whole or in part, as long as such sale or other disposition is made pursuant to an effective registration statement or an
exemption from the registration requirements of the Securities Act, and applicable state securities laws, and is otherwise made in accordance with the applicable provisions of the Securities Purchase Agreement. Upon such transfer or other
disposition, the Holder shall deliver this Warrant to the Company together with a written notice to the Company, substantially in the form of the Transfer Notice attached hereto as Exhibit B (the “Transfer
Notice”), indicating the person or persons to whom this Warrant shall be transferred and, if less than all of this Warrant is transferred, the number of Warrant Shares to be covered by the part of 

  

 7 

 
this Warrant to be transferred to each such person. Within ten (10) Business Days of receiving a Transfer Notice, an executed Investment Certificate and
the original of this Warrant, the Company shall deliver to the each transferee designated by the Holder a Warrant or Warrants of like tenor and terms for the appropriate number of Warrant Shares and, if less than all this Warrant is transferred,
shall deliver to the Holder a Warrant for the remaining number of Warrant Shares. 
  
 9. Benefits of this Warrant. 
  
 This Warrant shall be for the sole and exclusive benefit of the Holder of this Warrant and nothing in this Warrant shall be construed to confer upon any person other than the Holder of this Warrant any legal or
equitable right, remedy or claim hereunder. 
  
 10. Loss,
theft, destruction or mutilation of Warrant. 
  
 Upon receipt
by the Company of evidence of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity reasonably satisfactory to the Company, and upon surrender of this Warrant, if mutilated, the
Company shall execute and deliver a new Warrant of like tenor and date in replacement for the lost, stolen, destroyed or mutilated Warrant. 
  
 11. Notice or Demands. 
  
 Any notice, demand or request required or permitted to be given by the Company or the Holder pursuant to the terms of this Warrant shall be in writing and
shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding
Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage
prepaid), addressed as follows: 
  
 If to the Company:

  
 VeriChip Corporation 
 1690 S. Congress Avenue, Suite 200 
 Delray
Beach, FL 33445 
 Attn: Michael Krawitz 
 Tel: 561-805-8000 
 Fax: 561-805-0002
  

 8 

 with a copy to: 
  
 Holland & Knight LLP 
 701 Brickell Avenue, Suite 3000 
 Miami, Florida 33131 
 Mailing Address: P.O. Box 015441, Florida, 33101 
 Attn: Harvey A. Goldman, Esq. 
 Tel: 305-374-8500 
 Fax: 305-789-7799 
  
 and if to the Holder, to such address as shall be designated by the Holder in writing to the Company. 
  
 12. Taxes. 
  
 (a) The issue of stock certificates on exercises of this Warrant shall be made without charge to the exercising Holder for any tax in respect of the issue
thereof. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of stock in any name other than that of the Holder of any Warrant exercised, and the Company shall
not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the reasonable satisfaction of the
Company that such tax has been paid. 
  
 (b) Notwithstanding
any other provision of this Warrant or any other Transaction Document, for income tax purposes, any assignee or transferee shall agree that the Company and the Transfer Agent shall be permitted to withhold from any amounts payable to such assignee
or transferee any taxes required by law to be withheld from such amounts. Unless exempt from the obligation to do so, each assignee or transferee shall, upon request, execute and deliver to the Company or the Transfer Agent, as applicable, a
properly completed Form W-8 or W-9, indicating that such assignee or transferee is not subject to back-up withholding for United States Federal income tax purposes. 
  
 13. Applicable Law. 
  
 This Warrant is issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed entirely within the State of Delaware. 
  
 14. Amendments. 
  
 No amendment, modification or other change to, or waiver of any provision of, this Warrant may be made unless such amendment, modification or change is (A) set forth in writing and is signed by the Company and the Holder. 

 
 [Signature Page to Follow] 
  

 9 

 IN WITNESS WHEREOF, the Company has duly executed and delivered this Warrant as of the Issue Date.

  

			
	VERICHIP CORPORATION
		
	By:	 	

	Name:	 	 
	Title:	 	 

  

 10 

 EXHIBIT A to WARRANT 
  
 EXERCISE NOTICE 
  
 The undersigned Holder hereby irrevocably exercises the right to purchase
                     of the shares of Common Stock (“Warrant Shares”) of VERICHIP CORPORATION evidenced by the attached
Warrant (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 
  

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as: 
  
                      a Cash Exercise with respect to
                     Warrant Shares; and/or 
  
                      a Cashless Exercise
with respect to                      Warrant Shares, as permitted by Section 5(b) of the attached Warrant. 
  
 2. Payment of Exercise Price. In the event that the Holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the sum of $                    
to the Company in accordance with the terms of the Warrant. 
  

			
	Date:	 	  

	
	  

	Name of Registered Holder
		
	By:	 	  

	Name:
	Title:

  
 By tendering this
Exercise Notice, the Holder represents to the Company that it is an “accredited investor” as that term is defined in Rule 501 of Regulation D, and that it is acquiring the Warrants Shares solely for its own account, and not with a present
view to the public resale or distribution of all or any part thereof, except pursuant to sales that are registered under the Securities Act or are exempt from the registration requirements of the Securities Act; provided, however,
that, in making such representation, the Holder does not agree to hold the Warrants Shares for any minimum or specific term and reserves the right to sell, transfer or otherwise dispose of the Warrants Shares at any time in accordance with the
provisions of the Warrant and with Federal and state securities laws applicable to such sale, transfer or disposition. 
  

 11 

 EXHIBIT B to WARRANT 
  
 TRANSFER NOTICE 
  
 FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells, assigns and transfers unto the person or persons named below the right to purchase
                     shares of the Common Stock of VERICHIP CORPORATION evidenced by the attached Warrant. By signing this Transfer
Notice, the transferee agrees to be legally bound by the terms of the attached Warrant and of the related Securities Purchase Agreement and Registration Rights Agreement applicable to an Investor. 
  

			
	Date:	 	  

	
	  

	Name of Registered Holder
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	 Accepted and Agreed:

	
	  

	Transferee Name
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	Address:
	  

	  

	  

  

 12

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